James Peel looks at the UK IPO fees review

by kenteegardin

Fellow Patent SOLO James Peel of J.P.Peel & Co Ltd has been taking a look at the recently published Consultation document from the UK -IPO as they seek to balance the books. Here is his summary:

The proposed changes are a balance between a desire to increase income whilst changing the behaviour of applicants to simplify the UK IPO workload, particularly by encouraging applicants to file “better quality” patent applications. As an example, they report that in one year, ten individuals filed 3000 patent applications of which 51 were examined and only three resulted in granted patents which were renewed for just a few years.

The UK IPO says that they break even on costs/income after a patent has been renewed for 15 years. The fee increases may be needed to pay the salaries of the new patent examiners as their numbers have more than doubled in the past six months. Pressure had been exerted by CIPA to sort out the backlogs which were making it hard for the UK IPO to meet their own deadlines. Some years ago, national patent offices in Europe appeared to be struggling to find a role for themselves with a drop off in filings because of the success of the EPO. The UK IPO marketed itself as providing a fast and low cost route to patent protection. This appears to have been successful but at a cost to their non-urgent work. It must be a sign of confidence in their strategy and offering that the UK IPO are putting their fees up.

Two approaches to the fee increases are proposed: the introduction of new fees and increases in prosecution fees or an increase in renewal fees but with lower new fees and lower increases in prosecution fees. The latter approach is unlikely to change applicants’ behaviour though, and an opportunity might be missed.

The new fees are a charge of £10 for each page over 35 pages to be included in the application fee and a fee of £30 for each claim above 15 claims to be included in the search fee. The UK IPO predicts that the introduction of a claims fee will increase their income per case by about £210 as the average case has 22 claims. This calculation assumes that the behaviour of applicants will not change. I wonder if they took the elimination of omnibus claims into account. Also, the fees for long specifications in other jurisdictions can largely be eliminated on most cases by careful choice of font size, margins and line spacing.

In percentage terms at least, the biggest change is to the application fee which in one proposal is being tripled from £20/£30 to £60/£90 with a 25% surcharge for late payment. It is this fee which is aimed at dissuading “frivolous” applications. Such an increase in upfront costs is balanced with smaller increases to the search and examination fees.

There are greater fee increases for paper based transactions and so I wonder if we are being guided towards online transactions.  (Wonder no longer, James, the UK is going digital). This may inadvertently favour lone applicants as online transactions are on a case by case basis: it is not possible to make batch payments online.

Following the unpredictable result of the dramatic increase in claims fees at the EPO in April 2008, it is good that the UK IPO are consulting about the changes. It is now up to us to respond.

We are invited to respond by email by 6 June 2017 (Note the precise 11:45pm deadline). The earliest date on which the new fees could come into force is 1 October 2017.

Affording Regulation

If you wish to object to your regulator, IPReg, increasing your practice fees, then by 7 September you need to email IPReg

Earlier this month you probably received an email about the 2016 business plan and budget. It contained a link to this page which includes a nice little letter from Mr Heap the chairman of our regulator, a draft business plan, draft budget and, significantly, a table showing the proposed increases in fees.

Now the proposed increases don't look much, but they do amount to 7% which in a time of 0% inflation is quite stonking. Due to the fact that everybody pays more than one fee the precise impact is going to vary from firm to firm.

I was surprised to see that attorneys who are retired or inactive are paying to remain on the registers £147 for one or £236 for two . I suspect they won't be for much longer. What is the purpose of being on a register if you are retired, so I suppose this means unemployed and looking for a job - so raising that fee is to encourage them into the unregulated world?

Stop Discrimination against Patent and Trade Mark Attornies

In 2014 I paid  as a solo practitioner with no employees £390 and next year they will want £459. If I could limit my practice to one or other of patents and trademarks, then I could make a saving. However, I'm not too sure why I am penalised for offering more comprehensive service to the consumer. This structure encourages over specialisation and should STOP

Amongst the more interesting things the draft  business plan promises is a policy on stale examinations. They've been promising this for a while (might even be a little stale itself) but I am not sure if it has anything to do with the notorious  CIPA biscuit pixies.

Under Communications they propose to meet with registrants at regular open meetings - which is the same as last year's plan but I can't recall any.


Another thing they intend to do is monitor the enterprise court small claims procedure which is intended to widen access to the lay applicant.  Lay applicants do not use regulated people, why am I funding this?

One thing that isn't there is any review of the Insurance sector. At present rule 17 requires any new entity requiring approval to use PAMIA. Isn't it about time they reviewed the market and approved at least one competitor?

While regulation is necessary it seems desirable that we should stop the cost of it escalating. The Chairman's letter acknowledges that mining into ABS structures costs money. This year perhaps their review of what they did will reveal that it had little regulatory benefit. If IPReg is really too small to be cost effective, it should be looking to merge. Put that in the business plan.

