Kluwer Patent Blog is a publication of Kluwer Law International providing information and news on European patent law. We have gathered together experts from leading IP firms, to report on the latest developments. They in turn have enlisted professional colleagues from diverse backgrounds to offer both established and new voices into the mix.
I know that this is a patent blog. But something – I don’t know what, maybe it’s the upcoming meeting of the EPO’s Administrative Council – drives me to refer very briefly to a new CJEU ruling. Here is what the Court of Justice had to say about judicial independence in Case C-64/16. Emphases in bold are mine.
Article 2 TEU reads as follows:
‘The Union is founded on the values of respect for human dignity, freedom, democracy, equality, the rule of law and respect for human rights, including the rights of persons belonging to minorities. These values are common to the Member States in a society in which pluralism, non-discrimination, tolerance, justice, solidarity and equality between women and men prevail.’
Article 19(1) and (2) TEU provides:
‘1. The Court of Justice of the European Union shall include the Court of Justice, the General Court and specialised courts. It shall ensure that in the interpretation and application of the Treaties the law is observed. Member States shall provide remedies sufficient to ensure effective legal protection in the fields covered by Union law.
2. … The Judges and the Advocates-General of the Court of Justice and the Judges of the General Court shall be chosen from persons whose independence is beyond doubt …’
40 Consequently, to the extent that the Tribunal de Contas (Court of Auditors) may rule, as a ‘court or tribunal’, within the meaning referred to in paragraph 38 above, on questions concerning the application or interpretation of EU law, which it is for the referring court to verify, the Member State concerned must ensure that that court meets the requirements essential to effective judicial protection, in accordance with the second subparagraph of Article 19(1) TEU.
41 In order for that protection to be ensured, maintaining such a court or tribunal’s independence is essential, as confirmed by the second subparagraph of Article 47 of the Charter, which refers to the access to an ‘independent’ tribunal as one of the requirements linked to the fundamental right to an effective remedy.
42 The guarantee of independence, which is inherent in the task of adjudication (see, to that effect, judgments of 19 September 2006, Wilson, C 506/04, EU:C:2006:587, paragraph 49; of 14 June 2017, Online Games and Others, C 685/15, EU:C:2017:452, paragraph 60; and of 13 December 2017, El Hassani, C 403/16, EU:C:2017:960, paragraph 40), is required not only at EU level as regards the Judges of the Union and the Advocates-General of the Court of Justice, as provided for in the third subparagraph of Article 19(2) TEU, but also at the level of the Member States as regards national courts.
43 The independence of national courts and tribunals is, in particular, essential to the proper working of the judicial cooperation system embodied by the preliminary ruling mechanism under Article 267 TFEU, in that, in accordance with the settled case-law referred to in paragraph 38 above, that mechanism may be activated only by a body responsible for applying EU law which satisfies, inter alia, that criterion of independence.
44 The concept of independence presupposes, in particular, that the body concerned exercises its judicial functions wholly autonomously, without being subject to any hierarchical constraint or subordinated to any other body and without taking orders or instructions from any source whatsoever, and that it is thus protected against external interventions or pressure liable to impair the independent judgment of its members and to influence their decisions (see, to that effect, judgments of 19 September 2006, Wilson, C 506/04, EU:C:2006:587, paragraph 51, and of 16 February 2017, Margarit Panicello, C 503/15, EU:C:2017:126, paragraph 37 and the case-law cited).
45 Like the protection against removal from office of the members of the body concerned (see, in particular, judgment of 19 September 2006, Wilson, C 506/04, EU:C:2006:587, paragraph 51), the receipt by those members of a level of remuneration commensurate with the importance of the functions they carry out constitutes a guarantee essential to judicial independence.
Maybe the Administrative Council would like to re-consider its previous decision not to re-appoint Mr. Corcoran in the spirit of both the ILOAT’s verdict and this decision that rightly emphasizes the importance of judicial independence. According to the CJEU, this judicial independence compellingly requires the autonomy of the body exercising a judicial function (e.g. a Board of Appeal) and the protection of its members against removal from office.
There is simply no way to sidestep the requirements of Art. 23(1) EPC, as the EPO Management and the AC did in this case. And if the Administrative Council does not want to acknowledge this, it will sooner or later reap the fruits it has sown.
Among other things, the EPO’s official vision also includes to set world-wide standards in efficiency, so let us look into this goal a bit more closely. To begin with, what is efficiency? Wikipedia defines it as follows:
Efficiency is the extent to which time or effort is well used for the intended task or purpose.
Thus, we need to talk about (a) the intended task or purpose and (b) the extent to which time or effort is well used, when a patent is searched and examined by the European Patent Office
1. Intended Task or Purpose of Examination
The task or purpose of search and examination is to find out whether a given European Patent Application meets the requirements of the European Patent Convention, so that a patent can be granted. If this is not the case, the application must be refused.
Therefore, it is clear from the outset that the number of granted patents per year is NOT an indicator of efficiency per se. If the quality of the examination is insufficient, then the efficiency of the examination process is likewise insufficient, because the process does not serve the intended task or purpose.
There is obviously a very easy way to make the patent granting process super-efficient: One could think of simply registering a patent on any application filed, just like it is done in many countries (such as France) where there is (substantially) no substantive examination. Perhaps President Battistelli comes from this background. If the goal just is to register as many patents as possible per time unit, then one can indeed achieve massive gains in efficiency – and at the same time get rid of all these inconvenient examiners who write nasty letters to the Administrative Council complaining about a drop in quality.
