From October 2016 to March 2017 the team is joined by Guest Kats Rosie Burbidge and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Tian Lu and Hayleigh Bosher.

Monday, 24 April 2017

Court of Appeal dismisses Huawei's first appeal in Unwired Planet patent fight

The IPKat trying to stop time on a novelty clock.  
With the ink yet to dry on the judgment of Birss J on the non-technical issues arising from the Unwired Planet litigation (reported here and, with further analysis on its way), the Court of Appeal (Gross LJ, Floyd LJ and Arnold J sitting as a Court of Appeal Judge) handed down its decision in the first of the three related technical trials to receive judgment from the Patents Court in 2015/16.  With the AmeriKat busy at Fordham, she has depended on Steven Willis (Bristows) to update readers:  
"The patent in suit concerned a polling system for use in a wireless communication network.  At first instance, Birss J held the patent to be valid and infringed by wireless telecommunication networks that operate in accordance with the LTE standard i.e. the patent was standard essential.

Huawei was ultimately unsuccessful in its appeal of the Judge’s findings on novelty, entitlement to priority and inventive step, but the judgment raises some interesting issues concerning:
(i)      what constitutes the state of the art for the purposes of novelty and in particular what is meant by “before the date of filing” under Article 54(2) EPC;
(ii)     the approach to entitlement to priority where implicit disclosure is relied upon; and
(iii)  challenges to a finding of inventive step where the Judge at first instance relied upon secondary evidence.  
Novelty

Article 54(2) EPC states that ”the state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application [emphasis added].

There was a dispute as to whether the “Ericsson TDoc” formed part of the state of the art.  There was however no dispute that if the Ericsson TDoc did so amount, the Patent was anticipated.

The “Ericsson TDoc” was uploaded to a publically available server operated by the European Telecommunications Standards Institute (ETSI) in Europe at 08:36 (CET) on 8 January 2008 / 02:36 (EST) on 8 January.  Over 14 hours later, the priority document was filed at the USPTO, which was under EST at the time, at 22:59 (CET) on 8 January / 16:59 (EST) on 8 January.

Huawei alleged that as the Ericsson TDoc was made available at a point in time where it was 7 January in some parts of the world (including Hawaii and California), it had been made available “before the date of filing” and thus formed part of the state of the art for the purposes of novelty.   
For the visual learners, the Court of Appeal helpfully set out the below table summarising the position [emphasis added]:      

CET (GMT +1)
GMT
EST (GMT -5)
Hawaii (GMT -10)
Ericsson TDoc uploaded to ETSI server
8 Jan 08:36
8 Jan 07:36
8 Jan 02:36
7 Jan 21:36
Priority Doc filed at USPTO
8 Jan 22:59
8 Jan 21:59
8 Jan 16:59
8 Jan 11:59 
At first instance, Birss J asked two questions: (i) what is the priority date?; and (ii) was the putative prior art made available to the public before that date?  Birss J considered the timezone in the patent office of filing to be the relevant one for determining both questions.  Thus the Ericsson TDoc was made available at 02:36 on 8 January which was not “before the date of filing” for the purposes of novelty.  “The fact that this time was 7th January in some places in the world such as Hawaii is irrelevant.”

Floyd LJ upheld Birss J and set out the position as follows: “The priority date is the 24 hour period of the day on which filing took place, in the time zone of the patent office where it was filed.  The publication must occur before that day, on a time basis, by reference to the time zone of the patent office of filing.” 
Entitlement to Priority
The key question before the Court was whether there was disclosure in the priority document of polling "upon assembly" i.e. just before the data unit was transmitted rather than afterwards notwithstanding references in the priority document to the counting and polling of “transmitted” data units and bytes.

