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Thursday, 26 March 2009

EP Divisional Applications - the new 2 year rule

Laurent Teyssedre has beaten the IPKat to it again, in announcing the result of today's EPO Administrative Council vote approving the following new version of Rule 36 EPC:

(1) The applicant may file a divisional application relating to any pending earlier European patent application, provided that:

(a) the divisional application is filed before the expiry of a time limit of twenty-four months from the Examining Division's first communication in respect of the earliest application for which a communication has been issued, or

(b) the divisional application is filed before the expiry of a time limit of twenty-four months from any communication in which the Examining Division has objected that the earlier application does not meet the requirements of Article 82, provided it was raising that specific objection for the first time.

(2) A divisional application shall be filed in the language of the proceedings for the earlier application. If the latter was not in an official language of the European Patent Office, the divisional application may be filed in the language of the earlier application; a translation into the language of the proceedings for the earlier application shall then be filed within two months of the filing of the divisional application. The divisional application shall be filed with the European Patent Office in Munich, The Hague or Berlin.

It looks like the IPKat's earlier suspicions about the proposed amendments have been confirmed, and the EPO will be holding to their promise of preventing 'abusive' divisional applications from being filed in future. The IPKat is, however, not certain about how the new Rule will work in practice. Will applicants be prevented from filing a divisional to cover embodiments no longer covered as a result of a limiting amendment, if 2 years have passed since the first communication under Article 94(3)? Will it be necessary to provoke an objection under Article 82 by submitting multiple independent claims so that a divisional application can be filed? What would happen if an objection under Article 82 were to be deliberately provoked; will this set the clock running again? Will there be a rush of divisional applications filed within 6 months of the rule coming into force? We shall presumably find out all this, and more, in due course...

UPDATE (4 April): It's now official (also here). The changes will come into force on 1 April 2010.

21 comments:

Anonymous said...

The unintended consequences of this change will be huge.

The amended rule [and its interaction with proposed restrictions on the right to amend] is counterproductive and will result in more divisionals being filed, and more obscure strategies being followed in order to preserve the right to file divisionals for as long as possible.

Still, look on the bright side, if economic collapse reduces EP filing rates the divisionals might fill the gap.

Anonymous said...

Piffling half-measures - the way to stop abuses is to stop the parent applications being filed in the first place..

Anonymous said...

Filing and prosecuting of a divisional patent application could be expensive if it is to be substantively searched and examined on the basis of its own merits, and proceed to grant, mind you - further divisionals are not or cannot be precluded, further back annuities too need to be paid. The new Rule requires patent attorneys and applicants to foresee requirement of filing a divisional. Does communication under Art 94(3) provide some hint? Does client’s business strategy demand one? Is the grant likely on the basis of a certain set of claims. If nothing can be foreseen, and subject matter, indluding technolgy requires so, it would be prudent to file multiple independent claims in order to safe guard the applicant’s interests. However, the afore-mentioned may not be the case in a majority of the applications so a huge influx of divisional filings may not be filed. However, setting up of the time limit of 24 months does and will take away the applicants freedom of filing a divisional at or during late(er) stages of prosecution, which may not be desirable or serve applicants’ commercial interests well. The new rule, therefore in my view, would require a lot of planning, forecasting etc on the part of the applicants and their attorneys.

Anonymous said...

The regulatory change was made because applicants are abusing the filing of divisional applications. The classic abuse scenario is where the applicant files a divisional the day before oral proceedings are held on the parent application. Since the filing and search fees are due within one month and renewal fees are not due for at least four months, the applicant does not pay any fees up front for the divisional. The oral proceedings are then held on the parent application and if the applicant gets what he wants, he allows the divisional to lapse without paying any fees at all, despite the additional costs this brings to the EPO in processing it at the formalities stage. If the parent applicant is refused or he does not get granted everything that he wanted in the oral proceedings, instead of filing an appeal, the applicant then pursues the divisional and pays the various fees. This way the two instances of the EPO remain open to him in case he is once again denied what he wanted. The filing of a divisional has been seen, very wrongly, as an "ersatz appeal", which is not at all what it was designed for, the examining division then has to go through the motions of making the same objections all over again and possibly issuing a decision to refuse based on the same bases, hardly an efficient use of resources and time. Divisional filings are designed primarily for pursuing excised subject matter from non-unity cases, this is clear from the Paris Convention.

The fact that the abuses did not stop, meant that legislative measures were taken - industry has had more than enough time to change its behaviour and so maintain the more flexible previous system, but failed to do so, consequently the rules were changed.

Anonymous said...