Such a registration philosophy could indeed be considered, as matter of principle. It seems to work at least for France, the Netherlands and many other countries. And a German Utility Model is also registered without examination on the merits. One could certainly just register a patent as “efficiently” as possible and leave the examination of their patentability to the courts, if needed.
However, the European Patent Convention is obviously based on an entirely different philosophy, and it is probably not accidental that most applicants prefer filing their applications at the EPO rather than at the national patent (registration) offices. The EPC philosophy is based on the idea that patents are monopolies granted to applicants in exchange for the (sufficient) disclosure of a (technical) invention that is novel, involves an inventive step and is industrially applicable. Applicants are not supposed to have the right to simply monopolize whatever they want. The EPO’s job is to find out whether applicants’ inventions meet the standards of the EPC or not. Only a properly examined right is a good right that deserves a patent.
These principles of the European Patent Convention can only be changed by a diplomatic conference of its member states. The EPO management and the Administrative Council should firmly bear that in mind. Of course, it is possible to change the system completely and save a lot of money for the examination, but I doubt that applicants will be happy to continue paying the present high official fees if they do not get value in return, i.e. a properly examined monopoly right or at least a fair and well-grounded decision of refusal. But a thorough examination requires time and care, and both should not be shortened by simply unreasonable management goal such as “we want to see 20% more products per examiner in 2018”. You think 20% must be extreme and no sensible person on the planet would ever think of demanding that? I am afraid you are wrong. At least I took this figure from an open letter by the EPO’s Central Staff Committee (CSC) to President Battistelli and Vice President Casado:
…the CSC has observed with astonishment that, while the final PAX Reference Examiner Data is still missing, an enormous unexplained increase of another 20% of the overall production objectives has been cascaded down to the directorates, teams and examiners. Your strategic directions published on 31 January 2018 confirm that this is a new operational goal.
2. Extent to which time or effort is well used
What is “good use” of time or effort? This goes back to my earlier series of blogs about the EPO’s Problem with the Right Speed (I), (II), (III) and (IV), and I will try not to repeat here what I wrote there. Just two add-ons:
a) Deferred Examination
As I pointed out earlier, there are quite a number of applicants who do not actually want or need a super-speedy examination of their applications. This is particularly true, but not limited to, inventions in the field of Life Sciences. The EPO has therefore recently started a discussion of whether deferred examination should be offered to applicants. They call it “User-Driven Early Certainty” or UDEC.
I have to say that I very much welcome this change of direction from the EPO’s previous “speed über alles” policy towards a more applicant-friendly flexibility (which must obviously also take third parties’ interests into account). I am puzzled that the representatives of epi and Business Europe and BusinessEurope do not seem to like it and have raised all sorts of concerns, some of which I find quite strange. However, I accept that opinions on this matter may differ. Personally, I see no downside in slowing examination down, if (a) the applicant requests it and (b) no third party expresses an interest in having this application examined at accelerated speed, which could simply be accomplished by submitting observations pursuant to Art. 115 EPC. In my view, introducing a formal procedure for “deferred examination” is unnecessary. The EPO has introduced a quite successful PACE program without such a change of the EPO or its implementing rules. Why not simply enable an “anti-PACE request” on the same basis? It is a simple fact that many inventions, particularly in the field of Life Sciences, need to undergo extensive testing before their practical utility can be established (not to speak of marketing approval). Most of them fail during this testing period, resulting in that the application covering it is normally abandoned. Why bother the EPO with examining these inventions? If the examiners were allowed or even requested to handle a number of applications more slowly, they could prioritize their work better and make better use of their time and efforts (hence increasing efficiency by definition) by examining those applications faster where the applicant has an interest in “early certainty”.
b) Speed of Boards of Appeal
I have repeatedlycomplained about the snail pace of appeal proceedings, which in my view is mainly caused by the serious understaffing of the Boards of Appeal by the present EPO management. Finally, finally (and much too late!) there seems to be some light at the end of the tunnel. Even though I was not able to find any official communication to this effect, I was told by several reliable sources that the AC has finally appointed a considerable number of new technical members of the Boards of Appeal so as to fill the numerous open positions in the Boards’ Business Distribution Scheme.
If this is true (and I think it is), great and my compliments to the EPO management and the Administrative Council!
I do not know whether my somewhat sarcastic November blog played any role in this change of policy, but whatever the motives were, this is clearly a step in the right direction. But it is imperative that this first step be followed by a second and third step, at least in my opinion. The positions that will be reoccupied in 2018 may possibly prevent that the BoA’s backlog will increase even more, but they will clearly not suffice to considerably reduce the backlog. For that to happen, new boards must be opened and staffed appropriately and a consequential and long-term policy must be followed in the years to come that allows many more new board members to be appointed and appropriately trained in their jobs. And it goes without saying that ridiculous measures that just undermine the moral of BoA members, who are willing to do their job and do it very well, should be stopped and never ever considered again. There is a relatively simple recipe for EPO management to achieve optimum efficiency from the Boards of Appeal: (i) staff them appropriately, (ii) respect their independence, (iii) leave them alone and (iv) let them do their job.
If all of this is taken to heart, I am optimistic that the present backlog of cases will slowly melt down and that we will come back to “normal” durations of 1-2 years on appeal over the next couple of years.
And the icing on the cake would be a transparent communication policy by the Administrative Council that goes beyond the usual, completely meaningless boilerplate statement in its Communiqués:
the Council decided on a number of appointments and re-appointments as technically qualified members of the Boards of Appeal and as external legally qualified members of the Enlarged Board
I think the public has a right to be informed better than that. I would be the first to congratulate the AC if they showed us how many new technical BoA members they appointed, thus demonstrating their commitment to fight the only real problem with speed that the EPO currently has, i.e. the speed of appeal proceedings.
