G 0001/90 (Revocation of the Patent) 05-03-1991
Revocation of the patent by a decision
Revocation, failure to meet formal requirements when the patent is maintained as amended
Termination of opposition proceedings
Loss of rights
Summary of Proceedings
I. Decision T 26/88 of Board of Appeal 3.3.1 dated 7 July 1988 (OJ EPO 1991, 30) was based on the following facts: The patent proprietor had not paid the printing fee in due time. The Opposition Division (in this case a formalities officer executing the duties entrusted to him under Rule 9(3) EPC) thereupon revoked the patent in a decision under Article 102(4) EPC, giving as grounds the late payment of the printing fee. In appeal proceedings, Board of Appeal 3.3.1 took the view that, where the time limit is not complied with under Article 102(4) EPC, loss of rights occurs automatically by operation of law (point 3.2, 2nd paragraph, and point 4 of the Reasons). The document referred to as a "decision" by the Opposition Division (formalities officer), required interpretation. It should be viewed as a communication concerning a loss of rights which had already occurred within the meaning of Rule 69(1) EPC.
II. Decision T 26/88 affirms that the practice has always been to revoke a patent under Article 102(4) and (5) EPC by a decision. Since the alternative, i.e. automatic loss of rights, had apparently not been considered, the decisions of other Boards - T 387/88 (Board 3.4.1), T 35/88 (Board 3.2.2) and T 14/89 (OJ EPO 1990, 432, Board 3.3.2), for example - contained no reference to the point of law in question (cf. T 26/88, point 7 of the Reasons).
III. In the proceedings relating to T 26/88 the patent proprietor filed a request that the point of law be referred to the Enlarged Board of Appeal. Board 3.3.1 rejected this request on the grounds that an amendment made to Rule 58(6) EPC in the meantime had introduced a legal remedy restricting further losses of rights to very exceptional cases.
IV. On 20 August 1990 the President of the European Patent Office referred the following points of law in order to ensure uniform application of the law:
1. In opposition proceedings, does a decision to revoke a patent under Article 102(4) or (5) EPC, which is subject to appeal under Article 106 EPC, have to be delivered immediately, or should the loss of rights be noted in a communication under Rule 69(1) EPC?
2. Must a document which the Office notifies in accordance with the Implementing Regulations to the parties to proceedings pending before it and which possesses all the features of a decision by virtue of its title, form and content always be regarded as a decision within the meaning of Article 106(1) EPC against which an appeal can be filed, or can such a document also be a communication not subject to appeal, particularly under Rule 69(1) EPC?
V. The submission quotes in particular decisions T 14/89 and T 26/88 as being at variance with each other. The points of law in question were crucial because they involved procedural principles of fundamental importance to the parties and to Office practice. A decision to revoke a patent reflected the dual nature of the opposition procedure. The practice set out in the Guidelines Part D-VIII, 1.2.2 had not been called into question until decision T 26/88. Even if the risk of an inadvertent loss of rights owing to non-observance of a time limit were to remain the exception after insertion of the new Rule 58(6) EPC, there were still times when formal requirements were not complied with because the patent proprietor had no further interest in protection. It must then also be clear to the opponent that the proceedings have been terminated.
Reasons for the Opinion
The first point of law Revocation owing to non-observance of time limits for procedural acts
1. This point relates to opposition cases where it has already been established that the patent proprietor agrees with a revised text in which the Opposition Division intends to maintain the patent but fails to comply in due time with the requirements of Article 102(3)(b), (4) and (5) EPC in conjunction with Rule 58(5) EPC (payment of the printing fee, filing of translations of amended claims). The time limit for performing these procedural acts is stipulated in Rule 58(5) EPC as being within three months of notification of the request by the Opposition Division. With effect from 1 April 1989 a new paragraph 6 was inserted in Rule 58 allowing a grace period of two months from notification of a communication pointing out the failure to observe the time limit. This new rule will reduce the number of cases in which a loss of rights occurs through failure to observe the time limit. But the fundamental question remains as to whether a decision is required to revoke a patent for failure to observe a time limit or whether a loss of rights occurs by operation of law.
