2 Sep 2019

NL - Further comments transfer of priority

Key points

  • Today a different kind of post. I would like to follow up on my 5 August post about the transfer of priority and the Biogen vs. Celltrion decision of The Hague Court of Appeal. Partly because my post was mid-summer whereas it is 'must-read' decision (to quote Martin Wilming; @FPCreview).
  • To recall briefly, the Court found that the question of the validity of a transfer of priority must be decided by applying the EPC itself as lex loci protectionis (and not some national law) The Court then found that under an autonomous interpretation of the EPC there are no formal requirements for such an assignment. Whether you agree with the decision or not, the Court's detailed reasoning on the topic seems to deserve attention because the transfer of priority plays in quite a few cases.
  • My first comment is that the granted patent originated from a PCT application. However, according to T577/11, r.6.2 (of 22.03.2017), based on Article 27(5) PCT,  "Article 87(1) EPC 1973 (and not Article 8 PCT or Article 4 Paris Convention) [...] for the question at issue in the present case, namely whether the applicant was entitled to claim priority from the earlier application." (in that case, the Board found that the alleged assignment was invalid under any of the national laws invoked by the parties)
  • My second comment is a reply to the article of Mr. Bremi in GRUR Int. 2018, 128, because the Biogen vs. Celltrion decision addresses some of the concerns Mr. Bremi has about current EPO practice concerning the transfer of priority.
    • Mr. Bremi writes that "the EPO in the current practice has regarded Art. 87 (1) EPC as a sufficient basis to allow examination of the successorship, to ask for evidence and to find a loss of the right to priority in case of failure."
      In reply, where priority is invalid from the outset, there is no "loss" and this is a key difference with loss of priority due to late filing of a priority document.
    • Mr. Bremi signals that the idea was to keep the EPO out of entitlement issues under Article 60 EPC. Mr. Bremi then notes that "One additional reason for this is that the EPO should not be forced to be put into the “extremely difficult situation of having to apply the national law of the Contracting states”."  This situation is of course also avoided by EPC rule rather than national law, the former is the correct approach for transfer of priority issues according to the Court in Biogen vs. Celltrion.
      The same applies for Mr. Bremi's observation that " In assessing the validity of such assignments, the EPO is faced with highly complex conflict of law issues and, once the applicable law is determined, faced with having to apply basically any possible national law on earth, not only one of the laws of the Contracting States." This situation is equally avoided by adopting the approach of the Biogen vs. Celltrion decision.
    • Mr. Bremi proposes that: "it would then be sufficient if the applicant claiming priority to a previous application filed by another applicant, made a corresponding valid priority declaration and filed the corresponding certified copy of the priority filing. There is little risk of abuse during this step, since these must be submitted well before the publication of the subsequent application and normally before the mere existence of the priority application is known to the public." Mr. Bremi is presenting a proposal, not current EPO practice. In any case, Mr. Bremi appears to overlook that some priority applications are published by the national patent office almost immediately (weeks after filing), i.e. well within the priority year. The prominent example is, of course, a DE utility model application (this is even discussed in GL G-IV,1; see also this case). I wonder if possession of the certified priority document is really sufficient to avoid abuse.
    • Finally, Mr. Bremi argues that "in contrast to the above mentioned general principles in general law, that only the truly entitled may raise the issue, the EPO allows any third party to challenge a priority claim based on this argument." Although the precise meaning of "general principle" can be discussed of course, this rule " that only the truly entitled may raise the issue'" is not a common rule of all EPC states.  E.g. Italy has a different rule for entitlement of granted patents: 2 years after grant, any third party may request revocation if the patentee is not entitled. (Global Patent Litigation; Hoyng and Eijsvogels (eds); Aug 2019; Chapter Italy, para. 30; Article 118(4) IP Code; "after two years from the publication of the grant of the patent, if the entitled party has not filed an action of reclaim, any interested party may seek the revocation of the patent" ). Perhaps the rule is a general principle in German law, but at least Italy does not have the rule.
    • See for another reply to Mr. Bremi's argument, here.
  • My third comment is about para. 4.16 of the decision where the Court actually rebuts the German BGH (at least that's what I think). The Court acknowledges that if the assignment of the priority right is done early in the priority year, it may not yet be known in which countries priority-claiming applications will be filed; therefore the lex loci protectionis may not yet be fully settled (e.g. the parties may decide after the assignment of the priority right that the PCT application will enter the national phase not only in USA, China and EPO, but also Peru; the may then still have to check if the assignment document also suffices under the law of Peru). 
