When will the appeal fee be refunded?: G 1/18, the decision

The Enlarged Board of Appeal (EBA) decision G1/18 was recently published in French (IPKat post here). The decision can now also be read in English (with the aid of google translate). This Kat has thus now been able to add the decision to her summer reading! Readers who are not already familiar with this case, may also wish to keep their Visser handy...

The referral related to the correct interpretation of Article 108 EPC in the context of Rule 101(1) EPC. Article 108 EPC states:

Notice of appeal shall be filed, in accordance with the Implementing Regulations, at the European Patent Office within two months of notification of the decision. Notice of appeal shall not be deemed to have been filed until the fee for appeal has been paid. 

The referral asked the question, if a notice of appeal and appeal fee are filed after the time limit for filing an appeal, should the appeal fee be refunded? The EPO will only refund fees that are paid without legal basis. Therefore, whether or not the appeal fee should be refunded depends on whether the appeal is considered to have been legally filed. The question thus becomes: is the appeal legally filed if it is submitted after the deadline for filing an appeal? Given that the fee for filing an appeal is over 2,000 Euros (EPO Schedule of Fees), the refund of an appeal fee is not be a trivial matter.

Appeal fee refund

The President's referral in G 1/18 was in the context of conflicting case law of the Boards of Appeal. The majority of the Boards have found that the appeal fee should be refunded if the notice of appeal and appeal fee are paid after the deadline (e.g. J 21/80, J 16/82, T 324/90, and T 239/92 ). The minority of the Boards have found that the appeal fee should not be refunded (e.g.  T 2210/10 and T 1897/17). The EBA considered the President's Referral to be admissible, in view of the conflicting case law and the relevance of the question to other similar provisions in the EPC (Article 112(1)(b) EPC). These include the Articles and Rules relating to filing of a petition for review and opposition.

G 1/18 - The Decision

The EBA envisaged 3 possible situations that could arise in the context of Article 108 EPC:

Case 1. The appeal is filed before the deadline and the appeal fee is paid after the deadline.
Case 2: The appeal is filed and the appeal fee is paid after the deadline.
Case 3: The appeal fee is paid before the deadline and the appeal is filed after the deadline.

Each of the cases 1-3, the EBA reasoned, raises the questions a) whether the action was admissible and b) whether the appeal fee should be refunded.

Interpretation of Article 108 EPC

In order to arrive at the correct interpretation of Article 108 EPC, the EBA applied the jurisprudence of the EBA and the provision on the interpretation of treaties provided by Vienna Convention. In particular, the EPC should first be interpreted according to the ordinary meaning of the words. It should then be confirmed as to whether this interpretation is in line with the words in the context of the EPC as a whole and the intention of the legislator.

The EBA interpreted each sentence of Article 108 EPC in turn. In English, the first sentence of Article 108 EPC refers to "The notice of appeal". In German and French, Article 108 EPC specifies "Die Beschwerde" (roughly, "the appeal") and not the "Die Beschwerdeschrift" (roughly, "the notice of appeal"). The initial versions of the first sentence of Article 108 EPC (EPC 1973) were written only in German and French. The EBA concluded that it was the intention of the legislator that "appeal filed" and "notice of appeal filed" should be understood as equivalent. Similarly, "appeal not filed" and "notice of appeal not filed" should also be understood as equivalent.

The second sentence of Article 108 EPC specifies that the "the notice of appeal [i.e. appeal] shall not be deemed to have been filed until the fee for appeal has been paid". This sentence produces the legal fiction that the appeal is only deemed to have been filed after payment of the appeal fee.

According to a literal interpretation, the EBA considered the wording of Article 108 EPC to provide that an appeal is only validly lodged if the payment of the appeal fee is made by the deadline. In particular, the wording of the second sentence establishes a link in time with the first sentence; it implies that an appeal has already been lodged by lodging the notice of appeal in the required conditions and that the appeal can only be considered valid if the requirement laid down in the second sentence is fulfilled.

The EBA also found that the literal interpretations of the first two sentences of Article 108 EPC were in line with the EPC as a whole, and the purpose of the legislator. With regards to the EPC as a whole, the EPC provides for many legal situations in which the consequence of the non-fulfilment of a second act has the legal effect that a first act is a legal fiction and has not been made, for example Article 14(4) EPC). The literal interpretation was therefore found to be in line with the EPC as a whole.

