One year after amending Rule 142 EPC on interruption of proceedings - tidying up the zombie applications
C. Mulder (NL)
J. Van kan (NL)
Rule 142 of the European Patent Convention (EPC) deals with the situation that proceedings before the European Patent Office (EPO) are interrupted because the applicant for (or proprietor of) a European patent is prevented from continuing proceedings as a result of medical or financial hardship. In addition, Rule 142 EPC provides for interruption of proceedings in case of death of the applicant (or proprietor) as well as in the event of death or legal incapacity of the professional representative of the applicant (or proprietor).
The aim of Rule 142 EPC is to provide a safeguard for parties who are unable to act in proceedings, because they are temporarily legally incapacitated (e.g., due to insolvency, bankruptcy or mental health problems), and allows them to remedy any loss of rights which occurred during this period. The proceedings are resumed after the (new) party or the (new) professional representative involved has informed the EPO that the situation is normalised, and the wish is indicated to continue the proceedings. Under Rule 142(2) EPC as amended, the EPO can also resume proceedings of its own motion, if, after three years, no reaction from the applicant (or proprietor) is received.Decision CA/D 2/20 of the Administrative Council of the European Patent Organisation, Official Journal of the EPO 2020 A36.
In 2019, an article was published by the current authors discussing the problems with Rule 142 EPC.Cees Mulder and Joep Van kan, "On the Interruption of Proceedings before the European Patent Office Following Insolvency Proceedings and Protecting the Interests of the Public" in European IP Review 41 (2019) pp.305-312. Probably inspired by this article,In October 2018, a draft version of the article was made available to the Patent Law section of the EPO. the EPO started considering proposals for amending Rule 142 EPC, in particular with the goal to give the EPO ex officio power to bring the proceedings to an end if, after a certain period of time, no reaction from the applicant (or proprietor) is received.President EPO: "Amendment to the Implementing Regulations to the EPC regarding resumption of proceedings ‒ Rule 142 EPC", Committee on Patent Law, document CA/PL 13/19 (4 November 2019). Amended Rule 142 EPC entered into force on 1 July 2020.Decision CA/D 2/20 of the Administrative Council of the European Patent Organisation, Official Journal of the EPO 2020 A36. The EPO has published a Notice concerning the implementation of amended Rule 142(2) EPC.Notice from the EPO dated 29 May 2020 concerning implementation of amended Rule 142(2) EPC, Official Journal of the EPO 2020 A76.
After the entry into force of Rule 142 EPC as amended, the current authors published an article discussing the advantages and disadvantages of the amended Rule.Cees Mulder and Joep Van kan, "On the Interruption of Proceedings before the European Patent Office Following Insolvency Proceedings and Protecting the Interests of the Public" in European IP Review 41 (2019) pp.305-312. It was concluded that amended Rule 142(2) EPC partly restores the balance between the interests of the applicant (or proprietor) and the public. However, it was remarked that it would have been easy to provide for other possibilities to terminate interrupted cases, e.g. when the professional representative of the applicant informs the EPO that his/her client is no longer interested in continuing with the application. In addition, the quality and effectiveness of Rule 142 EPC could have been further improved. In particular, a period could have been introduced in Rule 142 EPC setting a limit to the retroactive effect of the interruption.Cees Mulder and Joep Van kan, "Amendment of the EPC Rule on interruption of proceedings puts an end to zombie applications" in epi Information 03/2020 pp.13-21. The current authors advocated to limit the retroactive effect to three years. This would have created a better balance between the interests of the public and the applicant (or proprietor).
In general, Rule 142 EPC regards the missing of time periods as if they had not occurred in a similar manner as further processing and re-establishment of rights. There are also analogies between interruption of proceedings and stay of proceedings.Rule 14(2) and 78(1) EPC. In the latter case, proceedings before a national court have been initiated by a person who is of the opinion that he is entitled to the grant of the European patent.Art. 61 EPC. Interruption of proceedings is not available for the opponent or his representative.Rule 84(2), first sentence, EPC. Also see T 516/14 of the technical boards of appeal.