And ceterum censeo, I caution that the Rules of Procedure of the Boards of Appeal, on which a user consultation is currently conducted, should not be abused as a vehicle to further shorten the appeal proceedings at the expense of the parties’ right to be heard and, in particular, it should not unduly limit the patentee’s right to file appropriate requests to defend his patent. One should firmly bear in mind that BoA proceedings are asymmetric to the detriment of the patentee: if the patent is revoked, then such a decision is (at least currently) final and the patent is gone for all EPC member states. Conversely, if the patent is maintained, it can still be challenged before the national courts. In my view, this asymmetry compels that a patent should only be revoked if its subject-matter really does not comply with the requirements of the EPC, and not because the patentee failed to submit the “right” auxiliary request in the first instance proceedings or with his grounds of appeal, except in absolutely clear cases of procedural abuse. Anything else would throw out the baby with the bath water.
While the patent world is waiting with anxiety what the German Federal Constitutional Court will do with the challenge of the legal basis of the Unified Patent Court Agreement, the man behind this complaint, Düsseldorf patent attorney Dr. Ingve Björn Stjerna has attacked the economic foundation of the UP system in a recent article on his website.
In his analysis ‘The European Patent Reform – The prearranged affair’, Stjerna writes: ‘before starting to legislate in a highly complex legal field like patent law, one would usually expect the legislator to have the impact of planned legislative changes profoundly and comprehensively assessed by respective scientific opinions and analyses’. However, this was not the case with the Unitary Patent system, Stjerna points out; the UP system was justified on the basis of ‘one single investigation on the patent judiciary, ordered by the European Commission: The report “Economic Cost-Benefit Analysis of a Unified and Integrated European Patent Litigation System”, presented on 26/02/2009, by Prof. Dietmar Harhoff.’
According to Stjerna, a lot is wrong with the two central hypotheses of the report: 1) the supposed duplication rate of court cases and 2) the argument that the UPC would set the level of the costs of proceedings ‘at a level equivalent to the cheaper continental systems like the German one’.
Stjerna: ‘A duplication rate of 16 to 31 percent as assumed in the Harhoff report is obviously too high. It was abandoned even by the Commission in an own study while the EU legislative proceedings were still ongoing. After its completion, a further study was published, amongst others authored by Prof. Harhoff, which found a duplication rate of only around 8 percent.’
And although the court costs are ‘more or less equivalent to or cheaper than those in the German system’, there is a big problem here as well, as the ‘maximum reimbursable representation costs at the UPC vs statutory German cost reimbursement’ are much higher: ‘In summary, it can be said that in proceedings with a lower value in dispute of up to EUR 500,000 the maximum reimbursable representation costs at the UPC exceed the statutory German RVG* reimbursement claim more than three-fold. (…) At a value in dispute of up to EUR 1m, the UPC limit exceeds RVG by roughly the factor 4.75, at EUR 2m approximately five-fold. The maximum is reached at a value in dispute from EUR 4m with almost six times RVG, before the spread is again decreasing.’
According to Stjerna, the enacted UP ‘legislative package (…) does not only contradict the initially communicated political motivation and promises, but (….) is also lacking the envisaged advantages. (…) the European patent reform has been adopted at EU level without defining the costs of unitary patent protection and of the proceedings at the UPC, both happened only well after the end of the legislative procedure.’
Only at the very end of his analysis, Stjerna says something about the legal challenge of the Unitary Patent and the Unified Patent Court Agreement before the German constitutional court, without admitting however he is the complainant.
‘A similar approach has been used for legal problems possibly endangering the enactment of the patent reform. These were and still are ignored or discussed away or, if this is not possible, a solution is postponed until some time in the indefinite future. (…) The present situation is special insofar as now a court is in a position to assess in detail the UPCA’s doubtful legal viability. By doing so, it can make up for what has been repeatedly and perhaps deliberately omitted in the European as well as in the national German legislative procedure, thus finally providing the badly needed legal certainty to the users.’
Later today, the German Parliament will discuss a motion of the right-wing Alternative für Deutschland (AfD), which is based on two of the arguments of the constitutional challenge. The AfD motion argues that the UPCA ratification bill did not have the requisite majority of two thirds of the members of the Bundestag and that UPC judges will not be independent since they are appointed by a panel which also includes attorneys at law and only for six years, and calls for the repeal of two acts concerning the Unified Patent Court and the Unitary Patent. The motion is not expected to get wide, if any support.
In its judgment of 7 November 2017, X ZR 63/15 – Digitales Buch, the German FCJ (Bundesgerichtshof) took the opportunity to complete its Kommunikationskanal case law on the admissibility of a generalisation of a teaching in patent claims by the omission of specific features that have been taught in the examples of the patent application.
