T 1839/18 - Strawman oppositions revisited

 Key points

• In this opposition appeal, patentee argues that the opposition was filed by a strawman and that the opposition is hence inadmissible. The named opponent is a natural person.
• Patentee's argument is that “at no point had the opponent proven that he had a true interest in the opposition, which however was a condition for any procedural act under the EPC. This position was supported by decision G 1/06 that thereby superseded earlier decisions to the contrary such as G 3/97.” G 3/97 hn.1(a) held that “an opposition is not inadmissible purely because the person named as opponent [...] is acting on behalf of a third party.”*
• G1/06 pertains to the application of Article 76(1) EPC for divisional applications but includes the paragraph: “13.4 The Board accepts that the principle of prohibition of double patenting exists on the basis that an applicant has no legitimate interest in proceedings leading to the grant of a second patent for the same subject-matter if he already possesses one granted patent therefor.” 
• This paragraph is the subject of referral G4/19 (pending as of 21.04.2021).
• The Board undertakes an extensive review of the case law and also a comparative and historical legal analysis (legal board member Mr. Heath). 
• The Board: “Summarising, the political rationale behind the remedy of opposition to be initiated by any person is the public interest. Already the English Statute of Monopolies 1623/24 has spelt out that patent monopolies are a burden to society. Their grant can only be justified by their technical contribution to society. Any person challenging a patent by way of opposition contributes to society by clearing the register from undeserved monopolies (where the patent is revoked), by reducing monopolies to the scope of their technical contribution (where the patent is limited in scope), or by adding legal certainty (where the patent is maintained unamended). Patents that are granted without meeting the requirements of patentability put in jeopardy the patent system's purpose of fostering industrial development in that competitors wishing to engage in research and development may divert such activities due to such wrongful titles. A further reason is that by opposition proceedings, legal certainty is enhanced.”
• “The Board therefore remains unconvinced that the Enlarged Board's case law on "straw man" oppositions is inconsistent with later decisions, has been superseded or is in contravention of Art. 6 ECHR. Nor is it able to see how such an opposition might put the proprietor at a procedural disadvantage. Finally, labelling an opponent as a "straw man" is misguided, as no interest in raising an opposition is necessary or needs to be proven, and consequently any argument based on an opponent's alleged lack of "real interest" must fail.”
  
  

*) of course hn.1b adds: "Such an opposition is, however, inadmissible if the involvement of the opponent is to be regarded as circumventing the law by abuse of process" with further details given in the decision and in headnote 1(c).

Disclosure: the decision indicates V.O. - the firm where I work - as representative of the opponent.

https://www.epo.org/law-practice/case-law-appeals/recent/t181839eu1.html

Reasons for the Decision

1. The appeals are admissible.

2. Admissibility of the opposition

2.1 The patentee argued that the opposition was not validly filed because the opponent, whom the patentee referred to as a garage owner in Valladolid (Spain), had no interest whatsoever in doing so.

2.2 Of the various arguments advanced by the patentee to question admissibility of the opposition is decision G 1/06 (OJ 2008, 307), namely the following passage:

"13.4 The Board accepts that the principle of prohibition of double patenting exists on the basis that an applicant has no legitimate interest in proceedings leading to the grant of a second patent for the same subject-matter if he already possesses one granted patent therefor."

The patentee construes this statement as a general acknowledgement that every act performed before the EPO requires a legitimate interest, thereby making previous case law of the Enlarged Board in regard of straw man oppositions obsolete.

2.3 The Board is unable to read this case in a broader context than that decided on (double patenting), and can see even less how this decision should have superseded case law that addresses the very specific issues of straw man oppositions, namely Enlarged Board of Appeal decisions G 3/97 and G 4/97 (published in OJ 1999, 245 and 270). The Enlarged Board in these decisions held as follows:

"1. Both referrals essentially pose the question whether an opposition is inadmissible if the opponent is acting on behalf of another person, ie as a straw man... the respondents invoked the principle that a person acting on behalf of a third party was not the true opponent.

