Tuesday, 26 February 2013

J 3/12 – Carte Blanche

The Euro-PCT application under consideration entered the European phase on September 11, 2006.

The renewal fee for the third year which fell due on March 31, 2007, was not paid. On May 4, 2007, a notice drawing attention to A 86(2) EPC 1973 was sent to the appointed European representative. On November 12, 2007, a communication under R 69(1) EPC 1973 was issued informing the applicant that the application was deemed to be withdrawn under A 86(3) EPC 1973.

On January 14, 2008, a request for re-establishment of rights was filed. On the same day the fee for re-establishment as well as the renewal fee for the third year together with the additional fee were paid. The applicant submitted that Microsoft Corporation had acquired the applicant company shortly before entering the regional phase before the EPO. It only became aware of the non-payment of the renewal fee by the communication of 12 November 2007. The European representative did not pay the renewal fee on entry into the European phase because at that time the fee had not yet become due and because, as a standing rule, any annuity fees on behalf of Microsoft were paid by CPA. It was difficult to establish what exactly prevented this application from being communicated in the proper way to CPA to secure timely payment for the annuity fee for the third year. At least, part of the reason was due to severe problems with a third party software tool, called Anaqua, that was used for communicating new cases for annuity payment from Microsoft to CPA. Investigations had shown that the present case had never been included in any of the lists communicated to CPA for annuity payment. The EPO reminder of 4 May 2007 had been forwarded to the responsible US law firm which forwarded this letter to the in-house Microsoft patent team. It was difficult to trace what exactly prevented a detailed review of the case. It appeared that the annuity reminder was uploaded by the US law firm into Anaqua but the annuity reminder was, for unknown reasons, not brought to the attention of the responsible person for handling annuity payments, Ms Sharon Rydberg at Microsoft.

On May 9, 2008, the Receiving Section issued a communication informing the applicant that no details had been presented to show that a normally satisfactory system was in place and that all due care had been observed.

By reply dated July 17, 2008, the applicant maintained that it had fully relied on the proper working of the internal data base Anaqua. It had only recently turned out that certain data in this system was incorrect. It was not possible to fully understand or know the reasons why. The applicant had to fully rely on the mentioned software tools, as the workload could not be managed otherwise. The applicant had built up a very large, worldwide patent portfolio in a very short period of time. Thus, from the beginning, the applicant relied on software tools to manage the workload which was overwhelming due to the high speed with which the portfolio increased worldwide. Once software tools were used, one had to rely on its correct operation, otherwise there was no sense in introducing them.

By decision dated September 2, 2011 (!), the Receiving Section refused the request for re-establishment. The decision was mainly based on the fact that it had not been sufficiently demonstrated that there was a normally satisfactory system in place for paying the renewal fee.

The applicant filed an appeal.

The Board found the appeal to be admissible and A 122 and R 136 EPC 2000 to be applicable. The request for re-establishment was found admissible, too. The Board then examined its allowability:

[4] According to A 122(1), an applicant can have his rights re-established, if in spite of all due care required by the circumstances having been taken, he was unable to observe the time limit. Under the established case law of the Boards of Appeal, an isolated mistake within a normally satisfactory system is excusable. To this end, the applicant or his representative must plausibly show that there was a normally effective system in place for monitoring time limits and that the non-observance of the time limit was due to an isolated mistake.

[5] In the present case, the appellant has not explained how the Anaqua software system which was used to administer all patent data and which calculated the due dates for the renewal fees worked. No details were given about which data was entered into the system, by whom or on which basis Anaqua performed the calculation of the due dates. It was neither made clear which data was transmitted to CPA nor how Anaqua worked at all. Thus, on the basis of the individual circumstances the Board is not in the position to judge whether the system was satisfactory. Nor can it judge whether, in the given situation, an isolated mistake was made, or whether the mistake was immanent to the system. The applicant conceded that the data in Anaqua was wrong but did not explain why. Thus, the individual circumstances remain in the dark.

[6] The appellant argued that it was not necessary to present and prove the individual circumstances and details as to why the individual mistake happened, if it exists another way to convincingly demonstrate that there was a satisfactory system in place. In a situation as present, where a huge amount of data is to be administered which can only reasonably be done by the use of software tools, it was sufficient to show that a system was in place which generally worked properly. The fact that very few mistakes occurred, taking into account the amount of data managed, was sufficient proof that a satisfactory system was implemented.

The Board cannot share this view. According to the established case law of the Boards of Appeal, the circumstances of each case must be looked at as a whole. The obligation to exercise due care must be considered in the light of the situation as it stood before the time limit expired. The steps the party took to comply with the time limit are to be assessed solely on the basis of the circumstances applying at that time (see references in Case Law, 6th edition 2010, VI.E.7.3.1). If a request for re-establishment is based on an isolated mistake the appellant must plausibly show that there was a normally satisfactory system established at the relevant time in the office in question (Case Law, 6th edition 2010, VI.E.7.3.3 a), J 13/07 [5.1]).