Anonymous @7:53

I fail to see how the example of filing a divisional application prior to a hearing can be considered an abuse. The EPO could, however, solve this 'problem' by requiring an up front payment of the application fee if it so desired. Also, the EPO publicity division is always proud to be touting the number of patent applications filed which presumably includes these 'abusive' filings.

What could be considered 'abusive' is the chain filing of divisional applications in an attempt to wring after last drop out of an application while ensuring that possible new developments of competitors are included within the scope of protection even thought this would not have been apparent from the original filing. On balance, the 24 month rule is probably a good idea but as always, the attornies will find ways of circumventing it.

Anonymous said...

Further to Anonymous @ 8.20's suggestion on upfront payment of filing fee, how about restricting the scope of divisional filing, eg specification contain claims that are intended to be protected in that application. This approach might and would generate multiple divisionals but would also earn filing fee for EPO.

Anonymous said...

Up front payment of fees seems to be the best way of avoiding abusive filing of divisionals. If one has to pay all the fees at once (search,examination and renewals) for getting a valid divisional application, divisionals would be filed only when they are really worth the money. Similarly, a notice of opposition or appeal is deemed to have been filed only once the corresponding fee has been paid (A 99 and 108 EPC).

A further point to keep in mind is that the costs incurred by the EPO when processing an application are not covered by the search and examination fees, but are recovered only through the renewal fees. Although there is the proposition to increase the search and examination fees to make them cost covering, this would make the initial phase much more expensive when it is uncertain whether something patentable exists. On the other hand, the yearly increasing renewal fees have the purpose to induce the proprietor to dropp his monopoly when it no longer pays off. Changing the fee balance structure is thus a dangerous course which has to be well thought through.

Anonymous said...

This problem could have been overcome more simply by introducing a time limit within which the parent application, and any divisionals, must be in order for acceptance. However, such an approach would have put all the emphasis on the EPO to actually start Examination within a reasonable length of time. It's time the EPO took its responsibilities more seriously. They are not short of money so why follow in the footsteps of the USPTO?! Why try to fix a problem that doesn't exist at all by penalising each and every patent applicant? Think the EPO backlog is high now, wait 'til this Rule comes in!!

MaxDrei said...

The "last drop" abuse is already tightly controlled by Art 123(2). What is depressing is the schoolmasterly tone of Anonymous at 7.53. "I'm talking to you, industry. We gave you more than enough time, to curb your scandalous abuse of the right to file patent applications. But you didn't heed our warning so, now, we are going to take away that right." What does that schoolmaster expect any one Applicant, or any one representative, to do? Refrain from filing divisionals, even while all his competitors continue to do so? Come on! Get in the real world. Back in 1973, the Founding Fathers of the EPC wrote a Protocol to Art 69 which recognised that there is a BALANCE between fair treatment of Applicants and reasonable legal certainty for the public. That principle is fundamental to patent laws. Any proposed amendment ought to be tested for compliance with the balance. UK law always did have instead a cap on the pendency period. At least the 24 month cap looks to be more workable than the UK solution.

Anonymous said...

Anonymous @8:20:
In my opinion the practice of refiling an identical application the day before oral proceedings with the goal of pursuing an identical invention for the second or third time after the first attempt was refused (or withdrawn before a refusal could be issued) can very well be considered as abuse. I don't believe that divisionals were ever meant to get multiple shots at the same subject-matter. Every legal system that I know, except for the EPC, has provisions against such practices. Try to file repeated and identical applications for a building permit and see what happens. I bet that there is no country in Europe in which the authorities are forced to examine the substance of each and every repeated application.

In my view, the only valid reason to allow divisionals in the EPC is to enable the applicant to get protection for inventions that are disclosed in the application as filed but not pursued in the procedure for the parent application.

I would say it is even questionable whether the applicant should have the possibility of getting protection for inventive concepts not present in the original set of claims (I guess it is too harsh to require the applicant to identify each potential invention already at filing, but giving him many years doesn't seem necessary). However, the applicant should certainly be entitled to file divisionals for claimed inventions that turn out to be non-unitary in view of prior art found by the EPO.

I guess it would be extremely tricky to formulate a R.36 EPC that restricts divisionals filed for (what I personally see as) valid reasons. Such a rule would most likely be completely unworkable, so I understand that the EPO prefers relatively straightforward time limits. Whether the proposed rule will really help or will suffer from too many unintended consequences, I don't know...

Btw, is the proposed rule not quite similar to some old form of R.25 EPC 1973?

MaxDrei said...

Useful, thoughtful mail from that anonymous at 10.39 pm. I have always said that one has to be able to give sound infringement clearance opinions, based only on the WO and a first class search report. In that case, then so too should Applicant in that same moment be required to "go final" with claims for further prosecution. There indeed is the balance between the interests of the inventor and those of the public.

I will make it my business now, to look up the original Rule 25.

