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Monday, 14 December 2015

"All due care" when not responsible for renewals

Decision T 942/12 is a very important and welcome decision on liability and renewal practice management for European patent attorneys. It addresses the onerous responsibilities that previous Boards have held are applicable to EP attorneys in cases where an applicant uses a third party service to pay renewal fees, and defines an exception to those onerous responsibilities.

From the Case Law of the Boards of Appeal III, E, 4.5.2(b), the following responsibilities can be discerned if the attorney is to be seen as having taken all due care:

  • Even if renewal fees are paid by someone else, the appointed professional representative remains responsible in the procedure before the EPO, and had to take the necessary steps to ensure payment if intended.
  • Where the European representative has every reason to believe that it was the appellant's intention to continue prosecution of the application, it is insufficient for the European representative only to send a single reminder more than four months prior to the expiry of the critical term. 
  • It is established jurisprudence that a representative, once appointed - and even if the renewal fees were paid by someone else - remained otherwise fully responsible for the application, and that this included a continuing obligation to monitor time limits, send reminders to the applicant, etc. 
  • A professional representative is not obliged to pay renewal fees on his client's behalf if he has received no instructions to do so. However, the representative's conduct has to be assessed according to the extent to which he has done all that is necessary to ascertain the client's true wishes. It is not the number of (unanswered) reminders that is decisive, but when those reminders were sent in relation to the date on which the time limit expired, how the reminders were formulated and what the representative's duties were in relation to the client.
In this case an application was assigned from one Australian applicant to another. The EP attorney firm was unchanged and was not responsible for renewals either before or after the transfer. Indeed the EP attorney firm had written instructions from the new Australian instructing attorneys that the EP firm:

"was not required to maintain renewal fee reminder records or attend to the payment of renewal fees." 

The EP attorneys received the standard overdue renewal reminder from the EPO (alerting the applicant to the missed renewal and the possibility of paying with a surcharge within an extended six month period), and forwarded this to the Australian attorney, but took no further action. The extended deadline was missed, apparently due to a mix-up at the Australian end arising from the transfer, and when the error came to light an application was filed for restitutio. While the Examining Division and the Board had to look at whether due care was taken by each party involved, the interesting part of each decision concerns the actions of the EP attorneys.

The orthodox view of the EP attorney's responsibilities can be seen from the first instance decision of the Examining Division which held:

"according to the above-mentioned jurisprudence [i.e. J 27/90, J 11/06 and J 1/07, which are the leading decisions in the section of the Case Law book referred to earlier], the fact that someone else is in charge for the payment of fees merely exempts the European representative from paying fees himself, but does not exclude his responsibility to monitor such deadlines and eventually send reminders. In the present case, no further reminder concerning the payment was sent or steps were taken by the European representative to enquire the reasons for the non-payment."

[The decision then noted that the EP attorney had, in the overdue period, sent status enquiries twice to the EPO and reminded the Office of a PACE request that was on file.]

"It would have been reasonable [under these circumstances] to expect that a professional representative acting with the necessary due care would have tried to clarify whether further maintenance of the application is intended. The time limits for paying renewal fees are absolutely critical, because if they are missed the patent application is deemed withdrawn and there is no easily accessible remedy like further processing. Thus they need specific attention."

The IPKat quotes these passages not because they are unusual but rather because the Examining Division was holding the attorneys to the onerous standards laid down by earlier Boards, in expecting the EP attorney (who is not able to get paid for any renewal or reminder activity, remember) to immediately diary the overdue renewal deadline in both a main diary and a secondary diary, to send multiple reminders, and to continue to monitor the status right up to the deadline, unless and until the intentions of the applicant to allow the application to lapse were definitively established. 

On appeal, the Technical Board of Appeal, which was expanded to five members, executed a surprisingly neat manoeuvre to sidestep the existing jurisprudence, and is to be applauded for recognising the commercial realities of acting as an EP attorney where one is not responsible for renewal fees, and being expected to put in place a comprehensive reminder regime for which nobody will pay:

Reasons for the Decision, 3.4:[...] 