The EBA further found the literal interpretation in line with the purpose of the legislator. The purpose of the legislator was identified by the EBA as being the provision of a simplified and efficient mechanism for closing a file. Article 108 EPC provides for this with the regards to the appeal file.

The sound of silence

The EBA noted that Article 108 EPC is silent as to what should happen if one but not the other of 1) filing the notice of appeal or 2) not paying the appeal fee, is done by the deadline. The majority of Boards of Appeal have interpreted this silence as meaning that if one of the actions is not done, the appeal was never filed (per Article 108 EPC).

The EBA considered the absence of the explicit instruction as to the legal consequence of doing one but not the other of filing a notice of appeal and paying the appeal feed. They found that the silence of Article 108 EPC was due to the legislators preference for not providing a specific definition of what is, after all, a negative situation. "Not filed" is not a positive well-defined legal event such as grant, revocation, maintenance or "deemed withdrawn". Therefore, providing a definition would have risked excluding particular situations from the condition of "not filed" that ought to be included.

What about Rule 101 EPC?

The EBA also dealt with the reference to Rule 101(1) EPC relied on by the minority case law. According to the minority of the Boards, per Rule 101 EPC, the appeal should be considered as filed, but inadmissible. Rule 101 EPC states:

(1) If the appeal does not comply with Article...108...the Board of Appeal shall reject it as inadmissible, unless any deficiency has been remedied before the relevant period under Article 108 has expired

To summarise the EBA reasoning on this point: Under Article 108 EPC, the appeal procedure is initiated by a first step, the filing of the appeal. To file an appeal, according Article 108 EPC, the notice of appeal must be filed and the appeal fee paid. Only if both acts are done by the deadline is the appeal filed. Furthermore, only once the appeal is in existence can the question of its inadmissibility be considered. If, for example, the statement of grounds of appeal is not filed according to Article 108 EPC, Rule 101(1) EPC applies, and the appeal is deemed inadmissible.

According to the EBA, the minority case law is therefore incorrect, and Rule 101(1) EPC should be read as applying to appeals that have been validly filed. The relevant provision of Article 108 EPC for the purposes of Rule 101(1) EPC is therefore the last sentence, referring to the statement of grounds: "Within four months of notification of the decision, a statement setting out the grounds of appeal shall be filed in accordance with the Implementing Regulations."

Given that a fee is refundable if it was paid without legal basis, the EBA therefore agreed with the majority case law that for Case 1 (in which the appeal is filed before the deadline and the appeal fee is paid after the deadline) and for Case 2 (in which the appeal is filed and the appeal fee is paid after the deadline), the appeal fee should be refunded. Additionally, in Case 3 (in which the appeal fee is paid before the deadline and the appeal is filed after the deadline), the EBA found that the appeal fee has clearly been paid before it was due and should also be refunded.

The EBA concluded by answering the referred question as follows (provisional translation provided in the EPO press release):

1. An appeal is deemed not to have been filed in the following cases:

(a) where notice of appeal was filed within the two‑month time limit prescribed in Article 108, first sentence, EPC AND the appeal fee was paid after expiry of that two‑month time limit;

(b) where notice of appeal was filed after expiry of the two‑month time limit prescribed in Article 108, first sentence, EPC AND the appeal fee was paid after expiry of that two‑month time limit;

(c) where the appeal fee was paid within the two‑month time limit prescribed in Article 108, first sentence, EPC for filing notice of appeal AND notice of appeal was filed after expiry of that two‑month time limit.

2. In the cases referred to in answers 1(a) to (c), reimbursement of the appeal fee is to be ordered ex officio.

3. Where the appeal fee was paid within or after the two‑month time limit prescribed in Article 108, first sentence, EPC for filing notice of appeal AND no notice of appeal was filed at all, the appeal fee is to be reimbursed.

The EBA decision is therefore clear, and provides some welcome certainty for EPO users. It is also worthy of note that the EBA considered their decision applicable to other provisions having similar wording to Article 108 EPC (e.g. with regards to the opposition and petition for review).

A notes on G 2/19, is Haar in Munich?

As a side note, it seems the EBA has had a busy July. The EBA have also announced their decision in G 2/19, on the question of whether Haar is in Munich (according to the EBA, it is) (EPO press release). The written decision has not yet been published. Stay tuned to IPKat for further EBA updates!