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The End of the “automatic” injunction in German patent Law ?

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Abstract:

A proposed new draft legislation to amend the German Patent Act (PatG) clarifies the right of the patentee to injunctive relief against a patent infringer and takes measures to accelerate patent nullity (invalidity) lawsuits to mitigate the so-called “injunction gap”.

The right of the patentee to injunctive relief in the form of a permanent injunction against a patent infringer is maintained. Based on an equitable assessment of the interests of the patentee against those of the infringer, however, an injunction may be delayed to mitigate hardship on the side of the infringer. The relevant aspects considered for the assessment of proportionality are the interests of the patentee in an injunction including its type of business (operating company or licensing entity), the economic consequences of an injunction for the infringer, the complexity of the products involved, and the conduct of the parties. The right to damages for patent infringement and the possibility of compulsory licenses (e.g. in the case of SEPs) are not affected be the proposed draft legislation.

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The German Ministry of Justice has published on 14 January 2020 a draft legislation to amend patent law (PatG) and other IP laws.

Besides some formalities and adaptions to international treaties, the main two issues of the draft legislation are a clarification of the right to injunctive relief of a patentee against a patent infringer and measures to accelerate patent nullity lawsuits before the German Federal Patent Court.

Background:

Concerns have been raised in particular by the Information and Telecommunications Industry and the Automotive Industry that for complex industrial products like smartphones or cars the economic consequences of an injunction against a patent infringer with the result of having to stop selling the complex product or to cease operation of a communication network are disproportionate to the interests of a patentee covering an invention which relates only to a small part of the whole product.

This problem may be exacerbated by the so-called “injunction gap” caused by the German bifurcated patent litigation system: Patent infringement lawsuits are handled by the specialized patent chambers of the Regional Courts (Landgerichte), i.e. in Duesseldorf, Mannheim or Munich, whereas patent validity complaints (nullity lawsuits) are decided by the Federal Patent Court in Munich. The patent infringement lawsuits (where different regional courts compete for lucrative “business”) take roughly 12 months for a first instance decision, which in the case of finding infringement is provisionally enforceable against a bond given as security by the patentee. In contrast, the first instance nullity lawsuit (which is typically started about 3-6 months after beginning of the infringement action) before the Federal Patent Court presently takes about 24 to 30 months. There is therefore the risk that a company has to stop selling its products in Germany based on a patent which later is found to be invalid.

Both the “automatic” right to injunctive relief of the patentee against the patent infringer and the “injunction gap” are perceived by some industries as inequitably favoring patentees over potential patent infringers. This has been a concern in particular towards patent licensing entities, which are not manufacturing or selling products and therefore are not themselves exposed to patent infringement lawsuits, allegedly allowing them to extract higher license fees than would otherwise be possible.

A particular aspect are standard-essential patents (SEPs), which have to be utilized to implement a particular standard as e.g. the 4G or 5G mobile communication standards. SEPs are an internationally highly debated matter involving antitrust issues and compulsory licenses according to § 24 PatG. The newly published draft legislation, however, does not deal with SEPs.

  1.  Accelerating the patent nullity lawsuits

§ 83 (1) PatG now includes a new statutory deadline for the defendant of a nullity lawsuit (the patentee) to provide within 2 months (extendable to 3 months with proper reasoning) a comprehensive defense against the nullity lawsuit. The Patent Court in turn is urged to provide within 6 months from notification of the nullity lawsuit a comprehensive provisional opinion on the validity of the patent, which is then directly forwarded to the district court handling the infringement action for consideration in its judgement.

In principle, this compressed (front-loaded) patent nullity procedure appears to be functional to serve its purpose to give the infringement court a proper basis for the assessment of patent validity before imposing a (provisionally enforceable) injunction against the patent infringer. The amendments, however, would require huge efforts and substantial organizational changes on the side of the Federal Patent Court. I expect that this issue will therefore cause considerable discussion. Furthermore, in order to preserve the balance between patentee and accused infringer, the latter should be likewise given a deadline of two months from notification of the patent infringement lawsuit to bring the nullity action if the patent invalidity defense is raised in the infringement lawsuit (which is almost always the case). Otherwise only the patentee would be under time pressure to prepare the whole patent validity defense within two months, whereas the accused infringer has no time constraints to prepare and bring the patent nullity complaint.

  1. The principle of proportionality for granting Injunctive relief against the patent infringer

So far, German courts broadly grant injunctive relief against patent infringers under § 139 PatG. The proposed draft legislation now introduces in § 139 in a new clause a balancing of the interests of the patentee with those of the accused infringer:

“The claim [to injunction] is excluded to the extent that the enforcement of the right to injunctive relief is disproportionate when, due to special circumstances taking into account the interests of the patentee vis-à-vis the infringer and the principle of good faith, it constitutes a hardship not justified by the exclusive right.”

According to the published reasoning for the draft legislation, however, the amendments are to be understood as a “clarification”, not as a substantial change of current practice (page 32 of the German text):

“Against this background, it seems appropriate to expressly clarify with the proposed addition to § 139 (1) – in line with Article 3(2) of Directive 2004/48/EC – that the enforcement of a patent injunction may exceptionally be disproportionate in individual cases.

The explicit consideration of the principle of proportionality in § 139 PatG must not, however, lead to a devaluation of patent law. A continuing strong injunctive relief is indispensable for the enforcement of patents for German industry. The draft therefore provides that the restriction of the right to injunctive relief remains – as laid down in the case law of the FCJ – limited to exceptional cases.”

This general principle of a clarification and not a restriction of the injunctive relief is reflected by the statement on page 51 of the reasoning that the burden of proof is on the patent infringer to show disproportionality of the injunctive relief and not on the patentee to give evidence that the injunction in proportionate.

According to the published reasoning (pages 51-53 of the German text), the main aspects to be considered when balancing the interests of patentee and patent infringer are:

(a) Interest of the patentee in an injunction

Here, a difference is made between operating companies and licensing entities, although framed in careful language:

“If the patent infringer sets out special circumstances which may in individual cases give rise to unjustified hardship, it may exceptionally be relevant in the context of an overall assessment of all circumstances whether the patent proprietor himself manufactures or has manufactured corresponding products or partial components which are in direct competition with the infringing product, or whether the patent proprietor is primarily concerned with the monetization of his rights and not with the execution of inventions as an expression of the innovative function of the patent system. The latter is usually the case with pure patent exploiters. In these cases, the patent holder’s interest may be primarily directed towards concluding a license agreement and not towards securing his own development and production activities. Clearly excessive license claims, which are to be enforced against good faith with the injunction, can also count against granting an injunction in such cases. However, the mere fact that the patentee does not use the patent himself through his own or licensed production is in itself not sufficient for the granting of a conversion- or use-up period; such a situation is therefore not necessarily to be taken into account to the detriment of the patentee. That is, claims for injunctive relief can also be a necessary corrective to the patent law, for example, when individual inventors or universities use the patent system to protect their rights using third parties.”