2. The patent proprietor can prevent the loss of rights by applying for re-establishment of rights if the relevant requirements are met (Article 122 (1) and (2) EPC). If he disagrees with the Opposition Division, however, and maintains that he observed the time limits for the acts in question, he is entitled to have a decision by the department of first instance reviewed by an independent appeal authority. Such a review, carried out in accordance with the due processes of law, is provided for in Article 106 EPC. According to paragraph 1 of this Article, an appeal lies from decisions of the Opposition Divisions.
3. The party affected by a loss of rights may also apply for a decision in cases where the European Patent Convention provides for an automatic legal consequence by operation of law (Rule 69(2) EPC). The alternative considered by Board 3.3.1 does not call into question the party's right of appeal. Decision T 26/88 concerns itself rather with general issues relating to the opposition procedure, endeavouring to interpret the Convention so as to render the procedure effective and achieve legal certainty.
4. The following should be noted from the outset: The wording of Article 102(4) and (5) EPC indicates clearly that in the event of failure to comply with specific formal requirements it is the Opposition Division's duty to revoke the patent by a decision. If a loss of rights by operation of law had been the intention, the legislator could have expressed this with the standard terminology of the Convention using the words "deemed to be revoked". The first requirement is to establish whether the literal interpretation of the provision is confirmed by the meaning of the words in context, which will mean comparing the ways of terminating proceedings provided for at various stages under the EPC. Termination of grant procedure
5. At numerous points the EPC uses phrases denoting an act to describe the termination of the grant procedure. For example: Article 91(3), 1st half-sentence, EPC ("shall be refused"); Article 97(1) EPC ("shall refuse"); Article 97(2) EPC ("shall decide to grant"); Rule 51(5) EPC ("shall be refused"). In these cases the Examining Division delivers a decision.
6. However, cases occur in which the grant procedure is also terminated other than by a decision, for example when the applicant withdraws his application or where the EPC deems the application to be withdrawn. In the latter case, the loss of rights occurs on expiry of the time limit that has not been observed. At several points the EPC says that "the European patent application shall be deemed to be withdrawn". In such cases - as when the application is expressly withdrawn by the applicant - no decision is necessary, but the applicant must be informed of the loss of rights (Rule 69(1) EPC). He may then, within two months of notification of the communication, apply for a decision (Rule 69(2) EPC), which must meet the general formal requirements and, in particular, must be reasoned (Rule 68 EPC). This decision notes the loss of rights that has occurred and is subject to appeal (Article 106(1) EPC). The loss of rights which occurs automatically by operation of law is generally expressed as the deemed withdrawal of the application (cf. Article 86(3) EPC; Article 91(5) EPC; Article 94(3) EPC, Article 96(1) and (3) EPC; Article 97(3) and (5) EPC, Rule 51(8) EPC). The wording of the PCT, to which the EPC refers (Article 150(2) EPC), also indicates when a legal consequence occurs through a legal fiction (cf., for example, Article 24(1)(iii) PCT). Deemed withdrawal can also take place when an appeal has been filed by the applicant. If the applicant fails to file his observations in due time when invited to do so by the Board of Appeal, the European patent application is deemed to be withdrawn unless the decision under appeal was taken by the Legal Division (Article 110(3) EPC). Whether the grant procedure is to be terminated by a decision of the Receiving Section or the Examining Division or by a communication concerning a loss of rights which has occurred as a result of a legal fiction (Rule 69(1) EPC), is always clear from the wording of the provisions. Termination of opposition proceedings
7. Except in the special case of suspension of proceedings under Rule 60 EPC, opposition proceedings are closed - in any of the following three ways - in accordance with Article 102 EPC:
- revocation of the patent (paragraphs 1, 4 and 5) - rejection of the opposition (paragraph 2) - maintenance of the patent as amended (paragraph 3).
