Monday, 15 August 2011

J 25/10 – Mere Assertions Won’t Do

The present decision deals with an appeal against the decision of the Examining Division (ED) not to refund the examination fees for a Euro-PCT application that had been withdrawn.

The application under consideration was filed on December 6, 2007. It claimed a priority of December 13, 2006. The EPO acted as ISA.

On July 13, 2009, the application entered the European phase. The applicant filed form 1200 and paid the filing fee, the designation fee and the examination fee. On July 29, 2009, the Receiving Section (RS) issued a communication pursuant to R 161.

By letter dated and received on March 23, 2010, the applicant withdrew the European patent application and requested that a refund of fees be made. 

The formalities officer acting for the ED informed the applicant that a refund of 75% of the examination fee was no longer possible since substantive examination had already begun. The applicant was asked to inform the EPO whether it wished to maintain the withdrawal.

By letter dated May 20, 2010, the applicant confirmed the withdrawal of the application and maintained the request for a partial refund of the examination fee.

The formalities officer acting for the ED maintained the finding that a refund was not possible. As the primary examiner had confirmed that he had already started with the substantive examination when the application was withdrawn, a partial refund of the examination fee was no longer possible.

By decision dated July 14, 2010, the request to refund the examination fee at a rate of 75% was refused. The present appeal was directed against this decision.

Here is the verdict of the Legal Board of appeal:

[2] According to Article 11(b) RRF the examination fee is refunded at a rate of 75% if the European patent application is withdrawn after the EDs have assumed responsibility but before substantive examination has begun. As rightly pointed out by the appellant, this provision does not leave any room for discretion, but rather lays down two conditions which must be met for the examination fee to be refundable. These two conditions must therefore be examined.

[3] As to the first condition, the ED is responsible for the examination of a European patent application under A 94(1) from the time when a request for examination is filed (R 10(2)). The request is not deemed to be filed until the examination fee has been paid (A 94(1), second sentence). The request for examination in this case was contained in box 4 of Form 1200, which was filed on 13 July 2009. On the same day, the examination fee was paid. Thus, as from this day the ED assumed responsibility. Notice of withdrawal was received after this date, i.e. on 23 March 2010.

[4] The second condition gives rise to the point in dispute, namely whether it has been established that at the date of the withdrawal substantive examination had already begun. Substantive examination is the examination of whether the European patent application and the invention to which it relates meet the requirements of the Convention, as set out in A 94(1), first sentence. This examination is only performed upon request. According to A 18(1), it is the ED which is responsible for this examination.

[5] For reasons which will become apparent, it is not necessary to consider precisely what kind of act or acts amount to the beginning of substantive examination in any particular case. It is only necessary to say that it requires a concrete act of the ED as regards substantive examination after the request for examination has been filed.

[6] In the present case there is no indication whatsoever in the file showing, by reference to objective criteria, that the ED had performed a concrete act of any kind which could be regarded as a start of substantive examination in the regional phase after the request for examination had been filed.

[7] It is clear that the written opinion issued by the EPO during the international phase according to Rule 43bis.1 PCT cannot be considered as an act of substantive examination, and indeed the ED in the decision appealed from did not assert that it could be so considered. In the written opinion, the International Searching Authority establishes whether the claimed invention appears to be novel, to involve an inventive step, and to be industrially applicable, as well as whether the international application complies with the requirements of the PCT in so far as checked by the ISA. This opinion is drawn up in the international phase and is governed by the provisions of the PCT. It is not part of the procedure before the EPO as designated or elected Office and does not give any assessment of whether the requirements of the EPC are met. Under the PCT, the international phase and the regional phase are clearly conceived as separate. Therefore, for the purpose of deciding whether substantive examination before the EPO as a regional patent granting authority has begun, acts performed by the EPO as an international authority under the PCT are not relevant (J 37/03 and J 38/03 [6]). Moreover, as set out above, substantive examination can only be carried out upon request (A 94(1), first sentence). Thus, acts performed during the search stage without a valid request for examination cannot be part of the examination procedure.

[8] It then remains to be decided whether it can be accepted in this case that substantive examination can have already started when there had been no communication and when there is also no other indication in the file that the ED had taken up its substantive work.

