J 5/11 – Be Vigilant

This is an appeal against the refusal of re-establishment by the Receiving Section (RS).

The applicant, a U.S. company, had failed to pay a renewal fee in due time.

On July 2, 2009, the RS had informed the applicant that the renewal fee for the 7^th year (1000 €) had fallen due on March 31, 2009, and could still be paid (together with an additional fee). The fees were not paid in due time.

On January 19, 2010, the RS informed the applicant that its application was deemed to be withdrawn.

The letter mentioned the possibility of applying for re-establishment of rights.

On March 29, 2010, the applicant filed a request for re-establishment. The request was justified as follows:

On May 12, 2010, the RS informed the appellant that it was not convinced that the applicant and its representative had taken all due care. The RS requested more detailed information about the economic challenges the appellant went through, a detailed explanation regarding the working procedures for payment of renewal fees both before and after the reduction in the workforce was made, a statement from “the individual who was assigned to take over responsibility for the payment of maintenance fees”, and a copy of the “multiple calendars” which were used to identify the due dates. The applicant was invited to reply within two months. No such reply was received.

The RS finally rejected the request for re-establishment.

The applicant filed an appeal and provided some of the missing information together with the statement of grounds of appeal.

The Board dismissed the appeal. The decision comes with the following headnote:

The applicant for re-establishment of rights who fails to substantiate his application adequately in the first instance proceedings, in particular after being expressly invited to do so, cannot normally make good that failure by submitting additional evidence with the grounds of appeal.

If you want to know how the Board came to this conclusion, just read on:

The question whether the decision under appeal was legally correct

[1] The primary duty of the Board of Appeal is to give a judicial decision on the correctness of an earlier decision taken by one of the first-instance departments listed in A 108(1) (see e.g. T 34/90, T 25/91 and T 506/91). Thus in the present case the Board must first of all decide whether the decision under appeal was legally correct on the basis of the information and evidence available to the RS at the time when it adopted the decision on 20 October 2010.

[2] The request for re-establishment of rights which the appellant submitted on 29 March 2010 was clearly inadequate for the purposes of R 136(2), which requires that the “request shall state the grounds on which it is based and shall set out the facts on which it relies”. The appellant’s request referred to certain economic challenges, the departure of personnel responsible for paying patent maintenance fees and the existence of multiple calendars. The appellant did not provide the sort of detailed information, backed up with evidence, that might have allowed the RS to conclude that the appellant had exercised “all due care required by the circumstances”, as required by A 122(1).

In this respect it must be borne in mind that the burden of proving that the requirements for re-establishment have been met lies with the applicant for re-establishment. In fact in the present case it is questionable whether the information provided in the appellant’s letter of 29 March 2010 was even sufficient to render the request for re-establishment of rights admissible, in the light of the case law of the Boards of Appeal. It has been held that a request which contains only general information and does not give specific details of the events that entailed the loss of rights should be rejected as inadmissible for want of substantiation (J 19/05).

[3] In T 324/90 the Board of Appeal held that evidence proving the facts set out in the request for re-establishment of rights may be filed after the expiry of the two-month time limit laid down in A 122(2) EPC 1973 [now R 136(1)]. In the present case the RS expressly drew the appellant’s attention to the inadequacy of the information provided in the request for re-establishment filed on 29 March 2010. In its letter of 12 May 2010 […] the RS set out in considerable detail the sort of information and evidence that needed to be provided in order for the request to be considered properly substantiated. As was noted in the decision under appeal, the appellant failed to reply to that letter.

[4] In view of the appellant’s failure to substantiate the request for re-establishment of rights it is clear that the decision under appeal is the only decision that the RS could lawfully take.

At the hearing on 6 June 2012 the appellant’s representative observed that it was impossible to provide further evidence in response to the RS’s invitation as a result of the economic difficulties encountered by the appellant. He conceded that the decision under appeal was correct on the basis of the available evidence.

The admissibility of the new evidence submitted during the appeal proceedings

[5] The Board must next consider whether the decision under appeal, though legally correct at the time when it was adopted, may none the less be challenged on the basis of the new evidence which the appellant submitted with its grounds of appeal and with its written observations of 16 January 2012.

