"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.