The patent application can either be the priority application or the original patent application. While in the former case the question of the admissibility of the generalisation is relevant with regard to the right to claim priority, in the latter case it is decisive for the question whether the generalisation is an (in)admissible extension. In both cases under the established case law of the FCJ it is necessary that the claimed invention has been disclosed identically in the (prior) patent application. This is to be assessed in accordance with the principles of novelty review (FCJ, Judgment of 14 October 2003, X ZR 4/00 – Elektronische Funktionseinheit). An identical disclosure requires that the skilled person can take the claimed technical teaching „directly and unambiguously“ from the original application documents (FCJ, Judgment of 11 September 2001, X ZR 168/98 – Luftverteiler; FCJ, Judgment of 8 July 2010, Xa ZR 125/07 – Fälschungssicheres Dokument; FCJ, Judgment of 14 August 2012, X ZR 3/10 – UV-unempfindliche Druckplatte) as a possible embodiment of the invention (FCJ, Decision of 11 September 2001, X ZB 18/00 – Drehmomentübertragungseinrichtung; FCJ, Judgment of 18 February 2010, Xa ZR 52/08 – Formteil). The exploitation of the content of such disclosure by a generalisation of the teaching shown in the originally disclosed examples is admissible if the described examples appear to the skilled person to be an embodiment of the more general teaching claimed in the subsequent patent application (or the patent), and if this teaching, in the generality claimed in the subsequent patent application (or the patent), could already be taken from the (prior) patent application as being part of the filed invention (FCJ, Judgment of 17 July 2012, X ZR 117/11 – Polymerschaum).
The earlier FCJ judgment of 11 February 2014, X ZR 107/12 – Kommunikationskanal, concerned the possibility to claim priority despite a generalisation of the technical teaching by omitting a specific feature in the subsequent patent application that was taught in the description and the examples of the priority applications. The FCJ had found that in such case priority could be claimed if the content of the (prior) patent application did not show a concrete connection between the concerned to be omitted feature and the claimed means for the solution of the technical problem underlying the patent. In the case underlying the Kommunikationskanal decision such connection could not be established, thus priority could be claimed. As this had not been relevant for the case at that time though, the FCJ did not comment on the omission of features that in accordance with the description of the patent application were in a (merely) cumulative manner relevant for the proposed solution of the problem underlying the patent.
In the judgment of 7 November 2017, X ZR 63/15 – Digitales Buch, the FCJ had the chance to make up for this. The case concerned a patent for a display device with an interface in the swivel joint. The description in the patent application distinguished between bigger less handy devices like laptops and notebooks and more handy and easier to operate devices like digital books. All the examples in the patent application concerned such book-like easily handable devices. The patent claim as defended in the main request of the nullity proceedings however used the expression “display device for the reproduction of text and/or image information” and not a “digital book”. Thus the claim did not reflect the distinction between the more and the less handy devices and accordingly included bigger devices like bigger laptops and notebooks.
The Federal Patent Court had found in first instance this contained a subject-matter extending beyond the content of the application as filed, thus inadmissibly extended the patent application. In the appeal proceedings, the FCJ confirmed this finding and reasoned that the omission of a feature that has been described in the examples of the patent application, namely in this case the book-like quality, was inadmissible if and because the means provided for in the patent claim served the solution of a problem that required the book-like properties of the device.
The problem underlying the invention was to provide a device for the reproduction of book information allowing for an easier handling and operation of the device. Feature group 3 of claim 1 required that the interface for the electronical connector was arranged within the swivel joint about which the casing with a main part and at least one secondary part could be folded open and shut. According to the description this construction avoided that the plug-in connections placed at the backside of the main part hindered (when plugged) that the device could be held at the spine and could be laid down on its back. Accordingly, the advantages of the plug-in connection in the swivel joint as provided for by the invention were described to be the better possibility to lay down the device, a more favourable symmetry and balance of the device and a lower irritation of the user by disturbing cables and a reduction of the “technical impression” of the device. These advantages of the claimed invention described in the original application necessitated that the device due to its dimensions, its weight and the choice and the arrangement of its control elements could be handled like a book. The described arrangement of the interface within the swivel joint was therefore functionally associated with the suitability of the device to be handled like a book. Therefore, devices that have a corresponding arrangement of the interface but could not be handled book-like were not disclosed as being part of the invention and the omission of this feature in the patent was inadmissible.
The FCJ further explained that the fact that such non book-like devices may realise other advantages described for the invention did not alter this assessment, because according to the description in the patent application the easy handling of the device was in the foreground of the advantages of the invention. Correspondingly, it was not directly and unambiguously disclosed that embodiments that could not be handled book-like fulfilling other advantages of the invention though, should be part of the invention.
The seemingly decisive criterion for the inadmissibility of the omission of the “book-like” feature in the patent claim for the FCJ was (just as it has been in the Kommunikationskanal decision) that the problem underlying the invention required (or did not as in the Kommunikationskanal decision) the presence of the concerned feature or in other words that there was a specific connection between the feature to be omitted and the problem and the corresponding invention of the patent application. This is similar to the feature (ii) of the essentially or the three-point test in the Guidelines for Examination, Part H, No. 3.1 “the feature is not, as such, indispensable for the function of the invention in the light of the technical problem the invention serves to solve”. It has been criticised as being vague though (see reference above) compared to the EPO test. It is surely true that it is difficult to predict what will be identified as concept of “the invention” used to measure whether or not there is a relationship with the to be omitted feature. It has to be kept in mind however, that the question of what the skilled person would learn or take from a patent application always contains valuating elements and correspondingly has discretionary elements. The orientation at the relationship between the to be omitted feature and the problem and solution identified by the skilled person in and from the patent application avoids however that the patentee is restricted in a manner not justified with respect to the technical contribution of the patent.
Around this time last year, in Edwards Lifesciences v Boston Scientific , His Honour Judge Hacon (sitting as a High Court Judge) had the opportunity to analyse two interesting aspects of UK patent law: (i) the law of implied disclosures and anticipation; and (ii) the importance of so-called secondary evidence in the evaluation of inventive step.
