Breeding Issues: Fruits of Crossing the Administrative Council
Part I
Heiko Sendrowski (DE)
These are busy times for the Enlarged Board of Appeal (EBA). Within two months, three Technical Boards of Appeal (in cases T 489/14, T 318/14 and T 831/17) have referred questions under Art. 112 (1) (a) EPC, and now the President of the EPO has also referred "a case" (see EPO web communication of 29 March 2019), treated at the EBA under the caption “G 3/19”. The President feels compelled to react expeditiously to an alleged legal uncertainty caused by decision T 1063/18. In this decision the Technical Board of Appeal held, in no unclear terms, that the Administrative Council acted ultra vires when introducing a new rule in the Implementing Regulations and therefore patents cannot be refused (or revoked) by invoking this rule.
This article attempts to elucidate ways of easing what appears to be a veritable disagreement between the Board of Appeal on one side and the Office, its Administrative Council, most Member States, the European Parliament and Commission and a number of vocal NGOs on the other side. As the legal field ploughed by decision T 1063/18 is rather special (exemptions from patentability for plants exclusively obtained by essentially biological processes), the article refrains, for the benefit of a larger audience, from taking one side or the other with regards to the correctness or desirability of decision T 1063/18. Instead it merely explores the means available for the Member States and parties to cope with the situation.
In the first part, the questions referred by the President will be analysed for their compatibility with Art. 112 (1) (b) EPC. As will be argued below these questions are unlikely to achieve what is necessary to reconcile the Board of Appeal with the relevant political actors. In the second part, alternatives to a Presidential referral are discussed, i.e. participation of the President (or a delegate of his) to individual appeal proceedings, a referral to the ECJ and amendments to the EPC.
Before addressing the President's questions in more detail, a brief summary of the technical and legal background is unavoidable.
According to Art. 53 (b) EPC, European patents shall not be granted in view of (1) plant varieties or (2) essentially biological processes for the production of plants. In joint decisions G 2/12 and G 2/13 the EBA had decided that product claims to plants other than individual plant varieties are in principle allowable, even if the only known means at the filing date for producing such plants is an essentially biological process, which eo ipso is not patentable. In reaction to these decisions, the European Parliament in Resolution 2015/2981(RSP) called "on the Commission to clarify the scope and interpretation of [the Biotech] Directive 98/44/EC ... in order to ensure legal clarity regarding the prohibition of the patentability of products [sic] obtained from essentially biological processes." The European Commission subsequently published a corresponding Notice (2016/C 411/03). The EPO Administrative Council, pressed by the EU Member States, amended the Implementing Regulations and inter alia introduced R. 28 (2) EPC which prohibits the grant of patents directed to plants or animals exclusively obtained by means of an essentially biological process.
In the case underlying decision T 1063/18 the examining division had refused a patent invoking said R. 28 (2) EPC. The Technical Board of Appeal found that the Rule was irreconcilably at odds with the interpretation of Art. 53 (b) EPC rendered by the EBA in decisions G 2/12 and G 3/12. The Board saw no reason to deviate from the EBA's interpretation. In what appears to be a first, the Board invoked Art. 164 (2) EPC to decide that R. 28 (2) EPC cannot take away what Art. 53 (b) EPC as interpreted by the EBA gives; a decision holding the subject-matter of a claim to be within the exception to patentability of R. 28(2) EPC is to be set aside. Without any recourse to the EBA the Board held the Administrative Council not competent to amend the EPC, here Art. 53 (b) EPC, by amendment of the Implementing Regulations, here R. 28 (2) EPC, and rejected the idea of the EU Commission having any say in the interpretation of the EPC or of EU law such as the Biotech Directive. The Commission's Notice had no legal authority.
Under these circumstances, it comes as no surprise that the EPO and Member States chose not to accept this lying down and accused the Board of causing legal uncertainty. They saw a remedy to this situation in a presidential referral to the EBA. Thus, hereinafter some aspects that could influence the outcome of referral proceedings are discussed and alternative ways for resolution are examined.