If a European representative is expressly instructed that he is not required to monitor the payment of renewal fees, the duty of due care does not involve that he nevertheless does so. It cannot be expected that the European representative monitors renewal fee payments at his own expense (he will not be able to charge fees for actions he is to refrain from according to his instructions). Furthermore, sending reminders against instructions may irritate the instructing party and may impair the relationship with the client. The client may have good reasons for giving such instructions, e.g. to avoid receiving reminders from different sources that will lead to additional work and expense for him. Reminders from different sources can also be a source of confusion and thus lead to mistakes. 

The present case therefore differs from the case law where it was held that even if the renewal fee was paid by someone else, the European representative remained responsible in the procedure before the EPO, and had to take the necessary steps to ensure payment (see Case Law of the Boards of Appeal, 7th edition 2013, III.E.4.5.2 b)), as in none of those cases the European representative had expressly been instructed not to monitor renewal fees. [Emphasis added]  

The Board therefore concludes that the duty of care of [the EP attorney] involved the forwarding of the notice drawing attention to Article 86(2) EPC to [the instructing Australian firm], not however checking whether [the Australian firm] indeed received the notice and took the appropriate action.

Ultimately the Board held that there was a single, isolated mistake made by the Australian attorneys, but that due care had been taken by all concerned and the application was restored.

An interesting point from the case file is that an informal survey was carried out and submitted to the EPO, where the EP attorneys polled 20 firms across several European countries asking what their practice was with regard to overdue renewal reminders from the EPO: while all 20 firms confirmed they would send the official overdue reminder on to their client, only 7 out of the 20 firms indicated that they would follow up, overwhelmingly because they could neither charge for such activity or expect to be paid for it when they were not responsible for renewals. 

The IPKat was surprised to see that the decision issued with the lowest-priority distribution code "D", meaning that it is not to be circulated, other than by publication on the website. Every decision from the Boards is given a distribution code of "A" (publication in Official Journal), "B" (circulation to all Board members and chairs), "C" (circulation to Board chairs), or "D" (no circulation). While most decisions are "D" category, this is because most are entirely conventional and simply follow existing case law.

T 942/12 warrants circulation to a wider audience, given that it distinguishes fundamentally over the conventional case law and creates an important new exception to the rather onerous due care regime that previously applied to EP attorneys in the area of renewal fees. The IPKat hopes that this decision is noted by the editors of the Case Law book in due course, and in the annual summary of important case law that issues as a special edition of the OJ.

Finally, full credit must go to the two firms that made the arguments that ultimately convinced the Board to recognise that the realities of an instruction not to monitor renewal fees should mean just that, namely Page Hargrave and Eisenführ Speiser, and thanks to Keith Gymer for pointing the IPKat towards the decision. 


28 comments:

Anonymous said...
This comment has been removed by a blog administrator.
Anonymous said...

As interesting as it may be, this is one decision more favourable to the applicant.
It has to be seen if this decision will be a one off, or if it the start of a change of case law.
In my opinion, this is the reason for the D distribution.
That the Board of Appeal comprised 5 members is nothing special, as the Examining Division was itself enlarged by a legal member, see Art 18(2) and Art 21(3,b).
On the other hand, one could conclude from this decision and from T 756/09, that Australian patent attorneys seem to benefit a special attention from the Boards of Appeal.

One of many said...

Correct decision. I would´ve taken it myself:) Alerting the applicant once is more than enough.

RakingItIn said...

Does this now not suggest that if you have a qualified representative and ask them to pay the renewal fees, and something goes wrong, then the Boards will look more harshly on the actions of the representative than if the same mistake had been made by an unqualified renewals bureau? Does this decision not put users of expensive representatives in a worse position than bargain-basement renewals shops? Or have I misunderstood?

Anonymous said...

I do not think this is a change in case law as the different outcome was caused by a difference in facts: the presence of an explicit order NOT to deal with renewal fees:
"was not required to maintain renewal fee reminder records or attend to the payment of renewal fees."
This had not been the case in previous decisions.

Anonymous said...

An outright absurd decision. It states you don't have to ecercise due care unless you can bill for it. Paying fees is a task of the European representative on behalf of the applicant and his or her duty. If he or she can be dispensed of this duty would be an interesting question. The obligation for foreign applicants to use a qualified representative is in the convention for a reason. It is not at the discretion of the applicant not even in part to proceed without a representativr. Anyhow, if the applicant does, he has to live with the consequences, i.e. refusal of the application. Once more, the boards provide preferential treatment for foreign applicants at the detriment of legal certainty to the European public. Once more they prove they are by no means a tribunal or a court or judges of any kind, with this totally freehanded approach to fees and time limits.