2. The Board is unable to accept this premise.

2.1. The status of opponent is a procedural status and the basis on which it is obtained is a matter of procedural law. The EPC addresses this in Article 99(1) in conjunction with Article 100, Rule 55 and 56(1) EPC. On this basis, the opponent is the person who fulfils the requirements of the EPC for filing an opposition; in particular, the person must be identifiable (see Rule 55(a) EPC). The EPC does not specify any further formal requirements to be met by the opponent. A person who fulfils the said requirements becomes a party to the opposition proceedings (Article 99(4) EPC). In these proceedings, only his acts are relevant. A third party (the "principal") who has incited the opponent to file the opposition cannot perform any procedural acts. The question whether the opponent's acts accord with the intentions or instructions of the principal is relevant only to the internal relationship between the latter and the opponent, and has no bearing on the opposition proceedings.

By contrast, it has been argued that a person acting on behalf of a third party is not acting in his own name...However, such a view is expressly contradicted by the opponent's procedural statements. He has neither stated that he wishes to file an anonymous opposition, nor is this his intention; instead, he expressly wishes to file the opposition in his own name...he is exercising his own right as a member of the public to file an opposition."

The Enlarged Board specifically addressed the question whether in addition to the requirements as stated in Art. 99 EPC any interest was required, and answered in the negative:

"3.2.1 Some of the EPC contracting states require, as a precondition for instituting revocation proceedings, that the plaintiff must have an interest in the invalidation of the patent. Taking a different approach, the EPC legislator explicitly designed the opposition procedure as a legal remedy in the public interest which, according to Article 99(1) EPC, is open to "any person". It would be incompatible with this to require that the opponent show an interest, of whatever kind, in invalidating the patent...

"3.2.3. All this shows that the opponent's motives are of no consequence for the purposes of the opposition procedure.

This procedure is designed to give the public the opportunity to challenge the validity of the patent in question (G 9/93, supra, Reasons point 3). This takes account, inter alia, of the fact that a patent office cannot be aware of all the actual circumstances which argue against patentability. For the purpose of the opposition procedure - to prevent the maintenance of clearly invalid patents, by making it possible to institute proceedings before the EPO itself - it does not matter who provides the EPO with the relevant information (see also T 798/93, supra, Reasons point 4, final paragraph). Opposition should be a simple, speedily conducted procedure in which, on the one hand, relevant objections to patentability are given appropriate consideration, and on the other hand, a decision on the validity of the patent is reached as quickly as possible, in the interests of both parties."

2.4 In other words, regardless of whether the Enlarged Board in the above passage of decision G 1/06 wanted to stipulate a rule whereby in principle, all acts before the EPO require a specific interest, the Enlarged Board in decisions G 3/97 and G 4/97 regarded the fact that anyone could raise opposition procedures as a specific legislative choice in the public interest that left no room for interpretation as to whether a legitimate interest could be required.

2.5 This is corroborated by other decisions that have taken decisions G 3/97 and G 4/97 as a starting point and qualified the basic principle that anyone could raise or continue an opposition in certain respects: An opponent may only raise one opposition (decision T 9/00, OJ 2002, 275), or should declare that a continuation of proceedings after lapse of the patent is still of interest (Rule 84 (1) EPC and decision T 598/98 of 16 October 2001).

2.6 From a comparative perspective, there is ample evidence for the fact that opposition proceedings in a good many countries can, as a specific legislative choice, be raised by anyone without demonstrating a legal interest. A comparative overview of opposition proceedings on the website of the World Intellectual Property Organisation (WIPO) under https://www.wipo.int/scp/en/revocation_mechanisms/opposition/index.html

mentions the following:

"The patent system intends to promote innovation, dissemination and transfer of technology by granting a limited exclusive right to prevent others from using a patented invention without the consent of the patent owner and, at the same time, requiring the patent owner to fully disclose the invention to the public. In order to meet this objective, the patent law lays down strict requirements, both procedural and substantive, to obtain patent protection. Those requirements are fundamental to a functioning patent system, as they were created in order to ensure that only those inventions that are "worth" protecting for the purposes of facilitating innovation and meeting the broad public interest would obtain patent protection.