In principle, interruption of proceedings is applied ex officio by the Legal DivisionArt. 20 EPC and Official Journal EPO 2013 p.600, item 1.2(b). and retroactively from the first day of the incapacity. In cases pending before a board of appeal, the board is responsible to deal with a request for interruption.See decisions T 854/12 and T 1389/18 of the technical boards of appeal. In T 54/17, the board decided that during appeal proceedings, the Legal Division has no exclusive jurisdiction to interrupt the proceedings. In addition, the professional representative of the applicant (or proprietor) can apply for interruption of proceedings if he informs the EPO about the situation of his client.See the last sentence of Rule 142(1)(a) EPC: "To the extent that the above events do not affect the authorisation of a representative appointed under Article 134, proceedings shall be interrupted only on application by such representative". Also see Rule 152(9) EPC. The entry of interruption of proceedings in the European Patent Registry has a declarative effect.Also see decision J 16/05 of the judicial board of appeal.
Procedural aspects of interruption of proceedings are dealt with in the Guidelines for Examination in the EPO.Guidelines for Examination in the EPO (edition March 2021) E-VII 1. In addition, the Case Law book gives a summary of the case law of the EPO Boards of Appeal in relation to interruption of proceedings.Case Law of the Boards of Appeal of the European Patent Office (9th edition; July 2019) III.D.3. The situation with respect to insolvency causing interruption of proceedings is extensively discussed in an article by Neuburger in epi Information.Dr. B. Neuburger, "Interruption of the proceedings due to insolvency before the EPO and UPC" in epi Information 04/2017.
It is noted that re-establishment of rights and interruption of proceedings are not to be understood as alternative remedies in case of a loss of rights. In principle, interruption excludes re-establishment since interruption is ordered ex officio and no action can be taken during interrupted proceedings. Nevertheless, re-establishment of rights may be requested as an auxiliary request if the evidence for interruption is not sufficient.For example, see EP 1 578 265, EP 1 945 542 and EP 1 996 074. If applicable, preference should be given to the application of re‑establishment of rights in which proving the impairment is less severe than for interruption of proceedings.See decision J 7/16 of the judicial board of appeal.-Case Law of the Boards of Appeal of the European Patent Office (9th edition; 2019) III.E.6.4.
In this article, the effects of amended Rule 142 EPC are discussed. In Chapter 2 it is shown that the EPO started with cleansing the piles of applications for which interruption was requested. In Chapter 3 a conclusion is offered.
2 Effect of amended Rule 142 EPC
2.1 Some statistics
The EPO weekly publishes a European Patent Bulletin containing the particulars the publication of which is prescribed by the European Patent Convention, the Implementing Regulations or by the President of the EPO.See Art. 129(a) EPC. The Bulletin has an online search tool (free of charge) for accessing information on the bibliographic and procedural status of European applications and patents from 1978 to the present.See (accessed 01.08.2021): https://data.epo.org/expert-services/index.html. Accessing "EP Bulleting search" is free of charge. For instance, a query can be set that cumulates the European patent applications and patents where interruption or stay of proceedings is contained in the file.The search criterion "PSSI" in EP Bulletin search retrieves patent applications and patents where stay of proceedings (Rule 14 EPC) or interruption of proceedings (Rule 142 EPC) occurred. For example, the query PSSI = 2018* retrieves all applications/patents where a stay or interruption of proceedings occurred in 2018.-In this article, the EP Bulletin search was used to retrieve the data in the Figures. The database is continuously updated, therefore Figures 1 and 2 mention the date on which the results have been retrieved.
