Will there be claims against the EPO?

A few days ago, the EPO Boards of Appeal issued the written reasons for decision T 1063/18 of 5 December 2018 by Board of Appeal 3304. This confirms what we already knew from the statement issued by the EPO on 7 December 2018 – that Rule 28(2) EPC is invalid.

Further, since it conflicts with Article 53(b) EPC as interpreted by decisions G 2/12 and G 2/13 of the Enlarged Board of Appeal – decisions made before the rule was even thought of – it must always have been invalid. Thus, every decision of the EPO which depends on Rule 28(2) is also invalid. And, as I observed before the rule was “made” (one cannot of course make an invalid law, but you will understand what I mean), all the pending cases which were stayed even before it was made were wrongly stayed. Actually, not only were the stays in those cases legally invalid because there was no legal authority to stay them, but also the reason they were stayed – the subsequent introduction of Rule 28(2) – has also been shown to be invalid. If, which I suppose is also impossible, one could have degrees of invalidity, then the rule itself is invalid, decisions made on the rule are also invalid, and the stays imposed before the rule was made are now doubly invalid.

The question which now arises is, what will the EPO do about all those cases? I rather suspect that, unless the parties affected make themselves heard, the EPO will be more concerned to try and reinstate the rule in some other form – though the only alternative is an amendment to Article 53(b) itself which would be difficult, since it would require a diplomatic conference. It might also be contrary to EU law as explained by Mike Snodin (thus moving from one form of invalidity to another). But even if valid and unless legislated with retroactive effect (which would not be a wise step in all the circumstances), even that would not change the status of the cases already tainted by invalidity.

Of course, parties to cases which are still pending can and should write to the examining division requesting that objections based on the invalid rule are withdrawn. But both they and applicants who have suffered stays and refusals to grant in cases now closed have an even greater cause to feel aggrieved, not least because the likely invalidity was (or should have been) fully clear to the EPO both when it decided to stay cases and when it made the invalid rule. While Mike Snodin’s article already mentioned suggests they may have a claim against their own governments, it seems they also have a claim against the EPO under Article 9(2) EPC which provides

“The non-contractual liability of the [European Patent] Organisation in respect of any damage caused by it or by the employees of the EPO in the performance of their duties shall be governed by the law of the Federal Republic of Germany”.

Depending on the provisions of German law, both the Organisation and some of its employees could be liable – the Organisation since it was its Administrative Council which made the invalid rule and its employees which presented it to the Council. Which employees? Well, that would require some consideration but wouldn’t one normally start at the top and work down? In any event, affected parties should perhaps be consulting their German lawyers.


A stay too far?

The EPO’s announcement of 12 December 2016 that it has stayed all examination and opposition proceedings in which the inventive subject-matter is a plant or animal obtained by an essentially biological process has already generated considerable comment. The best summary I have read is that of 20 December in the IPKat by Andy Sharples of EIP. While Andy’s final paragraph hints at the issue of the legality of the general stay, the later commentary of 4 January by Michael Roberts of Reddie & Grose lists four reasons why the stay is, as Michael delicately puts it, premature and inappropriate.

The third of those reasons – that “there is arguably no legal basis in the EPC for implementing a stay in proceedings under these circumstances” – echoed thoughts I have entertained since the announcement was made. I know of no legal basis in the law of the EPC for a general stay of a whole class of proceedings and nor does anyone I have asked. It seems not just arguable but beyond argument that there is no legal basis for a stay because the executive body (the European Commission) of a wholly separate institution (the EU) issues a self-avowedly non-binding interpretation of a law (the EU Biotech Directive) which is not part of the EPC.