However, in reality, it may nevertheless happen that an invention that does not fully meet the requirements under the applicable law obtains a patent. For example, since the patent examination process is conducted primarily ex parte, a substantive examiner may overlook a piece of prior art and inadvertently reach a positive decision regarding the patentability of the claimed invention. Such a situation should not be necessarily considered as low quality examination in a given country, since the piece of prior art could be published in an exotic language or in an isolated publication. Further, in some countries, only formality examination is conducted. In order to rectify the grant of a deficient patent, in general, a patent revocation procedures are provided either before a competent court or before an administrative/quasi-judicial body the decision of which can be reviewed by a judicial body. The opposition system provides an additional administrative layer of review that prevents the grant of invalid patents through the participation of third parties to the review process. The idea is that the participation of third parties, who may be well informed about the technology concerned, would complement the resources available to the patent office, and would increase the credibility of granted patents. The third parties could be, inter alia, competitors of the applicant or patentee having a good knowledge of the technological area concerned and who have their business interest in eliminating deficient patents.

Since the opposition procedure is provided just before or after the grant of the patent, it allows an early rectification of invalid patents. The possibility to rectify invalid patents at an early stage is also beneficial for a patentee, since the patentee can have more trust in the validity of his patent. Thus, a patent granted on an invention that has gone through opposition proceedings would be considered as having a higher credibility in terms of its compliance with novelty, inventive step and other requirements of patent law.

Compared to the review process before a court, the opposition system and related administrative mechanisms have various advantages. They include:

the opposition procedure, which is an administrative process, is generally simpler, quicker and less expensive;

an opposition may be filed by any person (or any third party), while a patent revocation procedure in court may, in some countries, be initiated only by a party who fulfills certain conditions, for example, being an interested party or being adversely affected by the decision subject to the appeal. Therefore, the opposition system takes into account the wider knowledge of the general public; in addition, in some countries, the reviewing body may also consider the evidence not presented by the parties;"

.....

"Entitlement to file an opposition: in many national laws, any party, including the applicant or the patentee, may file an opposition. However, some laws provide that any third party (excluding the applicant or the patentee) may file an opposition;

the disclosure of the identity of the requester: in some countries, it is possible for the opponent, the true party in interest, not to disclose his identity, which may be in favor of continuing good business relationship between the opponent and the patent applicant or patentee;"

2.7 Albeit in very general terms and without references to particular countries, the above WIPO publication highlights that it is common for opposition procedures to be initiated by any person, while nullity or revocation proceedings can only be initiated by an interested person. In other words, this distinction is nothing specific to the European Patent System.

2.8 The patentee argues in this regard that appeal proceedings before the Boards of Appeal should be likened to nullity or revocation proceedings and points to decisions G 7/91 and G 8/91 that highlighted the adversarial - rather than administrative - character of appeal proceedings.

2.9 Decisions G 7/91 and G 8/91 of 5 November 1992 (OJ 1993, 346 and 356, respectively), just as decisions G 9/91 and G 10/91 of 31 March 1993 (OJ 1993, 408 and 420, respectively) clarify the legal character of opposition and appeal proceedings and the nature of examining/opposition divisions and the Boards of Appeal. The gist of these decisions is indeed the distinction between the judicial character of proceedings before the Boards of Appeal, and the administrative character of examining and opposition proceedings. As the current case concerns the question of whether an opposition (rather than an appeal) has been validly filed, it might be appropriate to stress that the Enlarged Board in decisions G 9/91 and G 10/91 highlighted the administrative nature of opposition proceedings by raising opposition grounds of its own motion:

"16. Although the wording of Article 114 EPC is not formally covering the concept of grounds for opposition, there would seem to be support in the travaux préparatoires to the EPC for the opinion that the principle of examination by the EPO of its own motion as laid down in Article 114 EPC was intended to be applied even to that concept at least in proceedings before the Opposition Division (cf. BR/87/71, point 9). This has also been accepted in the practice of the EPO (cf. Guidelines for substantive examination of opposition, Part D, Chapter V). The Enlarged Board does not consider that there is sufficient justification for changing this practice insofar as it concerns the proceedings before the Opposition Division. It is obviously aimed at avoiding the maintenance of European patents which are invalid. Thus, an Opposition Division may, in application of Article 114(1) EPC, of its own motion raise a ground for opposition not covered by the statement pursuant to Rule 55(c) EPC or consider such a ground raised by the opponent (or referred to by a third party under Article 115 EPC) after the expiry of the time limit laid down in Article 99(1) EPC."