In determining the issue, Floyd LJ emphasised a number of points that should underpin the Court’s analysis:
  •  the threshold for entitlement to priority is significantly lower than that for determining whether a claim is novel:  the exercise of determining priority involves asking whether the invention is directly and unambiguously derivable from the priority document, not whether every possible embodiment of the invention is so derivable.”  To adopt the alternative approach would make claiming priority “impossibly hard”;
  •  the priority document must not be read in a vacuum: “both explicit and implicit disclosure must be taken into account”.  This is not the same as adding to the disclosure something which is obvious in light of it; and
  • due to the importance of assessing the common general knowledge in order to determine what is implicitly disclosed, an appellate Court must exercise caution when interfering with a first instance finding relating to priority. 
Floyd LJ held that the trial Judge was entitled to base his finding on the common general knowledge functionality of UMTS.  Accordingly polling upon assembly was disclosed in the priority document.  “To read it otherwise would be to do so in a vacuum.”          
Inventive Step
The inventive step issues focused on the Judge’s approach to secondary evidence.  Obviousness was alleged over a single piece of prior art – the Motorola TDoc – a submission to the relevant 3GPP standard setting committee (“the Committee”).  At first instance, the Judge identified the fact that by the priority date the Committee had rejected the proposals in the Motorola TDoc  as Unwired Planet’s strongest argument against the allegation of obviousness.    
Huawei argued that the Judge was wrong to have placed such weight on the secondary evidence and that the "primary" evidence of the expert witnesses effectively compelled a finding of obviousness.  The Court of Appeal reiterated the oft-cited reluctance with which an appellate Court should interfere with a first instance finding of an obviousness.  The Court noted that Huawei’s submission “effectively requires the court to conduct a detailed review of the expert evidence to see whether it did indeed compel a finding of obviousness.”  The Court went on to say that if Huawei’s submission did relate to an error of principle, “it would seem to require an almost complete review of the evidence by this court in every case where secondary evidence is relied on.”  This, said the Court, would be a “serious inroad” to the approach to obviousness on appeals.

Despite these reservations, the Court did go on to consider and reject the suggestion that the primary evidence did indeed compel a finding of obviousness, or that the Judge thought that the primary evidence showed that the invention was obvious.  However, in view of the Court of Appeal’s qualms with the approach, it seems unlikely that submissions of this nature will be welcomed in future cases."

Once upon a time: Inventive step argumentation as storytelling

The IPKat crafting an invention story, but struggling
to identify a suitable protagonist....
It is all about the story. A few years ago, a judge commented to the AmeriKat that they felt that sometimes patent litigators can underestimate the benefit of telling a convincing invention story when opening a case. The story, after all, is used as a tool to indicate value. "Judge, my invention has value! It is worthy of protection!", the story is meant to convey. So when the AmeriKat learnt that Dai Rees, former chairman of the Technical Board of Appeal, had written a paper on the very topic entitled "Inventive Step: The Stories We Tell" she asked him if he would be willing to explain to IPKat readers how one could go about telling a convincing invention story.  Dai explains:  
"In my paper I argue that inventive step in patent cases is of necessity in telling a story, and as such should be judged by appropriate standards. After exploring the reasons for taking this position, the standard approaches used by the English and German courts and the European Patent Organisation Boards of Appeal are examined to see how well they stand up as story-telling. 
For the English and German courts and the EPO Boards of Appeal, determining whether there is an inventive step in patent cases boils down to deciding on the truth of a “counterfactual conditional”, “If the skilled person had had knowledge of prior art X at the date of filing, he would have created (or done or considered), without the exercise of inventiveness, something which fell within the invention claimed”. Defining the formal truth of counterfactual conditionals is difficult; defining a formal proof of their truth is even more so. Nonetheless every day advocates make their cases for and against inventive step and judges decide. How? If they cannot use formal criteria they must use informal ones, and at least for this particular form of counterfactual conditional there is an obvious way to do it: let the advocate tell a story of how the skilled person would have arrived at the invention, and judge whether that story is convincing or not.

To be convincing a story must have realistic characters with reasonable motivation and no unlikely coincidences. We only have one character, the skilled person. Unfortunately, he (or she) is not realistic for two reasons: 1) he has access to all the public prior art, wherever it is to be found. There is nothing to be done about this; it is a necessary legal fiction resulting from policy choices. 2) The skilled person is strange in that he does not have “any spark of inventive capacity”. In my opinion this is an unnecessary restriction – we only need to tell a story in which he doesn’t use any inventiveness, which is not to deny him any inventive capacity.

