J 0008/18 - SME appeal fee and restoration priority

Key points

• An appeal against a decision of the Receiving  Section is filed by a Chinese SME. The Legal Board explains, firstly, that this small or medium-sized enterprise is entitled to the reduced appeal fee.
• "whereas the reduction in the filing fee and the examination fee is only available for natural persons and the above-mentioned entities if they have their residence or principal place of business in a Contracting State having a language other than English, German or French as an official language, and nationals of such state who are resident abroad, the applicable amount of the appeal fee is not dependent on the restrictions in Article 14(4) EPC, and also not on the language in which the notice of appeal is filed." 
• A second question what is the meaning of the self-declaration that the appellant is an SME. The EPO Notice OJ 2018, A5 states that " Appellants wishing to benefit from the reduced fee for appeal must expressly declare that they are a natural person or an entity covered by Rule 6(4) EPC".
• The Legal Board observes firstly that "The Decision of the Administrative Council [OJ 2018, A4; i.e. amended Rfees2)(1)11] does however not refer to Rule 6(6) EPC, wherein such declaration is mentioned, either." The Board emphasizes that "the Board is in no way bound by Notices from the EPO concerning the application or interpretation of legal provisions". 
• As a comment, I think the Board expresses here that the purported requirement of a declaration of OJ 2018 A15 simply lacks any legal basis and simply does not exist. This is somewhat similar to recent decision J 4/18 were the Legal Board concluded that the purported requirement that for reduction of the examination fee for SME's under Rule 6, there is no requirement that all applicants must fulfill the requirements of Article 14(4) EPC. 
• The Board nevertheless finds that the Notice "appears to suggest that it is enough to benefit from the reduced fee for appeal if the appellant simply declares that it is an [entitled entity]." The Board finds that "at least based on the principle of legitimate expectations the appellant could rely on the information given by the EPO and furthermore assume that its appeal would either be deemed filed or admissible following the refund of the regular appeal fee before the file was transferred to the boards of appeal" 
• The latter remark refers to the fact that the appellant had paid both the reduced amount and the full amount and the fact that the full amount was refunded, apparently the refund was made by the EPO already before the file was transferred to the Board. As a comment, I think the Legal Board could more straightforwardly have said that the even the higher appeal fee was validly paid by the applicant; the fact that someone in the EPO's accounting department decides to refund it does not make the payment invalid.
• The impugned decision was taken by the Receiving Section and did not state the name of the employee. The Board finds this to be a substantial procedural violation of Rule 113(2). 
• The substantive issue is that the applicant had filed a request for restoration of priority, within the time limit of one month from the expiry of the 31-month time limit but without paying the fee. The Board finds that the request is deemed to not have been filed by applying Rule 136(1) last sentence EPC mutatis mutandis.  
• The applicant had argued that further processing should be available for the missed time limit of Rule 49ter.2(b)(i) PCT. The Board explains that under " Article 48(2)(a) PCT [...] further processing is not available if it is not available for not meeting a corresponding time limit under the EPC. Article 121(4) EPC expressly rules out further processing inter alia in respect of the time limit for requesting re-establishment of rights. A request for restoration of rights as specified in Rule 49ter.2 PCT is equivalent to, and identical in legal nature, to a request for re-establishment of rights under the EPC". Accordingly, neither further processing nor re-establishment are available. 
• "The appellant's final argument [invoking  the principle of legitimate expectations] that it was not obvious that a fee was due for a request for restoration under Rule 49ter.2 PCT cannot convince the Board either. Apart from the fact that parties to proceedings before the EPO are expected to know the relevant legal provisions, it should also be known that the EPO charges fees for further processing and re-establishment of rights, and it would therefore be unlikely that the EPO did not charge a fee for the request for restoration under Rule 49ter.2 PCT. It would therefore have been incumbent on the appellant to check whether the EPO had made use of its right to charge a fee under Rule 49ter.2(d) PCT." 

J 0008/18 - J 8/18 - link

Reasons for the Decision

Admissibility of the appeal

1.1 The appeal fee was paid twice within the two month period of Article 108 EPC, once the reduced amount of ¤ 1880 on 3 April 2018 and once the regular amount of ¤ 2255 on 4 April 2018. The amount of ¤ 2255 was subsequently (on 17 April 2018) refunded to the appellant.

