Tuesday, 2 December 2014

G 1/13 - Opposition appeal by non-existing company

This enlarged board decision concerns the validity of an appeal filed by a company that at the time of the appeal did not legally exist, but which was later restored. The decision contains the following summary of the essential facts of the case leading to the referral:

(a) On 2 November 2004, notice of opposition against European patent No. 1058580 was filed by Formalities Bureau Ltd ("FBL"), a company incorporated under the laws of the United Kingdom.

(b) On 27 September 2005, and while the opposition proceedings were still pending, FBL was struck off the UK register of companies and on 4 October 2005 it was "dissolved" by publication of an official notice in the London Gazette. As a matter of UK law it thereby ceased to exist. The grounds for this administrative act were that FBL had not filed the requisite statements with the Registrar of Companies, thus giving the Registrar reason to believe that FBL was no longer in business or in operation.

(c) Opposition proceedings in the name of FBL nevertheless continued to be conducted by its previously authorized professional representative, Mr Peter Bawden, as if FBL continued to exist. On 29 October 2008, the Opposition Division issued an interlocutory decision whereby, account being taken of the amended claims filed by the proprietor, the patent and the invention to which it related were found to meet the requirements of the EPC.

(d) On 29 December 2008 notice of appeal was filed in the name of FBL, again acting by Mr Peter Bawden.

(e) Shortly before oral proceedings in the appeal, scheduled for 6 September 2012, the proprietor and respondent (hereafter "the proprietor") discovered that FBL had ceased to exist. At the oral proceedings, the proprietor requested inter alia that the appeal be declared inadmissible; FBL requested inter alia that the proceedings be suspended. In the event the Board of Appeal ordered the proceedings to be continued in writing to enable the FBL to file submissions relating to the admissibility of its appeal.

(f) On 26 September 2012, an application was filed with the UK High Court to restore FBL to the UK register of companies. The stated purpose of this was to enable FBL to continue the opposition appeal proceedings before the Board of Appeal. On 5 December 2012 an order was made by the UK High Court restoring the name of FBL to the register of companies. The effective date of the restoration of FBL to the register was 8 December 2012, the date when the UK court order was delivered to the UK Registrar of Companies. As a matter of UK law, FBL was thereby deemed to have continued in existence as if it had not been dissolved or struck off the register, i.e., as if it had never ceased to exist.

(g) On 13 December 2012 the proprietor inter alia filed a request for the "revocation" of the Opposition Division's interlocutory decision on the ground that the opposition proceedings had lapsed when FBL ceased to exist. Alternatively, as an auxiliary request, the proprietor requested that the appeal filed in the name of FBL be declared inadmissible.

The Enlarged board provided the following  headnote:
The questions referred to the Enlarged Board of Appeal are answered as follows:

1. Where an opposition is filed by a company which subsequently, under the relevant national law governing the company, for all purposes ceases to exist, but that company is subsequently restored to existence under a provision of that governing national law, by virtue of which the company is deemed to have continued in existence as if it had not ceased to exist, all these events taking place before a decision of the Opposition Division maintaining the opposed patent in amended form becomes final, the European Patent Office must recognize the retroactive effect of that provision of national law and allow the opposition proceedings to be continued by the restored company.

2. Where, in the factual circumstances underlying Question 1, a valid appeal is filed in due time in the name of the non-existent opponent company against the decision maintaining the European patent in amended form, and the restoration of the company to existence, with retroactive effect as described in Question 1, takes place after the expiry of the time limit for filing the notice of appeal under Article 108 EPC, the Board of Appeal must treat the appeal as admissible.

3. Not applicable.
Reasons for the decision

5. As already indicated, answers to the referred questions cannot be found directly and unambiguously by reference to the provisions of the EPC. The Enlarged Board considers that they must therefore be found by looking at the interrelation of national law and the EPC. As to this, the following factors appear to be relevant:

5.1 Legal entities such as companies exist only by virtue of the national legal system which governs their incorporation, subsequent existence and cessation (the term "national legal system" as used herein and in the following is meant to embrace also regional law in cases involving legal entities such as the Societas Europaea). So far as the EPC is concerned, the existence or non-existence of a legal entity is exclusively a matter for such national law. See, for example, T 15/01 (OJ EPO 2006, 153), point 9 of the Reasons. The legal personality of an entity acting in proceedings under the EPC is to be decided on the same basis as before national courts, namely the capacity to sue or to be sued in its own name and on its own account: see G 3/99, op. cit., point 9 of the Reasons.

5.2 It is a generally recognized principle of national law and also under the EPC that legal entities which do not exist cannot bring or take part in proceedings. See for example T 353/95 of 25 July 2000, point 2 of the Reasons.

5.3 Unlike the position of an applicant or proprietor of a European patent, the status of an opponent is a purely procedural status and the basis on which it is obtained is a matter of procedural law governed by the EPC: G 3/97 (OJ EPO 1999, 245) point 2.1 of the Reasons. While the status of a legal person as such has to be determined by the applicable national law, the right to bring opposition proceedings, to take part in such proceedings before the Opposition Division, to file a notice of appeal and to take part in appeal proceedings and have a legally binding decision issued on its requests are thus all matters subject to and to be determined autonomously by the procedural law of the EPC. See T 15/01, op. cit., point 9 of the Reasons.

