T 1426/14 - RE refused, renewal fee refunded

Key points

• The applicant had failed to pay the renewal fee with surcharge during his appeal against the refusal of the application. He requests re-establishment. The Board refuses the request due to lack of due care. As part of the RE request, the omitted act was completed as prescribed and hence the renewal fee with surchare was paid.
• The Board orders the refund of the renewal fee at issue (including the surcharge). 
• “Therefore [...]  the request for re-establishment of rights has to be refused. This means that the loss of rights communicated on 7 February 2019 has become final and the application is deemed to be withdrawn. Since the renewal fee for the 9**(th) year and the additional fee were paid after the loss of rights occurred, they were paid without legal basis and therefore have to be reimbursed.”
• As a comment, Rule 136(2) EPC prescribes that the renewal fee must be paid as part of the omitted act. Still, in line with G 1/18, it is correct to say that the renewal fee was “paid without legal basis” and is reimbursed.
• The Board is competent to decide on the RE request, instead of the examining division.
• “The noting of loss of rights was issued by the formalities officer on behalf of the examining division. At that time, however, the appeal proceedings were pending. Thus the loss of rights resulting from the failure to pay the renewal fees occurred in the course of the appeal proceedings. Given that with the commencement of the appeal proceedings, the competence to decide on the case has moved from the department of first instance to the Boards of Appeal [], the Board is competent to decide on the request for re-establishment of rights [].” This illustrates the devolutive effect of appeal.
• The order on the main appeal is that " The appeal proceedings are terminated"
• The renewal fees paid during the main appeal in the period 2014-2018 are not refunded (the file does not indicate such a refund, 09.11.2020) even though the Examining Division's refusal decision in 2014 is now final. 

About due care  for renewal fees and clients using payment service companies

• In case the applicant uses a payment service company and the European professional representative is instructed to pay no renewal fees: “However, in the present case, the representative was informed about the applicant's intentions and he could be sure that the applicant was aware of the running time limit. Once the applicant had clearly indicated that he had taken note and that he would pay, the representative had fulfilled his obligations and the responsibility shifted to the applicant.”
• “ All due care of an applicant in such a situation requires that he carefully studies the letters he receives from his consultants and gives the required instructions in good time.”
• “The Board does not concur with this view because that mistake [of the applicant] could have been avoided if the applicant had properly read the correspondence sent to him by his consultants [letter from professional representative], which is to be expected from a careful applicant taking part in business life.”

EPO T 1426/14 -  link

Reasons for the Decision

Board's competence to decide

1. According to Rule 136(4) EPC the department competent to decide on the omitted act shall decide on the request for re-establishment of rights. The noting of loss of rights was issued by the formalities officer on behalf of the examining division. At that time, however, the appeal proceedings were pending. Thus the loss of rights resulting from the failure to pay the renewal fees occurred in the course of the appeal proceedings. Given that with the commencement of the appeal proceedings, the competence to decide on the case has moved from the department of first instance to the Boards of Appeal (T 473/91, OJ EPO 1993, 630, Reasons 1.2), the Board is competent to decide on the request for re-establishment of rights (T 555/08, Reasons 2; see also T 936/90, Reasons 1; T 1381/11, Reasons 2; T 649/13, Reasons 3 and T 1201/10, Reasons 1).

Admissibility of the request for re-establishment

2. The loss of rights communication was issued on 7 February 2019. On receipt of this communication, the representative learnt about the non-payment of the fee and on this date the cause of non-compliance was removed. The request for re-establishment of rights was filed on 20 March 2019 together with grounds on which this request was based and setting out the facts on which it relies. The fee for re-establishment was paid on the same day. The omitted act, i.e. payment of the renewal fee for the 9**(th) year and the additional fee, was also completed on 20 March 2019. Thus, the requirements of Rule 136 (1) and (2) EPC are fulfilled and the request is admissible.

Allowability of the request

3. According to Article 122(1) EPC, an applicant can have his rights re-established if he has sufficiently shown that in spite of all due care required by the circumstances having been taken, he was unable to observe the time limit. From this it is clear that in the first place it is the applicant who has to observe all due care (J 3/93 of 22 February 1994, point 2.1). If a professional representative is appointed the duty of all due care applies both to the applicant himself and to his professional representative (J 5/80, OJ EPO 1981, 343, point 4, J 17/03 of 18 June 2004, point 5). In considering whether all due care has been observed, the circumstances of each case must be looked at as a whole. The obligation to exercise all due care must be considered in the light of the situation as it stood before the time limit expired (Case Law of the Boards of Appeal, 9**(th) edition 2019, III.E.5.2).

4. For cases where the non-compliance with a time limit involves some error in carrying out the party's intention to comply with the time limit, the case law has established the criterion that due care is considered to have been taken if non-compliance with the time limit results either from exceptional circumstances or from an isolated mistake within a normally satisfactory system (see references in Case Law of the Boards of Appeal, 9**(th) edition 2019, III.E.5.2).