1.2 According to Article 1(4) of the Decision of the Administrative Council of 13 December 2017 amending Articles 2 and 14 of the Rules relating to Fees (OJ EPO 2018, A4) the fee for appeal for an appeal filed by a natural person or an entity referred to in Rule 6(4) and (5) EPC shall be ¤ 1880. The fee for an appeal filed by another entity shall be ¤ 2255. These amounts shall be applicable for appeals filed on or after 1 April 2018 (Article 3(4) of the Decision). The present appeal has been filed on 3 April 2018.

1.3 An entity within the meaning of Rule 6(4) and (5) EPC is a small or medium-sized enterprise (SME) as defined by the European Commission Recommendation 2003/361/EC mentioned in Rule 6(5) EPC, or a non-profit organisation, university or public research organisation.

1.4 The Decision of the Administrative Council does not refer to Rule 6(3) EPC, that provides for a reduction in the filing fee and the examination fee for persons referred to in Article 14(4) EPC.

1.5 Thus, whereas the reduction in the filing fee and the examination fee is only available for natural persons and the above-mentioned entities if they have their residence or principal place of business in a Contracting State having a language other than English, German or French as an official language, and nationals of such state who are resident abroad, the applicable amount of the appeal fee is not dependent on the restrictions in Article 14(4) EPC, and also not on the language in which the notice of appeal is filed.

1.6 As a consequence, the fact that the appellant is an enterprise that has its principal place of business in China does not mean that it cannot benefit from the lower appeal fee.

1.7 The next question is whether the appellant can be qualified as a small or medium sized enterprise (SME) within the meaning of the European Commission Recommendation.

1.8 The appellant has filed no evidence to this effect, but merely a statement that the appellant is an SME within the meaning of the European Commission Recommendation. The Decision of the Administrative Council does however not refer to Rule 6(6) EPC, wherein such declaration is mentioned, either. The Board is aware of the Notice from the EPO dated 18 December 2017 concerning the reduced fee for appeal (OJ EPO 2018, A5), that appears to suggest that it is enough to benefit from the reduced fee for appeal if the appellant simply declares that it is an entity covered by Rule 6(4) EPC, provided that the declaration is filed at the latest by the time of payment of the reduced fee (Point 4 of the Notice). In the present case the declaration was filed eight days later. While the Board is in no way bound by Notices from the EPO concerning the application or interpretation of legal provisions, it is of the opinion that at least based on the principle of legitimate expectations the appellant could rely on the information given by the EPO and furthermore assume that its appeal would either be deemed filed or admissible following the refund of the regular appeal fee before the file was transferred to the boards of appeal.

2. Violation of Rule 113(1) EPC

The Board has furthermore noted that the appealed decision does not state the name of the responsible employee. As the exception in Rule 113(2) EPC does not apply, the decision does not meet the requirements of Rule 113(1) EPC. In decision J 16/17 it was held that a violation of Rule 113(1) EPC amounts to a substantial procedural violation. As the appellant did not base its appeal on this deficiency, and a remittal would only cause unnecessary delays, the Board has decided to exercise the discretion conveyed by Article 11 RPBA to decide on the merits of the case.

3. The appeal

3.1 With communication of 14 December 2016 the appellant was informed that the RO decision under Rule 26bis.3 PCT to restore the right of priority based on the criterion of unintentionality had no effect before the EPO (Rule 49ter.1(b) PCT). It was therefore necessary to file a request for restoration of the right of priority with the EPO as designated Office under Rule 49ter.2 PCT. The request was to be filed within one month from expiry of the 31-month time limit pursuant to Rule 159(1) EPC. This time limit expired on 5 January 2017. Therefore the request had to be filed by 5 February 2017 (extended to 6 February 2017 as 5 February was a Sunday).

3.2 A reasoned written request for restoration of the right of priority was filed on 6 February 2017, in which the appellant argued that the failure to file the international application within the priority period occurred in spite of due care required by the circumstances having been taken (Rule 49ter.2(a)(i) PCT).

3.3 Rule 49ter.2(d) PCT allows the designated Office to levy a fee for the request for restoration, that is to be paid at the same time as the filing of the request (Rule 49ter.2(b)(iii) PCT). Such fee is indeed levied by the EPO as designated Office (Article 2(1), item 13, RFees that expressly mentions restoration under Rule 49ter.2 PCT). The fee was however not paid by the appellant when filing the request for restoration.

3.4 With letter of 5 April 2017 the appellant requested further processing pursuant to Article 121 EPC and paid the corresponding fees. As an auxiliary request the appellant requested re-establishment of rights under Article 122(1) EPC into the time limit for paying the fee for restoration. In the appealed decision of 1 February 2018 both requests were rejected as inadmissible.

