T 0967/18 - Interuption of proceedings

Key points

• The proprietor appeals the decision of the OD issued on 05.02.2018.
• "the patent proprietor informed the EPO's Legal Division by submission dated 19 July 2019 that ... an  external administrator for [the then proprietor] had been appointed on 26 September 2016 as part of the company entering voluntary administration."
• The grant was published on 10.02.2016, avoiding a few other procedural complications.
• "The EPO's Legal Division informed the patent proprietor - with the communication dated 26 July 2019 - that the opposition proceedings had been interrupted in accordance with Rule 142(1)(b) EPC with effect from 11 November 2016 and that the proceedings would be resumed on 4 November 2019."
• The opponent filed an appeal against the decision of the Legal Division to not set aside the communication of 26.07.2019, case J 9/21 (post). The Legal Board dismissed the appeal because " it is not possible to set aside a declaration of interruption by the Legal Division with retroactive effect, not even if it was declared erroneously (for an interruption see T 1389/18, Reasons 6, and J 10/19, Reasons 4 to 13; for a stay see J 14/19, Reasons 3.5, with further references). "
• The present Board: "As correctly explained by the Legal Board of Appeal (J 9/21, Reason 3.3), in accordance with previous decisions of the boards, where the proceedings have been interrupted under Rule 142(1)(b) EPC, acts done by the parties or the competent body of the EPO during the period of interruption are considered "invalid"."
• "the appeal and the appeal proceedings have no valid subject eligible for judicial review. In line with established case law, an admissible appeal requires the existence of an appealable decision. Thus, the appeal in question must be regarded as not satisfying the requirements set out in Article 106(1) EPC. Hence, the board considers the appeal to be inadmissible."
• The Board refuse the requests for apportionment of costs. As to the conduct of the proprietor: "there is no evidence of an abusive behaviour of the patent proprietor. The patent proprietor did not request an interruption. The latter was ordered ex officio by the Legal Division under Rule 142(1)(b) EPC, after the patent proprietor had requested the registering of a change of ownership. It is not apparent that the patent proprietor was aware that the request for the change of ownership with the relevant information concerning the voluntary administration would have triggered an interruption of the proceedings. There is no evidence that the patent proprietor was aware that the legal situation created under Australian law required an interruption in the EPO proceedings. There is also no evidence that it deliberately waited for the outcome of the opposition proceedings to provide information which would have led to an interruption."
• "the board is not convinced that the failure to recognise the implications of the entry into voluntary administration for the EPO proceedings constitutes a serious and gross lack of diligence on the part of the patent proprietor. As the proceedings before the Legal Division and the Legal Board of Appeal confirmed, a complex analysis was required to properly assess the legal consequences."
• The OD can now open the file again on this patent with a filing date in 2009.

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/t180967eu1.html

1. Parties not represented at oral proceedings

The patent proprietor had withdrawn its request for oral proceedings in writing and was not represented at the oral proceedings. The proceedings were continued in its absence, and the patent proprietor was treated as relying on its written case in accordance with Rule 115(2) EPC and Article 15(3) RPBA.

2. Admissibility of the appeal

2.1 According to the Legal Board of Appeal's decision J 9/21 (see in particular Reasons 7 and 8), it is not possible to set aside with ex-nunc effect a decision on interruption or to replace the date of interruption or resumption with a different date. The Legal Board of Appeal therefore considered, for this reason alone, not allowable both the main request, i.e. that the decision of the Legal Division and the interruption of the proceedings be set aside and that the case be remitted to the Legal Division, and the auxiliary request, i.e. that the decision of the Legal Division be set aside and that 21 February 2017 be set as the date of resumption of the proceedings.

The current board agrees with the conclusion of the Legal Board of Appeal that it is not possible to set aside with ex-nunc effect a decision on interruption. It also agrees with the Legal Board's reasoning.

In the current proceedings, it is only necessary to decide on the effects that the interruption has on the appeal.

2.2 As correctly explained by the Legal Board of Appeal (J 9/21, Reason 3.3), in accordance with previous decisions of the boards, where the proceedings have been interrupted under Rule 142(1)(b) EPC, acts done by the parties or the competent body of the EPO during the period of interruption are considered "invalid".

Categories may be borrowed from legal national traditions to argue whether they are invalid, devoid of effect or even non-existent. But irrespective of this qualification issue, the result and impact on appeals lodged against decisions taken during an interruption remain the same: the appeal and the appeal proceedings have no valid subject eligible for judicial review.

In line with established case law, an admissible appeal requires the existence of an appealable decision. Thus, the appeal in question must be regarded as not satisfying the requirements set out in Article 106(1) EPC.

Hence, the board considers the appeal to be inadmissible.

