Amendment of Rule 51(2) EPC relating to the payment of renewal fees in the 6‑month additional period and its consequences

Cees Mulder (NL)Cees Mulder (NL)

Abstract
Effective 1 January 2017, the wording of Rule 51(2) EPC was amended to clarify when the deemed withdrawal of a European patent application ensues in case the renewal fee is not paid in due time. At the same time, the wording of the first sentence of Rule 51(2) EPC was also amended. However, the latter amendment may have undesired consequences. In this article, the situation is analysed and a proposal for repair is given.

Introduction

The payment of renewal fees, also referred to as 'maintenance fees' or 'annuity fees', is required to maintain a granted patent in force. Many patent laws also require the payment of such fees for pending patent applications. The renewal fees serve as a source of income for covering the costs of national and regional patent authorities that are not fully covered by other fees.

The European Patent Office (EPO) levies fees for the performance of its tasks (Article 51(1) EPC). Renewal fees in respect of European patent applications must be paid to the EPO in respect of the third year and each subsequent year calculated from the date of filing of the application (Article 86 and Rule 51 EPC). After grant of the European patent, the obligation to pay renewal fees becomes a matter of national law (Article 86(2), 141 and 39 EPC).

For historical reasons, the payment of renewal fees is treated differently from the payment of other fees under the EPC, such as, e.g., the filing fee and search fee, the designation fee and the examination fee. The latter fees fall due on a certain date which, normally, is the result of a procedural event, and the system then allows the applicant a period of time to pay the prescribed fees. The system for renewal fees is different: the renewal fee for a regular European patent application falls due on 'the last day of the month containing the anniversary of the date of filing' (Rule 51(1) first sentence, EPC). This last day of the month is the only day on which the renewal fee can validly be paid without additional fee. Although the possibility of advance payment of renewal fees (Rule 51(1) last sentence, EPC) mitigates the practical difficulties arising from restricting the payment possibility to one day, the procedural requirements for paying renewal fees do not follow the general principle for fees to be paid, i.e. at the expiry of a period of time.[1]

Influence of T 1402/13

In the EPC 1973, it was clear from the law when the loss of rights ensues when the deemed withdrawal of the European patent application ensues if the applicant does not pay the renewal fee in due time (Article 86(3), first sentence, EPC 1973):

"If the renewal fee and any additional fee have not been paid in due time the European patent application shall be deemed to be withdrawn."

The loss of rights is differently worded in Article 86(1), last sentence, EPC 2000:

"If a renewal fee is not paid in due time, the application shall be deemed to be withdrawn."

The Explanatory Remarks in relation to Article 86(1) EPC 2000 stated that the deemed withdrawal would still take place at the end of the six‑month additional period (See Official Journal of the EPO (2007) Special edition No. 4: Revision of the European Patent Convention (EPC 2000) Synoptic presentation EPC 1973/2000 - Part I: The Articles, p. 86):

"Article 86(3) EPC 1973 is also deleted and the legal consequence of a failure to pay the renewal fee in due time is added to Article 86(1) EPC 2000. It is emphasised that this does not modify the current situation, and under the Implementing Regulations to the EPC 2000 the application shall only be deemed to be withdrawn if the renewal fee and any additional fee have not been validly paid within the prescribed grace period for payment (see Rule 51(2) EPC 2000)."

The Guidelines for Examination in the EPO (2016) A-IV, 1.1.1 reflect this practice:

"In the event of non-payment of a renewal fee by the due date (Rule 51(1)), the application is pending up to the last day of the six-month period for payment of the renewal fee with an additional fee (Rule 51(2)), and a divisional application may still be filed during this period - even if the fees are ultimately not paid. Deemed withdrawal of the application takes effect on expiry of the six-month period. "

Nevertheless, the wording of Article 86(1) EPC 2000 leaves room for interpretation. In particular, Article 86(1), last sentence, EPC 2000 seems to suggest that the deemed withdrawal takes effect on the due date. This would be consistent with the view endorsed by Opinion of the Enlarged Board of Appeal in G 4/98, wherein the principle was confirmed that the deemed withdrawal of the application takes effect at the expiry of the normal period and not at the expiry of the so-called 'grace period'. The EPO incorporated G 4/98 to this effect several times in the Guidelines for Examination in the EPO (see A‑III 11.2.3, A‑III 11.3.4 and E‑VIII 2.1.3):

"Any loss of rights ensues on expiry of the normal period (see G 4/98)."

The Board of Appeal in T 1402/13 applied the principle that the deemed withdrawal of the application takes effect at the due date also to the payment of renewal fees. A consequence is that if an applicant files a divisional application in the six-month additional period but does (eventually) not pay the renewal fee for the parent application, the divisional is deemed not to have been validly filed, because the parent application was not pending when filing the divisional application.

The Boards of Appeal are not bound by the explanation of the law in the Official Journal or in the Guidelines: they are only bound by the provisions of the EPC (Article 23(3) EPC).