Of course if a provision of the EPC, including one of the few which were “borrowed” from the Biotech Directive, was the subject of a pending referral to the Enlarged Board of Appeal, a stay of possibly affected cases would be understandable though not obligatory; and a general stay – as opposed to a stay of one case sought by an individual party – is not standard although it happened in respect of the “clarity” referral G 3/14 (see here). However, in the case of the EPC provision in question (Article 53(b) which was not “borrowed” from the Biotech Directive), the Enlarged Board has already given its opinion (in G 2/12 and G 2/13) and that opinion is in effect binding on the EPO because, like all Enlarged Board opinions, it was sought to ensure uniform application of the law or to settle a point of law of fundamental importance. And such an opinion remains binding unless or until either the Enlarged Board on a further referral issues a contrary opinion (not unknown – see G 9/93) or the EPC is amended – neither of which has happened. Thus, there is no pending resolution of an undecided issue in the law administered by the EPO which could warrant a stay even of individual cases.

So what is the legal basis for the general stay? If the EPO – which employs a number of very good lawyers – knows of one, it is surprising that the announcement did not refer to it. Unless or until a convincing legal basis is made clear, the regrettable conclusion is that the stay seems to be unlawful. And, if driven to that conclusion, a number of equally regrettable and avoidable consequences appear to follow.

First, there is an institutional question – is the EPO entitled by mere announcement to suspend proceedings if there is no legal foundation for doing so? If so, the EPO could choose which provisions of the EPC it will at any time operate and which it will not. That way lies chaos.

Second, as already observed, the Enlarged Board of Appeal has provided an interpretation of the law in question. If the EPO can by mere announcement suspend the effect of a decision of its highest judicial body, then the independence of that body is threatened. On 1 July 2016, the EPO announced measures it had put forward, and the Administrative Council had adopted, which were said to increase the independence of the Boards of Appeal. So it is curious indeed that, less than six months later, another announcement has the opposite effect. This will present the new President of the Boards of Appeal (whose own appointment was announced on 16 December – four days after the general stay – and who will also be chairman of the Enlarged Board) and the new Boards of Appeal Committee of the Administrative Council with an early and fundamental challenge to their effectiveness.

Third, if the stay is unlawful, what should parties who are affected do? They could have two remedies. The first is to appeal against the imposition of the stay in their particular cases. Unless the EPO has by then produced the convincing legal basis which has so far eluded the rest of us, a Board of Appeal should allow the appeal and remit the case to the division in question with an order to decide it.

Now, I can already hear a few despairing voices saying, if the EPO can ignore the absence of any legal authority and even the Enlarged Board, why should it obey a mere Board of Appeal? To which I can only answer first, the more the issue is brought to appeal, the more apparent the absence of a legal basis will become; and second, each Board of Appeal has the power (in Article 18 RPBA) to “invite [the President of the EPO] to comment in writing or orally on questions of general interest which arise in the course of proceedings pending before [the board]” which would appear to cover the small matter of the presence or absence of any legal provision at all.

However, even if successful and complied with, an appeal will not compensate for the additional delay which the general stay will impose. One would not normally seek compensation for a stay but, if imposed without legal basis, then why not? After all, parties pay fees to the EPO (both one-off fees and, more importantly in the case of unwarranted delay, annual fees) for a service and if that service is even in part denied or suspended, then there is a case for repayment of fees and/or damages caused by the failure to provide the service.

Of course, if even now the EPO can show us the legal authority for the general stay of these plant and animal cases, then we can all breathe a sigh of relief….

Patent Eligibility Down Under

I have just returned from a longish trip to Australia where I had the honour of being invited to speak at two co-ordinated roundtable discussions, the first at the Melbourne offices of the lawyers Minter Ellison and the second in the Sydney offices of the patent attorneys F B Rice. The agenda, largely the same on both occasions, began with an invitation to me to predict where, on the question of patentability, the EPO is likely to go in the next five years.

Since these were private events, and moreover conducted under the Chatham House rules, I cannot reveal what I or anyone else said. But in preparing for the discussions my attention was firmly engaged by some recent Australian jurisprudence since the “whither EPO on patentability” was prompted by both the US Supreme Court and the Australian High Court Myriad decisions. Well, I knew the US case and had heard American friends express various degrees of displeasure about that and Alice Corp and their consequences but, while I knew of the Australian Myriad decision, I had not read it till now. Doing so on a flight from Cairns to Melbourne was, to say the least, an interesting experience.