3. Reimbursement of the appeal fee

Under established case law (see, for instance, J 15/01, Reason 3), where an appeal has been duly filed, as in these proceedings, but is deemed to be inadmissible, it is not possible to reimburse the appeal fees.

4. Apportionment of costs - Article 104(1) EPC

Both parties have filed a request for apportionment. Each request - to the board's understanding - had been considered late filed and not allowable by the opposing party. These two issues are discussed separately below.

4.1 Admittance

4.1.1 Request of the opponent

The opponent has argued that the rules of procedure do not apply to requests for apportionment. Hence, these requests may be filed at any time. Even if the rules applied, according to the opponent, its request did not constitute an amendment of its case, so it was not subject to Article 13(2) RPBA.

The board disagrees. There is no textual reason why the request for apportionment filed under Article 16(1) RPBA must not be considered part of an appeal case, which is implicitly defined in the rules of procedure and includes all "requests, facts, objections, arguments and evidence" presented by a party in the appeal proceedings (see Article 12(3) RPBA). The generic term "requests" covers requests on the costs of the proceedings. Therefore, adding such a request changes the appeal case.

Even if the opponent's view was correct and requests for apportionment were not subject to the RPBA, this would result in a lacuna in the procedural framework which the board should fill. This board sees no reason why it should not apply Articles 12 and 13 RPBA by analogy to the request at hand. The application of the RPBA to this request would not lead to any practical or dogmatic difficulties or unfair results. If the event or conduct which triggers the request took place after the statement of grounds and the reply, the board has the discretion to admit such a request under Article 13(1) RPBA. If the event or conduct which triggers the applicant's request takes place after the time limit referred to in Article 13(2) RPBA, this could constitute an exceptional circumstance within the meaning of that provision.

In the current case, the board had serious doubts as to whether the request could be admitted under Article 13(2) RPBA.

The respondent did not give any reason when making the request, left alone a cogent one, why this request was filed only two weeks before the oral proceedings. These reasons were only explained for the first time at the oral proceedings and were not convincing. The request could have been made earlier, for instance, when the Legal Division decided to suspend the proceedings. The effect of this decision on the proceedings was obvious from the outset and was also the reason for appealing against it.

However, in view of the lack of case law on the applicability of the RPBA to a request for apportionment indicated by the opponent, and as the request in question was not allowable, the board preferred to decide on the merits. Therefore, the request was admitted into the proceedings.

4.1.2 Request of the patent proprietor

The patent proprietor's request was filed in due time. The first procedural opportunity to file it (as well as to object to the opponent's request) was the oral proceedings. The patent proprietor anticipated this reaction by filing a written statement before the oral proceedings. The reason for this was admittedly that the patent proprietor did not intend to participate in the oral proceedings. Nevertheless, anticipating new requests or submissions in writing makes the preparation of the oral proceedings for both the board and the other party easier. Therefore, the arguments put forward by the opponent at the oral proceedings that the request and reply were filed late or that the conduct of the patent proprietor was problematic also in that regard are not convincing.

4.2 On the merits

4.2.1 Under Article 104(1) EPC, "[e]ach party to the opposition proceedings shall bear the costs it has incurred, unless the Opposition Division, for reasons of equity, orders, in accordance with the Implementing Regulations, a different apportionment of costs". Under Article 16 RPBA subject to Article 104(1) EPC, the board may on request order a party to pay some or all of another party's costs. In accordance with the second sentence of Article 16(1) RPBA, such costs may include those incurred by amendment to a party's appeal case, extension of a period, acts or omission prejudicing the timely and efficient conduct of the oral proceedings, failure to comply with a direction of the board, and abuse of procedure. The list is not exhaustive.

4.2.2 From the wording of Article 104(1) EPC, the general rule governing proceedings before the EPO is that each party must bear the costs it has incurred. As an exception to this principle, a party may be ordered to pay part of the costs of another party on grounds of equity. Since this is understood as an exception of a more general principle, it applies only in exceptional cases (see also T 1045/19, Reason 8).

As the case law correctly states, "Article 16(1) RPBA 2020 does not regulate in which cases a different apportionment of costs is justified" (T 1045/19, Reason 7). The provision has a different function: it lists "situations for which specific costs may be included in the apportionment". Indeed, the question "whether a different apportionment of costs is warranted is governed by Article 104(1) EPC which requires that, in order to find an exception to the rule that each party bears the costs it has incurred, "reasons of equity" must exist" (T 1045/19, ibidem). However, it is clear that at least the mention of "abuse of procedure" in Article 16(1)(e) RPBA does more than specify which costs may be taken into account. It provides a case where the apportionment would be justified on the merits under Article 104(1) EPC.