These ways of terminating proceedings are all described by phrases expressing an act ("shall revoke the patent", "shall reject the opposition", "shall decide to maintain the patent as amended"). As already shown with reference to the grant procedure, the EPC thus makes it clear that the competent department has to deliver a decision within the meaning of Article 106(1) EPC and that that decision must be reasoned (Rule 68(2) EPC). There is no apparent reason to believe that, contrary to the wording of Article 102 EPC, decisions are to be restricted to revocation of the European patent in accordance with paragraph 1. Nor does the historical documentation relating to the EPC give any indication that that might have been the intention when this provision was drafted.
8. The following considerations also support the view that the revocation of a patent in opposition proceedings must always take the form of a decision: The opposition procedure relates to a patent which has already been granted, and the loss of patent rights through failure by the patent proprietor to observe a time limit is alien to it. Apart from non-payment of the opposition fee (Article 99(1), 3rd sentence, EPC), there are no legal consequences that take the form of a legal fiction. The EPC does not make the time limits set by the Opposition Division for filing observations (Article 101(2) EPC) subject to an immediate loss of rights. The same applies to the time limit for making a statement (Article 102(3)(a), Rule 58(4) EPC) and to the time limit for performing procedural acts when the patent is maintained as amended (Article 102(3)(b), (4) and (5), Rule 58(5) EPC). While the patent grant procedure clearly provides scope for legal fictions, i.e. withdrawal of the patent application, a similar interpretation is out of the question in proceedings before the Opposition Divisions. Once a patent has been granted, the proprietor can no longer surrender it by informing the European Patent Office. At this stage in the proceedings, notices of surrender have to be addressed to the national authorities of the designated Contracting States (cf. T 73/84, OJ EPO 1985, 241, point 4 of the Reasons). The provision governing the refusal of a patent application under Article 97(1) EPC also sheds light on the matter by referring explicitly to the possibility that the EPC may provide for a legal consequence other than refusal of the application ("The Examining Division shall refuse a European patent application ... except where a different sanction is provided for by this Convention."). This concerns cases of deemed withdrawal where a communication is first sent under Rule 69(1) EPC. The corresponding provision relating to the revocation of a patent in opposition proceedings contains no reference at all to deemed revocation as a way of terminating the procedure. The provisions concerning entries in the Register also illustrate the differences between the grant and opposition procedures. Different ways of ending the proceedings are mentioned only in connection with grant (Rule 92(1)(n) EPC - refusal, withdrawal, deemed withdrawal). For opposition proceedings, on the other hand, only the entry of decisions is mentioned (Rule 92(1)(r) EPC).
9. The Community Patent Convention, in the version adopted in the Agreement relating to Community Patents dated 15 December 1989 but not yet in force, also contains provisions concerning the maintenance of a patent as amended in the context of the grant procedure (including translation of the Community patent), the opposition procedure and the revocation procedure. These provisions distinguish between cases in which the proceedings are to be terminated by a decision (opposition: Article 29(5), 2nd sentence, CPC; revocation: Article 58(4) CPC, Article 19(4) of the Protocol on Litigation) and cases where a loss of rights occurs by operation of law (grant procedure: Articles 29(5), 1st sentence, and 30(6) CPC). Procedures in which the patent is revoked (either opposition or revocation proceedings) are always terminated by a decision.
10. A comparison between pre-grant and post-grant procedures thus reveals significant differences. In all procedures following the grant of a European patent, standard procedure is to terminate proceedings by a decision. Objections to the use of decisions to terminate opposition proceedings
11. In decision T 26/88, Board of Appeal 3.3.1 compared the grant and opposition procedures, applying the legal fiction provided for in the final phase of the grant procedure following failure to observe the time limit for formal requirements (Article 97(3) and (5); Rule 51(8) EPC) to the Opposition Division's maintenance of a European patent as amended. Article 102(4) and (5) EPC (cf. points 3.4 and 3.5 of the Reasons) was to be interpreted similarly to Article 97(3) and (5) EPC, which provided for an automatic loss of rights in that the application was deemed to be withdrawn by operation of law. This meant replacing a decision to revoke by deemed revocation; the patent would not need to be revoked by the Opposition Division since it was already deemed to be revoked. Board 3.3.1 regarded this interpretation, which diverges from the wording of the provisions, as justified by the intolerable consequences arising from a decision to revoke the patent.