First, the process by which the Australian High Court arrived at its decision was curious. In Australia as in the USA, the question was whether Myriad could be allowed a claim to an isolated nucleic acid. The US Supreme Court held that was not patentable subject-matter because, as is well-known, US patent law contains an implicit exception to patent eligibility for laws of nature, natural phenomena, and abstract ideas. Australian law has no such provision but, as did English law in the past, provides that a claimed invention is patentable if it is a “manner of manufacture” within section 6 of the Statute of Monopolies 1624. Prior to Myriad, the test for deciding that had been established in NRDC v. Commissioner for Patents as whether that the subject matter of the claims was directed to an artificial state of affairs and in a field of economic endeavour.

So you might think that the question here was whether the act of isolating a nucleic acid was, or produced, an artificial state of affairs – but not so. The seven members of the High Court, disagreeing with the first instance judge and all five first appeal judges of the Full Federal Court, held that NRDC was not the last word and that several policy-related considerations should also be assessed which, in this case, pointed against patentability. I find two of these considerations surprising, if not troubling.

The first was that such decisions are best left to legislators which, in the Australian context is pretty extraordinary because the Australian parliament had as recently as 2013 considered and rejected the possibility of legislating to exclude gene patenting. And moreover this begins to approach the “leave it to politicians” approach which, as I’ve suggested before, is worse than the courts making the difficult decisions.

The second surprising policy consideration was that allowing Myriad-type claims would have a “chilling effect” on innovative research beyond the scope of the patent. That suggestion is surely extraordinary. In Europe we have seen that it is perfectly possible to use the requirement of industrial applicability to prevent one party monopolising a field of research because a research programme is not per se industrial exploitation. Could our Australian friends not use the NRDC requirement that a “manner of manufacture” (which seems to require a product or process) be in “a field of economic endeavour” (which suggests industrial applicability) to achieve the same result?

Curious Procedure Becomes More Interesting

Whatever one’s views on why so many petitions for review are unsuccessful (some of mine are here), the high failure rate is undeniable. So when only the fifth successful petition emerged in R 16/13, it offered a small ray of hope for the future of this curious “after the appeal but not another appeal” procedure.

The case is in German and I shall not attempt to translate it here. A good summary in English can be found in the article at page 100 of the latest edition of “epi Information”. It is enough for present purposes to say that the Enlarged Board found that, as has so often been alleged but not previously found, the Board of Appeal had not disclosed its view on a key item of evidence before giving its decision. It should have told the petitioner its view and allowed a chance to address it. As the author of that article, Dr. Eva Ehlich, observes

“For a petition…. to be allowable, the decisive criterion is the amount of information – or to use the wording of Art. 113 EPC: the level of detail of the grounds or evidence on which the decision is based – to which a party has a procedural entitlement before the decision is reached, and thus affects the definition of and the specific form given to the term “grounds” in Article 113(1) EPC.”

A frequent problem is that, while the petitioner might know that he does not have sufficient information, he does not actually know the missing information, at least in sufficient detail. Dr. Ehlich suggests that this might be resolved by reversing the burden of proof so that a petition should be allowed unless it can be established beyond doubt that the petitioner had positive knowledge of the grounds in question. That is an interesting proposal which could, in principle, be adopted by the Enlarged Board in its case-law and does not need any form of legislation.

While the Enlarged Board has not gone that far yet, it has addressed one question of evidence in petition cases and produced a principle which favours petitioners. In R 2/14, a decision declining to replace its chairman after an objection of possible bias, the Enlarged Board made clear that requests for information should be made of the “competent bodies” in the preparation of partiality objections and it is clear that the Enlarged Board expects that those requests should be answered with the supply of information. However, as the IPKat Blog has deduced, it is alleged in the pending petition R 2/15 that this principle had not been followed in the decision under review.

Petitions for review have just become much more interesting….