In Figure 1, the statistics of interruption and stay of proceedings are depicted. In the period 2010-2020, the average number per year is approximately 360 (standard deviation ≈160). The majority of the cases in Figure 1 relates to interruption of proceedings. The peaks in the figure are caused by one or several applicants with a portfolio of patent rights going bankrupt in a certain year.For instance in 2012, there is one applicant who went bankrupt, and the proceedings were declared interrupted for 343 patent applications: this explains the outlier in 2012 in Figure 1. In approximately 90% of the interruption cases, the proceedings are eventually resumed. However, in approximately 10% of the cases where interruption of the proceedings has been declared by the EPO, the proceedings are not resumed.In the period 2010-2020, proceedings were declared interrupted in respect of 4,314 applications whereas proceedings were resumed in respect of 3,852 applications. This implies that for approx. 420 applications (10%) proceedings have not (yet) been resumed. The latter has changed since the entry into force of amended Rule 142(2) EPC.
Figure 1 - Number of European patent applications and patents where the proceedings were declared interrupted by the European Patent Office (data retrieved on 04.08.2021).
The statistics of resumption of proceedings are shown in Figure 2. In the period 2010-2020 (note: not including 2021), the average number of resumed cases is approximately 350 (standard deviation ≈100).
In Figure 2, the peak in 2021 clearly shows that the EPO is effecting resumption of the proceedings of its own motion in cases which have been 'dead' for three or more years and where the applicant (or proprietor) has never indicated his/her wish to resume proceedings.The amendment of Rule 142(2) EPC has had no effect on the resumption statistics in 2020. The EPO started sending out letters announcing ex officio resumption after the entry into force date of Rule 142(2) EPC (1 July 2020), in which letters a date for resumption is set which is more than six months after the date of the letter. The first resumption dates were set on 1 February 2021. The peak in 2021 can be divided into the number of resumptions by applicants (say ≈250) and due to the EPO resuming proceedings ex officio (say ≈700).Note that the statistics over 2021 is not yet complete. The EPO also uses amended Rule 142(2) EPC to formally clean the files of applications which were filed more than twenty years ago, were interrupted and never resumed.A typical example case is EP 0080536: the European patent application was filed as a first filing on 2 December 1981 and published on 8 June 1983. Following the death of the applicant, the proceedings were declared interrupted effective 13 May 1985 and never resumed. On 28 July 2020, the EPO issued a communication (registered letter) where the Legal Division pursuant Rule 142(2), second sentence, EPC informed the professional representative that proceedings will be resumed ex officio on 1 February 2021 (on the same day, the EPO sent a communication to the heirs of the applicant informing them about the resumption). As no response was received, the EPO in a letter dated 9 March 2021 declared that the application is deemed to be withdrawn because the renewal fee for the 4th year and the additional fee have not been paid in due time. The European Patent Bulletin mentioned the deemed withdrawal on 21 July 2021 (issue 2021/29).
Figure 2 - Number of European patent applications and patents where the proceedings have been resumed by the European Patent Office (data retrieved on 04.08.2021).
2.2 A typical interruption case
The most common cases of interruption of proceedings are the ones where an applicant (or proprietor) runs into severe financial difficulties, often as a result of an action against his/her property.Almost 90% of the interruption cases relate to bankruptcy or similar judicial proceedings regarding the applicant or patent proprietor. In such a situation (e.g. bankruptcy or insolvency) the applicant is barred for a period of time from continuing the proceedings (legally incapacitated). Once the applicant is back in business, the proceedings can be resumed by informing the EPO of the identity of the person authorised to continue the proceedings.See Rule 142(2), first sentence, EPC.
By way of example, European patent application EP 1 483 732 has been selected. The most relevant events are arranged chronologically in the Table (the contents of the table has been retrieved via file inspection). In this case, the proceedings were interrupted in 2010. In April 2018, the EPO issued the following communication:
"You are invited to inform the Legal Division of the EPO if an interested party could be found to continue proceedings in this applications, and to file the relevant documents proving the authorisation of this/these party/parties in order to enable the EPO to resume proceedings. The Legal Division would also appreciate information if no interested party could be found to continue the proceedings.