Both the English (following Pozzoli) and the German courts regularly begin their inventive step discussion by defining the relevant skilled person, who then chooses, finds or possibly is presented with a piece of prior art to start his considerations from. This is clearly a gaping hole in the story. An alternative approach would be to start with the particular prior art and suppose that for every piece of prior art there is a skilled person, an engineer with the education and experience to develop on it. This is a reasonable supposition; after all the prior art was also developed by somebody, who can more or less take the place of the skilled person. Moreover this idea is in line with the position which the courts and the EPO BoA all take in practice, that inventive step arguments can start from any prior art which works. 
If we take this view, we further have to see the first step of the problem and solution approach (PSA) adopted by the German courts and the EPO BoA, namely “determining the closest prior art”, not as an instruction to the skilled person, but as an instruction helping us to find the right story to tell. The next step of the PSA is to determine the problem solved. This is carried out by comparing the features of the invention with those of the prior art chosen. Frequently in decisions there is no mention of how the skilled person becomes aware of the problem, but this is clearly essential for the motivation of our character. This is a significant weakness in many German and EPO BoA decisions.

Undoubtedly there is more that could be said however, for example applying story criteria to cases where the skilled person is a team, or where the invention involves a mixture of “technical” and “non-technical” considerations."
Dai's paper discussing these ideas in more detail (complete with citations and footnotes) is found here.  The AmeriKat is struck by the point on "instruction to a skilled person", and more generally the PSA.  As soon as you instruct a skilled person to do anything (including reading a piece of prior art with interest or comparing the closest prior art with the invention), you already in danger of giving them some indication as to where you want them to end up or at least what the focus of the dispute is (plainly the invention, especially if you are on one side of the debate).  At that point the story seems to have already been written. Could defining your skilled person not based on the patent but on the prior art help avoid this?  You are therefore not necessarily (and knowingly) already imbuing the skilled person or team with the realm of the subject matter.  It would also lend more naturally to allowing the skilled person to identify whether they would reach out to another skilled person in an abutting profession instead of presupposing a team from the start and having to navigate those issues. Or do we all end up at the same place? What do readers think?

Sunday, 23 April 2017

Should investment in innovation worry about geographic dispersion? Steve Case says "yes", but what about Pareto?


Does it matter that most innovative activity, at least in the United States, is taking place in a small number of VC-funded locations? Steve Case seems to think so. For Kat readers who may not recognize the name, Case was co-founder in the 1980’s of what later was called AOL. The company was a pioneer internet company, particularly in its vision of exploiting the platform in the creation of on-line communities. Case and AOL gained particular notoriety as a result of the merger with Time Warner in 2001. The deal has been criticized by some as one of the worst mergers of the internet age. Whether or not, Case’s guru status in the digital world seems to have been unaffected.

Case has become preoccupied with the future sources of innovation (who can argue with that?) and he has penned a widely-discussed book, “The Third Wave: an Entrepreneur’s Vision of the Future”. One of Case’s recent concerns, as he discussed in a recent interview and podcast on Bloomberg radio, is that 78% of all venture capital is invested in only three locations—San Francisco/Silicon Valley, Boston, and New York. So troubled is Case about this state of affairs that he has embarked on Rise of the Rest road trips in the US to seek/encourage significant innovation that might/should take place in other locations and which, in time, will also presumably enjoy a fair share of venture capital funding.

He pointed to medical technology and the advantages of supporting the tethering of innovative activities to leading medical centers. I.e., instead of opening yet another start -up in Silicon Valley, why not promote start-ups in Cleveland to support the innovation coming out of the Cleveland Clinic, or in Baltimore to support similar activities at the Johns Hopkins School of Medicine. Or, more generally, to encourage start-ups in Detroit instead of, e.g., Boston or New York, to take advantage of the large pool of engineers in Michigan (due in part to the presence of the auto industry), the lower cost of living and the more relaxed Midwestern life style.

