According to R. 111(2) EPC (former R. 68(2) EPC 1973), decisions of the EPO open to appeal shall be reasoned. The function of appeal proceedings is to give a judicial decision upon the correctness of a separate earlier decision taken by a department of first instance (see inter alia T 34/90, OJ 1992, 454 and G 9/91, OJ 1993, 408). A reasoned decision issued by the first instance department meeting the requirements of R. 111 EPC is accordingly a prerequisite for the examination of the appeal (T 1182/05).
The reasoning given in a decision open to appeal has to enable the appellants and the board of appeal to examine whether the decision was justified or not. A decision therefore should discuss the facts, evidence and arguments which are essential to the decision in detail. It has to contain the logical chain of reasoning which led to the relevant conclusion (T 292/90 on inventive step; confirmed in many decisions, e.g. T 951/92, T 740/93, T 698/94, T 278/00 (OJ 2003, 546); T 70/02, T 963/02, T 897/03, T 763/04, T 316/05, T 1366/05, T 1612/07, T 1870/07, T 1997/08 and T 2366/11).
The decision has expressly to set out the logical chain of argument upon which the conclusion and therefore the final verdict were based, in respect of each and every ground that was pleaded and substantiated (T 698/94). It is the consistent case law of the boards of appeal (see e.g. T 740/93) that a "reasoned" decision should deal with all important issues of dispute. See also T 1709/06. The grounds upon which the decision was based and all decisive considerations in respect of the factual and legal aspects of the case must be discussed in detail in the decision (see e.g. T 278/00 (OJ 2003, 546) and T 1182/05).
The principle enshrined in R. 68(2) EPC 1973 (now R. 111(2) EPC) ensured a fair procedure between the EPO and parties to proceedings, and the EPO could only properly issue a decision against a party if the grounds on which it was based had been adequately reasoned (T 652/97). In T 1123/04 the board noted that the criteria for the "reasoned decision" under R. 68(2) EPC 1973 are elaborated in the Guidelines (currently Guidelines E-IX, 5 - June 2012 version): the requirement in R. 68(2) EPC 1973 for a "reasoned decision" was not only motivated by the basic legal principle that a party should be informed of the detailed grounds of a negative decision, but that such reasoning and grounds should be comprehensible to those conducting a later judicial review (R. 68(2) EPC 1973: "Decisions ...which are open to appeal"). It should not be necessary for a board of appeal to have to reconstruct or even speculate as to the possible reasons for a negative decision in the first instance proceedings. In principle, a decision referred to in R. 68(2) EPC 1973 should be complete and self-contained.
In J 20/99 the board noted that all EPO departments should, if quoting a decision of the boards of appeal or any other legal authority, identify that authority and place the cited passage(s) in quotation marks, not merely cite verbatim without attribution.