12. The main considerations are summarised in point 3.7 of the Reasons in decision T 26/88:
A decision to revoke
- is pointless and entails unnecessary appeals; - causes legal uncertainty and misunderstanding.
13. The Enlarged Board of Appeal cannot go along with the argument that a decision to revoke the patent is pointless if issued as a result of failure to comply with formal requirements. Appealable decisions are not reserved for questions of substantive patent law and are by no means pointless even in connection with non-observance of time limits for complying with formal requirements. Even in such cases the patent proprietor must be allowed the right of appeal, since the matter of observance of time limits for procedural acts can give rise to questions of fact as well as of law. For example, the time at which a fee was paid may be disputed on a merely factual level, but the effective date for payment may also be debated as a point of law. How the Rules relating to Fees are to be interpreted in this respect has already been the subject of numerous decisions by Boards of Appeal, which in some cases have found in favour of the appellant. In other respects, the EPC calls for decisions on formal requirements at all stages of proceedings. Even where the requirements for a European patent application under Article 91(1)(a) to (d) EPC are merely matters of form, Article 91(3) EPC explicitly provides for refusal of the application by the Receiving Section as a legal consequence. This provision also has a parallel in the revocation procedure of Article 102(4) and (5) EPC in that the direct result of non-observance of the time limit is an adverse decision. The party to the proceedings can gain nothing by allowing the time limit to pass but pre-empting the decision to refuse the application by correcting the deficiency. After all, the legal basis for the decision is the fact that a formal requirement has not been met within the prescribed time limit. The decision to revoke the patent owing to failure to comply with formal requirements within the time limit is therefore a consistent part of the procedural structure of the EPC.
14. Decision T 26/88 also sees a risk of legal uncertainty in the case of decisions to revoke under Article 102(4) and (5) if the patent proprietor avails himself of restitutio in integrum as a legal remedy (points 3.3 and 3.7 of the Reasons). The following should be noted: a decision on an application for re-establishment of rights in the event of failure to observe the time limits under Article 102(4) and (5) EPC is no more complicated than where other time limits are not observed. This legal remedy is available to the patent proprietor in opposition proceedings "if the non-observance in question has the direct consequence, by virtue of this Convention, of causing the revocation of the European patent" (Article 122(1) EPC). The patent proprietor may therefore file an application for re-establishment of rights following the removal of the cause of non-compliance with the time limit even if the decision to revoke has not yet been delivered. Depending on the circumstances of the case, he may even be obliged to do so in order to comply with the time limit under Article 122(2) EPC. The competent departments can then deliver the requisite decisions in such a way as to avoid fragmenting the proceedings. Depending on the particular circumstances, the decision to revoke may need to be combined with the decision on the application for re-establishment of rights. If the patent proprietor disputes that the time limit has not been observed, contests the revocation of his patent on those grounds and applies for re-establishment of rights only as an alternative, it may be appropriate for a decision to be delivered on these issues at the same time. Where the decision is contested the Board of Appeal may then decide on both issues in one procedure.
15. The following observations may be made on the comments by Board 3.3.1 concerning the legal position of third parties when revocation occurs automatically (point 3.8 of the Reasons in decision T 26/88): If the patent proprietor has failed to observe the time limits under Article 102(4) and (5) and Rule 58(5) EPC despite taking all due care, he can apply to be re-established in his rights. Article 122(6) EPC provides for a right of continued use to protect third parties acting in good faith. No argument in favour of an automatic loss of rights can be deduced from the provisions regarding continued use. Article 122(1) EPC refers to the occurrence of the loss of rights and, in so doing, indicates various ways of terminating the proceedings:
- refusal of the European patent application or of a request - deemed withdrawal of the application - revocation of the European patent - loss of any other right or means of redress.