Far be it from this Kat to take on Steve Case. Still, this Kat is having some difficulty in understanding the advantages to entrepreneurship and innovation that would follow from a greater geographic dispersion of such activity. (For purposes of this post, I disregard what may be a prime political consideration, namely that such dispersion might help prevent a further economic hollowing out on a geographic basis, thereby reducing the likelihood of populist excesses.) Once we discount this, the question is whether such dispersion will lead to greater aggregate innovative activity at the national level.

What comes to mind in addressing this issue are the dynamics of the so-called Pareto principle, which is described by Wikipedia as follows--
"The Pareto principle (also known as the 80/20 rule, the law of the vital few, or the principle of factor sparsity states that, for many events, roughly 80% of the effects come from 20% of the causes. Management consultant Joseph M. Juran suggested the principle and named it after Italian economist Vilfredo Pareto, who noted the 80/20 connection while at the University of Lausanne in 1896, as published in his first paper, "Cours d'économie politique". Essentially, Pareto showed that approximately 80% of the land in Italy was owned by 20% of the population; Pareto developed the principle by observing that about 20% of the peapods in his garden contained 80% of the peas.

It is a common rule of thumb in business; e.g., "80% of your sales come from 20% of your clients." Mathematically, the 80/20 rule is roughly followed by a power law distribution (also known as a Pareto distribution) for a particular set of parameters, and many natural phenomena have been shown empirically to exhibit such a distribution [footnotes omitted].
Is not the current dispersion pattern perhaps an exaggerated instance of the Pareto principle? This Kat understands that this principle is far more nuanced that a single quotation might suggest and indeed it means different things to different people. But the underlying point suggests that the concentration of venture capital funding in only three centers is not necessarily a bad thing, and may even be positive. If a fourth (or fifth or sixth) start-up center for attracting significant venture capital will emerge, it will do on an organic basis, because the factors that have facilitated the current locations will also find a home in these additional locations. But it cannot be willed into existence.

Kat readers who want further convincing are invited to read the piece that appeared on February 28, 2017, on Bloomberg.com, “Why It’s So Hard to Build the Next Silicon Valley: Google brought its high-speed internet to Kansas City, but it didn’t turn the city into a tech paradise.”

The image at the top right was originally posted to Flickr by Thiago Avancini

The image at the lower left was made by Bill Ebbesen

Trade mark trolls in Cuba: an update

Cuba
Back in 2015 the IPKat hosted an interesting report by Jaime Ángeles (Angeles Pons) on the problem of trade mark trolls in Cuba. 

Jaime has now prepared an update on the situation. Here's what he writes: 

"In a post in March 2015 we discussed how the Cuban trade mark system had been invaded by numerous trade mark applications (at least 90 fillings, although the actual number might be around 100) by NON-owners of signs similar to registered US trade marks, most of them very well-known (and some including words and designs alike). Applicants have been Cuban citizens, US companies, and even Dominican Republic citizens.
Cuba is a country with a first-to-file regime and opposition process, and most of the real owners of the trade marks have filed oppositions to defend their rights. The first Cuban citizen that filed for several trade marks was Gustavo Fuentes Ledo. He filed applications for 66 trade marks, 39 of them were subject to a formal opposition.
In the latest publication of the Cuban Trademark Office (OCPI) (30 March) one could see the several appeals filed by Fuentes Ledo (arguably the first Cuban trade mark troll). The OCPI denied his applications on grounds of unfair competition and bad faith.
Trade mark applications already decided are:
·       SM SAM’S CLUB in class 35
·       Chase & design in class 36
·       Office Depot & design in class 35
·       Capital One & design in class 36
·       Carnival & design in class 39
·       Spirit Lines & design in class 39
·       Clark & design in class 7