In the same vein, decisions G 7/91 and G 8/91 affirm the possibility of the opposition division of continuing the opposition proceedings in the public interest although the opposition has been withdrawn (Rule 60(2) EPC):

"10.1 In the European patent system, the public interest is primarily safeguarded by the fact that within nine months from the publication of the mention of the grant of the European patent, any person may give notice of opposition to the patent. In principle, therefore, it must be assumed that the patent does not disturb those who have not filed opposition. It is therefore at variance with the thinking on which the European patent system is based to continue the appeal proceedings where the appeal of the sole opponent (or of the patent proprietor if the patent has been maintained in amended form) has been withdrawn merely in order to safeguard the interests of those who filed no opposition at all. Whatever the circumstances, the possibility - mentioned in this respect under point 7 above - of continuing the opposition proceedings by way of exception after the opposition has been withdrawn must be regarded as sufficient."

All of the above makes clear that opposition proceedings are administrative proceedings in the first place where public interest considerations supersede the interests of the parties. That this may apply in different measure for proceedings before the Boards of Appeal is of no concern to the argument raised by the patentee, because the argument concerns the admissibility of the opposition, not the appeal.

2.10 The Board readily acknowledges that the legislative choice of allowing everyone to raise opposition proceedings has given rise to discussions about its scope and limits. Already Josef Kohler (Handbuch des Deutschen Patentrechts, 1900) dedicates a whole section of his book on this issue (p. 373 - 383). According to him, the justification of anyone raising an opposition lies in the fact that validity or invalidity of a patent did not concern a specific individual, but the public at large ("Die Gültigkeit und Nichtigkeit des Patents ist eine nicht nur den Einzelnen, sondern den ganzen Verkehr betreffende Frage; denn der ganze Verkehr ist dabei betheiligt, ob ein technischer Vorgang Allen freisteht, oder nicht" - p. 373). After some further discussion on the legal nature of such proceedings (opponent as a representative of the public at large, or representative in his or her own right, p.375), Kohler argues the latter and concludes that "accordingly, legislation does not require proof of any interest" ("Dem entsprechend verlangt die Gesetzgebung gar keinen Nachweis des Interesses"), yet argues that there is an abuse "when the opponent demonstrably acts neither in his or her own reasonable interest, nor in the interest of a third party directly concerning him or her" ("wenn der Handelnde erweislich weder in vernünftigem Eigentinteresse, noch in einem ihn unmittelbar berührenden vernünftigen Drittinteresse handelt"). In the following decades after 1900, the lack of any interest was not or no longer deemed an impediment to raising an opposition, though. According to Hermann Jsay, Patentgesetz, 6th. ed. 1932, 397, "the action is a popular action. No specific interest is necessary; it is thus insufficient for the patentee to argue that the petitioner in a nullity action has no interest in the revocation of the patent" ("die Klage ist eine Popularklage. Ein besonderes Interesse ist nicht nötig; es genügt daher nicht, wenn der Patentinhaber einwendet, der Nichtigkeitskläger habe kein Interesse an der Vernichtung"). For further arguments related to possible abuses, see below.

2.11 Summarising, the political rationale behind the remedy of opposition to be initiated by any person is the public interest. Already the English Statute of Monopolies 1623/24 has spelt out that patent monopolies are a burden to society. Their grant can only be justified by their technical contribution to society. Any person challenging a patent by way of opposition contributes to society by clearing the register from undeserved monopolies (where the patent is revoked), by reducing monopolies to the scope of their technical contribution (where the patent is limited in scope), or by adding legal certainty (where the patent is maintained unamended). Patents that are granted without meeting the requirements of patentability put in jeopardy the patent system's purpose of fostering industrial development in that competitors wishing to engage in research and development may divert such activities due to such wrongful titles. A further reason is that by opposition proceedings, legal certainty is enhanced. This is of relevance since despite differences in national grant and enforcement practice, the general picture is that patents do not normally stand a better chance of being upheld in administrative or judicial proceedings.

