Introduction
In 2020, both IP Australia and the Intellectual Property Office of New Zealand (“IPONZ”) introduced updated fee schedules, with new fee structures impacting the payment of excess claims fees. This article explores aspects of these changes and other factors to be considered when deciding on the optimal number of claims in both jurisdictions.
Snapshot/Basics
When lodging a patent application in Australia or New Zealand, the number of claims pending has no bearing on official filing fees.
In Australia, excess claims fees can only be incurred at acceptance (i.e., allowance) of the application based on the number of claims pending at that time. Hence, there is generally no disadvantage to presenting a large number of claims for examination.
In New Zealand, excess claims fees are based on the maximum number of claims pending at any time during the examination procedure. However, unless there are a large number of claims, filing a voluntary amendment to reduce the number of claims prior to requesting examination may incur more cost than the excess claims fees payable.
In both jurisdictions, payment of excess claims fees may be cost effective when compared to the cost and uncertainty of post-grant amendments, particularly during invalidity proceedings.
Australia
– Excess claims fees are payable based on the number of accepted claims
Since 1 October 2020, excess claims fees are payable at acceptance based on the number of accepted claims as follows:
- AU$125 for each excess claim greater than 20 and equal to or less than 30 claims; and
- AU$250 for each excess claim greater than 30 claims.
As the fees are based on the number of accepted claims, there is no disadvantage to presenting a large number of claims for examination. Somewhat surprisingly, IP Australia have not used the introduction of a new fee schedule to try to recoup the expense of examining applications with large numbers of claims by introducing the payment of excess claims fees at the time of requesting examination or earlier.
Filing an amendment in order to reduce the number of claims at either national phase entry or when requesting examination is therefore not cost effective or necessary. The most cost-effective way in which the number of claims may be reduced, if required, is generally to do so concurrently with other amendments (e.g., when responding to an Examination Report).
– Voluntary amendments following acceptance or grant
Since 1 October 2020, if a proposed amendment following acceptance increases the number of claims in the complete specification and the total number of claims exceeds 20 claims following the amendment, AU$250 is payable for each additional claim that is included. Importantly, the fee is not restricted to claims in excess of 20 in this scenario, but rather each additional claim inserted should the total number after the amendment exceed 20.
In contrast, if a post-acceptance amendment increases the total number of claims from 15 to 20 or fewer, no excess claims fee applies.
This change is one to look out for as, for example, if the number of claims at acceptance or grant is 15, and an applicant files a request for a post-acceptance/post-grant amendment to insert additional claims:
- Adding six additional claims to provide a post-amendment total of 21 would cost AU$1500 (6 x AU$250) in excess claims fees
- Adding five additional claims to provide a post-amendment total of 20 would not incur any excess claims fees
In each case, an AU$250 official fee will apply for making a post-acceptance amendment.
The cost of the sixth additional claim in this scenario could therefore be considered excessive. If all six additional claims are directed to embodiments of commercial importance, deletion of a less important claim in the original claim set or combining the features of two other dependent claims into a single claim whilst amending the application would save a substantial fee (AU$1500).
New Zealand
– Excess claims fees are payable based on the maximum number of claims at any point during examination
In contrast to Australia, changes to the fee schedule at IPONZ introduced on 13 February 2020 appear directed to the recovery of costs associated with examining large numbers of claims in a single application. For applications where examination is requested on or after 13 February 2020, excess claims fees apply if 30 or more claims are pending at any point during examination and are calculated based on the maximum number of claims during examination. The fees are payable at acceptance of the application.
NZ$120 is payable for each fifth claim over the first 25 claims pending at any time during examination, regardless of whether the claim number is reduced prior to acceptance. For example, if examination is requested with 50 claims, and the claim number is reduced to 20 prior to acceptance, excess claims fees of NZ$600 are payable based on the maximum of 50 claims.