3.5 In the statement of grounds of appeal the appellant firstly argued that the conclusion by the Receiving Section that the request for restoration under Rule 49ter.2 PCT was deemed not to have been made because the fee for restoration was not paid, citing Rule 136(1) EPC, was incorrect.

3.6 With respect to this argument the Board notes that the PCT does not define the legal consequences if the fee Rule 49ter.2(d) PCT has not been paid within the time limit mentioned in Rule 49ter.2(b)(i) PCT. That means it is left to the practice of the designated Offices what those consequences are. It has so far been the practice of the EPO that a request which is subject to the payment of a fee is deemed not to have been filed if the fee has not been paid within the relevant time limit (cf. Referral pursuant to Article 112(1)(b) EPC by the President of the EPO, case G 1/18). The Board can therefore find no fault in the reasoning of the decision under appeal other than that Rule 136(1) EPC is not directly applicable. Rather, the last sentence of Rule 136(1) EPC can be considered to apply mutatis mutandis. The Board can also not see how the appellant could have been adversely affected by this finding.

3.7 It is undisputed that the fee for restoration mentioned in Rule 49ter.2(b)(iii) and (d) PCT was not paid within the applicable time limit mentioned in Rule 49ter.2(b)(i) PCT. The PCT itself does not provide for any relief in the event this time limit is missed. Whether any relief is available therefore depends on the national law of the designated Office. Article 48(2)(a) PCT states that "Any Contracting State shall, as far as that State is concerned, excuse, for reasons admitted under its national law, any delay in meeting any time limit". It is generally accepted that the term "Contracting State" within the meaning of Article 48(2) PCT covers the EPO, and that the term "national law" covers the EPC (cf. Article 2(x) PCT).

3.8 Furthermore, the time limit in Rule 49ter.2(b)(i) PCT is a time limit within the meaning of Article 48(2)(a) PCT (Rule 82bis.1(i) PCT). Thus the EPO would be obliged to provide relief in the event the time limit was missed if it would have had to provide relief in the same situation under the EPC.

3.9 The appellant argues that further processing under Article 121 EPC should be available for missing the time limit in Rule 49ter.2(b)(i) PCT. The Board agrees that the appellant indeed failed to observe a time limit vis-à-vis the EPO within the meaning of Article 121(1) EPC, as the request for restoration under Rule 49ter.2 PCT was to be filed with the EPO as designated Office. The Board further agrees that further processing could in principle be an available relief when a time limit to be observed vis-à-vis a designated Office is not met (Rule 82bis.2 PCT). However, relevant in the wording of Article 48(2)(a) PCT is the proviso "for reasons admitted under its national law", meaning that further processing is not available if it is not available for not meeting a corresponding time limit under the EPC. Article 121(4) EPC expressly rules out further processing inter alia in respect of the time limit for requesting re-establishment of rights. A request for restoration of rights as specified in Rule 49ter.2 PCT is equivalent to, and identical in legal nature, to a request for re-establishment of rights under the EPC (J 13/16, Reasons Nr 4.8).

3.10 The appellant argued that a request for restoration under Rule 49ter.2 PCT is not a separate request for restoration because a request under Rule 26bis.3 PCT had already been filed, but rather an opportunity to file additional arguments and evidence. That this is not the case already follows from the fact that the filing of a request for restoration under Rule 49ter.2 PCT is not dependent on whether a request under Rule 26bis.3 PCT was filed before the receiving Office. Therefore, a request for restoration under Rule 49ter.2 PCT is a separate and independent request (cf. J 13/16, Reasons Nr. 3.2, last paragraph, and 3.3).

3.11 Thus, the EPO is neither obliged under Article 48(2)(a) PCT to provide further processing if the time limit for requesting restoration of rights under Rule 49ter.2 PCT has not been met, nor entitled to grant further processing under Article 121(4) EPC. Therefore such request is inadmissible.

3.12 The same considerations apply to the appellant's auxiliary request for re-establishment of rights, as was already held in decision J 13/16.

4. Legitimate expectations

The appellant's final argument that it was not obvious that a fee was due for a request for restoration under Rule 49ter.2 PCT cannot convince the Board either. Apart from the fact that parties to proceedings before the EPO are expected to know the relevant legal provisions, it should also be known that the EPO charges fees for further processing and re-establishment of rights, and it would therefore be unlikely that the EPO did not charge a fee for the request for restoration under Rule 49ter.2 PCT. It would therefore have been incumbent on the appellant to check whether the EPO had made use of its right to charge a fee under Rule 49ter.2(d) PCT.

Order

For these reasons it is decided that:

The appeal is dismissed.