Anonymous said...

"It states you don't have to exercise due care unless you can bill for it."

Does it? Can't see that, but it would seem reasonable anyhow.

"Paying fees is a task of the European representative on behalf of the applicant and his or her duty."

Nope.

"If he or she can be dispensed of this duty would be an interesting question."

Not really, because any competent qualified representative will know the answer.

Why do people spout such nonsense?

Anonymous said...

An absurd decision? Anonymous, if you are in the business of filing applications, rather than an EPO employee, I suggest you always employ the services of a qualified attorney because that is a spectacular misreading of the decision. It most certainly does not tie the duty of care to the ability to charge in the way you say it does or favour foreign applicants.

Anonymous said...

Anonymous

The task of the EPA is to represent the applicant. If the applicant specifically desires representation only in certain aspects and not in others, the situation is clear.

The EPA is not responsible for an administrative mess made by the applicant (I could tell you some stories.... Applicant dies, applicant moves offices, emails to applicants confirmed email address bounce, applicant is never there to accept registered mail and does not pick it up from the Post Office)

There is a limit to what EPAs can be expected to do. EPO places the bar very high, too high IMHO.

MaxDrei said...

A blog like this serves a useful function, of alerting those within a specialist field to the misconceptions and ignorance of those millions of folks outside the field. In the past, patents were of no interest to non-specialists but now, it seems, patents are of huge public interest and attract much comment from members of the public. That, for patent professionals, is a mixed blessing. These days, the more ignorant a member of the public is, the more it thinks its assessment of an EPO Decision has as much merit as that of any specialist. Knowing virtually nothing about the subject, it nevertheless feels free to dismiss the decision as "absurd". I suppose it's the same when it comes to how to react to events in Syria, or to climate change.

We all know the famous Mark Twain Quote:

http://www.brainyquote.com/quotes/quotes/m/marktwain103535.html

Pity he isn't around today, to comment on anonymous contributions to blogs.

I guess the commentator who dismisses the decision as "absurd" has suffered a negative experience at the hands of a particular firm of European Patent Attorneys and is lashing out at them all, in general, in frustrated response. Now readers, how could I ever come to that idea?

Public enemy said...

The decision states that if an applicant who is obliged by the convention to make use of an attorney, misses a deadline he may avoid the sanction foreseen by the convention in such cases, simply by stating he told the applicant not to monitor the Deadline. This is counter to any orderly administrative conduct of both the office and the applicant. Firstly, the applicant may not take sole responsibility for checking deadlines, but is required to make use of a qualified attorney and cannot unilateraly waive a disposition of the EPC. Secondly, if he does nevertheless, he can't claim "impunity". A European applicant could not expect arbitrary leniance against the letter of the law simply by not employing an attorney at all (which European applicants are entitled too)

This was not a disciplinary case against an attorney, this was a case for or against a request for reinstatement by the applicant. There are no reasons for reinstatement whatsoever, the decision is manifestly legally defective and against the public interest of legal certainty. Legal certainty is a legal value much higher than whether attorneys get dully paid for each and every letter they write.

Had it been a disciplinary case it would be valid question, whether an EPA was entitled to delegate a duty which doubtlessly falls under his competence to a legally not qualified entitiy, more than quite probably not.

Another drastic example, that the boards even in extended composition lack the legal qualification which would be required from a proper court or tribunal.

MaxDrei said...

Another sad comment, from one who (this time around) styles himself "Public Enemy" and (in the time-honoured way) resorts to writing "manifestly" (it makes a change from "clearly" or "indubitably") when lacking any reason or basis for his prejudiced statements. How revealing.

Art 122(5) EPC is to the "intervening rights" that protects the public in the event of restoration.

The duty of "all due care" is imposed on all parties that were involved, not just the EPA. If you want restoration then you have to prove that there were no gaps at all, in the "due care" that was given to the lapsed property. Here, the Board took a real life view, and (drawing comfort, I am sure, from Art 122(5) EPC) found no gaps.

basic knowledge said...

@Public enemy:
Firstly, the applicant may not take sole responsibility for checking deadlines, but is required to make use of a qualified attorney and cannot unilateraly waive a disposition of the EPC.