In a decision dated 23 February 2018, Cantel v ARC Medical, the same Judge revisited these issues in a case concerning colonoscopes. Specifically, the patents in suit belonging to ARC Medical related to devices which are attached to colonoscopes to aid the detection of polyps and cancerous adenomas in the lining of the colon. These devices work by stretching and elongating the colon during withdrawal so that any abnormalities can be better seen. The claimant, Cantel was a distributor of ARC’s products but upon termination of the licence developed its own device and sought to clear the way in respect of it by alleging that the patents in suit were invalid and or not infringed. There were various design rights also in play which are beyond the scope of this short commentary.
Perhaps unsurprisingly, the Judge adopted largely similar reasoning in the ARC case as he had in Edwards. In relation to the issue of anticipation, the Judge reiterated the point that there will only be an implied disclosure in the prior art where the skilled person would inevitably have included the implied element. Thus, a prior art description of a bicycle implies two wheels, handle bars, and probably pedals but not lights and gears.
The second point of interest concerned the role of secondary evidence in the analysis of inventive step. The UK Courts have traditionally separated evidence on the question of obviousness into two categories: primary evidence from suitably qualified expert witnesses as to what the skilled person would have done or thought at the priority date of a patent; and secondary evidence which covers everything else such as how thought leaders in the field of the invention reacted to the invention described in the patent at the relevant time. The UK Courts have traditionally adopted a rather cautious approach to secondary evidence but there are signs that this caution may be receding. As he had done in Edwards, in ARC Judge Hacon placed some weight on the argument presented by the defendant that if the invention had been obvious, why had it not been done before? In so doing the Judge relied on a list of 11 questions set out in the leading Court of Appeal decision from 2010: Schlumberger v Electromagnetic Geoservices.
It remains to be seen if the trend towards placing greater reliance on secondary evidence will continue. In the authors’ opinion, events surrounding a new development or the opinions of thought leaders given without any influence of litigation or the benefit of hindsight can, depending on the circumstances, be of genuine probative value and the recent legal developments in this area are encouraging.
In the ARC case, the patents were held to be valid as proposed to be amended and infringed. It is not known if Cantel will appeal.
The official statement of the INPI for granted SPCs aligns with the actual practice for SPCs under examination. Until now the INPI communicated that it was not able to amend the grant decision, or to correct the term of the SPC indicated in the grant decision. The INPI nevertheless had proposed a compromise: it allowed recordal of the date of notification of grant of the community MA in the National Patents Register, but as it was then indicated “for information purposes only”.
The injustice for the holders of SPCs granted before October 6, 2015 and still in force is thus removed by this official statement. The reason of this turnaround is the Incyte ( http://C-492/16, December 20, 2017) judgement of the CJUE.
In this decision the CJEU affirms that the concerned SPC holders should have the possibility of an appeal in order to obtain correction of the duration indicated in their certificate, as long as the SPC has not expired.
The INPI has decided to respect the terms of this decision by proposing a slight formalism. Correction may be requested by the SPC holder registered on the National Patents Register, in the form of a simple request, accompanied by a copy of the publication in the Official Journal of the date of notification of the concerned community MA. The INPI therefore now applies what was regarded as impossible few months ago… the INPI having rejected requests to correct expiration dates of SPCs on the basis of French administrative law.
One can wonder whether the requests presented according to the previous official statement are sufficient or if it is necessary to proceed via a new request specifically aiming at fulfilling this official statement’s conditions and the Incyte judgment. We would advise that carefulness is essential and that the SPC holders should file a new request.
In order to ensure legal certainty of third parties, the request will be recorded in the National Patents Register and a mention will be added to the Official Bulletin of the Industrial Property. The INPI patents database ( https://bases-brevets.inpi.fr/fr/accueil.html ), accessible online, will also indicate the corrected expiration date of the SPCs.
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The Patent Trial and Appeal Board correctly determined that all 79 claims of a patent related to a computerized method for identifying and substituting information in an electronic document were invalid for obviousness, the Federal Circuit has held. Although the Board erred in its analysis by declining to apply a prosecution disclaimer limiting the patent’s claims such that they excluded those of a prior art patent, the court affirmed the Board’s determination based on its alternative holding that, even if the prosecution history disclaimer were accepted, the claims at issue still were unpatentable for obviousness (Arendi S.A.R.L. v. Google LLC, February 20, 2018, Newman, P.).
This will be a very long post (sorry, dear readers!), yet it cannot and will not be comprehensive enough to cover all aspects of this topic. In summary, my take on EPO quality is that not all is bad and a lot of people are still doing a good job. However, it is presently not at all the case that quality is outstanding or “setting worldwide standards”. Even worse, the trend of quality is downwards, which is most likely caused by the current EPO policy focusing too much on “production”. Honesty and a sober and realistic approach by EPO management would be needed to really improve quality and to bring the EPO closer to its vision.
The EPO strives to set worldwide standards in quality. Official communications from the EPO emphasize this time and again. President Battistelli writes: “But no matter the project or initiative scheduled for 2018, one issue at the EPO will take precedence above all others – quality. 2017 was a significant year for quality at the EPO and has given us a strong momentum to take forward into the next twelve months.” Vice President Casado writes “While we have kept pace with handling the rising number of applications by increasing productivity, quality takes precedence above all other considerations at the EPO.” Very good, so at least the priorities are set right.
Where does the EPO now stand with regard to quality? Looking again at the official communications and reports first, it seems that quality at the EPO is nothing but an incredible success story. And what is more, you can simultaneously rise both quality and productivity! In the EPO Gazette of 2017, the President wrote:
“So far, we’ve done a good job of ensuring that quality and productivity are rising simultaneously and we’ve shown that by the results in recent years – both in terms of internal quality targets and also user satisfaction. Once again we were ranked first among the IP5 offices and there has been increasing satisfaction in our User Satisfaction Surveys. But what will separate us from the pack (sic!) in the future is the ability to provide quality patents in a timely manner.”