Anonymous said...

Re Anonymous of 10:39 - Indeed the old Rule 25 EPC (up to 1988) required the applicant to file a divisional application within the time limit set for the applicant to respond to the first communication in the examination procedure of the parent or later in response to an objection of a lack of unity. After this, the applicant could only file a divisional with the consent of the Examining Division of the parent application. If there were reasons for the later filing of a divisional, it was left to the discretion of the ED for the parent file to decide whether or not the reasons given were valid. It would have been an interesting development to have reintroduced this system - I think that introducing an intellectual component (the discretion of the Examining Division) with appropriate Guidelines and instructions to examining staff could have mitigated the rather arbitrary nature of the 24 month time limit, for those cases where the applicant has a good reason for late filing of a divisional. Such a discreationary power would allow new and unexpected developments to be taken into account and would make the system more flexible, if less predictable.

However, the reason why old Rule 25 was modified in the '80s to abolish this discretionary component (to allow the applicant to file a divisional until he confirmed the text for grant under the old Rule 51(4), which was later further extended in 1990 to allow the filing of divisionals until the day before the publication of the mention of the grant), was because it appeared that the examiners were mostly allowing the filing of divisionals whenever requested by the applicant, without filtering them to allow only those cases where there were good reasons for late filing.

I expect time will tell what will happen with the present changes, although I imagine that if problems continue to arise, this discretionary component might be reconsidered. Since attitudes appear to have hardened in general to alleged abuses, the examiner's discretion might be exercised in a stricter way than was the case under old Rule 25 EPC_1973.

MaxDrei said...

The discretion of the Examining Division seems to work quite well, when it comes to the admissibility of further rounds of amendment, after the first (Rule 137(3) isn't it?). Tell Americans "You get only one go at amendment as of right. After that, you need consent" works wonders. And when the Examiners have that power they (nearly always) use it responsibly. Otherwise, we appeal. So, that suggestion above, about reliance on the discretion, does seem very workable, and good for mitigating any injustice in an otherwise brutal 24 month cut-off. There remains the legal uncertainty to the public, of not knowing when the scope of pretection will ever be finally set, but it's the same degree of legal uncertainty when prosecution of the parent drags on for many years. Art 123(2) govern both equally, to curb abuses.

Gobhicks said...

In terms of the wording of the rule itself: what, pray, is "the earliest application", for which there is no antecedent basis? And is it 24 months from "notification", as is the case for just about everything else in the EPC?

twr57 said...

Unintended consequences?

It may now become routine to file a divisional (possibly, in some cases, more than one) at the 24-month stage. People who do this would then seek instructions from the client, and (if the client is not interested) abandon them by failing to pay the fees.

It may well be that there are abuses (though I don't accept that filing a divisional before a hearing is necessarily one): but the remedy adopted is disproportionate. It reflects badly on the Office that they cannot devise anything better.

Compare the Korean Patent Office, where divisional practice is being liberalised (possibly not enough).

Anonymous said...

Where has the decision of the administrative council been announced? Also, does anyone know when the new Rule 36 will come into force?

IPBob said...

@gobhicks

It's the "pending earlier European patent application" that provides antecedent basis for "the earlier application", on a sensible interpretation of the Rule.

"Communication" is used quite a lot in the Rules, expecially in relation to examination. See Rule 71 EPC for example. I guess that the 10 day rule would apply to the 24 month period.

Anonymous said...

IPBob,
Perhaps there was a typo in the proposed rule and in (a) it was meant to refer to the "earlier" application rather than "earliest"? That would take the sting out of the provision somewhat.
EdT

Anonymous said...

Latest Anonymous: It doesn't look like a typo to me...

Anonymous said...

1. Are we looking at the official rule wording or a translation from the French blog? If "earliest" is the official wording then the rule is not clear, but I wonder if they mean the communication on the ulitmate parent, rather than the immediate parent, in the case of a divisional from a divisional? Otherwise, each divisional application you file would start the clock for filing the next one derived from the most recent divisional.

2. Subrule (b) will result in terrible problems. When I file cases with multiple independent claims, the EPO examiner tends to object to the number of claims without raising an objection of lack of unity. This means that you would be required to delete some independent claims without getting any right under subrule (b) to file a divisional application in respect of them, and all possibility of protecting the invention vanishes. If this happens in a divisional application, and the deadline under subrule (a) has passed, you will be completely stuck even though the claims were contained in the divisional application as filed (and possibly in the parent application as filed). No doubt we will be told that examiners have been instructed not to raise an objection of multiplicity of claims when there should be an objection of lack of unity, but such an instruction won't stop it happening.

Anonymous said...

Does anyone know the cost to file a divisional in the EU?

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