Tuesday, 27 May 2014

J 1/13 - Re-establishment of right



Appelant: " In view of such a huge company, a letter which is sent only to the address of the headquarters with no further indication (no service, no recipient's name) would certainly never reach the concerned person and would be lost",
"It did not amount to a lack of due care if letters not arriving from the representative were not forwarded to the competent person or were disregarded. This could be regarded as a way of sorting out potential junk mail that arrived in the Appellant's mail room."

EPO Board of Appeal: "'Quite why an official-appearing letter, even in the English language, should be regarded as junk mail was not explained".

For a Euro-PCT application, the European representative Cab did not pay the renewal for the 3rd year. The EPO sends a notice drawing attention to Rule 51(2) EPC, Article 2, No. 5 of the Rules relating to fees (EPO Form 2522)  to Appellant's representative. No renewal fee and additional fee (50% of the renewal fee) was paid. The EPO send  a notice of loss of rights pursuant to Rule 112(1) EPC (EPO Form 2524) informing that the application was deemed to be withdrawn under Article 86(1) EPC due to non-payment of the 3rd year renewal fee and the additional fee within the time limit.
Cab files a request for re-establishment in respect of the period for payment of the renewal fee pursuant to Article 122 EPC. A statement setting out the grounds on which the request was based and the facts on which the request relied was included. The fee for re-establishment was paid and the omitted act (payment of the third renewal fee plus additional fee) was completed on the same day. As a precautionary measure, oral proceedings were requested in the event that the EPO rejected the request for re-establishment.
As regards all due care and the cause of non-compliance, the following facts were submitted: had received a letter from Han (a foreign agent) requesting that a European patent application be filed for applicant Chem. The responsible person, despite a double-check, erroneously indicated in the database that the instructions for paying renewal fees had to be obtained from Chem and not from Han, who had sent the filing instruction.
A first and a second reminder of the time-limit for paying the third renewal fee was automatically generated by the database system and sent - due to the wrongful entry in the database - not to the professional client, Han, but to Chem. Two further reminders were sent always to the same address. Finally, Cab dismissed the file and closed it
The loss of rights communication was sent to the address of Chem too. When at a later moment, the EPO reimbursed the search and examination fees, Cab realized the error and requested re-establishment.
The Receiving Section decided to reject the request, since the 2 month period from the removal of the cause of non-compliance had expired; the removal being triggered by the loss of rights communication and not by the reimbursement.
In appeal, the Board went into the role of the applicant and ruled that the applicant, who had not reacted to any of the letters forwarded to it, had not taken due care.