    • The Court submits that "The practical problems that this may entail cannot set aside the principle enshrined in Article 2 of the PC that a country itself determines the conditions under which it grants and revokes patents for its territory (within the limits set by treaties)." (r. 4.16). 
    • More interesting is that in BGH X ZR 49/12, para. 12, it was decided that the transfer of priority rights follows " dem Recht des Staates der ersten Anmeldung, [...] (Benkard/Grabinski, EPÜ, 2. Aufl., Art. 87 Rn. 5; Singer/Stauder/ Bremi, EPÜ, 6. Aufl., Art. 87 Rn. 52; Wieczorek, Die Unionspriorität, 1975, S. 143; aA Ruhl, Unionspriorität, 2000 Rn. 260)." The BGH here overturns the precedent of KPA 16.12.1905 (see my post of last year) which had concluded that the lex loci protectionis applies based on very detailed reasoning.
    • The BGH's reasoning consists (entirely) of the references to the literature. So let's check it. Singer, 5th edition, Art.87 rdn.41 is silent about which national law applies. Benkard EPÜ 1st ed. Art.87 rdn.4 indicates the law of the state of first filing, referring to Benkard PatG. §15 Rdn.133 (9th ed.). I don't have Ruhl, but "a.a." indicates "other view" and indeed Benkard EPÜ  loc.cit. indicates that according to Ruhl, the law of the state of later filing applies to which the authors (Ullmann/Grabinski) add that "Dieser muß aber bei Übertragung des Prioritätsrechts noch nicht feststellen. Deshalb kann dessen Recht nicht grundsätzlich maßgebend sein" (idem Grabinksi in Benkard EPÜ 3rd ed. Art.87 rdn. 5) . Which brings us precisely at the point rebutted by the Court in Biogen vs. Celltrion, para. 4.16.
    • In Benkard PatG (11th ed.) I don't find anything in §15; § Int. Teil rdn.35 (p.43) says no more than that the assignment follows "innerstaatlichem Recht" .
    • Wieczorek discusses on p. 143 the KPA 16.12.1905  decision as "Grundleggend"; "diese Entscheiding fand in der Literatur allgemeine Zustimmung". As I've discussed last year, KPA 16.12.1905 unambiguously chooses the lex loci protectionis and not the country of first filing.  I am completely at loss (for more than a year by now) how BGH X ZR 49/12 can cite Wieczorek in support of the law of the state of first filing. 
    • Wieczorek (p.144) acknowledges that according to a French court decision, the form and " force probante" of acts done abroad are examined "aux préscriptions de la loi où ils sont rédigés; hence the conflict-of-law rules are different in Germany and France. The French decision is Cour de Cassation 01.02.1944, "JCP 1944 II 2588"; excerpts in Prop. Ind. 1951 (No.8) p. 38) (PDF at WIPO site here, but p.138 is blanked out; I think because it was a 'letter to the editor'). I'm curious to learn whether this is still current French law (and if you can sell and convey a French using a simple contract executed abroad, or if you need a French notary perhaps). I note that French law at the time was very strict and required the official registration of all contracts between parties having an effect on third parties (according to Wieczorek, p.144).
    • Finally, in the current Benkard EPÜ 3rd ed. Art.87 rdn. 5, Mr. Grabinksi writes that the law of the country of the first application applies, referring to Art. 14(2) Rome I Regulation. The Hague Court of Appeal explains why in their view Art. 14(20 Rome I Regulation does not apply in reason 4.17 in some detail. Mr. Grabinksi also highlights the difficulties in finding the lex contractus, as being uncertain for third parties and being difficult to determine if the parties do not make an express choice of law. Of course, the Biogen vs. Celltrion approach avoids this as well by finding an autonomous EPC rule which applies for all patents granted by the EPO, irrespective of the place of residence of the parties and irrespective of the state of first filing.
  • In the more recent BGH decision ECLI:DE:BGH:2018:040918UXZR14.17.0, (repaired link; case X ZR 14/17;  07.05.2020) para.68, the BGH indicates that the questions of the assignability ("Übertragbarkeit"), formal requirements and other requirements for an effective assignment, must be distinguished from those concerning the obligations between assignor and assignee. The questions of obligations are governed by the law governing the agreement ("Vertragsstatut"). The former issues are governed, according to German conflict-of-law rules (as established in BGH X ZR 49/12) by the law of the state of first filing. 
    • At least for the first question of whether a priority right can be assigned at all ("Übertragbarkeit"), established EPO case law is different in my view, in that it is acknowledged that Article 87 EPC governs this for all priority right claimed for European patent applications, irrespective of the state of filing of the priority application [Note 04.09.2019: see addendum below]. Hence the EPC governs the "Übertragbarkeit" according to the conflict-of-law rules applied by the EPO (Boards of Appeal) as forum, I think on the ground that the EPC is the lex loci protectionis or possibly because Article 87 is so clearly meant to cover priority invoked for European patent applications before the EPO, not for applicants using an EP application as first filing for claiming priority e.g. with the USPTO or Chinese Patent Office.
    • Note 18.05.2020: For X ZR 14/17, actually the question of the applicable law is left open in para. 74, as I understand it in view of the Spaltungstheorie and Einheitstheorie. 