The contribution to society by raising an opposition is thus threefold:

(1) Undeserved monopolies may be revoked or limited to their due scope;

(2) Industrial development is fostered in that the direction of innovation is not led astray by wrongfully granted monopolies;

(3) Legal certainty is enhanced.

It is therefore in the public interest to provide a simple, cost-effective and timely remedy for reviewing the grant of a patent. Allowing any person without proof of any specific interest to file an opposition is thus a "procedural instrument in order to request an objective legal control" ("prozeßrechtliches Instrument zur Geltendmachung einer objektiven Rechtskontrolle": Axel Halfmeier, Popularklagen im Privatrecht, 2006, 275 and Benkard, Patentgesetz, 11th ed. 2015, § 59 note 21).

2.12 The Board thus finds that the current system of allowing any person to have a patent reviewed by way of opposition proceedings regardless of any specific interest is in line with the function of patents to make a technical contribution to society and the public interest in legal certainty and clearing the register from undeserved or undeservedly broad monopolies. Case law of the Enlarged Board of Appeal in this regard is consistent and without contradiction.

2.13 The patentee however argues that such system contravenes Art. 6.1 European Convention of Human Rights (ECHR) whereby "In the determination of his civil rights and obligations...everyone is entitled to a fair...hearing.". It should be noted in this regard that the patentee is not alleging any disadvantage or unfair treatment in these proceedings, or in the proceedings before the opposition division. Rather, the patentee alleges a potential disadvantage in other, possible subsequent proceedings. Such disadvantage was not - according to the patentee - the fact that the patent could be revoked or limited in scope, but that the patentee would be unable to rely on these proceedings in future infringement proceedings. The patentee thereby invites the Board to consider the hypothetical case that in opposition proceedings, the "strawman" opponent (who had no real interest in the matter) made some procedural remarks that could have a bearing on the interpretation of the patent. If these opposition proceedings were conducted by the party with a real interest and if this party subsequently was sued for infringement of the patent at issue, the patentee - so the argument goes - could then rely on what was said in the current proceedings by way of estoppel. In this regard, the patentee relies on the German Federal Supreme Court case "Weichvorrichtung" and on a case of the US Board of Appeal, both cited in the facts and submissions.

2.14 The headnote of the decision "Weichvorrichtung" [German Federal Supreme Court decision "Weichvorrichtung" of 20 April 1993, English version in 25 IIC 420 [1995].] reads as follows:

"The declaration by an applicant that patent protection is not sought for a certain embodiment can be of importance for the interpretation of the scope of protection under the aspect of a venire contra factum proprium in an infringement suit, if the applicants waiver formed the basis of the patent being granted and if the waiver was declared in proceedings involving the party against whom patent protection was later claimed in contradiction to the waiver."

The above case relates to the well-reported Angora cat phenomenon whereby the patent is given a different interpretation in opposition and infringement proceedings. As Robin Jacob in UK Court of Appeal, decision of 19 August 2008, European Central Bank v DSS [2008] EWCA Civ 192 has noted:

"Professor Mario Franzosi likens a patentee to an Angora cat. When validity is challenged, the patentee says his patent is very small: the cat with its fur smoothed down, cuddly and sleepy. But when the patentee goes on the attack, the fur bristles, the cat is twice the size with teeth bared and eyes ablaze."

2.15 First of all, the Board observes that both the German and the English decisions concern statements made by the patentee rather than the opponent. The patentee did not provide the Board with any evidence (case law or other) that also declarations by the opponent had ever played a role in the subsequent interpretation of a patent in infringement actions. The Board further observes that for the case at issue, it is not apparent what advantage a future defendent in an infringement proceedings might derive from not having been part of the opposition or appeal proceedings.

2.16 Still, the patentee heavily relied on the prohibition of venire contra factum proprium as applied in the above German decision. A venire contra factum proprium refers to contradictory behaviour, in particular contradictory statements in regard of the same subject matter and is mentioned in the Unidroit Principles Article 1.8:

"A party cannot act inconsistently with an understanding it has caused the other party to have and upon which that other party reasonably has acted in reliance to its detriment."