As the issuance of a Direction to Request Examination in New Zealand appears to be rare, if not non-existent in recent years, attorneys should be proactive in ensuring that their clients are aware of potential excess claims fees in advance of the deadline to request examination. Excess claims fees may be reduced or avoided by filing a request for voluntary amendment to reduce the number of claims prior to requesting examination. However, the value of this strategy is dependent on the number of claims pending prior to the potential amendment. For example, if the initial claim set includes 100 claims, excess claims fees of NZ$1800 would be payable at acceptance if examination is requested without filing a request for claim amendments. This amount could be at least halved by filing a request for a voluntary amendment to amend the number of claims to 29 or less prior to requesting examination, depending on the complexity of the amendment.
In contrast, if the initial claim set includes between 30 and 50 claims, filing a request for a voluntary amendment to amend the number of claims to 29 or less may not be cost effective in view of the cost of the amendment and it may in that case be beneficial to the applicant to have all of the claims examined.
Divisional applications in New Zealand
In the case of divisional applications, the deadline to file a Request for Examination is five years from the filing date of the ultimate parent application. In view of current IPONZ practice, a divisional application should be filed with the original claims of the original parent application in the chain, and later amended to include a preferred claim set for examination. In practice, New Zealand divisional applications are often filed at or shortly before the five-year deadline, allowing little or no time for claim amendments prior to requesting examination. This can be costly when the original parent application includes a large number of claims, and it is advantageous to identify potential issues with excessive claim numbers well ahead of these deadlines to allow sufficient time to address them.
Strategies for the reduction or avoidance of excess claims fees
Several options are available in both Australia and New Zealand to either reduce or avoid excess claims fees. Common strategies are combining features of one or more dependent claims into a single claim and multiply appending dependent claims to one or more independent claims. Each multiply dependent claim is counted only as a single claim in both Australia and New Zealand.
When payment of excess claims fees is not excessive
Much time and effort is often spent in reducing claim numbers to reduce or avoid excess claims fees, but is it always worth it? The cost of a patent claim originates when the application is drafted, with the vast majority of an attorney’s drafting time spent deliberating over the precise wording of each claim. A decision to pay additional fees to retain some of these specific embodiments is sometimes a worthwhile insurance policy. Dependent claims are often drafted to expressly cover commercial products or preferred embodiments of inventions. Consequently, dependent claims often protect details describing the more important aspects of the invention to the applicant. Additional dependent claims to a product are likely to be more valuable than those to a process due to increased ease of enforceability.
If a patent is challenged in Australia or New Zealand, all claims of the patent must be invalidated for the patent to be invalidated. The more claims a patent has, the greater the challenge to anyone attempting to invalidate it. Multiple independent claims often make a patent more difficult to invalidate and the chances of a competitor “knocking out” your patent diminish further with each dependent claim, which provides a useful fallback position. Each claim of a patent can add a substantial cost to a revocation attempt and consequently a large number of claims may serve as a useful deterrent.
Applicants should also consider the potential need to amend the claims to address challenges to validity. Leave to amend to address a challenge to validity is granted at the discretion of the Court (see Apotex Pty Ltd v Les Laboratoires Servier (No 2) [2009] FCA 1019 at [86]-[88] for a list of guidelines relevant to the exercise of discretion). Due to support requirements, leave to amend is potentially more likely to be granted if the proposed features to be introduced into a claim are already present within the claim set. Individual dependent claim/s which can easily be inserted into a broader claim reduce the complexity and consequently the cost of post-grant amendments.
Recommendation
The most cost-effective strategy to reduce the number of claims in order to reduce or avoid excess claims fees in Australia is generally to do so concurrently with other amendments (e.g., when responding to an Examination Report), although amendments to reduce the number of claims can be made at any point prior to acceptance of the application. In contrast, excess claims fees can be an important consideration prior to requesting examination in New Zealand. Applicants should also consider the potential utility of additional claims in the event of a challenge to validity later down the track.
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