Under Art. 112 (1) (b) EPC the President may, to ensure uniform application of the law or if a point of law of fundamental importance arises, refer a point of law to the EBA where two Boards of Appeal have given different decisions on that question.
The President has submitted two questions (see https://www.epo.org/law-practice/case-law-appeals/eba/pending.html), both of which can be answered by yes or no, but the second one is only raised in case the first question is answered to the positive. The questions are:
- Having regard to Article 164(2) EPC, can the meaning and scope of Article 53 EPC be clarified in the Implementing Regulations to the EPC without this clarification being a priori limited by the interpretation of said Article given in an earlier decision of the Boards of Appeal or the Enlarged Board of Appeal?
- If the answer to question 1 is yes, is the exclusion from patentability of plants and animals exclusively obtained by means of an essentially biological process pursuant to Rule 28(2) EPC in conformity with Article 53(b) EPC which neither explicitly excludes nor explicitly allows said subject-matter?
Who may – or actually should – ask which questions to whom and at what point in time has been a recurring issue at least since medieval times (see Wolfram von Eschenbach, Perceval, books V and IX). It is thus of little surprise that this topic received intense attention at the time of drafting the EPC. A right of the President to submit questions had been foreseen already in the earliest preparatory documents (BR/11/69), and already at that time the scope of this right was contentious: The early drafts contained explicit provisions for allowing a Presidential referral in two situations: either a question could be referred any time except where such question arises in proceedings on a case, or a referral would be admissible where two Boards of Appeal have given different decisions on a point of law. During deliberations, the first alternative was criticised due to concerns that the EBA should not, as a court-like institution, have to deliberate abstract questions. For such questions the President can make full use of the EPO's legal department. Furthermore, it was feared that if the EBA gave an opinion without an actual appeal case and is later confronted with the same questions in a referral by a Board of Appeal, then the EBA might be biased in favour of adhering to the pre-formed opinion (BR/12/69, sec. 55). It was never doubted that the President should have the possibility of recourse to the EBA where the Boards of Appeal would maintain divergent opinions on questions of law. The more widely drafted right of the President was, however, deliberately deleted during the September 1971 Luxemburg conference (BR/132/71, sec. 45).
In view of the clear intention of the legislator as derivable from the wording of the Convention itself and from the travaux préparatoires, the EBA summarised in decision G 3/08 that the President may refer questions under Art. 112 (1) (b) EPC only if the absolute preconditions are fulfilled: (1) The President must refer a point of law that is of fundamental importance instead of a merely abstract one and (2) there must be a current, continuing divergence of decisions given by the Boards of Appeal. Hereinafter, it will be first discussed if the questions referred by the President are indeed focused to a fundamental point of law. After that, admissibility of the President's questions will be analysed in view of the criterion of persistent case law divergence.
In lieu of a legal definition in the EPC itself, a recurrent definition used by the German Federal Constitutional Court (FCC) may serve as an indicator of a generally accepted definition (see, for example, BVerfG 2 BvR 2157/15, sec. 22). According to the FCC a question of law is of fundamental importance if all of the following criteria are fulfilled: The question must be relevant to a decision; it is in need of clarification and capable of clarification; it may arise in an indefinite number of other cases (see also G 1/13 sec. 2); its answer is doubtful, for example because different views were held on this point; and a clarification by the supreme court had not yet taken place by the time the judgement under appeal was delivered.
The Technical Board in decision T 1063/18 has denied that a question of fundamental importance has arisen in the context of the amendment of R. 28 EPC. The Board explained that the situation was that of an acte éclairé, a clarification by the EBA had already taken place: The EBA had interpreted Art. 53 (b) EPC, and "any interpretation of the EPC by the EBA implies that the law should always have been read in conformity with that interpretation."
