| Patent Law Practitioners

Changes to annuity payment regulations

Author:

Rodrigo Bermeo-Andrade LLM, Bermeo & Bermeo Law Firm, Quito

On June 1 2010, the Ecuadorian Patent Office issued Regulation No 003-2010 CD-IEPI concerning patents which establishes an increase in maintenance fees and modifies the way of calculating the annuities to be paid. The new regulations have left many open-ended questions. Therefore, a formal clarification has been requested to the Ecuadorian Patent Office and they have stated that they will issue further explanations in coming weeks.

The real issue is how to determine the annuity number, the payment deadline and the amount to pay.

1) ANNUITY NUMBER

Under the previous regulations the annuity number was calculated based on the national filing date. Now, annuities are counted from the International Filing Date. Therefore, the annuity year and payment deadline are calculated based on the PCT International Filing Date (month, day, and year).

For example, if a patent entered the national phase in October 2008, then the third annuity would have been due in October 2010. However, we now look to the International Filing Date which is March 2006. This means that the sixth annuity is due in March 2011. In this particular case there would be no payment in 2010 because before June 2010, the payment was due October 2010, and after the new regulations, the payment is due in March. No back fees are required. (See chart below)

2) PAYMENT DEADLINE

As the annuity number, the deadline is established by the International Filing Date. In Ecuador, annuities are paid a year in advance and are due by the end of the PCT file month. Article four of the new regulation in accordance with article 80 of the Andean Decision #486 provides an additional six month grace period. If an annuity has not been paid by the end of the grace period, the application or granted patent automatical-ly expires. It is not possible to revive the patent after expiration.

Previously filed and granted patents:

The changes also affect granted patent applications and PCT applications that were filed in Ecuador before June 1 2010. As a general rule, if the previous deadline to pay the annuity was before June, the payment for that year was done per the old regulations. If the old deadline is after June, then the new legislation applies, and the new deadline must be taken into account. This can mean that no annuity is due on that year.

Here are some examples of different possibilities:

SCENARIO NATIONAL FILE DATE PCT FILE DATE RESULT
National Filing before June / PCT Filing month after June April 1, 2009 November 1, 2007 2010-2011 annuity paid in April 2010

Next annuity due in November 2011
National Filing before June / PCT Filing month before June April 1, 2009 May 1, 2007 2010-2011 annuity paid in April 2010

Next annuity due in November 2011
National Filing month after June / PCT Filing month before June July 1, 2009 May 1, 2007 No annuity due in 2010

Next annuity due in May 2011
National File month after June / PCT Filing month after June July 1, 2009 November 1, 2007 2010-2011 annuity paid in November 2010
National Filing month after June / PCT Filing month after June November 1, 2009 July 1, 2007 2010-2011 annuity paid in July 2010

As the chart shows, there are different possibilities with different outcomes. Therefore, it is important to establish the new deadlines correctly, considering that they can be before or after the previous national deadlines. A meticulous case by case study is needed, and the records, databases and docketing systems must be updated accordingly.

3) AMOUNT TO PAY

Once the annuity number and deadline are established (from the international filing date), the amount to pay is determined by the new enacted fees according to the following chart:

Annuity 1 2 US $104
Annuity 3 7 US $148
Annuity 8 11 US $228
Annuity 12 -14 US $320
Annuity 15 17 US $428
Annuity 18 20 US $572

If payment is made during the six month grace period, a 5% monthly charge is added per Art. Four of the Regulation.

New patent applications:

When filing a new patent application, the applicant has to pay in advance for all the past years' annuities. Given the 31 months allowed to enter the national phase in Ecuador, the applicant must sometimes pay up to four annuities at once.

Payments in advance:

If the annuity agent paid more than one maintenance fee in advance, prior to the enactment of the new regulation, an adjustment to the amount paid may be required so that the annuity meets the new established fee.

CONCLUSION

This new regulation will make it easier for a patent owner or applicant to keep track of the annuities since they are calculated from the International Filing Date. Unfortunately the confusion brought by these new regulations, especially during the first year has caused patents to expire due to skipped or incomplete payments. In reviewing our personal cases we have noticed that paying agents do not have a clear understanding of the new regulations. It is important to clarify the annuity number, the amount due and the deadline along with the annuity agent to avoid unduly expirations

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