We are regularly asked whether Germany offers a special fee reduction for small applicants – a “micro-entity discount” of the kind familiar from the United States or the European Patent Office. The short answer is that the German Patent and Trade Mark Office (GPTO) does not provide such a status-based micro-entity discount. The widely noted 30% reduction is a scheme of the European Patent Office (EPO). This article explains both regimes and, in particular, looks at Germany’s own cost-relief instrument – procedural cost assistance – and why it compares unfavourably with the international reductions.
The EPO micro-entity reduction
Since April 1, 2024, under Rule 7a EPC, the EPO has granted a 30% reduction on the principal procedural fees where the applicant qualifies as a micro-entity. The reduction covers, among others, the filing, search, examination, designation, grant and renewal fees, as well as certain Euro-PCT fees where the EPO acted as International Searching Authority.
Eligible applicants are not only microenterprises in the narrow sense, but also natural persons, non-profit organisations, universities and public research organisations. A microenterprise is defined – following EU Recommendation 2003/361/EC – as an enterprise employing fewer than 10 persons with an annual turnover and/or annual balance sheet total not exceeding EUR 2 million.
A filing cap applies in addition: each applicant must have filed fewer than five European or Euro-PCT applications in the five years preceding the relevant application. Where there are several applicants, each of them must independently meet the requirements.
Notably, the scheme applies irrespective of nationality, residence, place of business and language of the proceedings – a clear broadening compared with the earlier, language-based reduction. The status must, however, be expressly declared, at the latest when the relevant fee is paid; it is not applied automatically. If the status changes (for example because the thresholds are exceeded or the filing cap is reached), the EPO must be notified, and fees falling due thereafter are again payable in full. Incorrect declarations can have adverse consequences, so careful verification before declaring is advisable.
And at the GPTO?
The GPTO currently provides no comparable micro-entity reduction and no size-based tiering of patent fees. German official fees are, however, moderate by international standards in any event – a key reason why a separate reduction for small applicants has not been introduced here.
German law does, nevertheless, have its own instrument for financial relief, although its purpose is fundamentally different: procedural cost assistance (Verfahrenskostenhilfe).
Procedural cost assistance – Germany’s distinct route
Procedural cost assistance (Verfahrenskostenhilfe, “VKH”) under Sections 129 et seq. of the German Patent Act (PatG) allows parties in proceedings before the GPTO, the Federal Patent Court and the Federal Court of Justice to have the costs borne by the state, in whole or in part. In grant proceedings, the applicant receives VKH on request – applying Sections 114 to 116 of the German Code of Civil Procedure (ZPO) by analogy – provided there is a sufficient prospect of the patent being granted and the application does not appear frivolous (mutwillig). On a separate request, renewal fees may also be included; payments are made to the Federal Treasury. The effect of a grant is, in essence, that the legal consequences otherwise triggered by non-payment – such as the deemed withdrawal or lapse – do not occur. On request, a patent attorney or attorney-at-law may also be assigned to the applicant (Section 133 PatG).
VKH is therefore a valuable instrument, particularly for impecunious individual inventors. It is, however, not a discount but a means-tested form of welfare support – and this is precisely where the decisive differences from the international reductions lie.
Disadvantages of procedural cost assistance compared with the EPO and USPTO
Set against the micro-entity schemes of the EPO (30%) and the USPTO (60% for a “small entity”, 80% for a “micro entity”), several weaknesses of VKH become apparent:
- A means test rather than a status test. VKH requires the applicant to show that, given their personal and financial circumstances, they cannot bear the costs, or can bear them only in part; these circumstances must be disclosed and substantiated. The EPO and USPTO reductions, by contrast, turn solely on an easily verifiable status (company size, number of prior filings) – regardless of whether the applicant is wealthy or profitable.
- Practically closed to companies. Legal persons – such as the typical start-up GmbH – obtain VKH only under the very narrow conditions of Section 116 ZPO, namely where failure to pursue the matter would run counter to the general interest. The micro-entity reductions, in contrast, are designed precisely for microenterprises and are readily available to them.
- A merits assessment up front. VKH is granted only where there is a sufficient prospect of grant and no frivolousness. The office thus carries out a preliminary substantive assessment. At the EPO and USPTO there is no examination of the merits whatsoever; the reduction applies irrespective of the prospects of grant.
- Application burden, repeated at each stage. VKH must be applied for afresh for each stage of the proceedings – assistance granted for the grant proceedings does not, for instance, extend to opposition proceedings. The international reductions require no more than a simple declaration of status when the relevant fee falls due.
- Deferral with a repayment risk, not a genuine fee reduction. VKH does not reduce the fee owed; depending on the applicant’s circumstances it provides for the cost to be covered in instalments or in full, and that coverage may have to be repaid if the applicant’s situation improves. The micro-entity reduction, by contrast, permanently lowers the fee amount itself, with no obligation to repay.
- Purely national reach. VKH covers only proceedings before the GPTO, the Federal Patent Court and the Federal Court of Justice. Applicants filing in Europe or the United States benefit from the respective reductions there, but find no comparably low-threshold equivalent in the German proceedings.
In short, VKH is targeted support for the genuinely impecunious, whereas the EPO and USPTO reductions are conceived as broadly accessible, low-bureaucracy relief for small – and quite possibly economically healthy – applicants. The two instruments therefore serve different purposes and are only comparable to a limited extent.
Other routes to cost relief in Germany
Besides VKH, further options exist for reducing IP costs. These include, in particular, the EU SME Fund, through which – when the funding window is open – part of the official fees can be reimbursed; its focus, however, is on trade marks and designs. There are also funding and advisory services, for example through the patent information centres. Procedural levers can help to spread costs as well: the request for examination at the GPTO can be deferred, so that examination and downstream costs arise only once the commercial significance of the invention is clearer.
A look beyond Germany
The international picture is mixed. The USPTO, with its two tiers, goes considerably further than the EPO. Other offices, such as the Chinese CNIPA, also provide reductions. Anyone building an IP portfolio across several countries should factor these differences into their cost and filing strategy at an early stage.
Takeaways for practice
Microenterprises, individual inventors, universities and non-profit institutions filing in Europe should make active use of the EPO reduction – it can save substantial amounts across the entire grant and maintenance procedure, but must be declared in good time. For national German filings at the GPTO there is no micro-entity discount. Procedural cost assistance can step in, but it is tied to financial need, a merits assessment and a noticeable application burden, and is barely accessible to ordinary companies. It is therefore no substitute for a genuine fee reduction of the kind the EPO and USPTO offer. All the more reason for German applicants to consider available funding and a well-planned, cost-conscious approach to the proceedings.