A finding of an acte éclairé requires a cautious approach. A decision by the EBA is merely a text, and, as Socrates observed (see Phaidros, 276c), written words cannot defend themselves by argument and cannot teach the truth effectually, a text "always needs its father to help it". Thus even where the EBA had rendered an interpretation of the EPC there remains a need to let the EBA speak again, if only to complete or correct the written thoughts. The desire to hear the EBA again on a subject must, however, be balanced with the vocation of the Boards of Appeal to decide matters; they are the first – and only – judicial instance vested with the power to settle an appeal, so they ought to make full use of their powers. Balancing these demands another Board in decision T 297/88 developed some non-limiting criteria when a re-referral to the EBA appears to be advised:
- The reasoning of the EBA was so deficient that doubts as to the accuracy of the decision as such are inevitable. This condition is obviously not met in the present case, because not only was the Board satisfied that it can fully comprehend and follow the reasoning of the EBA, also the EU Commission and the Administrative Council have not lamented any profound confusion in the EBA's reasoning.
- The reasoning of the EBA was based on false assumptions and, therefore, doubts are raised as to the conclusion reached. This criterion is invoked by the EU Commission who bases its Notice on an analysis of the travaux préparatoires relating to the Biotech Directive. The Board in decision T 1063/18 even conceded that the EBA probably would have taken the Notice into consideration; but the Board concluded that the EBA would not have decided any different.
- Although the conditions were right and the reasoning was conclusive, legal and/or technical developments have occurred after the previous EBA decision which may make it desirable, in the public interest, for the question to be re-examined by the EBA. This condition requires further inspection.
Introducing a new Rule to the Implementing Regulations could be qualified "legal development". The Administrative Council invoked its right to amend the Implementing Regulations in order to bind the Boards of Appeal to a change in law ("for practical application of the Convention, only the interpretation of its provisions laid down in the Implementing Regulations is binding", see CA/56/17 sec. 24), thereby trying to effectively remove the basis of the EBA's reasoning.
The Board found that an amendment of the Implementing Regulations does not constitute a development requiring another referral of a question already answered by the EBA: Once the meaning of an Article of the EPC has been established by an interpretation of the EBA, this meaning "cannot be overturned by a newly drafted Rule of the Implementing Regulations, the effect of which is to conflict with this interpretation" (see, for example, T 39/93 sec. 3; G 1/88 sec. 4; G 2/95 sec. 1; G 6/95 sec. 4; G 2/07 sec. 2.2; J 14/91 sec. 2.2).
This reasoning, albeit in strict accord with well established case law, is not beyond doubt. The Administrative Council is not only competent to amend the Implementing Regulations, it is also competent to amend, inter alia, Art. 53 of the Convention to bring it "into line with European Community legislation relating to patents" (Art. 33 (1) (b) EPC). This provision has been introduced during the Diplomatic Conference of 29 November 2000. According to the travaux préparatoires (MR/2/00) the new power invested in the Administrative Council was intended to allow "any consensus achieved at EU level to be directly echoed in the EPC", avoiding the need for a new Diplomatic Conference. Thus, where the Administrative Council intends to bring the EPC into line with EU law such as the Biotech Directive, it may amend both the Implementing Regulations and the Convention itself. Focusing exclusively on the order of precedence of potentially conflicting provisions is thus not sufficient. It is possible that the Administrative Council, intending to change the provisions of the EPC, merely erred in amending the Implementing Regulations instead of the Convention itself. In this situation, it would have been incumbent on the EBA to rule if the Administrative Council benefits from the legal principle that the true will and not its erroneous expression is decisive ("falsa demonstratio non nocet"), and if the Administrative Council should be granted any deadline for correcting such error in formal implementation of its true will. For reasons elucidated in the second part of this article it is unlikely that the Administrative Council would act within its competence when amending Art. 53 (b) EPC to bring it in line with present R. 28 (2) EPC. This expectation does, however, not take away from the proposition that the competence of the Administrative Council is a fundamental point of law suitable for a referral to the EBA.
Another type of legal development could also be taken into consideration. The national laws of some Member State (DE, FR, IT, NL) have been changed in accordance with the Commission Notice, repeating the changes introduced by R. 28 (2) EPC. According to Art. 31 (3) of the Vienna Convention, recourse may be had to (any) subsequent practice in the application of a treaty which establishes the agreement of the parties to the treaty regarding its interpretation. It is important to note that the "subsequent practice" need not be implemented by all Member States as long as it is discernible that there is indeed an agreement of some sort. However by decisions G 2/12 and G 2/13 the EBA have already rejected that an accord of the Member States could be identified from the isolated changes in national laws. The Board in decision T 1063/18 therefore could rely on authority when disregarding these developments.