Little jewels from The EPO for 2014

More flexibility in dividing your applications

The EPO has been rather busy with its late 2013 Administrative Decisions .Its probably the case that most patents agents will be looking for a spot of CPD to make sure they understand the implications of the changes promised for 2014. The change in divisional practice in October which arrives on 1 April 2014 was greeted with much delight but the additional decisions all need to be read and digested. The whole package is driven by divisional issues. The changes in practice on searches are long overdue and it seems an age since CIPA was trawling for data on these iniquities. They don't arrive till 1 November 2014 so some applicants may be grateful for those prolonged delays in the arrival of their supplementary European searches, even if the renewal fees during that wait are inexorably rising as can be seen on the decision relating to fees. Cleveland have a helpful exposition of the new regime on unsearched subject matter here.
All this and the confusion over how to amend European patent applications now that our hands are tied and everything must be electronic as debated on the IPkat here means that 2014 is going to be an exciting year for the European Patent Attorney.
It is to be hoped that with all these procedural shenanigans that someone will remember that the role of the EPO is to issue valid patents efficiently (this includes timeliness) in the hope that those innovations will be exploited positively to the benefit of the European economy and not just of patent agents and litigators.

Regulating Client Money

One of the major difficulties I encountered in managing an IP practice as a Solicitor was compliance with the detailed acounts rules. At present those regulated by IPREG have a delightful concise Rule 11.

"Regulated persons shall ensure that their professional finances are managed appropriately."

If you are acting as a litigator it is a little more complex but in either case "money on account for fees or disbursements paid up front" can sit in the Office account. Possibly many patent and trademark agents do not even have a client account. However Financial Matters are one of the areas set to change under the latest proposals and we are beginning to see detail coming in that will make our terms of trade get ever longer and the duties of our Head of Finance ever more elaborate. So we may get:

"In the event that a regulated person receives money from a client, other than by way of payment of fees or disbursements incurred, but including money on account for fees or disbursements paid up front, they should ensure that such money is held on trust for the client in an account which is entirely separate from the regulated person’s or the firm’s professional business accounts.

In the event that money may be held on trust for a client, a registered person’s terms of business should deal with the issue of ownership of interest earned on money held on behalf of a client."



Running Away with Client's Money by Ian Burt et al

It may well be that there is no other way than to require the client account. However money can be recived for a client from the EPO and OHIM as refunds of fees and this necessarily becomes mixed with office money in deposit accounts. Many of us will have different ways of dealing with this and the client will usually be told what they are if and when it arises.   The matter is further complicated by the fact that that money is in Euros and we account in sterling. Nothing so far has appeared in the Code about the vexed question of how to convert unpaid disbursments in foregin currency into sterling. It has been common practice to include a profit cost uplift here. Even if you try to make a genunine pre-estimate of actual cost my rule (Xe rate +5% plus £10) won't be yours and indeed if your charges for currency conversion are higher than £10 nor should it be.

If you are a client where there are substantial disbursments its best to discuss policies in the engagement process. However it is worth remembering that cutting costs in one area often results in them appearing elsewhere so the overall cost is the one that needs to be fair.

Keeping it simple means keeping no client money, but that forces you into valuing disbursments so lets all head of to the Banks looking for client accounts that won't deduct charges. Dont forget to tell your clients that such money accrues no interest due to them.

Of course if IPREG give guidance on all this we are all compelled to operate the same way and that will likley be the Solicitor's way and may be anti-competitive. Remember the Red Book.

Free Community Trademark Representation

This post was provoked by the IPkat post on the OHIM decision to defer allowing community trademark applicants from outside the EU to use their services without the aid of a professional representative. The current rule is that the non-European applicant needs to be represented even if his application has no issues that require the intervention of a representative.

Anyone regardless of nationality can apply for a CTM and its not difficult to do online. It can be expensive if you get it wrong and professional advice can help you avoid mistakes and add considerable value, but for those entrepreneurs with confidence why should they not flash their credit card. The difficulty as I see it is that the European entrepreneur does not have a similar privilege to do the same in the rest of the world. If WIPO thinks its worth taking up, then compulsory representation for out-of-territory applicants could become a thing of the past but, until then, I do not see why OHIM should go unilateral.

There is a suggestion that professional bodies object to the removal of the restriction because it denies them work. For that reason I am prepared to represent an out of state applicant who needs a representative for free. This is not costless and it is an invitation to treat. The claimant of such free services must:

• provide sufficient information about themselves and the application so I can identify them for regulatory purposes
• agree to my terms of trade which contain a fair hourly rate for any professional services that may be needed, though there will be no fees if the CTM registers without any intervention on my part except the the taking over of representation, and a limitation of liability
• be prepared to sign an authorisation promptly if requested
• stay in touch for the next 10 years so I can forward any correspondence that arises such as a third party cancellation action.

In return I shall

• notify OHIM that I am your representative
• enter details of your trademark application into my docketing system
• forward correspondence by email only

Any other OHIM representatives offering similar free services to out of state DIY applicants is invited to add their offer in a comment.

I have already done this. A recent requester declined to provide any further information to identify himself and that is essential.