Due care of the representative

5. On the representative's side two mistakes happened. Firstly, CPA Global was not informed that they again resumed responsibility and thus should send reminders to the applicant. Why this mistake happened is not quite clear because by updating the representative's internal electronic file system the information should have been transferred automatically to CPA Global. The second mistake was made when the communication of 3 August 2018 was received, by not checking in CPA Global's data base whether reminders had been sent to the applicant. This might be qualified as an isolated mistake of the record's clerk. There is no need to decide whether or not the representative's system in relation to CPA Global and setting up a reminder system was satisfactory because the purpose of the whole system, i.e. making the applicant aware of outstanding renewal fees, was achieved since the representative informed the applicant about it. Thus the overall system worked in the end.

6. There was no need for the representative to send further reminders because the applicant had clearly stated in his reply on 3 October 2018 that he would pay the fee. It is established jurisprudence that even if renewal fees are paid by someone else, the representative retains a secondary responsibility and he has to take the necessary steps to ensure payment if intended. This means that, in the first place, the representative has to ascertain the client's true wishes which might involve sending more than one reminder (Case Law of the Boards of Appeal, 9**(th) edition 2019, III.E.5.5.2 b)). However, in the present case, the representative was informed about the applicant's intentions and he could be sure that the applicant was aware of the running time limit. Once the applicant had clearly indicated that he had taken note and that he would pay, the representative had fulfilled his obligations and the responsibility shifted to the applicant.

Due care of the applicant

7. Apparently, the applicant company is owned and run by Mr Hood only and therefore it is to be considered as an individual applicant. It is established case law that the same standards of care as those required of a professional representative or a patent department of a large firm cannot be applied to an individual applicant. Nevertheless, he must himself take all possible steps to ensure that he can do, properly and punctually, whatever is required from him during the grant procedure to prevent any loss of rights. He is not entitled to leave anything undone which may reasonably be expected from him with a view to observing time limits (see references in Case Law of the Boards of Appeal, 9**(th) edition 2019, III.E.5.5.1 b)).

8. In the present case, it was the applicant's duty to pay the renewal fees in due time. In this context he had appointed a professional representative and CPA Global to assist him and he could rely on getting necessary reminders which, unfortunately, he did not get from CPA Global as usual. But he was informed by his representative about the outstanding renewal fee and that payment had to be made by 31 December 2018. All due care of an applicant in such a situation requires that he carefully studies the letters he receives from his consultants and gives the required instructions in good time.

9. It is submitted that the applicant was confused because CPA Global had sent reminders with respect to the US patent and that he thought that his instructions to CPA Global to pay were in respect of the European patent application. However, the requests for instructions, both from the representative as well as from CPA Global were very clear. In the representative's email of 8 August 2018, clear reference was made to "European Patent Application No. 10732735.5" on top of this mail and the EPO's notice of 3 August 2018 informing the applicant about the non-payment of the renewal fee was attached. CPA Global's renewal fee notice of 6 September 2018, i.e. one month later, clearly referred to "U.S.A Patent number 8868489, Renewal date 21 April 2018". Apparently, Mr Hood did not react and therefore, CPA Global sent an email on 17 October 2018, following a telephone conversation of the same day, again referring to US patent number 8868489 and explaining that instructions needed to be sent to the US patent office at the latest on the following day. Mr Hood's reply on 18 October 2018 stated that "[t]his email is to confirm that I wish to renew US patent number 8868489. Please advise re payment". From this wording, as well as from the timely context, it is clear that Mr Hood wanted to pay the renewal fee for the US patent and not for the European patent application.

10. The applicant's mistake was that he thought that this payment was in respect of the fee mentioned in the representative's email of 8 August 2018 and that only one payment had to be made. This assumption was reinforced by the account statement sent by CPA Global on 29 November 2018 where only one outstanding fee was mentioned. In the applicant's view this qualified as exceptional circumstances which justified the re-establishment of rights. The Board does not concur with this view because that mistake could have been avoided if the applicant had properly read the correspondence sent to him by his consultants, which is to be expected from a careful applicant taking part in business life. Upon receipt of the reminder from CPA Global in September 2018, he should have noticed that another application, as well as another due date was mentioned. All due care in this situation would have required that he get in touch with his representative and ask for clarification. At that stage, the applicant had all the necessary information at his disposal but did not follow it up correctly. There were no circumstances which were beyond his control.

11. Therefore all due care on the applicant's side cannot be acknowledged and the request for re-establishment of rights has to be refused. This means that the loss of rights communicated on 7 February 2019 has become final and the application is deemed to be withdrawn. Since the renewal fee for the 9**(th) year and the additional fee were paid after the loss of rights occurred, they were paid without legal basis and therefore have to be reimbursed.

Order

For these reasons it is decided that:

1. The request for re-establishment of rights is refused.

2. The appeal proceedings are terminated.

3. The renewal fee for the 9**(th) year plus the additional fee are to be reimbursed.