The criteria (i) - (iii) are not exhaustive. The European Patent Organisation operates in a political context and recognises that it does so (CA/123/00). A question law is also of fundamental importance if a legal opinion held by the Boards and the EBA is contradicted for weighty reasons. The expression of differing views is not limited to opinions expressed by the courts, it also includes opinions expressed in literature. Thus the EU Commission Notice is not by its very nature irrelevant. It is not decisive that the Notice cannot have any binding effect on the Boards, nor the that Commission is not called to authoritatively interpret EU law or to represent the EPC Member States. Instead, the Notice should be treated at least as an educated opinion on the EU legislator's intentions. And the opinions expressed in the Notice were not apparently isolated but received further (political) support, for example by the EU Council (OJEU 2017/C 65/02). Of course, the Notice itself and the support it received are not legal developments, they are entirely of political nature. However, it is a daily task of the Boards to hear arguments from interested parties, to deal with the merits of such arguments and to weigh them when arriving at a conclusion.
In summary, the questions asked by the President are not abstract ones, they are not already finally decided by the EBA (no acte éclairé) and there is a legitimate interest to have these questions answered.
This finding, however, does not help in the present Presidential referral. Even if the President’s questions are worth being dealt with at the EBA, admissibility of a referral depends on that the President – instead of a Board of Appeal – is entitled to submit these questions.
In addition to there being a point of law of fundamental importance, the President's right according to Art. 112 (1) (b) EPC depends on at least two Boards of Appeal having given different decisions on that question. The EBA has commented extensively on this limitation of the President's right: A "presidential referral is not admissible merely because the European Parliament and Council have failed to adopt a directive or because consistent Board rulings are called into question by a vocal lobby", "the right of referral does not extend to allowing the President, for whatever reason, to use an Enlarged Board referral as a means of replacing Board of Appeal rulings with the decision of a putatively higher instance" (G 3/08 sec. 7.2.7). For a Presidential referral to be admissible it is mandatory that "two Boards of Appeal have given different decisions on the questions referred" (G 3/08, sec. 3). The EBA has particularly emphasised this aspect: a "referral is justified only if at least two Board of Appeal decisions come into conflict with the principle of legal uniformity. The object and purpose of Article 112(1)(b) EPC is to have an Enlarged Board decision re-establish legal uniformity when it has clearly been disrupted, not to intervene in legal development" (G 3/08, sec. 7.3.1). "Decisions of other (national) courts are not relevant when examining the admissibility of a referral" (G 3/08, sec. 5). The ambit of a Presidential referral can only be to remove a conflict in case law where such conflict makes it "difficult if not impossible for the Office to bring its patent granting practice into line with the case law of the Boards of Appeal" (G 3/08, sec. 7.2.6). Thus a mere unwillingness of the Member States, the Administrative Council or the EPO to abide with an interpretation of the EPC by a single Board or by the EBA is not sufficient.
In the light of these explanations, admissibility of the President's questions is legally doubtful.
For the first question the President invokes an actual divergence of case law. Specifically it is argued that decision T 1063/08 (and T 39/93 cited therein) differs from decisions T 272/95 and T 315/03. The President interprets the latter decision as agreeing that the Administrative Council may, by amendment of the Implementing Regulations, restrict (the questions euphemistically insist on using the term “clarify”) the scope of Articles of the Convention. However, both decisions only touched this question and found that the respective provisions of the Implementing Regulations were not in material conflict but could be interpreted in accordance with the corresponding Article of the Convention. Thus, the arguments relied on in the present referral are in essence based on obiter dicta (against admissibility of such referrals Moser in Beier/Haertel/Schricker, Münchner Gemeinschaftskommentar zum EPÜ, Art. 112, sec. 30). Until decision T 1063/08 the Boards never had to decide if the Administrative Council may overturn an EBA's interpretation of an Article by means of amending the Implementing Regulations.