It appears that the identity of the patent proprietor as an operative company or licensing entity may lead to a postponement of injunctive relief and the grant of use-up terms, but does not restrict the right to permanent injunction against the patent infringer.

(b) Economic consequences of the injunction

In the case of severe economic consequences of an injunction against the patent infringer, the injunction may be postponed, as stated in the reasoning:

“A restriction of the effect of the patent by granting a use-up period can be justified if the economic consequences of the immediate observance of the injunction in the individual case affects and disadvantages the infringer to a particularly high degree due to special circumstances beyond the impairments associated with his claim as intended.”

The right to permanent injunction, however, is not affected.

(c) Complex products

If the value of the patent in completely out of proportion to the costs of interruption of production of the infringing product, injunctive relief may be disproportionate:

“The consequences – such as the prolonged interruption of production – can in individual cases be so completely disproportionate to the value of the infringed patent that the interests of the patentee in the unconditional enforcement of his injunctive relief must exceptionally take second place.”

(d) Conduct of the parties

On the infringers side it can be taken into account if he has taken adequate measures to avoid a patent infringement by e.g. conducting a “freedom to operate” analysis or trying to obtain a license. On the patentee´s side, undue delay of the patent lawsuit despite knowledge of the infringement may be an argument against injunctive relief.

In any case, the right to damages for patent infringement is in no way affected be the proposed draft legislation. The possibility of compulsory licenses under § 24 PatG is likewise not affected by the draft legislation.

CRISPR EP Update: Broad Institute loses fundamental patent EP 2 771 468 at opposition hearing on 17 January 2018

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The patent dispute relating to the revolutionary CRISPR-Cas9 gene-editing technology between the Broad Institute (jointly operated by Harvard and MIT) on the one side and UC Berkeley on the other side is followed by the biotech community with great interest .

Broad Institute has been the first one to get a patent issued on CRISPR-Cas9 technology in Europe, namely EP 2 771 468. Against this patent, 9 oppositions have been filed, most of which so-called strawman oppositions. The oral hearing finalizing the first instance of the opposition proceedings has been scheduled to take place on 16-19 January at the EPO in Munich. In the preliminary opinion issued together with the summons to the oral hearing, the oppisition division took a non-binding provisional view that the four priorities P1, P2, P5, and P11 cannot be validly claimed by the patentee, because the priority right had not been validly transferred to the applicants of PCT application forming the basis of the granted EP patent.

The decision was issued already in the early afternoon of the second day of the hearing: The opposition division maintained its position laid out in the provisional opinion and decided that the patent proprietor cannot validly claim priorities P1, P2, P5, and P11. As a consequence the claims as granted (main request) were revoked on the ground of lack of novelty. The 64 auxiliary requests filed by the patent proprietor were not admitted to the proceedings. The patent was thus revoked in full. The course of the oral proceedings can be seen in this twitter thread.

In short, the grounds for losing the essential priority rights are as follows: In order to validly claim priority right of a European patent application either directly filed or as a national phase of a PCT application (as in the present case), either (i) the applicant of the priority application and of the later application are identical or (ii) the applicant of the priority application assigns the application to the applicant of the later application, or (iii) the applicant of the priority application assigns the priority right to the applicant of the later application.

The assignments of the application or the priority right must have occurred before the filing of the later application (here: the PCT application), since, for reasons of legal certainty, a retroactive effect is excluded. However proof of such transfer may be provided later.

Furthermore, in case of more than one joint applicants of the priority application, each applicant of the priority application must either be also applicant of the later application or have assigned the application or the priority right to one of the applicants of the later application before the later application date. This was not the case for the priority applications P1, P2, P5, and P11. One of the applicants (and inventors) of these US provisional priority applications was no longer applicant of the PCT application and did not assign the right to the application or the priority right to one of the applicants of the PCT application. As a harsh consequence, the applicants of the PCT application and proprietors of the European Patent lost priorities P1, P2, P5, and P11. Without entitle-ment to these priorities, the subject-matter of the granted claims lacked novelty over the prior art on record.

The written decision of the opposition division can be expected in approximately two to three months. In a press release issued shortly after the decision on priority and before announcement of the full decision, the Broad Institute already announced to lodge an appeal against the finding of the opposition division.

Disclaimer: Neither I myself nor the patent firm Betten & Resch, of which I am a partner, are involved in any patent cases relating to CRISPR-cas9 technology.

(picture by sporst)   Twitter: @patentlyGerman

German Federal Court of Justice (FCJ) takes different view on undisclosed disclaimers than recent EPO Enlarged Board of Appeal decision G1-16 – FCJ “Phosphatidylcholin” (19 September 2017)

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Unofficial Headnote:

Including a not originally disclosed negative feature (disclaimer) in a patent claim in order to delimit the claimed subject-matter from the prior art does not constitute an inadmissible extension of the subject-matter of the original patent application if the disclaimer does not have a technical effect.

To the relief of many patentees in particular in the chemical and biotech industries the Enlarged Board of Appeal has in its most recent decision G1-16 confirmed that undisclosed disclaimers are allowable under certain circumstances defined in the decision G1-03, namely in order to

  1. restore novelty by delimiting a claim against state of the art under Article 54(3) and (4) EPC (later published prior art);
  2. restore novelty by delimiting a claim against an accidental anticipation under Article 54(2) EPC; an anticipation being accidental if it is so unrelated to and remote from the claimed invention that the person skilled in the art would never have taken it into consideration when making the invention; and
  3. disclaim subject-matter which, under Articles 52 to 57 EPC, is excluded from patentability for nontechnical reasons.

An undisclosed disclaimer is defined by including into a patent claim a negative technical feature, whereby neither the disclaimer itself nor the subject-matter excluded by it have been disclosed in the application as filed (G1-16, point 14).