From the review of the decisions (we reviewed the “Informe Conclusivo” of trade mark applications: SM SAM´S CLUB and design No.2014-0488, dated 3 February 2017), the OCPI searched the internet for the trade marks and found that the trade marks existed and had been subject to extended international use. However the Cuban Trademark Office considered that the trade marks were not well-known in Cuba, at least at the moment. It considered that the opponents could not demonstrate use by Cuban undertakings or foreign investors in Cuba. It however conceded that a small portion of the population might have been exposed to those trade marks.
The OCPI relied on bad faith and unfair competition to deny registration, and considered that:
·       The applicant (Fuentes Ledo) had filed for 66 different trade marks between June 2014 and January 2015 in twenty different classes.
·       The internet search confirmed that all the trade marks filed by Fuentes Ledo were at least “very similar” to those used by third parties.
·       The opponents are well-established in their own markets, notably the US.
·       Searches in international trade mark databases returned no registrations in the name of the applicant (Fuentes Ledo).
·       The applicant, being a Cuban citizen, does not have any official (Government) permits to operate in Cuba, in any or all the different economic areas affected by the perspective trade marks.
·       Part of the goods and services covered by the trade mark applications are forbidden activities for an individual person in Cuba (“trabajo por cuenta propia”), eg manufacturing pharmaceutical or dental products and cruise lines services, “to mention some”. The products and services would be only valid in Cuba for authorized legal persons and companies.

An individual person
operating a cruise line?
According to the OCPI, those elements all together amounted to unfair competition. The OCPI considered that the applications would harm the interest of different agents in the marketplace (actual and potential entities) and consumers alike, as well as being detrimental to the public order and fair competition that must prevail with transparency, loyalty and in such a way as to allow the good development of commercial relations and the principle of legal certainty.

The OCPI also considered that the ultimate goal of the applicant was to harm third parties in an irrational way.
The OCPI did not mention, value or consider in the decisions the Panamerican Convention. However it mentioned that the decisions would comply with the international commitments assumed by Cuba with the Paris Convention and TRIPS.
It is pertinent to mention that even way back in 1997, the OCPI denied several applications or cancelled registration of well know trade marks by third parties, including: GUESS, Old Spice, Pizza Hut, Duracell, Liz Claiborne, Calvin Klein, Hewlett-Packard, Kotex, Winchester, Hard Rock Café.  

In the following months, decisions will continue to flow. No doubt that the rights of original trade mark owners will also prevail in the decisions to come."

Friday, 21 April 2017

Fordham 25 (Report 6): The Judges

Brad Smith at last night's Gala Dinner
After an incredible night at the gala dinner, where the AmeriKat's new IP idol, Brad Smith (Microsoft), delivered and incredible an emotive speech on the stories of innovation, IP and society that makes our field so unique and exciting, Day 2 of the Fordham conference got into swing.  The AmeriKat, rarely a morning Kat, did not make it to the sunrise sessions but she prowled in for the ever popular view from the judges session with a smattering of trivia and more serious issues.

Mr. Justice Arnold (Chancery Division, High Court) recalled working with both Robin Jacob and Christopher Floyd when they were all barristers. He enjoys cooking, but within his job, he finds it fascinating rather than "fun" with the most interesting area being trade marks.  He agreed that the most challenging area in IP law right now is copyright because of the impact of the caselaw of the CJEU and because of the extensive technological developments in the tech sector.  It is difficult to find consistent principles in the decisions of the CJEU on copyright, in part because the problems they are addressing are not simple.  He expected that over time the CJEU caselaw would be refined through dialogue with the national courts, just as it had been in the area of trade marks.  He commented that all supreme courts, including the UK Supreme Court, found IP cases challenging, in part because they do not have a specialist IP background.

Hon Annabelle Bennett (Chancellor, Bond University) considers that patent law is changing the most.  When asked what annoys her the most about advocates it was lawyers who do not answer the question.  It is also not okay to be interrupted by advocates.  Judges get to do the interrupting.
Hon. Annabelle Bennett

Mr. Justice Birss (Chancery Division, High Court, London) commented that occasionally when judges from other divisions (who do not handle IP cases) get together they talk about the cases they are doing.  When some of his colleagues who do not do IP cases hear about what is preoccupying his attention in court, they think that Mr Justice Birss's cases are incredibly interesting.  That is because it is!  The subject matter - be it an invention, a product or a service - is incredibly interesting.  In answer to whether everyone can become a patent lawyer, Mr Justice Birss commented that you don't have to have a science degree to be a great patent lawyer.  A lot of great patent lawyers do not have science backgrounds.  A lot of great copyright lawyers, are scientist.  There is no predetermination as to whether someone is going to be a great IP lawyer by virtue of their background.