5.4 The issues raised by the referred questions should be resolved by also taking into account general principles such as equal treatment, legal certainty and procedural efficiency and by considering the interests of the parties involved and of the general public. See T 1091/02 (OJ EPO 2005, 14), point 2.4.1 of the Reasons.

6. The Enlarged Board considers that the starting point should be the clearly established principle under the EPC that national law should be referred to in order to determine whether a legal entity exists or has ceased to exist, and has capacity to act (see point 5.1, above). As a first step, therefore, the EPO should clearly follow UK law in the present case at least to the extent that the EPO should recognise that FBL existed and had capacity to act before it ceased to exist and that the same applies after it was restored to existence.

7. As to the next step, the Enlarged Board provisionally considers that the EPO should also follow national law as regards the deemed retrospective existence of such a legal entity. This is merely to apply the general principle that such issues are the exclusive concern of national law.

8. There are of course limits on the extent to which the EPO should follow national law. For example, a provision of national law which purported to confer on a company procedural rights which were contrary to the EPC could not be acknowledged by the EPO. Such matters are the exclusive concern of the EPO and cannot be usurped by national law. An example of the interface between national law and the EPC relates to the transfer of oppositions. While the validity of the contract purporting to transfer the opposition as between the parties is a matter to be determined by the relevant national law, the procedural status of opponent is nevertheless not freely transferable: G 2/04 (OJ EPO 2005, 549).

9. The question is then whether any limits should be set on the above deference to national law having regard to the circumstances of the present referral, for example because of any adverse consequences which would follow for the proprietor, other parties to the proceedings, the EPO or the general public. The answer should have regard to the fact that an opponent company may cease to exist and then be restored to life at any stage before, during or after opposition proceedings. The answer should also not depend on the reasons why the opponent company ceased to exist or to what extent its directors or representative could be considered as culpable for this event. The possible effect of the conduct of a party or its representative on proceedings is a different issue which forms no part of the present referral. See point 17, below.

10. So far as the proprietor, the Opposition Division and the referring Board were concerned, until September 2012 all had proceeded on the assumption that FBL existed. To recognise the retroactive existence of FBL would simply be to confirm this assumption.

11. As to the general public, the possibility is remote that an interested member of the public, having inspected the UK Register of Companies and found that FBL no longer existed, would then have relied exclusively on this information in order, for example, to conduct their business. If they had an interest in the proceedings before the EPO, it is more likely that they would have relied on the information to be found in the EPO register of patents and/or on what information was available from inspection of the public file at the EPO. If they had information from all these sources they might well have been puzzled by what they had learnt, but it is highly unlikely that they would simply have ignored the information available from the EPO.

12. On the other hand, if steps taken in opposition proceedings were to be retrospectively declared a nullity, potentially many years after the filing of the opposition, the previous assumptions made by the proprietor, the EPO and the public would turn out to have been false.

13. A competing interest is of course that of the proprietor. It is argued that to recognise the retroactive restoration of FBL to existence would be to deny the proprietor's right to have had the appeal and opposition proceedings dismissed as inadmissible. The submission, however, begs the question of whether the proprietor had such a right. Certainly, in proceedings before the opposition division a proprietor would have the right to request the bringing to an end of those proceedings by the appropriate means once the non-existence of the opponent company had been discovered. The same applies to appeal proceedings. The Opposition Division or the Board of Appeal, if presented with a counter-request to adjourn the proceedings to enable the opponent company to apply to be restored to existence, would have been faced with the problem that the opponent company at that point did not exist. Whether the Opposition Division or the Board of Appeal would have adjourned the proceedings, if necessary of its own motion, to enable this to happen would in the Enlarged Board's opinion have been a matter for the exercise of their discretion. (In the present case FBL was restored to existence while the proceedings had been ordered to be continued in writing to enable the FBL to file submissions - see point II(e), above).

14. The Enlarged Board accepts that a proprietor's interest in wishing to bring the opposition proceedings to an end is a legitimate one but concludes that there is no clear balance in a proprietor's favour leading to the conclusion that a company's retrospective existence as a matter of national law should not be acknowledged by the EPO in such circumstances. The ability of the parties, the EPO and the public to have confidence in the public record and the need for certainty are just as important. The Enlarged Board therefore confirms its provisional conclusion (point 7, above).

15. This conclusion does not appear to be out of step with the general position under other systems of national law, in so far as the position is known to the Enlarged Board and can be considered equivalent (see points 2.3.4 and 2.3.5, above).

16. So as concerns the various arguments of the proprietor:

16.1 The Enlarged Board of course accepts the general principles that a legal entity which does not exist cannot be, or cannot remain a party to proceedings; that where an opposition or an appeal is filed by a non-existent company the opposition or appeal will in principle be inadmissible; that where a sole opponent ceases to exist the opposition division may terminate the proceedings; and that where a sole appellant who was opponent ceases to exist the appeal proceedings should be terminated by the appropriate means. None of these principles, however, can necessarily be extended to deal with the case where an opponent company is restored to existence with retroactive effect under national law. Indeed, this point is at the heart of the referred questions.

