DP7033 The London Agreement and the Cost of Patenting in Europe

Author(s): Malwina Mejer, Bruno van Pottelsberghe de la Potterie
Publication Date: November 2008
Keyword(s): European patent system, fee elasticity, London Agreement, patent fees, translation costs
JEL(s): O34, P14, P51
Programme Areas: Industrial Organization
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=7033

This paper analyses the consequences for the European Patent System (EPS) of the recently ratified London Agreement (LA), which aims to reduce the translation requirements for patent validation procedures in 15 out of 34 national patent offices. The simulations suggest that the cost of patenting has been reduced by 20 to 30 percent since the enforcement of the LA. With an average translation cost saving of ?3,600 per patent, the total savings for the business sector amount to about ?220 millions. The fee elasticity of patents being about -0.4, one may expect an increase in patent filings of eight to 12 percent. Despite the translation cost savings, the relative cost of a European patent validated in six (thirteen) counties is still at least five (seven) times higher than in the United States.