After the issuance of T 1402/13, the EPO was compelled to clarify the wording of the law in relation to when the deemed withdrawal ensues if a renewal fee is not duly paid. To this end, Rule 51(2) EPC was amended effective 1 January 2017 (Decision of the Administrative Council CA/D 17/16; Official Journal of the EPO (2016) A102). The amended text of Rule 51(2) EPC reads as follows:

"If a renewal fee is not paid on the due date under paragraph 1, the fee may still be paid within six months of the said date, provided that an additional fee is also paid within that period. The legal consequence laid down in Article 86, paragraph 1, shall ensue upon expiry of the six-month period."

The last sentence of Rule 51(2) EPC clarifies how Article 86(1), last sentence, EPC should be interpreted.

In document SACEPO/WPR 8/16 (see the Report form the European Patent Practice Committee in epi Information 1|17), the reason for the amendment was given:

"The Office replied that the proposed amendments to Rule 51 EPC simply consist in a clarification of the current practice and stated that there is no legal impediment to the provision of different regimes in the pre- and post-grant procedure; both regimes are in line with the Paris Convention."

Undesired consequences of the amendment of Rule 51(2) EPC

After the amendment, Rule 51(2) EPC consists of two sentences. The amendment also includes a minor reformulation of the first sentence. In the previous version, Rule 51(2) EPC was formulated as follows:

"If a renewal fee is not paid in due time, the fee may still be paid within six months of the due date, provided that an additional fee is also paid within that period."

The first sentence of Rule 51(2) EPC after amendment is now formulated as follows (underlined words show the new text):

"If a renewal fee is not paid on the due date under paragraph 1, the fee may still be paid within six months of the said date, provided that an additional fee is also paid within that period."

In particular, two amendments require attention:

  1. The wording 'on the due date' has been added;
  2. The wording 'under paragraph 1' has been added.

Both amendments have undesired consequences.

Item 1

The use of the word 'on' in 'on the due date' is wrong or at least confusing, because renewal fees may be validly paid in a period of three months before they fall due (Rule 51(1) last sentence, EPC). This was brought to the attention of the EPO (see the Report form the European Patent Practice Committee in epi Information 1|17):

"SACEPO members suggested that the wording be clarified in the English text by replacing 'on the due date' with 'by the due date' in Rule 51(2) EPC. The EPO will consider the proposal further and if necessary reflect the change in the French and German translation."

Unfortunately, the English text was not adapted, but the German text was amended to reflect the possibility of payment of the renewal fee before the due date:

"Wird eine Jahresgebühr nicht bis zum Fälligkeitstag nach Absatz 1 entrichtet, so kann sie noch innerhalb von sechs Monaten nach Fälligkeit entrichtet werden, sofern innerhalb dieser Frist eine Zuschlagsgebühr entrichtet wird."

Item 2

A specific reference to the first paragraph of Rule 51 EPC is included in the new wording of Rule 51(2) EPC. The intention for making this amendment was to clarify the wording of Rule 51(2) EPC. However, it has undesired consequences for the expiry of the 6-month additional period in three different situations.

If an applicant files a divisional application, when renewal fees are already due in respect of the parent application, renewal fees must also be paid for the divisional application, because the divisional application is 'deemed to have been filed on the date of filing of the earlier application' (Article 76(1) EPC). Rule 51(3) EPC deals with this situation:

"Renewal fees already due in respect of an earlier application at the date on which a divisional application is filed shall also be paid for the divisional application and shall be due on its filing. These fees and any renewal fee due within four months of filing the divisional application may be paid within that period without an additional fee. Paragraph 2 shall apply."

In the last sentence of Rule 51(3) EPC, a reference is made to Rule 51(2) EPC. The consequence is that the reference to Rule 51(1) EPC in the first sentence of Rule 51(2) EPC has to be taken as the law prescribes. Therefore, the starting point of the calculation of the six-month additional period for the payment of the renewal fee (with additional fee) after filing a divisional application should be the 'normal' last day of the month following the anniversary of the parent application and no longer the filing date of the divisional application. This is the consequence of the last sentence of Rule 51(3) EPC referring to (amended) Rule 51(2) EPC which contains an explicit reference to 'the due date under paragraph 1'.

The same should apply to the situation where renewal fees are due after a successful re-establishment of rights (Art. 122 EPC) after a refusal or deemed withdrawal of the application (Rule 51(4) EPC). The last sentence of Rule 51(4) EPC contains the same wording as that of Rule 51(3) EPC:

"Paragraph 2 shall apply."

The same should apply to the situation where renewal fees are due after a successful petition for review (Art. 112a(5) EPC). The last sentence of Rule 51(5) EPC contains the same wording as that of Rule 51(3) EPC.