The Enlarged Board of Appeal (EBA) reasoned that such undisclosed disclaimers in most cases constitute added matter, i.e. “the requirements of Article 123(2) EPC leave virtually no chance of an undisclosed disclaimer being allowable” since “introducing any disclaimer per definitionem excludes subject-matter from a claim and, hence, changes the technical content of the claim” (G1-16, point 42). The EBO allowed undisclosed disclaimers under the above-mentioned clearly defined conditions despite the fact that they violate Art. 123(2) EPC, because under these circumstances a violation of Art. 123(2) EPC would not give the patentee or applicant an unwarranted advantage damaging to the legal security of third parties; this being the rationale behind Art. 123(2) EPC (G1-16, point 36).

The German Federal Court of Justice (FCJ), however, applies in the recently published ex-parte decision “Phosphatidylcholin” a different reasoning. In the case the FCJ had to decide upon an appeal on points of law (“Rechtsbeschwerde”) of the applicant of a patent application, which has been rejected both by the GPTO and the Federal Patent Court based on the ground that of an undisclosed disclaimer consisted of an inadmissible extension beyond the content of the original application. The patent claim before the FCJ reads as follows:

“Cosmetic, nontherapeutic use of

a) 5 – 30% by weight of sodium chloride and 

b) 5 – 30% by weight of glycerol,

in each case based on the total composition,

c) wherein these preparations are free from phosphatidylcholine

d) in hand protection creams, cleansing milk, sun protection lotions, nourishing creams, day creams or night creams for reinforcing the barrier function of the skin.”

The undisclosed disclaimer (feature c)) requires that the claimed preparations are free from phosphatidylcholine (a particular form of lecithin). Such preparations free from phosphatidylcholine are not disclosed in the original application documents. The GPTO and the Federal Patent Court therefore rejected the claim as inadmissibly amended, which finding was not contested by the applicant itself.

The FCJ, however, takes a different position and concludes that in the original application documents there is also no indication that phosphatidylcholine is a necessary component of the preparation or that its addition is considered advantageous. Therefore, the disclaimer “merely expresses the fact that from the large number of possible compositions of the preparation, which are possible according to the original application documents, only those containing phosphatidylcholine are excluded”. In addition, the undisclosed disclaimer merely serves to distinguish the invention over a (non-accidental, prepublished) prior art reference R disclosing skin protection preparations containing sodium chloride and glycerin in addition to the main ingredient phosphatidylcholine. The FCJ concludes that undisclosed disclaimers do not consist of an inadmissible amendment if (i) they serve the purpose to distinguish the claimed subject-matter over the prior art and (ii) the disclaimer has no technical effect. The use of undisclosed disclaimers is allowable during the examination as well as in post grant procedures.

The reasoning of the FCJ thus differs from that of the EBA. The EBO concludes: Undisclosed disclaimers constitute an inadmissible amendment but are exceptionally allowable under the above-mentioned circumstances 1., 2., or 3. The FCJ finds: Undisclosed disclaimers do not constitute an inadmissible amendment in the first place and are therefore allowable (i) if they serve to distinguish the claim over the prior art and (ii) if they do not have a technical effect.

In practice, the main difference is that under the FCJ approach the allowability of undisclosed disclaimers is also applicable to non-accidental prepublished prior art (as reference R in the subject decision “phosphatidylcholine”). Condition (ii) requires that the undisclosed disclaimer must not have a technical effect, i.e. the skilled person must not derive any new technical information therefrom. This condition seems to imply that undisclosed disclaimers are not be accepted to support inventive step. The FCJ has decided in the “phosphatidylcholine” case that the disclaimer does not have any technical effect based on the application documents without reference to the prior art, such that the question of inadmissible extension is independent from the considered prior art.

The assessment of a potential technical effect of the undisclosed disclaimer, however, may lead to the following problem:

In the present appeal on points of law case the FCJ had to refer the matter back to the Federal Patent Court to decide on the merits whether the claim containing the disclaimer is novel and involves an inventive step over the prior art. It is to be expected that novelty will be confirmed, because otherwise the disclaimer would not have made any sense. More interesting, however, is the assessment of inventive step: The closest prior art document R discloses a skin protection preparation comprising phosphatidylcholin (as main, essential ingredient) + glycerol + sodium chloride (features [C+A+B]). The application under review claims glycerol + sodium chloride + (not phosphatidylcholin), i.e. features [A+B+notC]. Would it be obvious for the skilled person starting from closest reference R to provide a skin protection preparation removing the main, essential component? Probably not. In this case, however, the disclaimer notC would indeed have a technical effect establishing inventive step, contrary to the finding of the FCJ allowing the disclaimer in the first place. It will be interesting to see how the Federal Patent Court will resolve this matter.

The EBA approach, in contrast, appears to avoid such problems: A negatively claimed technical feature is regarded as (almost) always having a technical effect such that its addition contravenes Art. 123(2) EPC, but is exceptionally allowed under certain precisely defined conditions avoiding unnecessary hardship for the patent proprietor while preserving legal certainty for third parties.

CRISPR EP Update: Oral hearing at EPO in opposition case against Broad patent is scheduled for 16 January 2018. Preliminary opinion negative for Broad

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The patent dispute about the revolutionary CRISPR-Cas9 gene-editing technology between the Broad Institute (jointly operated by Harvard and MIT) on the one side and UC Berkeley on the other side is of great interest in the biotech community.

In the US, the Broad Institute prevailed in the interference hearing at the USPTO. The UC Berkeley has meanwhile filed an appeal to the CAFC.

In Europe, the first patent of UC Berkeley has very recently been granted by the EPO.

As in the US, however, the Broad Institute has been the first one to get a patent issued in Europe, namely EP 2 771 468. Against this patent, 9 oppositions have been filed, most of which appear to be so-called strawman oppositions.

With office communication of April 19, the EPO has now scheduled oral proceedings at the EPO main building at 16 January 2018. In the preliminary opinion issued together with the summons to the oral hearing, the oppisition division takes the non-binding provisional view that the opposition is expected to be successful on the ground of added matter (claims 1 and 2) and the ground of lack of novelty (claims 1-6 and 9-17). Even though the EPO emphasizes the non-binding nature of such provisional opinions, it is in most cases very difficult for the party negatively affected by the opinion to reverse the view of the opposition division. It will thus be tough for the Broad Institute to repeat its success in the US in Europe.