Orwell on Competition

There’s nothing like getting back to basics. Having been asked to kick off a “Pharmaceutical Law Academy” summer school held at my old university, the organisers kindly allowed me to stay on and listen to talks on clinical trials, marketing authorisations, pharmaceutical trademarks, pharmaceutical advertising and pharmacovigilance. All of which was very interesting but the show-stealer was the last item on competition law and the pharma industry.

I’ve long been aware that the competition watchdogs in Brussels have had some curious obsession with what they regard as the unhealthy state of “big pharma” but I had not heard the lurid details from, as it were, the victims’ point of view. The presentations by Peter Rowland of Herbert Smith Freehills and Fleur Herrenschmidt of Novartis International AG were eye-opening and gave a slightly different picture to that of the EC Competition website.

Apparently the clever pharma-watchers in the European Commission do not see the ownership of a patent for a medicine as a right to be respected but as a target which, if attacked, qualifies the attacker as a would-be entrant to the market whose entry is being deliberately blocked by the patent – a slightly unconventional view of IP rights which could have been written by George Orwell.

It seems that behind this double-think (or is it half-think?) view of IP rights and wrongs lies the belief that the pharma landscape is divided neatly between research-based patent-owning monoliths who are the devils resolved to keep the price of drugs up and crusading generics companies who are the angels struggling to knock out patents and lower prices for the good of Europe’s sick and injured. As if we didn’t all know that these days the generics companies have some very substantial patent portfolios of their own and that many research-based pharma groups have their own generics subsidiaries. Where do the clever chaps in Brussels acquire their tinted spectacles?

Patents and Politics

I spoke at a recent conference in Cambridge entitled “Patents on Life: Through the Lenses of Law, Religious Faith and Social Justice”. As the title suggests, the focus was on biotech, transgenic animals, stem cells, seeds and the patent provision most often mentioned was the morality and ordre public exception. Interestingly, the majority of those present were not patent attorneys and IP lawyers but bishops, theologians, ethicists, and academics and not just European but American. My talk was about decisions of the EPO Boards of Appeal in this area including, as you would expect, the Oncomouse, WARF and Broccoli/Tomatoes decisions.

One of the other speakers suggested the new CRISPR technology should be considered immoral but judged by politicians and not the normal patent procedures, presumably to reflect a more direct view of the popular will. Another speaker, after asking why CRISPR had not been “banned” already, observed that patent examiners and judges are reluctant to make decisions on moral questions. She also suggested politicians should decide “morality” patent cases.

Quite why they thought politicians would be better at making decisions on tricky patent issues was not explained. As a mere observer of the political process, I’ve never been overwhelmed by the moral standards of politicians but maybe I’ve missed something. Nor did those speakers, or anyone else, suggest how the politicians would go about their extra duties as guardians of patent morality. Would they as legislators pass a new statute every time a controversial patent application is filed? Or would they set up some additional parliamentary committee, or maybe a new Quango, to deal with such cases? Maybe the legislators should turn themselves into a supreme court for the day to exercise the powers of a morality tribunal (I seem to recall that happened in South Africa under the apartheid regime which, as morality matters go, might not be a happy precedent).

And what about the procedure? Would the politicos simply “ban” the tricky cases or might it be possible actually to extract a patent from them? Who would decide in the first place which cases raise morality issues to be sent over for parliamentary scrutiny? Would everyone who has a say now be entitled to be heard? And if a case had not just a moral angle but also one of those tiresome everyday questions like novelty or inventive step, would the poor old patent offices be allowed to deal with that? And if so, who would go first, the morally-bereft patent examiner or the morally-astute politician?

We can of course be sure of one thing – it wouldn’t take any longer (or cost any more) than the present system….

Better Safe than Sorry…

By a happy coincidence, the EPO Opposition Practice group on LinkedIn has recently blogged on a similar theme to my last post about numbers of requests. A very active member of that group, Mikko Piironen of Papula-Nevinpat  made the wise observation that similar problems appear “the other way round” in that in opposition proceedings opponents submit multiple citations against patents, some of them self-contradictory. He speculated that this may be done to draw the proceedings out. I think he may well be right but I also reckon the tactic may simply reflect a lack of sound judgment, or maybe just plain nervousness, as well as a failing in EPO procedure.

