The Quiet Reversal of the Cost Structure
For decades, an unspoken rule of thumb governed the patent world: the office is cheap, the attorney is expensive. Anyone looking to reduce the cost of a patent filing turned the attorney screw — shorter specifications, leaner searches, more input from the inventor.
At the European Patent Office (EPO), that rule of thumb has long since ceased to apply. Official fees have overtaken attorney drafting fees. A European proceeding now costs more in pure official fees than the drafting of the application itself — and the gap is widening.
It is precisely this reversal that sets up the question set to reshape the IP industry in the coming years: What happens when Artificial Intelligence drastically reduces one side of the cost equation — and not the other?
The Cost Comparison in Numbers
Consider a typical constellation: entry into the European phase (or a direct filing) with 20 patent claims, pursued through the 5th renewal year. The figures are based on the EPO schedule of fees as in force from 1 April 2026.
EPO Official Fees
| Item | Amount |
|---|---|
| Filing fee (online) | €135 |
| European search fee | €1,595 |
| Designation fee | €720 |
| Examination fee | €2,010 |
| Claims fees (claims 16–20: 5 × €290) | €1,450 |
| Subtotal — entry/examination | ≈ €5,910 |
| 3rd year renewal fee | ≈ €690 |
| 4th year renewal fee | ≈ €845 |
| 5th year renewal fee | ≈ €1,000 |
| Subtotal — renewal fees (years 3–5) | ≈ €2,535 |
| Total EPO official fees | ≈ €8,445 |
Note: Renewal fees at the application stage follow the applicable schedule of fees; the 3rd and 4th year renewals were raised above average with effect from 1 April 2026. The figures above are rounded to this order of magnitude.
Attorney Drafting
| Item | Amount |
|---|---|
| Drafting and filing of the application | €3,000 – €5,000 |
The result is striking and, for many clients, counterintuitive: even today — without any AI — the pure EPO official fees in this model case, at roughly €8,400, sit well above the attorney drafting fee of €3,000 to €5,000. The office has become the larger cost block, not the attorney.
This figure is the lever on which everything that follows turns. Because AI initially acts on only one of the two sides — the attorney’s.
Scenario 1: The Attorney Becomes Cheap, the Office Stays Rigid
AI-supported tools for claim drafting, specification generation, and prior-art search substantially reduce the attorney workload per application. The drafting fee — already the smaller item — falls further, to a fraction of its former level.
On the office side, in this scenario, nothing happens.
That is not an unrealistic assumption; it follows institutional logic. The EPO is a monopolist without competitive pressure. It pursues its own objectives, which are not aligned with the cost interests of applicants — among them safeguarding the employment and continued standing of a large examiner workforce. An authority with this incentive structure does not necessarily pass on AI-driven efficiency gains in the form of lower fees; it may just as readily channel them into institutional preservation, reserves, or political latitude. The most recent fee round — an increase in most core fees from 1 April 2026, with above-average rises in the early renewal fees — points to a rigid, upward-tending fee regime rather than to any pass-through of efficiency gains.
The consequences for firms:
If value creation per mandate shrinks on the attorney side, but overall demand for IP rights does not grow to the same degree, a displacement dynamic sets in. The same work is done by fewer people in less time. The number of mandates a single attorney can handle rises — the total number of mandates awarded does not.
The result is a market in which more and more attorneys compete for fewer and fewer economically viable mandates. The price of legal work falls, margins erode, and the efficiency gains from AI accrue not to the profession but are passed through to clients under competitive pressure. The office’s rigid cost block, meanwhile, prevents falling attorney costs from pushing the total cost of a filing low enough to noticeably stimulate demand. The office remains the bottleneck — and firms bear the adjustment burden alone.
In this scenario, AI is not a growth driver for firms but an accelerant of consolidation.
Scenario 2: Both Sides Give Way — The Filing-and-Grant Machine
The second scenario rests on a bolder assumption: the office, too, opens up to AI and passes on the efficiency gains. This becomes possible because here AI is not merely cheaper, but simultaneously better.
The decisive technical point is search. A near-perfect, machine-driven search for novelty-destroying prior art — across all languages, databases, and document classes — reduces the cost of the most labour-intensive part of examination while at the same time raising its quality. For the first time, cost reduction and quality improvement coincide rather than pulling against each other.
If both cost sides — attorney and office — fall at once, the entire economic calculus of the patent system tips over. Protecting even the smallest improvements becomes financeable. The number of new filings can rise dramatically.
At the end of this trajectory stands an industry that transforms into a filing-and-grant machine: applications are generated by machine, searched by machine, examined by machine, and granted by machine — a procedure that, in routine operation, no longer requires any human interaction. The inventor supplies the core technical information; everything downstream runs automatically.
Litigation, too, becomes a machine matter.
Automation does not stop at grant. In opposition and revocation proceedings, the intensive search for novelty-destroying prior art is the core of every dispute — and this is exactly where AI is strongest. What today ties up weeks of attorney and office work becomes a fast, exhaustive machine search.
A two-tier model becomes conceivable:
- First instance by AI: The decision on whether a patent is maintained is taken, at first instance, by an AI system — fast, cheap, and based on an exhaustive search.
- Second instance by humans: Review remains reserved to human examiners — but at significantly higher cost. The human eye shifts from being the standard to being an expensive remedy.
This structure would have far-reaching consequences for access to justice. The cheap, automated first instance lowers the threshold for challenges to IP rights; the expensive human second instance becomes a filter affordable only to those with enough at stake. Whoever wants human review pays for it — a pay-for-human model at the heart of the sovereign procedure.
The Real Fork in the Road
Both scenarios share the same starting diagnosis — the reversal of the cost structure in the office’s favour — and diverge on a single question: Does the EPO give way, or not?
- If the office stays rigid (Scenario 1), the full force of AI concentrates on the attorney side. Firms consolidate, competition intensifies, and clients benefit only to a limited degree, because the official cost block caps the total saving.
- If the office gives way (Scenario 2), a largely dehumanised filing-and-grant apparatus emerges, with sharply rising filing numbers — bringing with it all the follow-on problems of quality assurance, a flood of prior art, and the delicate transition to machine-made legal decisions.
Institutional economics argues, in the short term, for Scenario 1. A monopolist without competitive pressure and with its own preservation interests has little incentive to translate efficiency gains into fee reductions. Technical development — particularly the quality of machine search — drives, by contrast, towards Scenario 2.
The likely path lies somewhere in between: the attorney side automates and consolidates first (Scenario 1 is already underway), while the office side follows more slowly, under political pressure, and in stages. The transition to a fully automated procedure would then be no single leap, but a years-long contest over the question of where in the procedure the human remains indispensable — and who pays for them.
What This Means for Applicants and Firms Today
For clients, the decisive cost question shifts. No longer “Which attorney is cheap?”, but “How do I manage the official cost block?” becomes the central strategic task — through the number of claims, the timing of payments, geographic reach, and the question of which rights are even worth maintaining.
For firms, the answer lies not in clinging to the hourly model for text production, which AI is eroding in any case, but in shifting towards what machines cannot (yet) deliver: strategic counsel, the translation of imprecise invention disclosures into robust claims, responsibility and liability for content — and the human second instance that, in Scenario 2, becomes the most valuable asset of all.
The reversal of the cost structure is already reality. Which of the two scenarios follows from it will be decided not in the firms — but on the question of how a monopolistic office deals with the very technology that calls its own cost base into question.
This article is provided for information and discussion and does not constitute legal advice. The fees stated refer to the EPO schedule of fees as adjusted with effect from 1 April 2026.