CRISPR EP Update: Berkeley EP patent application close to grant

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EPO by sporst

While the CRISPR-cas9 patent fight between the Broad Institute (“Team Zhang”) and the UC Berkeley (“Team Doudna”) in the US saw its first hearing at the USPTO´s Patent Trial and Appeal Board on December 5, the UC Berkeley has only a few days later received good news from the European Patent Office. An Office Action from December 8, 2016 indicated allowability of broad claims for its European patent application (publication number EP 2 800 811). Claim 1 reads as follows:

1. A method of modifying a target DNA, the method comprising contacting the target DNA with a complex comprising:

(a) a Cas9 polypeptide and
(b) a single-molecule DNA-targeting RNA comprising:
(i) a DNA-targeting segment comprising a nucleotide sequence that is complementary to a sequence in the target DNA, and
(ii) a protein-binding segment that interacts with said Cas9 polypeptide, wherein
the protein-binding segment comprises two complementary stretches of nucleotides that
hybridize to form a double stranded RNA (dsRNA) duplex,
wherein said two complementary stretches of nucleotides are covalently linked
by intervening nucleotides,
wherein said contacting is in vitro or in a cell ex vivo; and
wherein said modifying is cleavage of the target DNA.

A restriction to either eukaryotic or procaryotic cells seems not to be present. The contacting of the target DNA to be modyfied by the method, however, according to the claim has to take place in vitro or in a cell ex vivo. 

A notice of allowance from the EPO (communication under Rule 71(3) EPC) can be expected soon.

 

Disclaimer: Neither I myself nor the patent firm Betten & Resch, of which I am a partner, is involved in any patent cases relating to CRISPR-cas9 technology.

(picture by sporst)

New decision of the German Federal Patent Court: Payor bears the risk of missing deadline before the GPTO if GPTO does not use direct debiting mandate

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Official headnote of the decision 7 W (pat) 29/15 of the 7th Senate (legal senate) of the GPTO dated May 12, 2016:

If a patent office fee is payed by a direct debiting mandate, the date of receipt of the mandate is according to § 2 No. 4 PatKostZV (Rules on payment of patent fees) regarded as the day of payment of the fee only if the mandated amount is withdrawn by the Federal Account on behalf of the Patent Office. According to this regulation the debtor alone bears the risk that, for whatever reasons, the amount is not withdrawn. This is true also if the amount has not been withdrawn because the Patent Office does not make use of the direct debiting mandate close to the due date. 

In the case to be decided by the court an opponent filed an opposition against a German patent on October 7, 2011, i.e. on the last day of the opposition period, and paid the statutory opposition fee of EUR 200 by means of a direct debit mandate. The GPTO, however, did not make use of the direct debit mandate, allegedly because it was not forwarded to the accounting office. Only after initiation of an insolvency procedure with respect to the opponent on November 25, 2011, which was communicated to the GPTO on December 6, 2011, did the GPTO accounting office take notice of the direct debiting mandate, but could no longer make use of it due to the insolvency. On December 20, 2011 (date of receipt) the opposition fee was paid to the GPTO by remittance with the authorization of the insolvency administrator.

The GPTO decided on June 25, 2015 that the opposition is deemed not having been filed due to failure to pay the opposition fee within the prescribed deadline.

The opponent appealed to the Federal Patent Court (FPC), which, however, rejected the appeal with the following reasoning:

According to the court, prereqisite of the “privileged” payment date of the receipt of the direct debit authorization is the actual withdrawal of the authorized amount by the GPTO. The withdrawal was no longer possible upon initiation of the insolvency proceedings on November 25, 2011. In the courtś view the fact that the GPTO had sufficient time to withdraw the money between October 7, 2011 and November 24, 2011 (i.e. about 7 weeks, whereas this procedure according to the statement of the GPTO typically takes about 2-3 weeks) does not change this general rule as long as by the delay general principles of the rule of law are not violated. The fact that the opponent is not responsible for these delays could only taken into account in abreinstatement procedure which, however, is not available in case of missing the opposition deadline. In addition, the court reasoned the opponent could use other possible payment methods avoiding this risk. The remittance received by the GPTO on December 20, 2011 was regarded as too late.

The Federal Patent Court allowed further appeal (Rechtsbeschwerde) to the Federal Court of Justice (FCJ).

Personal comment:

I hope that the opponent will lodge further appeal with the FCJ and that the decision will be revised upon appeal.

In my view, the decision unduely shifts the burden of the settlement risk of a payment of GPTO fees completely to parties of proceedings before the GPTO, be it opponents against a patent grant of a third party or patent applicants itself having to pay annuity fees or the like. This is true in particular for the formulation of the official headnote, which generalizes the individual case decided by the court to a general responsibility of parties before the GPTO using fee payment by direct debit authorization to bear the risk if any failure of the office to use the authorization to withdraw the fee.

Strict deadlines in patent proceedings serve the purpose of legal certainty for the involved parties as well as for the public, e.g. the public has a right to know whether a patent grant has been opposed to or not. Strict deadlines for fee payments can serve the same purpose as in the case of annuity fees, where the public needs to know whether or not a patent lapses or not. Payment of procedural fees as filing fees, opposition fees etc., however, are irrelevant for legal certainty but mainly serve the purpose of contributing to the procedural costs of the office.

Therefore it should be sufficient if the involved party of proceedings before the GPTO has timely and in accordance with the procedural rules initiated payment of the correct amount. Any delay caused by the office should not be to the disadvantage of the involved party. This should be particularly true in the decided case in which not a withdrawal attempt of the GPTO failed, because the GPTO never undertook such attempt, and the opponent has actualy made payment of the opposition fee after initiation of the insovolvency proceedings, albeit inevitably after expiry of the opposition deadline.

The reference of the FPC to other payment methods avoiding this risk is not helpful either. According to the rules on payment of patent fees there are in total four ways to pay fees to the GPTO (and the FPC):

1. Direct debit authorization (according to SEPA procedural rules). This payment method is the most popular one.

2. Remittance. The deadline is met only if the GPTO receives the money in time. The delay risk thus is also borne by the debtor.

3. Cash payment to the cashier of the GPTO.

4. Cash payment at a bank to the benefit of the corresponding Federal Account of the GPTO.

As the payment methods of direct debit authorization and remittance are unpredictable and thus not “save” to meet a GPTO or FPC deadline, the discussed decision and in particular the very gneral official headnote thus has the consequence that careful applicants and their patent attorneys have to pay patent fees (wish can be substantial for large applicants) using less “privileged” routes, namely to use cash only. This cannot be the intention of an important government agency in 2016 !