The reformulation of the first sentence of Rule 51(2) EPC also causes a conflict in relation to Euro-PCT applications upon entry into the regional phase before the EPO. Rule 159(1)(g) EPC states:

"pay the renewal fee in respect of the third year provided for in Article 86, paragraph 1, if the fee has fallen due earlier under Rule 51, paragraph 1;"

In the situation before the amendment of Rule 51(2) EPC, if the renewal fee has already fallen due before the entry, the six-month additional period is to be calculated from the entry date (or the 'Monday', if there is a 'weekend' extension).

With the amended wording of the first sentence of Rule 51(2) EPC, the six-month additional period for a Euro-PCT application in this situation is to be calculated from the 'the due date under paragraph 1' of Rule 51 EPC, and no longer from the 'entry date'. This may imply that the payment of the renewal fee with additional fee for a Euro-PCT application expires already shortly after the acts for entry have been completed, because the expiry of the 31-month period is no longer the starting point for the calculation of the additional period.

Despite the wording in Notice from the European Patent Office in Official Journal of the EPO (2016) A103:

"The amendments do not change current practice under these provisions."

the author is of the opinion that the 'clarifying' amendments of the first sentence of Rule 51(2) may have consequences if in a case before the Boards of Appeal, the law is read without applying it in the manner desired by the EPO in its Notice or as is in the Guidelines. Since the last sentence of Rule 51(3) EPC does not mention 'mutatis mutandis', the Board will read the text of the law literally which may result in a different interpretation depending whether the application is a direct European, a divisional or a Euro-PCT application.

As explained above, the due date for calculating the renewal fee with additional fee for a divisional application under the revised wording of the first sentence of Rule 51(2) is no longer the filing date of the divisional but the due date of the renewal fee of the 'parent' application. In addition, there is also no mutatis mutandis in the last sentences of Rule 51(4)(a) and of Rule 51(5)(a) EPC. Furthermore, in Rule 159(1)(g) EPC in relation to the Euro-PCT applications entering the regional phase before the EPO, there is no mention of how to pay the renewal fee with additional fee within the six-month additional period. Also here, the amended formulation of the first sentence of Rule 51(2) EPC has to be applied.

How to repair?

The problem could easily have been avoided if a reference to 'paragraph 1' was not included in the amended wording of the first sentence of Rule 51(2) EPC. This sentence would then read (underlined words show the new text):

"If a renewal fee is not paid on or before the due date, the fee may still be paid within six months of the said date, provided that an additional fee is also paid within that period. "

In this proposed formulation, the wording 'on or before' is employed to indicate that renewal fee may be validly paid in a (three-month) period before it falls due (see Item 1 above).

In addition, the wording 'in due time' in the previous version of Rule 51(2) EPC, has been replaced by the clarifying wording 'on or before the due date' without adding the limiting feature 'under paragraph 1' (see Item 2 above).

In this manner, the last sentences of Rule 51(3), 51(4)(a) and 51(5)(a) EPC can be interpreted according to the long-standing practice of the EPO in relation to the calculation of the six-month additional period. The same would be the case for calculating the 6-month additional period for renewal fees in relation to Euro-PCT applications (Rule 159(1)(g) EPC).

Note that the above text proposal derives from the wording of Article 86(2) EPC 1973 which was formulated as follows:

"When a renewal fee has not been paid on or before the due date, the fee may be validly paid within six months of the said date, provided that the additional fee is paid at the same time."

Conclusion

As long as the new wording of the first sentence of Rule 51(2) EPC as amended effective 1 January 2017 is not 'repaired', applicants run the risk that a Board of Appeal reads the new wording of Rule 51(2) EPC literally and ignores the explanatory statements of the EPO that the amendment does 'not change current practice under these provisions'. As is explained in this article, the amended wording may have serious consequences for the starting point of the calculation of the additional six‑month period in relation to the payment of renewal fees for divisional applications (Rule 51(3) EPC), for Euro-PCT applications (Rule 159(1)(g) EPC) as well as to the situations referred to in Rule 51(4) and (5) EPC.

Acknowledgement

The author would like to express his gratitude to Derk Visser for his advice and stimulating discussions during the preparation of the article.

  1. In 2015, an article was published with a detailed proposal to simplify and streamline the payment of renewal fees in the EPC (European Intellectual Property Review 37 (2015) pp. 644-652). By only amending a few words in Rule 51 EPC, the due date of the renewal fee and the last day of valid payment would become decoupled. It was proposed to move the 'due date' of the renewal fee to the anniversary of the filing date of the application while the concomitant renewal fee would have to be paid within one month of the due date. The result would be an elegant system where the payment of renewal fees is streamlined with the payment of the 'normal' fees. In addition, in the proposal, the payment of renewal fees for direct European patent applications as well as for divisional applications and for Euro-PCT applications would follow the same rules. In the article, advantages and disadvantages of the proposed amendments of Rule 51 EPC were discussed extensively.
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