To attain this goal, the President wrote in the same Gazette that “internal quality objectives continue to be set and achieved.” and in the very next sentence he continues: “Each year our staff attain more ambitious goals”. Hmm, so is there still something to improve? Not much it seems, since according to the EPO’s Quality Report 2016 as many as 80% of “Users” are “satisfied or very satisfied” with search and examination services, 17% find it average and only 4% seem to be “not satisfied”. Likewise, regarding patent administration services, even 87% of “Users” in 2016 were “satisfied” or “very satisfied” and only 4% “not satisfied”.
So everything is in perfect order and the quality of EPO services is fantastic.
I find “quality” an extremely difficult subject to cover objectively. Firstly, how to measure it? User satisfaction surveys seem to strongly depend on the participants and the questions that were asked. JuVe, for example, published the following survey results on their website at about the same time as the EPO, i.e. in 2016:
“Zunehmend Sorge bereiten der Industrie dagegen mögliche Qualitätsprobleme als Folge interner Querelen, die das Münchner Amt nun schon seit mehreren Jahren beschäftigen. Nur noch 46 Prozent der Umfrageteilnehmer sind mit der Qualität der Patenterteilungsverfahren zufrieden, 54 Prozent sind es nicht. Auch in Bezug auf die Beschwerdeverfahren sieht eine knappe Mehrheit von 50,2 Prozent ein Qualitätsproblem.”
“Industry is increasingly worried about possible quality problems as a consequence of internal struggles that keep the Munich Office busy for several years by now. Only 46% of the survey participants were satisfied with the quality of the patent examination proceedings, 54 were not. Also in regard to appeal proceedings, a small majority of 50.2% sees a quality problem.”
The EPO figures in the Intellectual Asset Management (IAM) survey seem to be better, though not nearly as good as the EPO’s own figures.
Quality is a perceptual, conditional, and somewhat subjective attribute and may be understood differently by different people. Consumers may focus on the specification quality of a product/service, or how it compares to competitors in the marketplace. Producers might measure the conformance quality, or degree to which the product/service was produced correctly.
So for what it’s worth, let me give you my own take on what I perceive the quality of EPO products to be in these days:
1. I think that the overall quality is still mostly satisfactory, but not as good as it could or should be. I would rate it perhaps with a 3 on a scale from 1 (very good) to 6 (unsatisfactory), on average. I will provide a few examples below that I hope will justify my rating. I am perfectly happy to concede that other sensible observers may come to a slightly better or worse rating.
2. In normal times, the quality of EPO products only changes relatively slowly over time.
3. Having said that, I do think that quality has decreased over the last two years.
4. My greatest concern is the long-term impact of the current policy of EPO management, which I think is very much at odds with the stated objective of “quality takes precedence over all other considerations”.
In this contribution, I will try to strictly separate quality (in content/accuracy) from efficiency (speed), which will be subject of a different blog. Note, however, that many observers/surveys may confuse the two for understandable reasons. In the end, no patent office will be rated with “good” if its office actions or decisions take forever.
1. Quality – Current Ratings
Most, but certainly not all, office actions that I get to read are reasonably well substantiated and provide an acceptable basis for proceeding further. The same is true for decisions by the opposition divisions. I do not have my own well-substantiated view on the quality of searches – so, dear readers, you may wish to chime in here.
I also do not have the time to systematically study the quality of the patents granted, but my general experience-based impression is that if and when the EPO errs, it mostly errs in favour of applicants. Note that this will not necessarily generate complaints or negative ratings in user surveys. If anything, it may rather have a positive impact. Thus, the dramatic increase in patent grants over the last two years will not necessarily be accompanied by great user dissatisfaction. In the end, every applicant gets what he/she wants, and “only a fraction” of patents granted have a scope that seriously disturbs and annoys competitors to an extent that they will file an opposition. Moreover, the budgets of most companies are pretty tightly constrained, with the result that there is not necessarily more money for filing oppositions now than in the past. I would therefore caution against taking too much comfort from positive ratings in undefined “user surveys” and from the number of oppositions filed per year, which, as I would have expected, has not increased with the strongly increasing number of grants. It has even decreased somewhat from 2014 (5%) to 4% in the years 2015 and 2016. In my view, none of this is a reliable quality indicator.
The EPO’s own figures in the Quality Report 2016 seem to suggest that its Directorate Quality Audit (DQA) is happy with about 85% of the intentions to grant (R 71(3) Communications), whereas the number of search reports found “compliant” by quality audits is in the order of as much as 95%. This in turn means that 15% of the (internal) decisions to grant are not found compliant with the EPO’s own standards.
The EPO’s representation of these results is interesting. Here is the relevant paragraph from the EPO’s Quality Report 2016 2016, p. 18, with my emphasis added.
The EPO’s Directorate Quality Audit (DQA), which is placed under the direct control of the President, audits the compliance of products delivered by patent examiners and patent administration with legal requirements. DQA performs annual audits on European and international search reports and on applications proposed for grant. Furthermore it audits opposition and refusal decisions bi-annually. Patent administration products and processes are audited based on risks identified in this area. A detailed analysis of approximately 925 search and examination procedures per year takes place. The 2016 results of the quality checks were positive: the objective for compliance in search was exceeded and the objective for classification was met. The audits produced recommendations for improvement that are being addressed by specific actions.