Hon. Edger F. Brinkman (Court of The Hague, The Hague)  spent a year in the Court of Appeal but has returned to first instance and much prefers being a trial judge.  He missed the freshness of the cases and (like Rian) the vibrancy and speed of summary proceedings that can be completed in just a few weeks.  His preference is for patents, especially pharmaceutical patents, which remind him of his chemistry background.  He enjoys the trials themselves most, and very much likes asking "trick" questions - he is most annoyed when advocates know the answer!  He is in favour of specialist courts, but queried whether judges should stay on those courts for the entirety of their careers.   

Lord Justice Floyd (Court of Appeal) said that the Chancery Division is very interesting.  He said that is where he had the most fun.  He considers that the US Supreme Court practices, with the greatest respect to them, are verging on the anti-patent side.  It is very difficult for non-specialist courts.  He considers that trade mark cases are the most fun, including the Kit-Kat case and color trade mark cases, which are pushing the limits of protection to trade mark law.

Hon. Dr. Klaus Grabinski (German Federal Supreme Court) commented on a question on amicus briefs: the German courts have no concept of these submissions and would simply send them back!  Arnold J commented that the UK Supreme Court receives increasing numbers of interventions and welcomes them.

Hon. Gordon Humphreys  (Chairperson of the Fifth Board of Appeal, European Union Intellectual Property Office) explains that decisions should be consistent and if there is a variance in decisions then they should refer it to the Enlarged Board.  This is happening increasingly. In the past year there have been 3 referrals and there are two pending.

Sir Robin Jacob (Faculty of Laws, University College London) responded to a question on allowing new evidence at appeal level.  He felt that this rendered the appeal stage a new hearing rather than being a true appeal - parties should bring all of their case, and make it their best case, at first instance. 
Judge Rian Kalden

Judge Rian Kalden (Court of Appeal of The Hague) relished her work as a first instance judge, particularly enjoying fast, summary proceedings, but on the other hand likes the additional time for reflection that that appeal court benefits from.  She sees copyright as a key area of development and noted that the CJEU has recently begun to take an interest in this area.  Her advice for advocates is to avoid verbosity in written arguments where that is not strictly necessary.

Maria Eugénia Martins de Nazaré Ribeiro (Formerly Judge of the General Court of the European Union, Luxembourg) has spent 30 years at the General Court, although she didn't initially mean to be a judge.

Hon. Pauline Newman (U.S. Court of Appeals for the Federal Circuit, Washington, D.C.) said her work in private practice was more "fun", but the job of a judge was very interesting.  On the appellate side, the argument is always full of tension and drama.  However, that comes with the obligation to try to find the "right" answer - she didn't necessarily call that "fun".  She thinks that the developments in the IP field reflect what is happening in the nation more broadly - the evolution of the tech sector is driving not just GDP and international development, but also the growth in the patent litigation business.  Patent litigation is no longer the sleepy boutique practice it was when she entered it, it is now a hugely interesting and dynamic area.  The tech sector has also driven huge developments in copyright law, and perhaps that is more fun!
Judge O'Malley

Hon. Kathleen M. O’Malley (U.S. Court of Appeals for the Federal Circuit, Washington, D.C.) read Gideon's Trumpet when she was 13 and that is when she knew she wanted to be a judge. She says that you are never really ever prepared to be a judge until you get on the bench and do it.  The experience of being a trial judge is the best preparation. She likes first principles - analyzing jurisdiction, procedure and separation of powers.  Sometimes they come up in patent law but they often come up in all cases and that is what she enjoys the most.  Congress went out of the way not to create a specialist court as they wanted the judges to have a general court experience.  About half of those on the Federal Circuit have technical background but everyone is equipped to deal with science.  She considers that IP is becoming much more global and noted how often judges refer to foreign precedents.