Fees may be validly paid by any person (GL A-X, 1, previously Legal Advice 6/91), so for making payments representation is never necessary.

Secondly, if he does nevertheless, he can't claim "impunity". A European applicant could not expect arbitrary leniance against the letter of the law simply by not employing an attorney at all (which European applicants are entitled too)

Read the decision. The applicant still had to show that it (and the Australian firm) had exercised all due care required under the circumstances.

Meldrew said...

Public Enemy

Had it been a disciplinary case it would be valid question, whether an EPA was entitled to delegate a duty which doubtlessly falls under his competence to a legally not qualified entitiy, more than quite probably not.

No it wouldn't. The EPA delegated no duty in this case, he was told by his principal that he had no duty. On your argument, any EPA that used a fee payment agency would automatically be negligent. Are you going to discipline all of them?

Public enemy said...

My point was that it was not a disciplinary case and therefore this question did not to have bee answered by this board. EPAs may use agencies, secretaried, Australian attorneys, Crocodile Dundee or other stuff, but they remain legally responsible for their supervision. The flx of money is of no importance of respective responsibltes. The applicant cannot relieve the rep. from a duty which is imposed on him by the EPC The applicant's order in this respect has no legal effect.
What happened here, was that a mandatory legal consequence was not imposed because somebody not qualified and evidently unable to perform a quite simple duty with due care did a major mistake - after having received reminders to perform this duty
If an EPA is told to do something - wrong - the one who told him is to face the consequences not the public having to face an illegal ressurection of an actually abondoned claim. Art. 22(5) EPC is only there to limit the negative effect in extremis, it is not to be misused for justifying the manifest abuse of procedure by the applicant and the board.
Lets hope that this "decision" is not to set case law.

Meldrew said...

Public Enemy

The applicant cannot relieve the rep. from a duty which is imposed on him by the EPC

Where in the EPC is the duty imposed on the representative to ignore his principal's instructions?

The only duties imposed on the representative are those set out in the Regulation on Discipline and Code of Conduct. Neither of these say that the representative should officiously ignore client instructions. Indeed, pestering the client with unwanted communications contrary to clearly expressed instructions might be a disciplinary matter, as acting in a manner likely to confuse their principal's affairs.

Anonymous said...

Public Enemy

If your logic is followed, the vast majority of restitutio cases based on isolated errors in an otherwise satisfactory system should have been decided against the applicant because most are the product of failing to perform relatively straightforward actions. The point of the restitutio system is to allow such cases to be restored and Art 122 EPC provides protection to third parties who might have acted to their potential detriment on the basis of an understanding that the application had lapsed. If your approach is followed, restitutio is only going to be allowed in very extreme cases, which I don't think was the intention of the legislator. In any event, it would mean binning a substantial body of Board of Appeal case law.

To me the decision looks to be a manifestly sensible interpretation of the law grounded in reality, rather than some ideal world in which mistakes are not made.

Anonymous said...

Public enemy:

I highly recommend that you read the actual decision, rather than just the summary. The person "not qualified and evidently unable to perform a quite simple duty with due care" was an Australian patent administrator of 30 years experience who made a single isolated mistake under a period of significant stress. Under your entirely ridiculous standards, not only was the administrator negligent, the Australian attorneys were negligent the moment they instructed the European Patent Attorney not to pay the renewal fees.

An attorney cannot remain responsible for something they have been explicitly told not to do by an informed client. To hold otherwise would be absurd.

Anonymous said...

Dear Public Enemy,
you are talking utter nonsense. You may have read the decision(which we all doubt), but you would have wasted your time doing so as you have no understanding of the law. That is what us "qualified attorneys" are here for. Now, as has been pointed out several times above, if you want to pay the fees for your European patent applications yourself, you are free to do so, without using an authorized representative, whether you are a dingo or a dingbat, because that it what the law provides for.

Run along now.

p. E. said...

A mistake was made which had the possible, if not unavoidable consequence of the applicant loosing a patent application, i.e. Incurring a damage. Probably not existential but definitely unpleasant. A real life experience, bad lawyers may cost you some or even a lot of money.

Whether this was the fault of the European or Australian attorney, did not really have to be decided by the board. The applicant could have exercised regress before a proper tribunal against either or both. A proper tribunal would have had to decide whose attorney's if any insurance would have had to pay the damages. None of the business of the board. The lack of legal qualification of the boards is shown by the use of the term "excuse" in their "decision".