Logically, if document 1 is far and away the closest prior art, what purpose will be served by offering an alternative inventive step attack based on document 2? And if the best argument requires a combination of document 1 with document 3, why will a combination of documents 2 and 3 assist? Because, I suggest, the mind which has noticed the possibility of the alternative arguments does not have the confidence to rely on the best argument, or cannot avoid the nagging anxiety that the argument he or she knows to be best may not be seen that way by the opposition division or board of appeal, so the second-best is added in, and then the third-best and so on…

All very understandable. But how often do those who prepare such cases think how they come across when first read by the division or board? What would you prefer to read – 20 pages with four arguments of varying quality, the best usually first and the rest successively poor, or 5 pages with one well-presented and convincing argument?

Of course, it can be said that, as with multiple requests, the system encourages multiple attacks by discouraging late submissions and that this promotes the “better safe than sorry” approach. But English procedure is even tighter on late-filed submissions and yet multiple arguments are relatively rare compared with EPO proceedings. The difference, I suggest sotto voce, is that in EPO proceedings costs are only very rarely awarded for duplication, time-wasting and the like.

Safety in Numbers?

During a recent discussion with a friendly group of patent attorneys in Cambridge we broached the familiar question of the best time to file auxiliary requests. I expressed my almost standard view, namely as soon as possible, and ideally as many as possible during first instance proceedings to avoid, or minimise, admissibility issues on appeal. This provoked some more familiar questions – as many as possible and as soon as possible even if you don’t actually want some of them? Won’t that tell an opponent that you are prepared to accept less than you want? Well, my answer, which is not always popular, was – better to have a fall-back position, even one you would prefer to avoid, than no fall-back position.

And then the next question was, suppose you have a really large number of requests, should you still file them all? Or keep some back? Still better safe than sorry, was my answer. But it set me thinking about numbers of auxiliary requests. For many years, the largest number I could recall was 50 plus in T 446/00, a decision which warned against both late filing of requests and filing too many on appeal. Then there was T 221/06 in which, although the number of auxiliary requests actually filed was only 15, they were put forward as open to such wholesale re-shuffling of the various claims that, according to the board of appeal’s calculation, the total number of potential requests came to 384. The board rejected that as the “pick and mix approach”. Undeterred, the patentee petitioned for review of that decision but fared no better before the Enlarged Board (see R 11/08).

But now we have T 280/11 which must not only beat all previous records but set an almost impossible challenge for those hoping to do better (or worse?). In that case, the optimistic patentee filed a total of 685 auxiliary requests, of which only a paltry 227 were filed much in advance of the oral proceedings, 454 were added a few days before, and another 4 on the day. Mind you, the patentee was refused a request to file his 686th request during the afternoon of the hearing. As I say, best to plan the fall-back position….

EPO Petitions – Appeals in Disguise?

Recently, when I gave a talk on EPO case law, a patent attorney of some considerable experience asked me whether or not petitions for review have been a success. She observed, as have others, that on the one hand the first successful petition (R7/09) was a prime example of the sort of case petitions were designed to meet – something goes wrong and a party is denied its say as a result. In that case, the patentee who was respondent never received the grounds of appeal, the board of appeal didn’t know he hadn’t so the case went forward without him.

On the other hand, is the reason so many petitions fail that, although they should be confined to procedural errors, unsuccessful parties are dressing up “ordinary” results as procedural errors just to try and restart their cases?

I’m sure that does happen a lot but I’m often surprised not only how bad the disguise is but also how often petitions are filed which almost repeat earlier unsuccessful petitions.

The case law is not voluminous, since there have only been just over a hundred petitions so far. Yet it seems that many of those who draft and file petitions do not take the time to read it. What is your experience of this?