From this it follows that the individual circumstances of the case must be assessed, i.e. how Anaqua worked and how it was handled in 2007 with Microsoft in order to ensure timely payment of the renewal fee. It is not sufficient to refer in general terms to Anaqua as being a well established software without giving the details as to how it works and how it was handled in the specific case, because otherwise it cannot be judged whether it was an isolated mistake, or a general failure of the system.

A system should be organised in such a way that no mistakes happen and only when it is demonstrated that the mistake was an isolated one re-establishment can be allowed. It cannot be accepted that it is sufficient to argue that a proper system has been installed once and further not to have to demonstrate how it was handled on the mere assumption that a few mistakes would be acceptable. This would go against what all due care requires. To this regard, the details how the system worked must be submitted and proven. This encompasses the data entry. The best software system is of no use if incorrect data are entered at the beginning. In the present case, the mistake resulted from wrong data in Anaqua. If an applicant relies on a database system he must make sure that it is fed with the correct data. The more an applicant relies on a software system for monitoring procedural aspects concerning his patent applications or portfolio, the more he must make sure that the data on which the system performs its calculations is correct. In the present case, it has not been shown at all that there was a satisfactory procedure in place for entering and cross checking the relevant data. Thus, the monitoring system has not been sufficiently described, nor has any evidence been furnished. Moreover, it seems that it was not just an isolated mistake which happened, as is shown by cases J 4/12 and J 23/10 which have the same underlying facts.

[7] If the appellant’s argument were accepted this would mean giving a “carte blanche” to applicants who administer a large amount of patent applications and who apply generally accepted systems. It would not be clear where the limits of all due care lie, because it would be difficult to draw a line how many mistakes could be accepted without loss of rights. This would not be in line with the wording of A 122(1) which stipulates that all due care required by the circumstances has to be shown. This means in the individual situation, not just in general.

[8] The Board cannot see how the jurisprudence, cited by the appellant, concerning the proof of prior use of mass products or public availability of commercial brochures could be applied here. It might well be that the monitoring of time limits of a huge patent portfolio is somehow a mass business, nevertheless A 122(1) requires that the individual circumstances of the case have to be explained and proven. The principle of balance of probabilities only affects the standard of proof but does not release the applicant from his obligation to submit the necessary facts.

[9] Moreover, even after expiry of the due date, the appellant could still have paid the renewal fee together with an additional fee. Once a reminder to this regard is received, all due care requires that the applicant checks whether the non-payment was intentional or not. It cannot be assumed that everything is correct, simply because the software normally works correctly. These reminders serve as a safety-net if a mistake happens. Apparently, the EPO reminder was uploaded into Anaqua by the US attorney, but nothing happened. As admitted by the appellant this was Ms Rydberg’s fault, since she did not perform her duties correctly. Again, no details were presented as to why and thus it has not been established that all due care in respect of the additional period has been observed. Thus, re-establishment of rights must already fail for this reason. […]

The appeal is dismissed.

Should you wish to download the whole decision, just click here.

There is also a parallel decision: J 4/12.

The file wrapper can be found here.


Roufousse T. Fairfly said...

The mention of "Microsoft" in connection with "software problem" gave me a certain feeling of déjà vu... (Sorry for the cheap humor).

J23/10, published July 2011, concerned the same applicant, involved the same software tool:

X. When an application entered the regional phase, the date of entry was coded in the applicant's internal database (called Anaqua) as the national phase filing date ("NP filing date"). The coding of this date created the "Instruct Renewal Task" command. Based on this command, the Law Engine, which was part of Anaqua's patent management software, calculated the due date for the renewal fee. Once a month, Ms R... ran a report from the database which generated a spreadsheet which showed the applications for which renewal fees were about to fall due. In the present case, for unknown reasons, the "NP filing date" had not been coded and therefore no due date had been calculated for the renewal fee. Accordingly, this application had not been on the spreadsheet created by Ms R... . It would have been Ms R... 's task to check whether the European patent application was on this list, based on the data of the parent application (i.e. the international application from which it was derived). However, she had overlooked this, as she had explained in her affidavit.

XI. In addition, the appellant's representative submitted that when Ms R... received the notice from the EPO dated 17 April 2007, she acted properly by enquiring with the EPO. Nothing more could be expected from her. When Ms R... received this communication she realised that there were two mistakes. She should not have received this communication and the due date indicated was wrong. She assumed that this communication could not relate to the application in question. US applicants could not be expected to have a system in place in case the EPO wrongly sends communications to the applicant instead of the European representative.

If the reestablishment wasn't allowed then, despite an addressing error by the EPO, then there is no reason to allow it in the two present cases.

Roufousse T. Fairfly said...

Reading the post again, I see that the US employee involved is also the same one as in the earlier decision. Jamais deux sans trois, as the saying goes.

One could speak of a Rydberg series. (Sorry!)