They are not there to excuse, condemn or otherwise sanction the acts of the applicant and his representatives, to judge the state of mind or levels of stress of attorneys and their personnel. It was their sole task to establish whether the application should have been allowed to proceed. Maybe it should, but definitely not for the reasons given by the board.

Whether the mistake occurred because of gross negligence, deliberatedly or excusably was none of their business. They are neither god nor judges, they do not possess the legal and medical qualification to judge on such matters.

The reasoning contained in the decision is absolutely rational and logical from the attorney's view point. Alas the members of the boards are not their "clients" lawyers. They represent the interest of the public and not merely that of the user's of the system. This is what actually distinguishes a judge from the rest of world. Athene is blind folded for that very reason. To be blind to the interest of the party or parties, she is expected to be just not understanding and forgiving or excusing.

It is indeed "funny" that the original decision of the examining division was reverted on grounds which were not presented to them or even in the appeal but only later in the course of the appeal procedure i.e. long after the grace periods of restitutio. Again it was both rational and logical for the attorney to try, but it was neither rational nor logical for the board to accede to this bold attempt. Totally arbitrary decision. Assigining it the D distribution level shows that the board themselves was not overly confident.

The Pat Controller said...

"A mistake was made which had the possible, if not unavoidable consequence of the applicant loosing a patent application, i.e. Incurring a damage"

A loose patent application can indeed cause a lot of damage! I keep mine tightly under control.

Meldrew said...

Public Enemy - it seems you like needling attorneys by use of specious and legally ignorant arguments.

Public Enemy - it seems you have had a degree of success.

Public Enemy - it seems you are aptly named.

______________

All other readers - treat Public Enemy with appropriate disdain and do not rise to the bait of this ********* troll.

[********* - I'm stuck for a word. Is there an antonym for eponymous? Or does eponymous work both ways?]

Patent on the loose said...

@ The Pat Controller

Your comment made my day. Brilliant!

Anonymous said...

To pE said

In the first place it is odd to say that the Board of Appeal lacks legal qualification. The Board was made up of five members, two legally qualified and three technical members. The three technical members are also legally qualified in that they are fully versed in the provisions of the EPC.

You say that the Board did not have to consider negligence and that is none of their business. However, in order to succeed with an application for restitutio it is necessary to show that whatever has gone wrong was 'in spite of all due care required by the circumstances having been taken'. It is difficult to see how the Board can make a finding on that without considering whether there was some form of negligence.

I am not sure why you consider it an arbitrary decision. If anything appears arbitrary here, I would say it is your arguments.

Roget McThesaurus said...

Meldrew I think that you mean "aptly named troll" ... ?

basic knowledge said...

As far as I can tell Public Enemy has not written even a single sentence that does not betray ignorance of the law. And ignorantia juris non excusat...

Anonymous said...

All this means is that the instructing attorney can say, "Please monitor and remind us, even though you won't actually being paying the renewal fees", and the EP attorney is still on the hook - the instructor elsewhere now gets reminders from two parties.

basic knowledge said...

@Anonymous:
You might be right, but I doubt it. Although the explicit instruction not to monitor renewal fee payments was a fact used by this board to distinguish from earlier cases, I have the impression that the boards in those earlier cases were not confronted with the argument "I cannot charge my client for this and still you require me to monitor those deadlines?"

An attorney probably should inform his client that he must charge a fee for monitoring renewal fee payments. If the client does not want to pay the fee, it is difficult to see how the attorney could still be blamed for a missed renewal fee payment.

Suppose the client instructs his attorney to file an appeal at no charge. Would the attorney still be required to file the appeal? Obviously not.

If anyone is at fault, it would have to be the client for not instructing his attorney to monitor the renewal fee deadlines (for a fee). But here we have a difference with other acts, such as timely filing an appeal. Non-European applicants must use a professional representative to file an appeal (unlike European applicants), but they can pay renewal fees themselves (like European applicants). If a non-European applicant is not willing to pay an attorney for filing an appeal, then obviously he did not take all due care. But if the non-European applicant is not willing to pay an attorney for making sure renewal fees are paid in time, that is quite another thing. All due care does not require a European applicant to use the services of a professional representative to ensure timely payment of renewal fees and there is no reason why it would be different for a non-European applicant.

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