It seems to me a bit of an attempt to embellish the situation that the rate of compliance in grants is not mentioned or critically commented in this summary. Perhaps it is hidden behind the cloudy language “recommendations for improvement”, which the audits produced and which are (of course) being addressed, albeit not with any measurable success at least between 2015 and 2016. But I would personally not call the fact that about 15% of all grants are non-compliant with the EPO’s DQA’s own standards a “positive” result.
Let me be clear: I like the fact that the EPO has produced a comprehensive Quality Report for 2016 and I would encourage it to compile such reports in the future. However, when reading and trying to understand the 2016 Report, I could not resist feeling that it uses a too bright colour palette to depict the present situation. Let me give you one more example:
Patent invalidity in Europe is very low. This is illustrated by the example of Germany, the main validation country for European patents, and one of the main European jurisdictions. (…) These invalidated patents represent less than 0.01% of the total number of granted EP patents valid in Germany.
The figure of less than 0.01% may be correct as such, but it is almost certainly misleading. Only a minute fraction of EP patents is attacked in German nullity proceedings. Of these patents, about 70-75% are found wholly or partially invalid by the German Federal Court every year. Note that I am not arguing here that this figure would mean that 70-75% of EP patents are completely or partly invalid, since most nullity plaintiffs obviously select the patents they want to attack under the aspects of (a) whether and how the patent disturbs their economic activities or plans and (b) the chances of success. I would, however, posit that the figure of 70-75% of invalid or at least partially invalid patents tells you more about patent quality than the absolute figure of 0.01%.
The EPO’s second observation about Germany is that
“In 80% of infringement cases in Germany the defendant does not even try to challenge validity. Indeed, there are approximately 1200 infringement cases in Germany each year, compared to only 250 nullity cases (Bundespatentgericht, Annual Report 2014). This suggests that in the vast majority of cases the potential infringer does not see any chance of challenging the validity of the patent concerned.”
Again, and with all due respect, I think this is wrong and misleading. Firstly, the counting of infringement cases by the infringement courts is different and more generous than the counting by the Federal Patent Court. For example, if a patent is enforced in parallel by an infringement action and a request for provisional injunction, this counts as two infringement cases, but the invalidity counter-attack only counts as one. Secondly, a German nullity action may only be filed once no opposition proceedings are pending (or can be made pending) anymore, which means that the only available counter-measure in many cases is the filing of an opposition or an intervention in pending opposition proceedings. Thirdly, the defendant in an infringement action may obviously be of the view that he has sufficiently good chances to win by pleading non-infringement only. Therefore, the discrepancy between the figures of the infringement courts and the figures of the Bundespatentgericht is certainly not due to “the infringer not seeing any chance of challenging the validity of the patent concerned”. Some reality check may be appropriate here: In my entire professional life of now more than 25 years, I have indeed reviewed and attacked many patents, but I have never come to the professional conclusion that there is “not any chance of challenging the validity of the patent concerned”.
I must admit that statements like these in a Quality Report of the EPO, which are obviously made with an intent to assure readers that the quality of EPO products is fantastic, make me a bit suspicious. Maybe the German Patent and Trademark Office or the UKIPO might wish to carry out their own and independent validity check of a random sample of EP patents – it would certainly be interesting to compare these results with the EPO’s. Moreover and more importantly, it would provide the EPO’s Administrative Council with a truly independent quality control audit. I am sure that the EPO’s DQA’s are doing a good job, but I am also certain that they would not be allowed to publish any result that would put the EPO in a negative light. Readers be reminded of Article 20(2) of the Service Regulations according to which:
A permanent employee shall not, whether alone or together with others, publish or cause to be published, without the permission of the President of the Office, any matter dealing with the work of the Organisation. Permission shall be refused only where the proposed publication is liable to prejudice the interests of the Organisation.
So we can be 100% certain that if the President wants the quality of the EPO to be “excellent” and “setting world standards”, and if he thinks, for whatever reason, that it is in the interest of the “Organisation” that the current quality of the EPO products is praised as much as possible in order to justify his agenda, then the quality will be praised exactly like that. Any more sober or realistic rating by an EPO employee runs the risk of “prejudicing the interests of the Organisation” and may have personal consequences for him or her. It is bitter that I have to write this so clearly, but I would urge the EPO’s supervisors to bear that firmly in mind when looking at the EPO’s official figures.
2 Quality – “Stickiness”
My second thesis about quality at the EPO is that it does not dramatically change overnight. The reason is quite simple: Well-trained and experienced examiners and formalities officers will generally continue to provide good products, at least unless they are pressurized to an extent that this ceases to be possible. As I argued before, you cannot turn the conveyor belt faster every year, thus I find the EPO management’s stated objective for 2018 to increase the number of “products” per employee by another 7% both ridiculous and dangerous. We may live in Modern Times, but even there turning the conveyor belt faster has not really worked and, on a more serious note, the time necessary for a careful review of a case or a thorough prior art search cannot simply be shortened ad libitum. This is the difference between a car manufacturer and a Patent Office, and I specifically dedicate this comment to the AC’s Chairman Dr. Ernst, who gave me the impression that he does not (want to) comprehend this connection.
But coming back to my second thesis, I think it is true that “quality” will only slowly and incrementally change under “normal” circumstances. The EPO’s quality report 2016, for what it’s worth, seems to confirm this by and large, see particularly figures 9, 10, and 12, whereas I do not believe that the sudden jump shown in figure 14 between 2013 and 2014 has to do with real-world quality metrics. Furthermore, I find it hard to make sense of figure 15, where some bars or parts thereof seem to be missing.
