T 0635/21 - The divisional game at the EPO

Key points

• The patentee withdrawals its appeal during the oral proceedings before the Board.
• ". The Board is mindful of the fact that in certain circumstances, the withdrawal of an appeal can be considered abusive, namely in the context of several (pending) divisional applications where the withdrawal of an application or appeal is meant to avoid legal certainty, see e.g. the decision of the District Court Munich of 24 February 2020 (7 O 1456/20), headnote 1: "A patentee that on the basis of a parent application has branched off several, mostly identical divisional applications, acts contrary to honest practices when by voluntarily dropping the patent right prior to a decision of the opposition division, avoids a decision of the Boards of Appeal for a parallel divisional patent that could clarify the legal situation for the whole field of the invention". Further such practices are highlighted by K. Foss-Solbrekk, "The Divisional Game: Using Procedural Rights to Impede Generic/Biosimilar Market Entry", 53 IIC 1007-1037 (2022)."
• As a comment, "considered abusive" may also be interpreted in connection with national law and EU competition law.
• "for the case at issue, the board remarks that it is established case law that an appellant has the right, based on the principle of party's disposition, to withdraw its appeal at any time and that the use of a right does not in principle constitute an abuse (see for example decision T 0674/03). Moreover, there is in the Board's view insufficient evidence that the withdrawal of the appeal was part of a systematic approach by the appellant to avoid clarifying the issues of patentability by way of a written decision on such issues. The board thus concludes for the above reasons that the respondent's request for apportionment of costs is not justified and that any party has to bear the costs it has incurred."
• The case was about bendable glass.
• As a comment, during the oral proceedings, the Board announced a conclusion that AR 68 (!) did not meet the requirements of Article 83 and that this issue appeared to apply to all other requests on file. Had the Board announced this finding directly as a decision, the Board would be obliged to issue the written decision. 

EPO 

The link to the decision is provided after the jump, as well as (an extract of) the text of the decision.

https://new.epo.org/en/boards-of-appeal/decisions/t210635eu1.html

1. According to Article 104, paragraph 1, EPC and Article 16(1) RPBA 2020 each party shall in principle bear its own costs in proceedings before the EPO. The board may however order a different apportionment of costs for reasons of equity.

2. The board notes that the above rule differs from a number of national jurisdictions that allow the successful party to recover its expenses from the unsuccessful one. Under the EPC, the only reason for a different apportionment of costs is the inequitable conduct of one of the parties.

3. In the present case, the respondent argued that the appellant, by withdrawing the appeal at a late stage during oral proceedings, prevented the respondent from obtaining a reasoned decision on the issues of patentability as discussed. This was compounded by the fact that such course of action had equally been chosen by the appellant also at least in one parallel case related to the same technology (T 1521/20) in order to leave undecided, by avoiding a reasoned decision, the validity of the still ongoing parallel cases wherein similar patentability issues will have to be discussed again. Therefore, the appellant's withdrawal of the appeal amounted to an abuse of procedure that justified the request for apportionment of costs in the respondent's favour.

4. The board observes that case law on inequitable conduct has primarily been developed by the Boards of Appeal for a party that has requested oral proceedings, thereby constraining the other side to appear to the hearing, and without or very short notice choosing not to attend the same (decisions T 909/90, T 53/06).

5. Still, inequitable conduct by a party is not necessarily limited to an unexcused non-appearance for an oral hearing that but for the party's conduct would have been unnecessary. Rather, according to decision T 952/00 (Reasons, point 5), "the equity requirement is a matter for the body hearing the case to decide at its discretion in the light of the facts. It is to be seen as the compensation one party owes another as a result of his negligence or culpable irresponsibility, or a wrongful act carried out with intent to cause the other party harm and leading to damage requiring that party to request oral proceedings or the taking of evidence which would otherwise have been unnecessary. The wrongful act, whether intentional or simply the result of culpable negligence, must be judged in relation to what the normal behaviour of an ordinarily diligent party would have been. It must also be clearly and obviously the direct cause of the costs which should not have been incurred".

6. The Board is mindful of the fact that in certain circumstances, the withdrawal of an appeal can be considered abusive, namely in the context of several (pending) divisional applications where the withdrawal of an application or appeal is meant to avoid legal certainty, see e.g. the decision of the District Court Munich of 24 February 2020 (7 O 1456/20), headnote 1:

"A patentee that on the basis of a parent application has branched off several, mostly identical divisional applications, acts contrary to honest practices when by voluntarily dropping the patent right prior to a decision of the opposition division, avoids a decision of the Boards of Appeal for a parallel divisional patent that could clarify the legal situation for the whole field of the invention".

Further such practices are highlighted by K. Foss-Solbrekk, "The Divisional Game: Using Procedural Rights to Impede Generic/Biosimilar Market Entry", 53 IIC 1007-1037 (2022).

7. However, for the case at issue, the board remarks that it is established case law that an appellant has the right, based on the principle of party's disposition, to withdraw its appeal at any time and that the use of a right does not in principle constitute an abuse (see for example decision T 0674/03).

Moreover, there is in the Board's view insufficient evidence that the withdrawal of the appeal was part of a systematic approach by the appellant to avoid clarifying the issues of patentability by way of a written decision on such issues.

8. The board thus concludes for the above reasons that the respondent's request for apportionment of costs is not justified and that any party has to bear the costs it has incurred.

Order



For these reasons it is decided that:

The respondent's request for apportionment of costs is refused.