It is also argued that decision T 1063/08 diverges from an earlier EBA decision (G 2/07). Given the clear systematic separation of Boards on Appeal and Enlarged Board of Appeal (see Art. 15, 20, 21, 112 and 112a EPC) it is not prima facie convincing to argue that a divergence between one Board of Appeal decision and an earlier EBA decision is a divergence in Board of Appeal decisions.
However, the President's right to a referral must not be unduly restricted. The intention of Art. 112 EPC was always to safeguard uniformity of Board of Appeal decisions. Such uniformity must be apparent to ensure confidence of the users (applicants and opponents) of the European patent system and of the general public alike. Otherwise doubts would remain whether decisions depend on the preferences of the Board of Appeal in charge of a case, thereby thwarting legal certainty. Thus, even a divergence in obiter dicta (see G 3/93, sec. 2) or between Board of Appeal and EBA can legitimise a referral under Art. 112 (1) (b) EPC. And in a situation like the present where so much is at stake for applicants, care must be taken not to overdo insistence on formal admissibility.
In summary, the first question referred seems admissible. For the second question, however, admissibility seems to be unattainable due to a lack of anything that could be interpreted as a divergence in case law. The Board in decision T 1063/18 meticulously adhered to the interpretation of Art. 53 (b) EPC given by the EBA. In the referral itself no attempt was made to argue an existence of divergence. Instead, admissibility was invoked because the second question is directly related to the first one, or because the second question is admissible under Article 112(1)(b) EPC by analogy. Both arguments are hardly convincing.
For the first argument a comparison between a referral and opposition proceedings is enlightening. An opposition is admissible in total where one ground for opposition has been admissibly raised. The topic of an opposition is always a singular one: to revoke or not to revoke a patent. Independent questions referred to the EBA are, however, by definition not singular. Thus, each question must be admissible independent of all others. Otherwise the President could circumvent the clear intention of the legislator not to busy the EBA with abstract questions by raising one admissible question and insisting that all other questions are thematically linked thereto.
The second argument – admissibility by analogy – basically is that a question is admissibly referred not because the conditions of Art. 112 (1) (b) EPC are met, but because the circumstances are similar enough to those of an admissible case. This argument hinges on an evaluation of the term “enough”. A minimum requirement to meet this criterion is that the law objectively needs to be completed. Where it is found that the legislator did not want to link a legal effect to some setting, it is of no importance that this setting is to some degree similar to another setting that comes with the coveted legal effect.
Regarding the right to a referral, the legislator made a clear systematic distinction between the Boards of Appeal and the President: The Boards may refer “any [!] question to the Enlarged Board of Appeal if it considers that a decision is required for the above purposes” to ensure uniform application of the law or if the question is a point of law of fundamental importance. The President, however, may only refer a point of law to the EBA where two Boards of Appeal have given different decisions on that question, even if the question is a point of law of fundamental importance (see Moser in Beier/Haertel/Schricker, Münchner Gemeinschaftskommentar zum EPÜ, Art. 112, sec. 28; Günzel/Kinkeldey in Benkard, EPÜ, Art. 112 Rn. 6). The wording of Art. 112 (1) (b) EPC thus clearly and correctly reflects the intention documented during the genesis of the EPC to prevent the President from referring questions unless there is a divergence of case law.
The political actors may be dissatisfied with the Board's failure to refer a question already decided by the EBA. However, in view of a so far unambiguous case law the Office is faced with no difficulty to align its patent granting process with the case law of the Boards of Appeal. Or, using the words of the EBA: “A discrepancy between office practice of the EPO and the case law of the Boards of Appeal is not in itself sufficient to justify a referral by the President of the EPO to the Enlarged Board of Appeal, if the practice of the EPO is not warranted by the case law” (G 4/98, sec. 1.1).