In relation to patents, the above-mentioned decision "Weichvorrichtung" has put it this way:

"[I]t may run counter to the principles of trust and good faith, especially in view of a venire contra factum proprium (contradictory behaviour), if the scope of patent protection now claimed has been the subject of a waiver; this may especially be the case if the waiver was essential for the patent being granted and was declared in proceedings involving the party who is no subject to an infringement suit."

However, the patentee's arguments for an alleged contravention of Art. 6 ECHR due to a prohibition of venire contra factum proprium must fail for the simple fact that in the present case there is no contravention against one's own fact. The estoppel based thereupon could only be raised in subsequent proceedings to the extent that there are contradictory statements in relation to the former act. By the simple fact that a statement in possible subsequent proceedings has not yet been made and its content is therefore unknown it cannot contradict a former act or statement. The German Federal Supreme Court was faced with a case where a declaration made in examination was compared to a contradictory declaration made as a matter of fact in subsequent proceedings. The patentee's case, if any, consequently might be argued in subsequent proceedings, but not in this one.

2.17 Other cases of possible abuse mentioned in academic writings (Somi Miscunescu, Der "Strohmann" Einwand im Patentnichtigkeits- und Markenlöschungsverfahren, GRUR Prax 2012, 429) concern the circumvention of contractual non-challenge clauses or res iudicata effect of inter partes nullity actions. None of this has been argued here.

2.18 The patentee also points to opposition proceedings under 35 USC § 112(a)(2) and the US Board of Appeal case Ventex Co. Ltd. v. Columbia Sportswear North America, Inc., IPR2017-00651 (PTAB of 24 January 2019) according to which an opposition could be filed by anyone, yet an opponent needs to declare any "real party of interest". The above case does not concern the question whether the petitioner could raise an opposition for lack of interest, but whether such opposition was time barred in light of earlier infringement suits against "real parties of interest". The court specifically identified the defendant of a previous infringement suit as having a close connection to the petitioner in the case the board had to decide.

2.19 The Board finds it difficult to see what the patentee wishes to demonstrate by a reference to the above case. During the entire opposition and appeal proceedings, the patentee has referred to the phantom-like existence of an alleged "party of real interest" and invited the opposition division and the Board to draw conclusions therefrom. In creating all these hypotheses, the patentee has effectively invited the opposition division and now invites the Board to search in a dark room for a black cat that may not even be there. Despite the fact that the patentee has invited the Board to draw consequences from the fact that a "party of real interest" was behind the current opponent, the patentee has never presented any evidence to back this up. As the lack of any such party can hardly be proven by the opponent (negativa non sunt probanda), it would have been incumbent on the patentee to instil doubts in this regard in order to pursue its case of alleged procedural unfairness.

2.20 Finally, the patentee points to the revised fee structure of the EPO based on the Administrative Council decision of 13 December 2017 (CA/D 17/7) which allows for a reduced appeal fee to be paid by individuals. This could be abused by companies when employing "straw men" to file their oppositions/appeals.

It might be helpful at this stage to point out that the Boards of Appeal are not the custodians of the EPO's finances and neither are they called upon to question the wisdom of decisions made by the Administrative Council in full knowledge and awareness of the established jurisprudence of the Enlarged Board of Appeal. Should the Administrative Council have wished to impose further conditions for taking advantage of paying a reduced fee and in order to avoid abuses, it would no doubt have done so. In the case of issue, the full appeal fee was paid and no abuse alleged. Though the Board appreciates the proprietor's concern for office finances, it is not apparent what advantage an opponent under an assumed guise might gain over the proprietor from a fee reduction. If under their true guise they had no right to the fee reduction they would run the risk - if found out - of their opposition being deemed not filed for non payment of the appeal fee, Art 8, RFee with Art 99(1), last sentence, which would rather be to their detriment.

2.21 The Board therefore remains unconvinced that the Enlarged Board's case law on "straw man" oppositions is inconsistent with later decisions, has been superseded or is in contravention of Art. 6 ECHR. Nor is it able to see how such an opposition might put the proprietor at a procedural disadvantage. Finally, labelling an opponent as a "straw man" is misguided, as no interest in raising an opposition is necessary or needs to be proven, and consequently any argument based on an opponent's alleged lack of "real interest" must fail.

2.22 The request for a referral is thus refused and the opposition is admissible.