An innovative solution in addition to a reversal of the decision at the FCJ would instead be to allow payment in the cryptocurrency bitcoin, where a payment confirmation is received within about 60 minutes.

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Amicus curiae brief in the case G1/15 of the Enlarged Board of Appeal of the EPO

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I herewith publish my amicus curiae brief, which I filed on February 27, 2016 in the case G1/15 of the Enlarged Board of Appeal of the EPO relating to the issue of so-called “poisonous divisionals” under the EPC (photograph by sporst):  

 

This amicus curiae brief is submitted in accordance with Art. 10 of the Rules of Procedure of the Enlarged Board of Appeal providing observations on question 5 of the questions referred to the Enlarged Board of Appeal by the Technical Board of Appeal 3.3.06 in the case T 0557/13, pending as G1/15. The opinions expressed in the brief are my own and do not necessarily reflect the views of Betten & Resch or any of its clients.

1.Introduction

The case G1/15 relates to the issue of self-collision between parent and divisional applications as mutual prior art documents under Art. 54(3) EPC, a situation which became notorious as “toxic divisional” or “poisonous divisional” problem. Surprisingly, this issue has come up for the first time only in September 2012 with the still singular Appeal Board decision T 1496/11, despite the large number of divisional applications pending or having been granted under the EPC since it coming into force in 1978.

The “toxic” situation occurs when of two related European patent applications EP1, EP2 (either parent or divisional) both claiming the same priority date P of an earlier application (either national or European) one application (e.g. EP1) comprises a patent claim containing a generalization with respect to the priority application such that the claim of EP1 as a whole cannot validly claim the priority date P of the earlier application and at the same time EP2 comprises a specific embodiment which can validly claim the priority date P. The specific embodiment of EP2 validly claiming priority P thus is novelty-destroying prior art under Art. 54(3) for the generalized claim of EP1 not enjoying priority P.

In the case T 1496/11 (referring decision T 0557/13, Reasons 15.1.7) claim 1 of the parent patent was directed to a security document including a security device which comprised a functionally defined “feature (10) which can be inspected, enhanced or optically varied by the optical lens when …“. The priority document disclosed only a “printed or embossed” feature for this purpose. The board concluded (Reasons, 2.1) that the claimed subject-matter had been generalized by omitting the more specific indication and thus encompassed security devices including features produced by other means. Hence, it did not constitute the same invention as that set out in the priority document (Article 87(1) EPC). Consequently, the subject-matter of claim 1 was found to be only entitled to the filing date of the parent application upon which the patent had been granted. The board went on to conclude that the subject-matter of claim 1 lacked novelty under Article 54(3) EPC over an embodiment disclosed in its published European divisional application. This embodiment was identically disclosed in the priority document and was hence entitled to the claimed priority date. Therefore it anticipated the subject-matter of claim 1 of the parent patent, which was not entitled to the priority.

As the situation that a priority application contains one or multiple specific embodiments and relatively narrow claims and a later European or PCT patent application has broader claims is rather common for users of the patent system due to continuous improvements of the claimed invention, the conclusion is obvious that poisonous parent or divisional applications “killing” their relatives are rather common and threaten a substantial number of European patents, in particular if national invalidity courts would follow T 1496/11 in applying Art. 54(3) EPC to parent/divisional applications.

One possibility to avoid this highly undesirable situation for patent owners is to entitle the generalized claim partial priorities such that those parts of the claimed scope which are disclosed in the priority document can enjoy its priority and the remainder of the claimed scope enjoys the priority of the filing date. The specific example enjoying the earlier priority date thus anticipates only those parts of the generalized claim which validly claims the same priority, thus not forming novelty-destroying prior art under Art. 54(3) EPC. Or, in the words used in the referring decision T 0557/13, a “generic OR-claim” encompassing alternative subject-matter by virtue of one or more generic expressions or otherwise may be entitled to partial priority. This solution to the toxic divisional problem is dealt with in questions 1 – 4 of G1/15. The present amicus curiae brief, however, focuses exclusively on the general question of whether or not parent and divisional applications can be mutual prior art under Art. 54(3) EPC at all, that is, question 5 of G1/15, which reads as follows:

5. If an affirmative answer is given to question 1, may subject-matter disclosed in a parent or divisional application of a European patent application be cited as state of the art under Article 54(3) EPC against subject-matter disclosed in the priority document and encompassed as an alternative in a generic “OR”-claim of the said European patent application or of the patent granted thereon?

In my view, question 5 should be answered independent from the answers to questions 1 – 4, and it should be answered in the negative. Both issues – partial priorities and the application of Art. 54(3) to parent/divisional applications – are very important as such, but not necessarily dependent on each other. Allowing partial priorities under the “conceptual approach“ suggested in T 1127/00 to distinguishing “a limited number of clearly defined subject-matters” as required by decision G2/98 is essential not only to establish novelty of an EP application having a generic “OR”-claim over a specific embodiment contained in its divisional or parent application, but also over such specific embodiment contained in its national or European priority application. The eligibility to partial priorities under the “conceptual approach“ is therefore to be affirmed. Conversely, the eligibility of divisional/parent applications or patents as prior art under Art. 54(3) EPC is a fundamental question of patent law under the EPC, which should be clarified by the Enlarged Board of the Appeal, also in order to serve as precedence for national invalidity courts in Europe.

2. Applying Art. 54(3) EPC to parent/divisional applications is inconsistent with the right to file divisional applications

According to Art. 76(1) EPC

(1)    A European divisional application shall be filed directly with the European Patent Office in accordance with the Implementing Regulations. It may be filed only in respect of subject-matter which does not extend beyond the content of the earlier application as filed; in so far as this requirement is complied with, the divisional application shall be deemed to have been filed on the date of filing of the earlier application and shall enjoy any right of priority.

This provision prescribes the right of the applicant of a European patent application to file a divisional application, which shall enjoy any right of priority of the parent application. Likewise, under Art. 4G of the Paris Convention

(1) If the examination reveals that an application for a patent contains more than one invention, the applicant may divide the application into a certain number of divisional applications and preserve as the date of each the date of the initial application and the benefit of the right of priority, if any.