It may be argued that the conflict between the existence of the words of Rule 28 (2) EPC and the case law of the Boards of Appeal creates a sufficient difficulty. But upon closer inspection this alleged conflict does not exist. In a society adhering to a separation of powers, the executive must apply the law as interpreted by the courts even if the executive and/or legislative does not like the interpretation. It is to be kept in mind that the executive is not bound to the "letters of the law". What is decisive is the will of the objective legislator. It is the prerogative of the judiciary to define the meaning of the law; the executive has to act according to this definition (unless in cases of manifest unrighteousness of the law and/or its interpretation). Admittedly the EPC does not contain a provision for having an Article or Rule annulled by the Boards. However, where the Boards have decided that there is no room for application of R. 28 (2) EPC, the EPO is no longer bound to nor may it apply this Rule in examination and opposition proceedings.
It may also be argued that the EPO is not bound by decision T 1063/18 except for a single patent granting process, for all other patent grant and revocation processes R. 28 (2) EPC would still be applicable. Such argument would constitute a gross neglect of the function of the Boards of Appeal in the concert of powers under the EPC. First of all the argument is not special to the decision in question. Following this argument, the EPO would be liberated from applying any case law whatsoever, it could intentionally refuse patents as it sees fit and leave it to the Boards to correct any errors. This is at odds with the Rule of Law. Second, where the judiciary has given an interpretation of the EPC that is generally applicable, then all cases currently pending before the EPO must be treated according to said interpretation (see G 9/93 sec. 6.1, affirmed in G 3/97 sec. 7). In the present case this means that R. 28 (2) EPC is devoid of substance: it is a string of words without effect.
The President may propose that decision T 1063/18 is an isolated one and that it is to be expected that it will be overruled either by the EBA or by subsequent Board of Appeal decisions. However, neither does this alter the criteria for admissibility for a referral nor does it liberate the EPO from adhering to the Board's interpretation of the EPC. The mere hope (or conviction) that some future Board might decide in conflict to decision T 1063/18 is not equivalent to the presence of a conflict as stipulated by Art. 112 (1) (b) EPC. Even where it later turned out that decision T 1063/18 were indeed an isolated decision the President would not be entitled to a referral, because legal development would have made this decision obsolete. Then a fortiori the President is not entitled to a referral where legal uniformity has not been disrupted yet.
Furthermore the chances for a change of view by the Board are negligible. The issue in question, i.e. the applicability of R. 28 (2) EPC, arises only in a special technical setting, i.e. plant breeding. According to the business distribution scheme all decisions based on R. 28 (2) EPC will be dealt with by the same Board. Given that the present decision was rendered by the Board in an enlarged composition according to Art. 21 (3)(b) EPC and Art. 9 RPBA, it is difficult to nourish any expectation that the Board in a different composition will come to a divergent conclusion. The President and the Administrative Council have no say in the allocation of duties to the Boards of Appeal as this is handled autonomously by the Praesidium of the Boards of Appeal, extended to include all Chairmen (R. 12b (4) EPC). Moreover, if the Administrative Council were to amend the Implementing Regulations in order to interfere with the establishment of the business distribution scheme (for example to transfer plant breeding cases to another Board), this could only be justified with great difficulty, to say the least (cf. Art. 23 (3) EPC). And the present referral would still remain inadmissible as the amendment of the business distribution scheme would not create per se divergent case law.
The instrument of a referral might have been used in order to obtain an obiter dictum by the EBA (see G 3/08, sec. 10 and 11). However, little would be obtained by such approach. According to the EPO's statement of 29 March 2019, the Presidential referral is intended to find "a solution in the short term following the decision T 1063/18." If the EBA does accept the referral, then the Boards of Appeal as well as the President and the Administrative Council will have to adhere to any interpretation handed down by the EBA, and it is so far difficult to see why the EBA should deviate from its reasoning developed in four earlier cases. If, however, the EBA hands out an obiter dictum, then the content is not binding for the Boards of Appeal or the EPO. And if the EBA merely explains that no difference exists between its prior decisions and the Board's decision T 1063/18, then nothing is gained either.
Part II of this article will be published in epi Information 3/2019