Please file observations within a period of two months. This period begins on notification of this letter."
Normally, the EPO does nor receive responses to this kind of letters. However, in this particular case, the representative of the applicant responded by sending a letter on 5 June 2018:
"With reference to your letter of April 4, 2018, for the above-mentioned patent application, I can inform you that the bankruptcy of applicant, being xxx, ended in 2016."
However under old Rule 142(2) EPC, the EPO had no power to terminate the proceedings. The Legal Division answered on 19 June 2018:
"Regarding your letter dated 05 June 2018 received with the European Patent Office (EPO) on 11 June 2018, please be informed that according to Rule 142(1)(b) proceedings are interrupted ex-officio. Therefore your request dated 05 June 2018 cannot be granted."
If Rule 142 EPC had not been amended, the case (and many other similar cases) would remain interrupted until the end of the life of the patent application (without paying any fees). The amendment of Rule 142 EPC has put an end to these so‑called "no‑end files" or "zombie" applications. To this end a second sentence was added to Rule 142(2) EPC (new text in red):Decision CA/D/2020 of the Administrative Council of the European Patent Organisation, Official Journal of the EPO 2020 A36. Amended Rule 142(2) EPC applies to all proceedings already interrupted on or after 1 July 2020.
When, in the cases referred to in paragraph 1(a) or (b), the European Patent Office has been informed of the identity of the person authorised to continue the proceedings, it shall notify such person and, where applicable, any third party, that the proceedings will be resumed as from a specified date. If, three years after the publication of the date of interruption in the European Patent Bulletin, the European Patent Office has not been informed of the identity of the person authorised to continue the proceedings, it may set a date on which it intends to resume the proceedings of its own motion.
|EP 1 283 732||Proceedings|
|13.03.2002||Filing NL 1 020 161||Priority application|
|26.02.2003||Filing PCT/NL03/00145||International filing date|
|18.09.2003||WO 03/077110 A2||International publication without international search report|
|23.09.2004||WO 2003/077110 A3||Publication international search report|
|06.09.2004||Request for entry into the European phase|
|21.10.2004||EP 1 483 732||Invitation to file amended claims and, where required, to pay claims fee
(Rules 109-110 EPC 1973)
|15.02.2010||Information on bankruptcy||Letter to the EPO by the professional representative that the applicant is bankrupt as from 5 January 2010
Annexes: decision of the court + confirmation letter from the Chamber of Commerce
|22.02.2010||Proceedings are declared interrupted as of 05 January 2010||Communication from the Legal Division pursuant Rule 142(1)(b) EPC|
|05.01.2010||Interruption of proceedings||Interruption is declared retroactively|
|08.03.2010||Appointment of a new representative||Communication from the EPO on amended entries concerning the representative (Rule 143(1)(h) EPC)|
|12.04.2018||Request to inform the EPO whether proceedings can be resumed||Brief communication from the Legal Division pursuant Rule 142(2) EPC|
|11.06.2018||Representative informs the EPO that the bankruptcy of the applicant ended in 2016||Letter to the EPO by the professional representative|
|19.06.2018||Communication from the Legal Division that the request cannot be granted because proceedings are interrupted ex officio||Communication concerning resumption of proceedings after interruption pursuant Rule 142(2) EPC|
|10.11.2020||EPO announces that the proceedings will be resumed of its own motion on 01 June 2021||Communication from the Legal Division pursuant Rule 142(2) EPC|
|01.06.2021||Resumption of proceedings||EPO uses Rule 142(2), second sentence, EPC to set a date for resumption|
|15.06.2021||Invitation to pay renewal fees with additional fee (50%) for the 8th till the 19th year which may be validly paid until 01 December 2021||12 notices from the EPO drawing attention to Rule 51(2) EPC and RFees Art. 2(5)|
|02.12.2021||Application deemed to be withdrawn||The EPO will issue a Rule 112(1) EPC communication|
Table - Example of a European patent application where proceedings were interrupted because of bankruptcy of the applicant and resumed by the EPO of its own motion.