4.2.3 From the exceptional nature of the cost apportionment provided under Article 104(1) EPC and the reference to the abuse of procedure contained in Article 16(1)(e) RPBA, the board draws the following inference. More than just a mistake made by a party or a negligent delay in a procedural act which may occur in a proceedings and which may lead to additional activities and costs is required for the order of a different apportionment. The abuse of procedure refers to such extreme situations where "the exercise of rights is predominantly intended to cause damage and other legitimate purposes take a back seat" (J 14/19, Reason 13.1). Therefore, while the board considers that negligent behaviour may also justify apportionment, the negligence must be serious enough to be considered equivalent to wilful misconduct.

4.3 Apportionment of the opponent's costs

The opponent's request is not allowable for two reasons:

4.3.1 First, there is no evidence of an abusive behaviour of the patent proprietor. The patent proprietor did not request an interruption. The latter was ordered ex officio by the Legal Division under Rule 142(1)(b) EPC, after the patent proprietor had requested the registering of a change of ownership.

It is not apparent that the patent proprietor was aware that the request for the change of ownership with the relevant information concerning the voluntary administration would have triggered an interruption of the proceedings. There is no evidence that the patent proprietor was aware that the legal situation created under Australian law required an interruption in the EPO proceedings. There is also no evidence that it deliberately waited for the outcome of the opposition proceedings to provide information which would have led to an interruption.

Finally, there is no evidence on file that (i) the patent proprietor's representative before the EPO knew that the patent proprietor had entered voluntary administration and (ii) the national records of a transfer in Germany and the UK were performed by the European representative before the EPO. According to the patent proprietor, these national changes of ownership records had not resulted in any interruption of proceedings in those states. The board has no evidence to the contrary.

4.3.2 Second, the board is not convinced that the failure to recognise the implications of the entry into voluntary administration for the EPO proceedings constitutes a serious and gross lack of diligence on the part of the patent proprietor.

As the proceedings before the Legal Division and the Legal Board of Appeal confirmed, a complex analysis was required to properly assess the legal consequences. It was necessary to examine the interaction between Australian domestic rules and EPC provisions and to assess whether voluntary administration (without a bankruptcy judgment) under Australian law could be considered equivalent to an action taken against the patent proprietor's property which prevented it by legal reasons from continuing in the proceedings (Rule 142(1)(b) EPC). This assessment was not straightforward. The external administrator's appointment was voluntary. And there was no bankruptcy judgment.

As argued by the patent proprietor and also reflected in decision J 9/21 (see Reason 2.2), even the opponent was of the opinion that (i) the appointment of an external administrator did not result in the patent proprietor being prevented by legal reasons from continuing in the proceedings, (ii) an interruption was not justified and (iii) Rule 142 EPC was not applicable to that scenario.

In the current proceedings, the opponent argues the opposite. The European representative should have known that it was prevented from continuing because Rule 142 EPC is clear in this respect. At the oral proceedings, when asked to explain these contradictions, the opponent stated that the main reason for the appeal against the decision of the Legal Division was to make clear that the Legal Division should not have ordered an interruption without hearing the parties affected by that decision. However, the case made in the two proceedings remains contradictory.

4.3.3 The board concludes that the patent proprietor's conduct in failing to notify the EPO of its entry into voluntary administration in the circumstances described above was the result of an error of assessment. This error was not due to such a gross lack of care that could be considered equivalent to wilful misconduct.

4.3.4 The conclusion drawn by this board is in line with the assessment of the Legal Board of Appeal. The Legal Board of Appeal did not consider the patent proprietor's conduct to be abusive. It merely stated that "it was nevertheless unfortunate that the respondent only informed the EPO by letter of 19 July 2019 about having entered into voluntary administration almost three years before. Had the respondent informed the EPO in a more timely manner, the impact of the interruption could have been less severe" (see J 9/21, Reason 5.2).

4.3.5 In view of the above considerations, the opponent's request for apportionment of costs under Article 104(1) EPC is refused.

4.4 Apportionment of the patent proprietor's costs

The patent proprietor's request for an apportionment of costs is not allowable for the following reasons. The request is based on the late filing of the opponent's request.

More specifically, the patent proprietor considers that it was an abuse of procedure to file a request only two weeks before the oral proceedings which could have been filed earlier in the proceedings. The board agrees that the request could and should have been filed earlier. However, in cases where there is an unjustified delay in filing a request, the question is whether this conduct results in additional costs that would not have been incurred if there had been no delay. In the current case, there is no evidence that this occurred. Indeed, the patent proprietor would have had to prepare the submissions filed on 10 March 2023 in any event. The board has no evidence that higher costs were incurred due to time pressure in the current case.

Consequently, the patent proprietor's request for apportionment of costs is also rejected.

Order



For these reasons it is decided that:

- The appeal is inadmissible.

- The requests of the respondent (opponent) and the appellant (patent proprietor) for a different apportionment of costs under Article 104 EPC are refused.