Summary of Facts and Submissions
(...)
VIII. As regards the request for re-establishment of rights, on 30 August 2012 the Receiving Section, having sent two communications on 17 August 2011 and 25 April 2012, respectively, decided to reject this request as inadmissible, holding that with the receipt of the loss of rights notice by the docket service and the renewal department within the Appellant's representative's office the error ought to have been discovered, thus removing the cause of non-compliance. The request for oral proceedings was also rejected, with reference to the Board of Appeal decision J 17/03 in which the Board had noted that the Receiving Section had given the appellant - as in the present case - ample opportunity to present its case, during which several letters and communications had been exchanged.
IX. On 26 October 2012 the Appellant filed a notice of appeal. In the statement of the grounds of appeal of 21 December 2012 it claimed that the appealed decision lacked adequate reasoning and the Receiving Section had not respected the Appellant's right to be heard. The Appellant claimed that the decision gave no explanation why the Applicant's submissions were not considered as convincing by the Receiving Section.
X. The Board summoned the Appellant to oral proceedings to take place on 27 November 2013. On 1 October 2013 the Board sent a communication (transmitted via fax on the same day) pointing out, inter alia, that the cause of non-compliance was removed either when the representative or when the Appellant itself should have noticed the non-observance of the time limit. This might have been the case when the loss of rights notice was received but not submitted to the responsible patent attorney. As to the question whether the Appellant itself ought to have discovered the error the Board indicated that the questions to be considered in this context included:
- Whether an organisational fault did not exist if four reminders and - probably - a notice according to Rule 51 EPC regarding a specific patent application had not been forwarded by the receiving department of the Appellant to the competent unit within the Appellant's organization;
- Whether the Appellant's internal organization should at least have ensured that a letter stating the loss of rights in respect of a specific patent application was forwarded to a competent person;
- Whether letters should at least have been sent back to the EPO if a competent person within the organisation
XIII. During oral proceedings that took place on 27 November 2013 the Appellant's representatives explained that ….
XIV. As to the Appellant itself, it was to be noted that it never dealt directly with the EPO but always employed local firms who worked together with foreign firms to handle their patent applications. Thus, it was fair to expect mail regarding patents to arrive only through those channels which, in the case at hand, was the appointed representative Han. It was not known to the Appellant's representatives what exactly had happened to the letters sent to the Appellant. But it did not amount to a lack of due care if letters not arriving via the correct channel (i.e., via Han) were disregarded. This could be seen as a way of dealing with junk mail that arrived in the Appellant's mail room. In the decision J 22/92 the Board had decided "in dubio pro reo" that incoming letters had been taken for copies of letters already received by the appointed representative. Therefore, with regard to the Appellant itself, the cause of non-compliance had never been removed at any relevant time.
Reasons for the Decision
4. The cause of non-compliance with this time limit was twofold. The first cause was the fact that the Appellant's representatives in Europe, Cab, were of the opinion, when not paying the renewal fee and the additional fee, that they were executing their client's wish to let the patent application lapse. The second cause was the fact that the Appellant thought its wish to pursue the patent application was being carried out by its Korean and European authorised representatives, Han and Cab, respectively.
5. These errors were caused by the mistake which had happened at the beginning of the procedure, when the relevant data were entered into Cab's data base: at that time Mrs S erroneously entered the information that instructions for payment of the renewal fees had to be obtained from the Appellant (Chem) instead of the professional client (Han). This resulted in sending the renewal fee reminders to the Appellant, which reminders remained unanswered and thus lead to the erroneous assumption by Cab that the fee was intended not to have been paid.
6. The cause of non-compliance with a time limit is not just removed when the underlying error is actually discovered by the person concerned but when he or she ought to have noticed the error, taking all due care (J 27/88, point 2.7 of the Reasons). This line of argument has been followed in many cases, e.g. J 5/94, J 27/01 and T 1486/11.
7. So far as concerns Cab's knowledge, is it well recognised that within a law or patent attorney's firm the relevant person to discover the error is the representative and not his or her employee:
"It must be his responsibility to decide whether an application for re-establishment of rights should be made and, if it is to be made, to determine the grounds and supporting facts to be presented to the European Patent Office"
See T 191/82 of 16 April 1985 (OJ EPO 1985, 189), point 1 of the Reasons. See also J 7/82 (OJ EPO 1982, 391), J 9/86 and T 381/93. On the other hand it is not up to the representative to extend the time period of Rule 136(1) EPC at will by keeping him- or herself intentionally uninformed, as set out in T 1985/11, point 6 of the Reasons, where the board found it irrelevant that the representative had not read the letter when acknowledging its receipt.
8. It needs to be considered, therefore, whether all due care required that Mrs S, the representative in charge of the application, should have taken steps such that she was informed of an incoming loss of rights notice, especially in cases where her firm's employees had inferred the client's wish to let the application lapse only from the fact that all reminders concerning the due time of the fee had remained unanswered. As to this, the Appellant argued that even if Cab's systems had been set up in this way it is not the case that Mrs S would have discovered the error. ….
9. The fact that the decision whether or not to pursue a patent application is up to the applicant and not to the representative - who is dependent on instructions received from the client - has to be taken into account. Assuming that even professional clients such as Han not infrequently choose the way of not giving any express instructions when they intend to let an application lapse, the Board can accept that the - here foreseeable - receipt of a loss of rights notice only gave reason to check the database system for inconsistencies (such as forgotten reminders or returned mail) but was not to be seen as the same red alert as the - non expected - receipt of such a notice under other circumstances.
10. It cannot therefore be assumed that the error would have been discovered if the notice of loss of rights had been forwarded to Mrs S.
11. The loss of rights notice received by the representative's office is therefore considered by the Board not to have constituted the removal of the cause of non-compliance so far as concerns the representative.
12. Although most cases regarding the removal of the cause of non-compliance deal with the point in time when a representative discovered (or ought to have discovered) the error, it is recognised that the person whose knowledge is relevant may also be the applicant itself (see e.g. J 27/88, point 2.3 of the Reasons, J 27/90 (OJ EPO, 1993, 422), point 2.4 of the Reasons; T 840/94, OJ EPO 1996, 680, point 2 of the Reasons; and T 32/04, point 2 of the Reasons).
13. Therefore, it has to be decided whether, and if so when, the cause of non-compliance was removed as regards the Appellant itself, taking all due care. On the one hand, an applicant employing a professional representative to pursue a patent application may rely upon his agent to act diligently and according to its will (J 22/92, T 381/93). On the other hand, even if a representative has acted correctly this does not exempt his client from suffering the consequences of his own mistakes. See J 3/93, point 2.1 of the Reasons, where the board noted that accepting the opposite would mean conceding more rights to a represented applicant than to an applicant acting on its own.
15. The Board accepts that an applicant may quite properly rely primarily on an outside patent firm to see that its interests are being looked after. Circumstances may also show that an applicant who receives a notice from the EPO may bona fide and reasonably believe that it has also been sent to its representative, who is dealing with it. The Board also does not doubt that the Appellant had carefully selected and appointed Han and Cab as its representatives.
16. However these considerations do not address the critical points so far as concerns the Appellant in the present case, namely what happened to the loss of rights notice dated 7 October 2009 which was forwarded to the Appellant by Cab, and/or why the Appellant did not react to it. No doubt there could be many plausible accounts for the Appellant's apparent inaction but if a party wishes to establish that it did not notice, or for some reason did not react to an omission notified to it by a loss of rights notice despite taking all due care it must produce some evidence dealing with the issue and not merely rely on assertions.
17. The Board notes that it was originally said on behalf of the Appellant (see request for re-establishment dated 2 April 2010, pages 4 and 5):
" In view of such a huge company, a letter which is sent only to the address of the headquarters with no further indication (no service, no recipient's name) would certainly never reach the concerned person and would be lost",
This argument was not pursued in such bald terms by the Appellant before the Board (the representative said that she did not know what exactly had happened to the letters forwarded by Cab). The reality is that the Appellant is a large organisation with worldwide activities. Presumably it has some system whereby incoming post at its head office is sorted and directed to the relevant departments, even when such mail is in the English language. No evidence was provided as to what this system was and therefore what might have happened to the loss of rights notice (and indeed the previous renewal-fee reminders which Cab had forwarded). This was despite the fact that the Board in its communication had raised very specific questions about the Appellant's systems. Rather, the answer of the Appellant to this communication was not to provide evidence of what did or might have happened to the loss of rights notice or what was decided to be done about it but largely to rely on general observations and assertions (see Point 14, above).
18. Reliance was also placed on the decision in J 22/92. There, however, the Board appears to have accepted as a fact that the applicant had assumed that documents it received were copies of those already sent to its attorneys and that the applicant was entitled to think in all good faith that the attorneys had already dealt with the problem (see point 3.3.2 of the Reasons). If there had been evidence in the present case that someone within the Appellant's organisation, having considered the loss of rights notice, had for good reason made a similar assumption, then the Board might well have been prepared to accept this. In the absence of such evidence, however, what the consequences of such an assumption might have been do not need to be considered.