3 Quality – Direction of Change
Why am I of the opinion that quality has somewhat decreased over the last few years? A few observations:
My firm files more than 3000 EP applications every year. This means we have certain standards and routine procedures that we follow in their prosecution. One of them was to make use, as a standard procedure, of the possibility to waive a second communication according to Rule 71(3) after we have drawn the EPO’s attention to errors in the first communication (which are quite frequent!). Before this backdrop, here is an internal email of one of my partners:
About 10 % of 71(3) texts that I receive include a Druckexemplar including errors in compiling the text within the EPO. These errors can be corrected when responding. If the amendments are trivial, I have tended to file the response with a waiver. No longer.
Sadly the EPO’s incompetence has extended itself on 2 of my files to the Druckexemplar attached to the “Information” Communication following such a waiver by introducing new random errors. These are much less easy to correct as the file irrevocably enters the EPO’s granting machinery about 3 days or so after the date of the “Information” Communication. In my latest case our Office did not receive the “Information” until 7 days after the date which it bears. Too late to halt grant.
I am swiftly coming to the view that filing a waiver to the first 71(3) Communication is no longer appropriate in view of the current abysmal levels of quality control within the EPO.
And my partner was not alone with his complaint. Meanwhile we have changed our standard procedure and no longer recommend our clients such a waiver, since we cannot rely on the EPO any more.
When preparing for this blog, I thought I might as well do a short poll among my colleagues to see whether my own rating is an outlier or well within the mainstream. So I asked them two quick questions: (i) How do you rate the overall quality of EPO work products on a scale from 1 (very good) to 6 (unsatisfactory)? (ii) In your opinion, has this quality improved, deteriorated or stayed about the same in the last 2-3 years? I received more than 50 answers. The average rating on this scale was 3.2, with a few “2”s, many “3”s, a couple of “4”s and one “5”. On question (ii), two thirds responded that quality has decreased over the last 2-3 years, one third responded that quality has stayed about the same, and exactly none (zero) responded that there was an improvement in quality. This result alone should give the EPO management and its supervisors, the Administrative Council, something to think about.
Some of my colleagues provided further comments, so I thought I might share them with you and, hopefully, the EPO in order to give them an idea where a bunch of people are happy and where there might still be room for improvement:
– Some of the “products” have clearly unjustified objections but most are good.
– I would say the decrease in quality was slight. Where I have seen changes: Examiners are granting praps sooner, but are making more amendments themselves in the R71(3). I also have the impression that an Exam div will issue a summons, but then avoid oral procs if they can. In terms of formalities, recently I have had a couple of slip ups.
– Quality has (very evidently) decreased: some patent applications are granted, although I myself believe that the claims on file do not merit a grant at all …, more and more simple but serious mistakes, both in examination and opposition proceedings
– Clearly decreased (4-)! Number of R 71(3) communications is steadily increasing, at the same time EESR and Rule 70 as well as Art. 94(3) communications only deal with few specific issues (like inventive step), other issues that should be discussed are simply left for a later point in time! Clear impression of more time-pressure that is being compensated by a decrease of quality!
– I see the full breadth of quality variations, would tend towards 3-4 (for Opposition Divisions rather 4; perhaps this is because I have more hearings in The Hague than in Munich:-)
– Stayed about the same? Yes – the average is pretty good, but still quite a lot of variation (both examination and opposition). Some examiners are very reasonable, others are unwilling to engage with our submissions.
– Obsession with “clarity”, Art 84, is getting more and more irritating. They object under Art 84 just for the sake of it. Any excuse will do. Deferring to their objections does not improve “clarity”. Often, it prejudices it. Often, I have to ask them to withdraw their silly insertions in their Druckexemplar.
– One has the feeling that, for Examiners, the days of making an adult, intelligent, overall assessment of patentability takes second place to virtue signalling, to the EPO’s in-house Quality Police, using Art 84 EPC, that I’m meeting the quality metrics imposed on me.
– The examiners seem to be under a lot of pressure and do strange things. Example: Examiner calls me indicating that the claims are grantable, but the adaptation of the description is missing. He then sends me a draft adapted description by email, asking for a quick reply. The whole thing had to be done twice since his/her adaptation was quite sloppy.
– The worst point is the 71(3) quality. Nearly all texts are faulty. I have complained to several examiners about this. They know about this problem but allegedly can’t change it (it’s allegedly a software problem) and encouraged me to complain officially.
– Also noticed more errors in decisions, such as missing pages etc.
– Generally it seems to me that more and more tasks are pushed onto the applicant (or rather the representative) while the EPO still levies the same fees. For example the EPO online submission of oppositions requires a detailed submission of information for each cited document, so that it can readily be moved onto the register without any input from the EPO. Another example, due to the errors in the 71(3) I have now been asked by examiners to not only file the amended pages but the entire spec, so that they do not have to do any work anymore putting it together or checking correctness.
– The examiners are forced to summon very early in prosecution (to a degree where even they consider it “ridiculous” as one examiner put it). Various examiners are helpful to telephone instead of issuing an examination report, but this cannot be the solution..
This case concerns the issue of the urgency required in order to justify a preliminary injunction for patent infringement. The CoA Düsseldorf had to deal with the question of whether the Petitioner may wait for the outcome of a pending invalidation action before filing a motion for a preliminary injunction. The CoA Düsseldorf confirmed that it was acceptable to wait for at least the first instance decision. However, in general it is sufficient to know the result of this outcome and waiting further for the written grounds of the decision shall generally be considered to destroy the urgency.