Early Certainty from Opposition at the EPO
A well-functioning patent system should provide users and third parties with legal certainty. One pillar of legal certainty is of course a high quality patent which will stand up in court, but another is timeliness. The EPO explains its latest initiative
In 2016 the average length of opposition proceedings amounted to roughly two years. Protracted oppositions can cause doubt and confusion in the market as well as legal uncertainty. In recent years the long duration of opposition proceedings has sometimes led national courts to rule in infringement proceedings despite pending parallel opposition proceedings.
In answer to the universally accepted need for faster opposition proceedings, the EPO has embarked upon Early Certainty from Opposition, an ambitious reform of how it manages oppositions. The target is to reduce the average time to a decision to 15 months for a standard case by streamlining the procedure to deal with certain procedural steps in parallel rather than in series, while retaining the parties’ right to be heard. Faster decisions will increase legal certainty and increase the confidence of national courts and the UPC in a timely conclusion of opposition proceedings at the EPO. This should encourage them to await the decision of the opposition division before continuing infringement proceedings.
The opposition procedure before the EPO
Any third party can oppose a granted European patent within nine months of the publication of the grant. The opposition must be reasoned and filed in writing. The grounds for opposition are limited to non-patentable subject-matter, lack of novelty or inventive step, insufficient disclosure or added subject-matter. In recent years between 4.2% and 4.8% of patents have been opposed, with a declining tendency, whereas the number of granted patents is continuously growing. In consequence, the number of oppositions filed annually has been quite stable, between 3000 to 4000.
Opposition proceedings are conducted as independent inter partes proceedings with the patentee and the opponent(s) as parties. The opposition brief defines the scope of the proceedings, although the opposition procedure is by nature both administrative and investigative – the opposition division may investigate the facts of its own motion. However, this power has always been limited in the interests of procedural transparency and efficiency.
There are three possible outcomes of opposition proceedings: rejection of the opposition, maintenance of the patent in amended – generally more limited – form and revocation of the patent. While the share of each outcome used to be roughly one-third, in the past two years the number of patents maintained in a more restricted form after opposition proceedings has risen to over 40%. As a result, approximately 70% of the opposed patents are maintained in some form, which is a similar outcome to that of invalidity proceedings before national courts. One difference compared to many court proceedings is the cost; the fee for opposition is only €785 (2017). There are no further official fees except in the case of maintenance of the patent in amended form, in which case a new publication fee of €75 (2017) is payable. As a rule each party bears its own costs, unless reasons of equity justify a different apportionment of costs.
The opposition decision takes effect in all the contracting, extension and validation states in which the European patent has been validated. The same will apply in future for a European patent with unitary effect. Filing an opposition has no suspensive effect, unlike the opposition appeal. The decision can be appealed before the EPO’s boards of appeal by any adversely affected party. In 2016, a total of 1,814 appeals were filed against opposition decisions. In 28% of opposition appeals with substantive legal review the patent was either maintained as granted or in amended form; 21% of appeals led to a revocation of the patent.
From serial to parallel processing
In July 2014 the EPO launched its Early Certainty from Search initiative, aiming to provide a high-quality search report with a preliminary opinion on patentability within six months after filing. This objective was achieved in 2016 and backlogs markedly reduced, representing a milestone in providing applicants with greater certainty for their patent applications. At the same time as speeding up searches in 2014, oppositions were given priority, resulting in almost 20% more opposition decisions in 2015 and a significant decrease in the EPO’s opposition backlog.
Following this success, the EPO extended Early Certainty to patent examination and opposition in July 2016. This responds to users’ calls for better timeliness and should result in significant improvement to these services. The aim is to finalise opposition decisions for a standard case within 15 months of the expiry of the nine month term for filing an opposition against a granted patent, as opposed to just over two years at present.
To achieve this goal, the EPO has streamlined its internal workflows in opposition proceedings, taking care to respect the parties’ right to be heard as enshrined in the EPC. It is important to note that the 15 months average applies to standard cases. More complicated opposition cases may well take longer than 15 months (see below for some examples). Some opposition cases might be concluded more quickly.
Under the revised workflow, the opposition is immediately forwarded to the proprietor after receipt at the EPO and formal examination for its admissibility. In parallel the opposition file is allocated to an opposition division normally consisting of three technically qualified examiners, of whom only one may have been involved in the grant proceedings of the patent. Sometimes the opposition division may decide to enlarge its composition with a fourth, legally qualified member. This is normally the case when legal issues concerning patentable subject-matter, entitlement to priority, intervention or transfer of opposition are at stake, or when witnesses need to be heard to gain evidence of an alleged prior use.
Parties can file amendments to the text of the patent or other submissions up to two months before the date of oral proceedings. This leaves the parties sufficient time to provide their comments and allows them and the opposition division to prepare the case for the final discussion in the oral proceedings. The opposition division can at its discretion admit later-filed documents and submissions into the proceedings if the documents are prima facie relevant and they could not reasonably have been filed earlier.
Observations and possible amendments filed by the patentee within the four months’ time limit for responding are communicated to the opponent without delay. The opposition division then prepares the next action, in most cases a summons to oral proceedings, which is usually issued at least six months before the proposed date. The summons includes a communication describing the issues to be discussed and the opposition division’s preliminary and non-binding opinion on the relevant aspects. The time limits for replying to communications from the opposition division are four months for communications raising substantive issues and two months for other communications. Extensions of time limits are granted only exceptionally in justified cases. Examples include the need for further tests or experiments, or cases with a multitude of opponents or large numbers of documents. A non-exhaustive list of reasons to extend time limits is included in the EPO’s Guidelines (E-VII.1.6).
In oral proceedings, the parties may present their requests and arguments. The chair of the opposition division steers the discussion, ensuring the parties’ right to be heard. Following sufficient discussion and consideration of all evidence and arguments, the opposition division normally announces the decision at the end of the oral proceedings. The written reasoned decision is issued within a couple of weeks. The two-month period for filing an appeal starts to run from the notification of the written decision. However, if the patent is revoked, it ceases to exist on the day of the oral proceedings, when the decision is announced.
Increasing legal certainty
As is apparent from the procedural amendments outlined above, the time savings induced by the Early Certainty from Opposition initiative result primarily from more efficient file handling, leading to a reduction of the processing time of an opposition file while retaining the amount of time the examiners invest in the file. This allows for timely and high quality opposition proceedings, but ensures that the parties’ right to be heard is respected. The faster conclusion of the proceedings increases legal certainty not only for proceedings before the EPO but also for infringement proceedings in national jurisdictions.