20. In the submissions at the oral proceedings before the Board it was asserted in effect that the Appellant had perfectly reasonably chosen to receive mail only via specific channels, i.e. in patent cases via the appointed main representative in Korea (Han). While it was not known to the Appellant's representatives what exactly had happened to the letters forwarded by Cab, it did not amount to a lack of due care if letters not arriving from Han were not forwarded to the competent person or were disregarded. This could be regarded as a way of sorting out potential junk mail that arrived in the Appellant's mail room. Quite why an official-appearing letter, even in the English language, should be regarded as junk mail was not explained. In any event, however, before a decision to disregard a formal letter of this kind can be taken, it has to land on the desk of a relevant and responsible person who can then take such a decision. It cannot amount to the taking of due care if someone in the post room takes it upon themselves to do so. Again, however, no evidence was provided about how the loss of rights notice was or might plausibly have been disregarded in this way.
21. In the absence of any such evidence the Board concludes that the loss of rights notice should have landed on the desk of someone within the Appellant's organisation (presumably someone within the Patent Management Team) and alerted them to the omission to pay the renewal fee, which in turn should have caused that person at least to contact Han and thus Cab. In this way the omission to pay the renewal fee should have come to light. Therefore the Board can only conclude that the cause of non-compliance in the person of the Appellant was removed in the days or weeks after its European representative, Cab, had forwarded the loss of rights notice to the Appellant on 12 October 2009. It does not have to be decided on what precise day the error ought to have been noticed, since the request for re-establishment was not filed until 2 April 2010. There is no evidence suggesting that in a properly run organisation such as the Appellant it would have taken at least until after 2 February 2010 (ie two months before the request was filed) for the error to have been revealed.
22. Thus, the cause of non-compliance was removed more than two months before the request of 2 April 2010 was filed. In consequence, not having met the time period of Rule 136(1) EPC, the request is inadmissible and the Receiving Section's decision to reject it was correct.

This decision has European Case Law Identifier: ECLI:EP:BA:2013:J000113.20131127.
The whole decision can be found here. The file wrapper can be found here

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