[9] In the decision under appeal the ED first stated that “the assessment regarding the start of the examination procedure lies entirely in the responsibility of the ED” […]. This is true in the sense that the ED has to make the assessment, and that often it will only be the ED which has access to the relevant information needed to make this assessment. But it does not mean the ED can take the decision without reference to the relevant facts.

[10] The only point on which the refusal for the partial refund was then based was “that the primary examiner confirmed that he started already with substantive examination” […]. This is no more than an unsubstantiated assertion. Article 11(b) RRF establishes clear conditions which must be fulfilled in order for a partial refund of the examination fee to be made. Whether these conditions have been fulfilled in any particular case is a question of fact. If the request is to be refused on the basis that these conditions have not been met, the ED must give reasons why the conditions are not met, having established what the facts are. It is not sufficient simply to assert that a condition of a provision is not met without reference to underlying facts which objectively demonstrate that this is so. To do so would amount to an arbitrary decision which is not verifiable and goes against all legal certainty.

In G 3/08 [7.2.1] the Enlarged Board of Appeal said that “the predictability and verifiability of all state action are indispensable elements of a democratic legal order”, these being amongst the principles which the EPO must support. The Board further said:
“Another essential element of a democratic legal order is the principle that a public authority is bound by law and justice. This is supplemented by the principle of uniform application of the law. Both principles are designed to ensure predictability of jurisdiction and hence legal certainty by preventing arbitrariness” (point [7.2.3] of the Reasons).
A mere assertion that a condition laid down in a legal provision is not met, without sufficient substantiation by reference to the underlying facts, violates these principles.

[11] As the appellant points out, without factual information relevant to the criteria of when substantive examination began, the date of this event cannot be objectively determined. In the present case this resulted in the determination appearing to be at the discretion of the ED. The appellant points out that the ED had been asked for the exact date of the start of substantive examination and the criteria applied to its assessment. However, no such information was provided. Without such information, the appellant could not determine the correctness of the decision. The Board would add that without such information it also cannot determine whether the decision that substantive examination had begun was correct or not. The decision was therefore neither predictable nor verifiable, contrary to the principles set out in G 3/08.

[12] It appears to the Board that the application of these principles is particularly important in the present case for two reasons. First, since the decision which the Office, via the ED, is required to take involves its own financial interests, it is important for the public confidence in the Office that the decision-making process should be transparent. For the same reason it is also important that such decisions should be reviewable by the Boards of Appeal. Second, in the present case any relevant information lay solely within the knowledge of the Office. It is not a case in which, for example, a communication had been sent to the applicant, so that there were externally verifiable facts on which a decision to refund fees could be based and reviewed. This makes it important that the applicant (and the Board of Appeal) knows what the actual underlying facts are on which the decision was based.

[13] In conclusion, it cannot be accepted as established in this case that substantive examination had already begun when the application was withdrawn.

[14] The Board is aware that in the meantime the Office has changed its practice as regards the refund of the examination fee as outlined in the Notice dated 22 October 2009 (OJ EPO 2009, 542), to which the appellant has referred. However, the Board notes that it is still Article 11 RRF which is applicable and therefore a 75% refund of the examination fee can still only be denied if substantive examination has already begun. As already made clear, this requires a concrete act of the ED with regard to substantive examination.

Reimbursement of the appeal fee

[15] According to R 111(2) decisions which are open to appeal shall be reasoned. The reasons should deal with the facts of the case and should enable the appellant and the Board to understand how the department of first instance came to its conclusion. The Board must be in a position to assess on the basis of the reasoning given in the decision under appeal whether the conclusion drawn by the first instance from the established facts was justified or not (T 278/00; T 850/95). This is not the case here. The lack of any sufficient reasoning by reference to established facts constitutes a substantial procedural violation which justifies the reimbursement of the appeal fee (R 103(1)(a)).

I have been in this situation more than once but I have never had the perseverance to appeal against the decision not to refund the examination fee. From the attorney’s point of view, the fact that the ED cannot simply refuse a reimbursement without providing evidence that substantial examination has indeed begun is certainly to be approved.

To read the whole decision, click here. Alternatively, you can wait for the OJ, where this decision is to be published.

The file wrapper can be found here.

NB: I have discovered this decision after two weeks of (very enjoyable) Internet abstinence. Some restless fellow bloggers have already reported it (e.g. here and here).