After the entry into force of amended Rule 142 EPC, the EPO started sending out registered letters to applicants (or proprietors) where proceedings have been interrupted more than three years as calculated from the mention of the date of interruption of proceedings in the Bulletin.
In the example case (see the Table), the EPO sent on 10 November 2020 a registered letter to the professional representative informing him that, following Rule 142(2), second sentence, EPC, the EPO will resume proceeding on 01 June 2021. In its letter, the Legal Division informs:
"The EPO points out that, in case of an alleged succession in title concerning the European patent application/European patent in question, the above date of the resumption of proceedings may be postponed upon reasoned request and submission of relevant documentary evidence."
This gives the applicant (or proprietor) the possibility to inform the EPO (reasoned request), e.g., that he/she is negotiating with a potential successor in title and more time is needed before proceedings can be resumed.
Apart from making reference to the time limit for the request for examination and paying the examination fee, the letter notes in relation to renewal fees:
"Renewal fees which would have fallen due in the period between the day on which proceedings are interrupted and the day before they are resumed fall due on the day of resumption (J ../87, OJ EPO 1988, 323). For such fees, the full six-month period under Rule 51(2) EPC therefore begins to run on the day after proceedings are resumed.
In the example case (see the Table), the applicant has no interest in continuing proceedings and did not pay any fees on or before the date of resumption.
When renewal fee(s) is (are) not paid by the due date, the EPO issues a courtesy communication to pay the renewal fee within 6 months from the due date with 50% additional fee.Rule 51(2) EPC; see Guidelines for Examination in the EPO (edition March 2021) A-X 5.2.3. In the example case, the EPO issued 12 separate letters (not sent by registered mail, which is correct and not required) for the payment of the renewal fee + 50% additional fee for the years 8-19 of the patent application. The total amount of the renewal fees to be paid, including surcharge, is € 28,770.
The 12 letters received from the EPO specify that the renewal fees with additional fee may be validly paid until 1 December 2021. If not paid, the EPO will send a loss-of-right notification to the applicant, that the application is deemed to withdrawn.Rule 112(1) EPC. Further processing as a remedy is excluded.Among others, Rule 135(2) EPC excludes Rule 51(2) and 112(1) EPC from further processing.
In this manner, the EPO is able to close a file in a legally and technically sound manner, even if it is not informed of the person entitled to the application or patent. The procedure under Rule 142(2), second sentence, EPC, as amended, ensures that no backlog stock is built up due to "no-end files".
Interruption of proceedings before the European Patent Office provides a safeguard for an applicant for or a proprietor of a European patent, who is temporarily unable to act in proceedings before the EPO as a result of financial or medical hardship.
Interruption of proceedings is declared ex officio by the EPO and, normally, retroactively from the first day of the legal incapacity.
In view of the recent amendment of Rule 142 EPC, ex officio power is given to the EPO to resume proceedings three years after the publication of the interruption date in the European Patent Bulletin. This amendment partly restores balance between the interests of the applicant (or proprietor) and the public. The advantages, disadvantages and the risks of the amendment have been discussed by the authors in an earlier publication.Cees Mulder and Joep Van kan, "Amendment of the EPC Rule on interruption of proceedings puts an end to zombie applications" in epi Information 03/2020 pp.13-21. In this publication, the authors show that with little effort, the quality and effectiveness of Rule 142 EPC could have been further improved.
Nevertheless, it can be derived from the statistical results that the EPO uses the new "own motion" power to get rid of the "zombie" applications. The resumption forced by the EPO terminates the no-end cases and reduces uncertainty of the public whether a case will stay "alive" until the end of the 20 years or will be declared deemed to withdrawn.