Hon. Gerard Rogers Chief Judge (Trademark Trial and Appeal Board, U.S. Patent and Trademark Office) was formerly an interlocutory attorney in the Court, which he remembered being a very satisfying role as it involved so much control over the procedural path of the cases, shepherding them through discovery and up to trial.  The work of the chief TTAB judge involves hearing fewer cases.  He always wanted to be a journalist rather than a lawyer (having graduated in the Watergate era), and particularly enjoys the writing of the decisions.  In response to a question about the value of oral argument, he noted that the TTAB only hears oral argument in around 15% of cases.  This low value is  partly due to the nature of many decisions being ex parte appeals of examiners' decisions where the record is already highly developed.  However oral argument is still important in cases where the goods or services diverge from regular, consumer goods and the Board needs additional help to understand the nature of the case.

Hon. Misao Shimizu (Intellectual Property High Court, Tokyo) has heard a broad variety of cases, including family and tax law, as well as IP.  His court now hears 50% patent, 25% trade mark, and 25% copyright cases and he enjoys patent cases the most.  He is looking forward to hosting a pan-Asian IP conference in the autumn at which judges from several Asian countries will exchange experience and hold a mock IP trial.

Double-check your docketing!

We rely upon automated systems for so much in modern society.  But an automated system is only as reliable as its human inputs.  Following a recent EPO Board of Appeal Decision J 0023/14 (Re-establishment of rights) of 15.12.2016, Katfriend Heiko Sendrowski alerts us to the dangers of deficiencies in docketing systems - and checking procedures - when deadlines are at stake:

"Background

On 5 November 2012, the applicant received a notice from the EPO drawing attention to the non-payment of the renewal fee for the fourth year in relation to a European patent application. This notice stated that "if the renewal fee and additional fee are not paid in due time, the European patent application shall be deemed to be withdrawn".  The European representative promptly alerted the applicant and US attorneys by email, initially receiving no response. After chasing, the US attorneys responded on 20 March saying "Received!!!"On 6 May 2013, the appellant's European representative was informed that the time limit pursuant to Rule 51(2) EPC had been missed and that the application was deemed to be withdrawn. 

The applicant therefore filed a request for re-establishment of rights on 4 June 2013.  The applicant submitted that the European patent application had been "inadvertently, inexplicably and unintentionally" not entered into its docketing system (apparently as a result of human error - various national applications arising out of the same international application had been entered into the system).  One standard practice of the applicant's docketing system was to send periodic reminders to the appellant regarding upcoming annuities for patent applications pending before the EPO, but because the system was unaware of the existence of the European application in question, the checking process failed in the present case. 

Decision

Before discussing re-establishment of rights, the Board disagreed with the reasoning of T 1402/13 of 31.5.2016 (not the one of 25.2.2016!) that the loss of rights ensues upon expiry of the normal due date unless the additional fees are paid, implying that missing the last date for paying the additional fees does not have the "direct consequence of causing a loss of rights" as required by Art 122(1) EPC.  The Board noted that such reasoning is irreconcilable with the protection of legitimate expectations of EPC users. It was not the intention of the legislator to cancel re-establishment of rights as a means of redress in such cases.  It is thus possible for the rights to be re-established upon payment of the annuities plus surcharge (see sec. 2.5).


Is Kitten input any more reliable?
However, on the facts, the Board noted that the initial mistake was that the application was not uploaded by the applicant into its docketing and annuity system.  A cross-check was only performed on the data entered into the docketing system against documentation provided by attorneys and its internal proceedings were unsuitable for detecting missing data in the docketing system; the applicant's cross-checking system could not be considered independent and effective as demanded by the Boards (see sec. 3.2.3, 3.2.4).

The applicant's argument of an isolated error in an otherwise functional system was dismissed, because "the mere allegation that the case at issue was the first instance of unintended failure does not show that a satisfactory system was in place and that thus all due care has been taken" (see sec. 3.2.6).  On the facts, the applicant's appeal for re-establishment of rights was dismissed. 

Comment

The real error by the applicant was losing or ignoring the EPO communications drawing the applicant's attention to the imminent loss of rights. After all, had the applicant compared these documents with the contents of its docketing system it could not have failed to notice that the corresponding application had not been entered into the system in the first place."

Subscribe to the IPKat's posts by email here

Just pop your email address into the box and click 'Subscribe':