[6] There is case law to support the view that an applicant for re-establishment of rights who fails to substantiate his application adequately in the first-instance proceedings cannot make good that failure by submitting additional evidence with the grounds of appeal (J 18/98 [3-4,7]). In that decision the Board held that facts pleaded for the first time in the grounds of appeal cannot be taken into consideration, on the ground that to act otherwise would be incompatible with the judicial nature of the Boards of Appeal.

[7] While it is true that the primary function of the Boards of Appeal, as stated above in paragraph 1, is to give a judicial decision on the correctness of a first-instance decision of the Office, that does not necessarily mean that new evidence submitted for the first time on appeal is automatically inadmissible. A rigid rule excluding all new evidence on appeal might lead to injustice and unfairness in some cases and would not be compatible with the principles of procedural law generally recognized in the Contracting States (cf. A 125).

[8] The appellant does not have an absolute right to introduce new evidence with its statement of grounds of appeal. That is clear from the wording of Article 12(4) RPBA, which refers to “the power of the Board to hold inadmissible facts, evidence or requests which could have been presented or were not admitted in the first instance proceedings”. Article 12(4) RPBA must be read in the light of A 114(2), which provides:

“The EPO may disregard facts or evidence which are not submitted in due time by the parties concerned.”

It is sometimes said that there is a contradiction between the Office’s power to disregard late-filed evidence (A 114(2)) and its obligation to examine the facts of its own motion (A 114(1)) (see, for example, the discussion in “Case Law”, 6^th edition 2010, VII.C.1). There is, however, no such contradiction because the Office is not required to disregard late-filed evidence but merely given a discretionary power to disregard such evidence (see T 122/84 [11] and the reference made therein to the Travaux Préparatoires to the EPC).

[9] There is, moreover, a difference between evidence that is in the public domain and easily accessible (e.g. published patent applications) and evidence that is within the private sphere of the party concerned (e.g. information about the economic challenges facing the party and about the organization and working methods of its internal departments). The Office’s duty to examine evidence of its own motion is more stringent in relation to evidence that is in the public domain, and the case for admitting such evidence when it is filed out of time by the parties is correspondingly stronger. The Office’s duty to examine of its own motion evidence that is in the private sphere of the party concerned is obviously limited. Such evidence can only be taken into consideration by the Office if it is brought to the Office’s notice by the party concerned. If evidence of that type is not put forward in the proceedings before the first-instance department of the Office, it is difficult to see any compelling reason why the Board of Appeal should exercise its discretionary power under A 114(2) and Article 12(4) RPBA in such a way as to admit the evidence when it is filed with the grounds of appeal or a fortiori at a later stage of the appeal proceedings.

That is particularly true when, as in the present case, the first-instance department has expressly drawn the appellant’s attention to the need for supporting evidence, indicated precisely what type of evidence is needed and given the appellant an adequate time limit within which to file the evidence. In such a situation it was surely incumbent on the appellant, which had lost its rights through failing to pay a renewal fee by the original due date under R 51(1) and through failing to pay that fee and the additional fee within the six-month period provided for in R 51(2), to make an effort to gather together the requested evidence and to file it within the prescribed time limit or at the very least, if that proved impossible, to request an extension of the time limit under R 132(2). Even a company in economic difficulties must show some degree of vigilance in protecting its patent rights and responding to a request for information and evidence from the Office. The appellant did not show that minimum level of vigilance and gave every impression that at that point it had lost interest in its European patent application.

[10] A further point to bear in mind is that under A 122(4) re-establishment of rights is ruled out in respect of the time limit for requesting re-establishment of rights. If an applicant for re-establishment of rights who completely failed to substantiate the application, as required by R 136(2) within the two-month time limit laid down in R 136(1), were then allowed to file with his grounds of appeal the evidence that he could and should have filed with the application for re-establishment, the effect of that would be to deprive of all meaning the rule laid down in the first sentence of A 122(4). The appeal proceedings would be used as a means of obtaining re-establishment in respect of the time limit for requesting re-establishment.

[11] In the light of the above considerations the Board concludes that there are no grounds for exercising its discretionary power under A 114(2) and Article 12(4) RPBA in such a way as to admit the evidence filed for the first time with the grounds of appeal and with the written observations submitted on 16 January 2012.

[12] Consequently the appeal must be dismissed.

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