Many European trademark professionals would like advising on trademarks to  be a reserved legal activity, but at present it is not. It is therefore important for applicants seeking assistance to have some way of checking that a representative conforms to some code of conduct. You can only do that on a state by state basis and the UK regulator  IPReg does not pull its weight at the moment by providing a list of regulated firms so you might do better to choose a solicitor whose status you can check. For more information on representation see the OHIM page.

Barristers Terms of Engagement - sharing or bearing the Risk

I have to thank barrister, Jane Lambert of NIPC for drawing my attention to The Bar Council Consultation on their terms of engagement.

The paper is worth a read just for the explanation of the delights of the "cab rank rule" and the fact that there is no obligation to pay barristers. What gentlemen to have practised so long on such unsound terms. I have every sympathy with the need for reform.

The downside of making the solicitor (or presumably other regulated lawyer such as a a patent or trade  mark agent since CIPA, ITMA and IPReg are listed amongst the consultees) responsible for payment under the New Contractual Terms  is that the solicitor then bears all the risk of the non-paying client and today that is SO LARGE we will always needs barristers fees as a retainer in advance of giving instructions.

The Terms also allow for open hourly rate contracts. 

It seems to me that the Bar Council is asking for a lot in exchange for the cab rank rule. In Intellectual Property Matters that does not really hold up. Clients have to instruct Council they can afford and who are available. For many IP matters it makes a lot more sense for the barrister and solicitor to work in partnership sharing and managing the risk. Gone are the days when a barrister did not contaminate his hands with issues of money.

The risks are greater if the solicitor is not a large organisation and I believe solo solicitors are just as worthy of protection as younger and more vulnerable barristers.

What to do - make your opinions known to your representative body and ensure they respond to the Consultation, comment on this blog. If there is enough support and consensus we can submit a SOLO response.


This has not got a lot to do with apples but its a nice one and somehow it ought to be shared and not poisoned.

Paying for Regulation

No, not that sort of regulator - I mean the one that the Legal Services Act will impose on IP practitioners whether they practice as solicitors or under the protected titles for registered trademark attorneys and patent attorneys. IPREG has a consultation out on how the cost should be shared. Download it here. Naturally it peddles the alleged evidence that SOLO is high risk and will attract the use of most regulation services. Rest assured, Mr Heap, we do not want them. However since the professional members of the Shadow Board are all drawn from big practice, we do not stand much chance. Hopefully lay members who will properly consider the concerns of the consumer will be appointed soon to redress the balance.

The object of regulation is to protect the consumer. What about a payment model based on turnover like insurance premiums. Surely turnover reflects exposure to the market. At the moment we are counting people and regulated bodies. Some SOLO practices employ armies of paralegals and have high turnover. Are these the high risk ones or are the low turnover ones an equal risk? I have asked for the evidence referred to in the Consultation Document but so far the request goes unanswered.

I believe the consumer does deserve the benefit of regulation but at present the Act seems likely to achieve the exact opposite of its intention and the exodus of many business advisers in the IP and wider legal field from the regulated sector. Since the practice of law (other than litigation, probate and conveyancing) is largely an unreserved activity In England, this seems the most likely outcome.

Do our clients deserve more. If they do perhaps we should consider voluntary self- regulation. Oh that was what the profession used to be about wasn't it?

Early Assist for Trademark Applicants

I have been working on a personal response to the UK IPO consultation on credit crunch fee structures which is due in before 1 June 2009. To download the consultation paper go to http://www.ipo.gov.uk/pro-policy/consult/consult-live/consult-feeservices.htm

The overriding objective of the consultation is that businesses should protect their trademarks and inventions. It is also clear that the IPO feel some responsibility to the significant proportion of unrepresented applicants. These may represent a larger proportion of applications abandoned before advertisement and they were certainly a category Gowers cared about. Of course we must point out that there are some very cost-effective qualified trademark professionals available for hire amongst the SOLO group. If you need or want to offer help post a comment.

Amongst the proposals are a new Early Assist program, abolition or suspension of the Fast Track and encouragement for e-filing. The Early assist program appears to replace the recently abolished Search and Advisory Service and would let businesses get help and refunds of some of their fees if they wanted to represent themselves.

If I were an entrepreneur starting a business today with next to no cash, I would not spend what I had on a trademark attorney. I would try the DIY route. I might not bother to protect my mark at all. If I were starting a stay-small business it is not much of a priority, but let's suppose I want to grow my business then protecting the brand is on the agenda and a UK trademark is a good place to start. For such a one, is this Early Assist program the best solution? Can we improve it? I think we can. I think it could be better offered as IP Aid by selected quality approved private practitioners rather than through the IPO. Some of the more innovative filing services such as Trademark Direct are already offering a No TM No fee guarantee. Our entrepreneur does not want to waste his limited cash. In the beginning it is easier to change a name than fight a war.

Therefore I think this idea needs encouragement and I am hoping we can think of ways that would make it work better and ensure that the trademarks registered with such assistance are not just in compliance with the Act and rules, but the right protection for the business as well.