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….