(2) The applicant may also, on his own initiative, divide a patent application and preserve as the date of each divisional application the date of the initial application and the benefit of the right of priority, if any. Each country of the Union shall have the right to determine the conditions under which such division shall be authorized.

an applicant has the explicit right to a divisional application, either according to paragraph (1) in response to a non-unity objection of the patent examiner or according to paragraph (2) in his/her own right. The EPC constitutes, according to its preamble, a “special agreement within the meaning of Article 19 of the Paris Convention“. Hence, it shall not contravene the basic principles concerning priority laid down in the Paris Convention (Referring decision T 0557/13, Reasons 12.1; G 2/98, Reasons, 3).

It is very clear that a specific example or embodiment in the description of a European patent application cannot be cited as prior art under Art. 54(3) for a generalized claim (generic-OR-claim) in the very same application, even if the specific example can validly claim an earlier priority date as the generalized claim. Art. 76 (1) EPC as well as Art. 4G of the Paris Convention give the applicant the right to file a divisional application under the same conditions (same filing date, dame priority date) as the parent application. If the act of making use of this right through filing a divisional application retroactively creates prior art not present before and posing a high risk of invalidating not only the divisional but also the patent application, the applicant cannot properly enjoy this right to a divisional application but is at least partly deprived of the right to a patent for his/her invention disclosed to the public. The applicant should with respect to novelty over the prior art of the invention disclosed in the patent application not be in a worse position after filing the divisional application than before filing it. Applying Art. 54(3) EPC to parent/divisional applications is thus inconsistent with the right of the applicant to file divisional applications according to Art. 76 EPC as well as Art. 4G of the Paris Convention and therefore could in my view not have been the intention of the drafters of the EPC.

3. Applying Art. 54(3) EPC to parent/divisional applications is inconsistent with the purpose of Art. 54(3) EPC

Art. 54 EPC defines the prior art when assessing novelty and inventive step of European patent applications:

Article 54 EPC (Novelty)

(2) The state of the art shall be held to comprise everything made available to the public by means of a written or oral description, by use, or in any other way, before the date of filing of the European patent application.

(3) Additionally, the content of European patent applications as filed, the dates of filing of which are prior to the date referred to in paragraph 2 and which were published on or after that date, shall be considered as comprised in the state of the art.

It recites two types of prior art, namely prepublished prior art according to Art. 54(2) EPC and fictional prior art (“shall be considered as comprised in the state of the art”) according to Art. 54(3) EPC. The latter is only relevant for the establishment of novelty but irrelevant for judging inventive step (Art. 56 EPC).

From the wording of the provision (“the content of European patent applications”) it is not clear, whether or not parent or divisional applications of a European patent application under consideration should be regarded as part of that fictional prior art.

The purpose of Art. 54(3) EPC is to avoid double patenting, that is to ensure that only the first applicant filing an application directed to the same subject-matter will be granted a patent. This can be directly seen from the travaux préparatoires to both the EPC 1973 and the EPC 2000 (detailed discussion and references enclosed in the amicus curiae brief of Vossius & Partner dated November 17, 2015, pages 4 – 7):

“The Chairman then summarized the discussion stressing that the basic idea was that only one patent could be granted for one invention.” (Travaux préparatoires to the EPC 1973, document 9081/IV/63-E-Final, page 69, fifth paragraph)

“Article 54(3) EPC contains a legal fiction (…). The purpose of this provision is to include European prior rights into the state of the art in order to preclude double patenting.” (Travaux préparatoires to the EPC 2000, document CA/PL 17/99 e, page 1, items 1 to 2).

This was also confirmed by Enlarged Board of Appeal in its decisions G 1/03 (Reasons, 2.2.2) of April 8, 2004 and in G 2/98 (Reasons, 8.1) of May 31, 2001.

One should keep in mind, however, that with the formulation of Art. 54(3) EPC the “prior claim approach” to double patenting (which was e.g. applied in German patent law before the introduction of the EPC and the accompanying harmonization of substantive European patent law) was replaced by the “whole content approach”, which excludes from patent protection everything which was disclosed in an earlier filed, later published EP application. Therefore only the first inventor to file a patent application has the right to the patent to the disclosure in this application and later applicants are precluded from obtaining a patent therefor.

Applying Art. 54(3) to parent or divisional applications is contrary to the purpose of avoiding double patenting also according to the “whole content approach” for the following reasons:

(i) Double patenting in parent/divisional applications is handled in the examination proceedings at the EPO by refusing a divisional application if it claims the same subject-matter as a pending parent application or a granted parent patent, as confirmed by the Enlarged Board of Appeal in its decision G 1/05 (Reasons, 13.4):

“The Board accepts that the principle of prohibition of double patenting exists on the basis that an applicant has no legitimate interest in proceedings leading to the grant of a second patent for the same subject-matter if he already possesses one granted patent therefor. Therefore, the Enlarged Board finds nothing objectionable in the established practice of the EPO that amendments to a divisional application are objected to and refused when the amended divisional application claims the same subject-matter as a pending parent application or a granted parent patent.”

That is, to avoid double patenting between parent/divisional applications, the later examined application is refused based on the principle of avoiding double patenting applying the “prior claim approach”, but not through the application of Art. 54(3) EPC.

(ii) The effect of applying Art. 54(3) to parent/divisional applications does not serve the purpose of preventing double patenting. Four different cases can be distinguished:

(1)    The parent/divisional applications EP1, EP2 do not claim earlier priority dates such that the effective filing date of both applications is the actual filing date, which is by definition identical for both applications. They therefore cannot form prior art to each other under Art. 54(3) EPC, requiring an earlier date of one application, even if the claimed subject-matter is identical. In this case double patenting would be possible even when applying Art. 54(3) EPC to parent/divisional applications.

(2)    Both parent/divisional applications EP1, EP2 claim earlier priority date P. The claims of both applications are identical and both can validly claim priority P. Again, the applications cannot form prior art to each other under Art. 54(3) EPC, even though the claimed subject-matter is identical. Therefore double patenting likewise cannot be prevented by application of Art. 54(3) EPC to parent/divisional applications.

(3)    Both parent/divisional applications EP1, EP2 claim earlier priority date P. The claims of both applications are identical, but generalized with respect to priority application P such that both EP1 and EP2 cannot validly claim priority P but only the respective filing dates EP1 = EP2. Assuming that both applications EP1 and EP2 contain the same embodiment validly claiming priority P (the typical situation), then both applications form prior art to each other under Art. 54(3) EPC and none of it survives, even if the applicant would withdraw one of the applications after its publication. Again, not double patenting would be prevented by application of Art. 54(3) EPC, but both applications would be invalidated even if the applicant would itself avoid double protection by withdrawing one of the applications.

