Patent Disputes - Costs

When budgeting a patent enforcement case the following financial aspects should be taken into account:

Fees of the party’s own legal representatives

The party’s own legal representatives either bill on an hourly basis, depending on the workload, or they charge the statutory fees according to the Statutory Fee Act. Usually, the party’s own legal representatives will bill on an hourly basis, or other alternative fee arrangement, because patent cases are sufficiently complex that the statutory fees fall well below the normal costs of handling a case. Thus, the client and the law firm reach a written fee agreement (which cannot fall below the levels set by the Statutory Fee Act). According to Preu Bohlig’s experiences, the costs for services provided by the legal representatives until the end of first instance range from approximately €50,000 for simple patent infringement cases and €90,000 – €160,000 for more complex patent infringement cases.

Court Fees

Court fees, which depend on the litigation value, have to be advanced by the plaintiff when filing the complaint. The court fees are deducible from cost tables contained in the Court Fees Act. The plaintiff makes a preliminary estimation of the litigation value in the complaint, which is usually decisive for the whole proceedings.

Eventual reimbursement

The losing party is liable to pay the advanced court fees and must reimburse the statutory fees of the winning party. Because these fees depend only on the litigation value, the recoverable fees of the winning party do not depend on what the lawyers of the winning party have actually billed. Accordingly, it is irrelevant that the lawyers have billed on the basis of an agreed hourly rate. In case of a partial win, the costs are shared among the parties according to their prevailing parts.

Split patent litigation system

The defendant in patent infringement proceedings usually challenges the validity of the asserted patent by filing a nullity complaint with the centralized FPC in Munich or through opposition proceedings. Costs resulting from these proceedings are added to the overall costs.

Particularities for Non-European Companies

Plaintiffs without a residence or principal place of business in a member state of the European Community must, upon request of the defendant, provide a security, such as a bank guarantee, for the potential cost reimbursement claim in case the complaint is dismissed.