16.2 As to the cases cited by the proprietor in support of the proposition that an appeal by a defunct company is inadmissible (T 525/94 of 17 June 1998, T 353/95 of 25 July 2000, T 477/05 of 22 February 2007 and T 480/05 of 8 March 2007), these were cases where the appellant had apparently ceased to exist with the consequence that the appeal proceedings were brought to an end. Again, however, while they show that the FBL's appeal could have suffered the same fate in the period when it did not exist, they do not help answer the question of what should happen when, under national law, an opponent appellant is deemed always to have existed.

16.3 The proprietor referred to the principle that opposition proceedings should be a simple, speedily conducted procedure (G 2/04, point 2.1.4 of the Reasons). It is true that the discovery that an opponent company has ceased to exist may, if proceedings are adjourned to allow an application to be made to restore the company to existence, delay the proceedings. However, the time taken to restore FBL in the present case was about three months and in any event took place while the proceedings were adjourned to allow the parties to file submissions. The Opposition Division and Boards of appeal have a remedy where the delay is unreasonable or amounts to an abuse, namely not to adjourn the proceedings but to bring them to an end.

16.4 The Enlarged Board's conclusion does not mean that national law trumps or overrules the EPC. The EPC and national law (here that of the UK) are not inconsistent with each other in this respect.

16.5 It is true that the EPC provides for various remedies, such as further processing and re-establishment of rights (Articles 121 and 122 EPC, respectively) in cases where a party has suffered a loss of rights. The proprietor refers to G 1/97 (OJ EPO 2000, 322), point 4 of the reasons, 2nd paragraph, in support of the proposition that the Enlarged Board should be very reluctant to extend the existing codified remedies under the EPC. However, the present case is not concerned with the grant of new procedural remedies but with whether national law should be followed as regards the deemed existence of a company.

16.6 The Enlarged Board's conclusion does not mean that a proprietor in such circumstances is faced with the possibility that a defunct opponent may reappear many years later. Where, for example, an opposition has been rejected as inadmissible because it was filed by an opponent which did not exist, the company will not later be able to deny that the order was notified to it (and thus claim that the order has not yet become final) while, at the same time, claiming that it is deemed always to have existed (see also point 19, below). As a side-note the Enlarged Board also understands that under UK law as it now stands the possibility of restoring a company to existence is basically only available within the period of six years from the date of the company ceasing to exist (UK Companies Act 2006, section 1030(4)).

16.7 The proprietor has argued that the non-admissibility of the opposition and the appeal is demonstrated by the fact that after FBL ceased to exist the authority of its attorney will have lapsed. First, however, the submission begs the question of the retroactive effect of the company's restoration to existence. Secondly, according to Rule 152(8) EPC a representative shall be deemed to be authorised until the termination of his authorisation has been communicated to the European Patent Office.

16.8 Contrary to the proprietor's submissions, the Enlarged Board does not see that the fact that the order of the English court did not mention why FBL was restored is of any relevance. The same applies to the submission that the UK court may give further directions for placing the company "as nearly as may be" in the same position as if it had not been struck off. No evidence was filed to support these submissions. So far as the Enlarged Board is aware the provision whereby a company is retroactively restored to existence takes effect, as a matter of UK law, exactly in accordance with its wording: see the decision of the Court of Appeal of England and Wales in Peaktone Ltd v. Joddrell [2012] EWCA Civ 1035.

17. As to the proprietor's suggestion that the Enlarged Board should also comment on whether an obligation to inform the EPO about important procedural requirements at the EPO exists, and what the consequences of non-compliance are, this does not form part of the referred questions and there is no factual basis for any such "comment". Indeed the referring Board refused to include such a question in the decision, saying (point 11 of its Reasons):
"The respondent has not explained the relevance of the question which it asks the Board to refer to the Enlarged Board of Appeal concerning the parties' obligation to keep the EPO informed about certain matters. In particular, the respondent has not indicated what specific consequences would, in its view, follow in the present case from a failure to comply with such an obligation (were the existence thereof established). The Board does not therefore consider it necessary to refer that question to the Enlarged Board of Appeal."

18. The tenor of the Enlarged Board's answer to Questions 1 and 2 is in each case therefore: yes. In the circumstances Question 3 does not call for an answer. The Enlarged Board has already noted that the referred questions need to be reformulated to refer to a company as having ceased to "exist" rather than as having been dissolved. In addition, in Question 1 the stage at which the company is restored to existence is left unclear and therefore needs some reformulation.

19. Finally, it needs to be made clear that, in circumstances such as these, full effect should be given to any procedural steps which have been taken place while the opponent company was not in existence. The restored company cannot be placed in a better position than if it had in fact continued in existence all the while.

This decision has European Case Law Identifier: ECLI:EP:BA:2014:G000113.20141125. The whole decision can be found here. The file wrapper can be found here. Photo obtained from by Tom obtained via Flickr.


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