(4)    Both parent/divisional applications EP1, EP2 claim earlier priority date P. The claims of both applications are not identical, EP1 being generalized with respect to priority application P such that EP1 cannot validly claim priority P, but EP2 can. Then EP2 would form prior art under Art. 54(3) EPC with respect to EP1, but not vice versa. Therefore EP2 would survive, but not EP1. Thus, one application would be eliminated, but because the claims are different. The effect again is contrary to avoiding double patenting.

In conclusion, the application of Art. 54(3) to parent/divisional applications of the European patent application under consideration is in clear contradiction to the purpose of this provision to avoid double patenting.

4. Self-collision between parent and divisional applications in other jurisdictions

1) USA:

According to 35 U.S.C. § 102 (a) (2) an earlier filed and later published patent application (prior application) directed to the same invention is only to be regarded as prior art, if it names another inventor. Therefore, self-collision between parent and divisional applications is explicitly excluded (Report of the Tegernsee experts group: Treatment of conflicting applications; September 24, 2012, paragraphs 64 – 65, enclosed to this brief)

2) Japan:

According to Article 29-2 of the Japanese Patent Act an earlier filed and later published patent application (prior application) directed to the same invention (using the “whole content approach”) as the invention under consideration is regarded as novelty-destroying prior art with the explicit exceptions that the inventor or applicant (at the time of filing) are identical. Therefore, parent and divisional applications are excluded from the prior art effect of earlier filed and later published applications (Report of the Tegernsee experts group, paragraphs 39 – 48)

3) Germany:

The provision of § 3 (2) German Patent Act (PatG) is worded as Art. 54(3) EPC, thus leaving it open whether or not parent/divisional applications can form novelty-destroying prior art. There are to date no FCJ decisions in which divisional applications have been cited as prior art for parent applications/patents or vice versa. According to § 39 German Patent Act (PatG) the division of a pending patent application into a parent application and a divisional application (the latter pending at the same stage of the procedure as the parent application) is regarded primarily as a procedural act dividing one application procedure into two separate procedures (“Schulte”, PatG, 9th edition, § 39, No. 10 – 13). § 39 (3) German Patent Act also speaks of a “declaration of division”, indicating the focus on the procedural aspect of a divisional application.

This focus on the procedural aspect gives rise to the following considerations: As in all jurisdictions, in German (as in European) patent law a specific example or embodiment in the description of a patent application cannot be cited as prior art for a generalized claim (generic-OR-claim) in the very same application, even if the specific example can validly claim an earlier priority date and the generalized claim cannot. If the filing of a divisional application is mainly a procedural act dividing one application procedure into two separate procedures, the declaration of division should not change the prior art status of the content of the original (combined) patent application. It would be a surprising result at least that new prior art should be created retroactively by the act of dividing one application procedure into two procedures. Based on these considerations, parent and divisional applications should not be regarded as prior art with respect to each other under German Patent Act.

5. Conclusion

In summary, parent and divisional applications should not be regarded as prior art under Art. 54(3) EPC to each other, independent from the practice of entitlement to partial priorities.

Applying Art. 54(3) EPC to parent and divisional applications of the patent application under consideration is not consistent with the purpose of Art. 4 G of the Paris Convention and Art. 76(1) EPC giving the applicant the right to divisional applications. If this right carries the risk that the parent application is invalidated by the divisional application or vice versa, the provisions are not appropriate and sufficient to provide the applicant this right.

Applying Art. 54(3) EPC to parent and divisional applications is also not consistent with the purpose of Art. 54(3), i.e. to avoid double patenting in the sense that only the first inventor to disclose an invention has the right to the patent.

As the intensive discussion about “poisonous” or “toxic” divisionals has shown, the application of Art. 54(3) EPC to parent and divisional applications exposes applicants and patentees under the EPC to a considerable invalidity risk. Conversely, no purpose or positive effect thereof can be recognized. Question 5 of the referral should therefore be answered in the negative.

Alexander Esslinger

Enclosure:    Report of the Tegernsee experts group: Treatment of conflicting applications; September 24, 2012

CRISPR Update: 9 Oppositions filed against first granted European CRISPR-Cas9 patent

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The revolutionary CRISPR-Cas9 gene editing method is presently the hottest issue in molecular biology. The scientists Jennifer Doudna of UC Berkely, Emmanuelle Charpentier of the Max-Planck Institute for Infection Biology in Berlin and Feng Zhang of the Broad Institute (jointly operated by the MIT and Harvard University) are regarded as pioneers in this field and areeach involved in start-up companies commercializing the new technology.

In parallel a dispute about who owns the IP related to this scientific breakthrough has evolved. Interference proceedings are pending before the USPTO to decide ownership of the technology.

Meanwhile Mr. Zhang and the Broad Institute obtained four granted patents in Europe by means of an ultra-fast prosecution procedure between February 11 and September 2, 2015. The 9-months opposition period against the first grated patent EP 2 771 468 expired on November 11 and nine oppositions have been filed (according to the EPO patent register on November 13, 2015). The opponents are:

  1. CRISPR Therapeutics AG
  2. Novozymes A/S
  3. Boxall Intellectual Property Management Ltd.
  4. Sarittarius Intellectual Property
  5. Regimbeau
  6. Mr. George Schlich
  7. Dr. Martin Grund
  8. Mr. Harvey Adams
  9. Dr. Ulrich Storz

The first opponent in the list is the company co-founded by Emanuelle Charpentier for commercializing the gene editing technology, opponent 2 is a Danish biotech company, opponents 3 to 5 are IP law firms and opponents 6 to 9 are patent attorneys from the UK or Germany. It is not unlikely that opponents 3 to 9 are so-called “strawman opponents”, i.e. acting for a different party wishing not to be named in the proceedings. Such strawman oppositions are explicitly allowed under EPO case law and are quite common if the “real opponent” e.g. wishes not to endanger ongoing cooperation with the patentee.

Despite much interest of the biotech community in the case, a first instance decision of the opposition division cannot be expected earlier than in about two years, in particular in view of the huge amount of evidence filed by the opponents.