There is nothing to indicate that, as a matter of principle, the loss of rights must occur as early as possible, or that, as a result of the patent proprietor's failure to observe a time limit in opposition proceedings, third parties should be able to derive rights (the right of continued use) at a time when the patent proprietor has not yet exhausted the means of redress available to him. Nor would that be to much purpose, since a third party could not yet sensibly assume that a loss of rights had indeed occurred; he cannot at that point tell for certain whether the party who has suffered the loss of rights will present facts and evidence on the basis of which the omitted act will be regarded as having been performed in due time and, where appropriate, the communication concerning the loss of rights cancelled. If the patent proprietor obtains a decision in his favour the use of the invention by the third party then constitutes an infringement of the patent. It cannot be the purpose of the rule to cause third parties to engage in such use as long as the loss of rights has not ceased to be contestable. The loss of rights noted in the communication under Rule 69(1) EPC ceases to be contestable only if a request for a decision (Rule 69(2) EPC) has not been filed within the prescribed time limit or if a decision under Rule 69(2) EPC has become final.
16. The "travaux préparatoires" relating to Rule 69 EPC show that the "Implementing Regulations" sub-committee discussed the consequences of deemed withdrawal at a very early stage. Many members of the working party took the view "that an act of such consequence must necessarily be the outcome of a decision of a juridical nature, so that the applicant's rights would be safeguarded and he would be enabled to file an appeal within a certain period of time. Such a decision was imperative, especially as the fact that the application was deemed to have been withdrawn would be published, thus enabling bona fide third parties to begin exploiting the now free invention." (Report by the "Implementing Regulations" sub-committee, September 1970, BR/51/70, p. 13). The sub-committee also pointed out that the loss of rights should not be entered in the Register of Patents until the time limit for filing a request for a decision had passed, or, if a request for a decision is filed and a decision delivered, until the applicant no longer has the right of appeal (Report by the sub-committee, November 1970, BR/68/70, p. 11). The applicant should therefore be granted legal protection in the event of deemed withdrawal, without third party rights of continued use arising. The fact that the time when the loss of rights ceases to be contestable has special importance for the protection of third parties' legitimate expectations also becomes clear from the transitional provisions which accompany amendments to the Implementing Regulations in appropriate cases. Examples are Article 2 of the Administrative Council decision of 8 December 1988 amending the Implementing Regulations to the EPC (OJ EPO 1989, 2) and Article 2, No. 3, of the Administrative Council decision of 7 December 1990 amending the Rules relating to Fees (OJ EPO 1991, 11, 15), where the more favourable provisions of the amended law are to be applied to all earlier cases in which the "establishment of loss of rights has not yet become final on the date of the entry into force of this decision".
17. Nor can the Enlarged Board agree with the argument that a decision to revoke is more likely to lead to misunderstanding than a communication under Rule 69(1) EPC. A direct decision to revoke is a clear, single-stage procedure and is reasoned. Deemed withdrawal, on the other hand, involves a communication which is not accompanied by reasons and a subsequent, reasoned decision delivered on special request. The communication is sent in advance to make it unnecessary, where non-observance of the time limit is not contested, to give reasons for the loss of rights as noted. At the same time, this two-stage procedure is more complex than an immediate decision. In any event, however, the party's right to a reasoned, appealable decision is safeguarded. In what cases a communication which does not have to be reasoned (Rule 69(1) EPC) needs to be issued initially is a matter for the legislator to decide. If the legislator has laid down different rulings for grant and opposition proceedings (the latter being an inter partes procedure), this does not constitute an inherent contradiction.
18. To summarise: given the unambiguous wording of the EPC's provisions, together with their general context, revocation of a European patent under Article 102(4) and (5) EPC always requires a decision.
Conclusion regarding the first point of law
19. The answer is as follows:
"The revocation of a patent under Article 102(4) and (5) EPC requires a decision."
Conclusion regarding the second point of law
20. In the submission to the Enlarged Board of Appeal the second point of law is not formulated as a primary question in the sense that the Boards of Appeal differ in their practice; it is raised only as an additional problem in case the revocation of a European patent under Article 102(4) and (5) EPC has to be noted initially through a communication under Rule 69(1) EPC. Since it has been established on the first point of law that the Opposition Division has to deliver a decision, there is no longer any need to give an opinion on the second point.