The EPO file for the patent EP1951304 at issue in Court of Appeal The Hague 30 July 2019 (Biogen vs. Celltrion) is here; the OD decision is here. An appeal is pending as T2842/18 (status 18.05.2020); the validity of the priority appears to be no longer contested in appeal
The OD in EP1951304 found the priority to be validly claimed because all the inventors (applicants of the priority-founding provisional application) were applicants for the PCT application (the fact that they were applicants for USA only, was considered not prejudicial;  p. 28 of the reasons) (link).

  • This so-called "PCT Request Form" approach of the OD may be based on Ntc. OJ 2014, A33 §9; this Notice does not bind the Boards of course.
  • Note 18.05.2020: as noted in this article of Evenson and Denny, the “PCT Request Form” approach was also applied in by the OD in EP1965823 (appeal T 2749/18 pending) and in EP2940044 (appeal T1837/19 pending).
  • See also T 0845/19 (EP2215124), Communication of 05.02.2020; and T 0419/16 (EP1725261), Communication of 06.02.2020.

Addendum 04.09.2019: I realized that I don't know a T decision where this is said with so many words. The closest remarks in the case law are that: "It is generally accepted that the right of priority is transferable independently of the corresponding first application." (T969/14, reason 1.1);  "It is generally accepted that the right of priority is transferable independently of the corresponding first application which can remain with the original applicant. " (T205/14, r.3.3) and "Priority rights are assignable independently of the corresponding patent application, and furthermore, their assignment may be restricted to specific countries." (T62/05, r.3.6) However, the FICPI country review indicates that under the national law of some countries, the priority right can not be assigned or not separately assigned ("Countries where these rights appear to be inseparable include the United States, Canada, Peru and Singapore." FICPI country review 6 June 2017 page 2).

Addendum 16.09.2019: I would like to add that Mr. Bremi in Singer/Stauder/Luginbuhl 8th ed. Art.87 rdn 61, footnote 126 writes: "Es stellt sich z.B. auch die Frage, ob für das Verpflichtungsgeschäft zwar z.B. das Vertragsstatur oder eine Rechtswahl der Parteien im Vertrag Anwendung finden kann, hingegen für das Verfügungsgeschäft zwingend lex loci protectionis Anwendung finden muss."

Addendum 13.11.12: The interested reader may also consult the Swiss Federal Patent Court case S2019_007, 1 October 2019 (Icos vs. Sandoz), in particular, footnotes 12 and 13 for a discussion of the Spaltungstheorie and Einheitstheorie. The decision implicitly raises the question of the choice of law rule should be the same for patents (as registered rights) and copyright. I add that the Court in Celltrion/Biogen gave an alternative basis for the lex loci protectionis by pointing out that priority is a rule about patentability.

Addendum 13.11.2019: A case note for this case was published by Mr. Vigand in LexisNexis Propriété Industrielle 2019 comm.56 (November 2019 issue, p. 28).

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