Apple´s “Slide to unlock”-patent finally invalidated as being obvious by the German Federal Court of Justice (FCJ)

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Slide-to-unlock

Official Headnotes:

a) For the examination of inventive step instructions relating to the presentation of a particular content and thus aiming to influence human imagination or comprehension are not taken into account as such. Instructions relating to information to be reproduced according to the teaching of the invention can support patentability in relation to inventive step only in so far as they determine or at least influence the solution of a technical problem with technical means.  

b) Claim elements relating to information have to be examined as to whether the information to be presented at the same time forms an embodiment of technical means – not already recited elsewhere the claim – for solving a problem. In such case the technical means for solving a problem have to be taken into account for the examination of patentability. 

Apple´s well-known and  internationally litigated “Slide-to-unlock” patent – being part of the original iphone patents – has been invalidated in first instance nullity proceedings by the Federal Patentn Court. The patentee appealed to the Federal Court of Justice, which on 25 August 2015 rejected the appeal and finally confirmed the invalidation decision of the Federal Patent Court. The grounds for the decision have been published on the FCJ website only now.

Representative method claim 1 reads as follows:

1.A computer-implemented method of controlling a portable electronic device comprising a touch-sensitive display comprising:
detecting contact with the touch-sensitive display while the device is in a user-interface lock state;
transitioning the device to a user-interfae unlock state if the detected contact corresponds to a predefined gesture; and
maintaining the device in the user-interface lock state if the detected contact does not correspond to the predefined gesture;
characterized by
moving an unlock image along a predefined displayed path on the touch sensitive display in accordance with the contact, wherein the unlock image is a graphical, interactive user-interface object with which a user interacts in order to unlock the device.

In the proceedings a written description “N1 Quick Start Guide, Version 0.5” relating to a prior art mobile phone “Neonode N1” formed the closest prior art reference E14. It describes a mobile phone having a touch-sensitive display displaying upon actuating a power button the information “Right sweep tp unlock”. Thereupon the user can unlock the device using a corresponding finger movement (gesture). An unlock image, however, is not displayed. Upon failure to unlock the phone an invitation to retry is instead displayed. The distinguishing features over closest prior art reference E14 therefore were found to be:

(5.1) Moving an unlock image

(5.2) along a predefined displayed path on the touch sensitive display

(5.3) in accordance with the contact,

(5.4) wherein the unlock image is a graphical, interactive user-interface object

(5.5) with which a user interacts in order to unlock the device.

In its first instance decision the Federal Patent Court found that all claim elements (5.1) to (5.5) would relate only to the presentation of information directed to the user and would not influence the technical functioning of the device and consequently had to be ignored for the assessment of inventive step.

The FCJ expressly disagreed with this finding. According the the FCJ the technical problem solved by the invention over the prior art is to provide a more user-friendly unlocking procedure. This technicla problem is solved by the combination of above features (5.1) to (5.5) solving the technical problem of improving user operation reliability by the technical means of optically signalling the unlock path to the user.

The court, however, held that features (5.4) and (5.5) do not add any technical matter to features (5.1) to (5.3) which would contribute further to the solution of the technical problem of improving operation relaibility of the unlock procedure and were therefore ignored by the court for the examination of inventive step. Features (5.1) to (5.3) were meanwhile regarded by the court as obvious in view of further reference E7, a video presented at a conference in 1992 showing several virtual operation keys on a touch sensitive display, among them a virtual slider toggle providing the function of the unlocking mechanism according to the patent in suit (“The user can then grab the pointer and slide it to the other side”), albeit not in connection with a mobile phone. The court, however, took the view that the skilled person would nevertheless apply the refined virtual key functionality disclosed in E7 to the gesture-controlled unlock procedure of the mobile phone with touch sensitive display according to E14, thus rendering the claim obvious of a combination of references E 14 and E7. This judgement equally applied to the amended claims of the several auxiliary requests on file.

While the judgement resulted in the loss of the patent of Apple, it is in general good news for inventors striving to improve user interfaces. Patent applications in this field are frequently rejected as being related to the presentation of information which allegedly had to be ignored when assessing inventive step. The FCJ clearly disapproves such practice stating (at the end of paragraph 18 of the judgement): “It would not be justified not to include the technical effects of the presentation of information for the examination of inventive step, because they are claimed in the patent claim merely in the form of presentation of a particular information.”

Multiple patentees have to pay separate appeal fees for joint appeal: Decision “Set of building bricks” by the German Federal Court of Justice (FCJ)

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Official Headnotes:

a) If multiple patentees file an appeal against the decision of the German Patent and Trademark Office (GPTO) in opposition proceedings, each one has to pay an appeal fee (Law on Patent Fees No. 401 100). 

b) If for an appeal lodged by multiple participants only one appeal fee has been paid, it has to be examined whether the paid fee can be assigned to one appellant. 

In the decided case “Set of building bricks” an opposition was filed against the patentin suit which was jointly owned by two patentees. The opposition was successful and the patent was revoked by the patent department of the GPTO. The two patentees jointly filed an appeal against the revokation decision but paid only one fee. The Federal Patent Court dismissed the appeal as inadmissible on the ground that the one appeal fee paid cannot be assigned to one of the two joint appellants and therefore none has paid the necessary fees.

The joint patentees lodged a further appeal for legal review (“Rechtsbeschwerde”) with the FCJ and were successful. The FCJ confirmed the first instance decision that the two patentees had to pay two appeal fees for their joint appeal, but that in order to avoid hardship a single appeal fee is to be assigned to one of multiple appellants whenever possible. The was done by the FCJ based on the name of the first appellant on the money transfer form filed with the Federal Patent Court. Consequently the case was remitted back to the Federal Patent Court for decision on the merits.

This deision is important for all applicants before the GPTO because the FCJ made it clear that joint right holders (not only of patents, but also of utility models, trade marks and designs) have to pay separate fees for appeals and similar legal remedies explicitly enumerated in the Law on Patent Fees. The FCJ confirmed that the regulations in the Law on Patent Fees do not distinguish between right holders and opponents or other third parties. Under this reasoning seperate appeal fees for joint appeals therefore have to be paid not only in contradictory proceedings like oppositions but also in the most common appeal procedure, namely an appeal against the rejection of a patent application by the GPTO.

The ruling is in contradiction to hitherto common practice at the GPTO and the Federal Pastent Court requiring the payment of only one appeal fee for a joint appeal of multiple patentees. It is also contrary to the law and practice at the EPO and that in patent nullity proceedings.