The European Patent Office's Enlarged Board of Appeal has issued a decision in the consolidated cases G 1/22 and G 2/22 on Oct. 10 that redefines the way that entitlement to priority is assessed at the EPO, significantly relaxing the previously strict approach.
This is a welcome development for many patent applicants and will make challenging the right to priority in post-grant opposition proceedings far more difficult.
However, applicants should still be mindful of the national law requirements in various contracting states of the European Patent Convention, or EPC, which may now be stricter than the EPO's more relaxed approach.
The Enlarged Board of Appeal's reasoning also leaves open questions as to the nature of the evidence that will be required to successfully challenge priority entitlement in disputes between co-owners of priority applications.
Until now, the EPO has taken a strict approach to assessing the right to claim priority from a previous application. In particular, the requirement that the subsequent application is filed by either the applicant for the priority application or their successors in title has been interpreted restrictively.
Consequently, attacking priority claims on the basis that the applicants for the priority application and the subsequent application are not identical has become an increasingly common tactic used by opponents during EPO opposition proceedings.
Once the priority claim is lost, the effective filing date of the patent may move up to 12 months later, which can result in additional prior art being citable against the patent. This has led to the demise of some high-profile patents at the EPO on the basis of legal technicalities that serve little to no public interest, frustrating many stakeholders.1
The EPO had previously developed the following strict principles for assessing the validity of priority claims:
- If all of the applicants named on the priority application were not named on the subsequent application, there was a presumption that the priority claim was invalid if challenged unless evidence could be provided showing that the priority right had been transferred from the missing priority applicant or applicants to at least one of the applicants named on the subsequent application;
- An express written assignment of the priority right was generally required;2 and
- The priority right must have been transferred prior to the filing date of the subsequent application, and this could not be remedied by executing retroactive assignments.3
The decision of the Enlarged Board of Appeal in consolidated cases G 1/22 and G 2/22 effectively sweeps away these principles in favor of a more applicant-friendly approach.
The decision redefines the way entitlement to priority under Article 87 of the EPC will be assessed at the EPO from now on, substantially raising the bar for challenging the validity of priority claims during opposition proceedings.
The EPO is competent to assess priority entitlement.
One of the questions referred to the Enlarged Board of Appeal was whether the EPO is competent to make determinations regarding the entitlement of a party to claim priority.
The Enlarged Board of Appeal answered this question in the affirmative because — at least as far as the EPO is concerned — the creation, existence and effects of the priority right are governed exclusively by the EPC, specifically Articles 87 to 89.4
In reaching this conclusion, the Enlarged Board of Appeal reviewed various national laws and found that the priority right is distinct and separate from the right to the subsequent patent under Article 60(1) of the EPC, which defers to national law, and must therefore be treated separately.
The EPO will apply the autonomous law of the EPC when assessing priority entitlement.
In a departure from previous case law, the Enlarged Board of Appeal held that entitlement to claim priority should be assessed under the autonomous law of the EPC rather than national law.5
This permitted the Enlarged Board of Appeal to develop its own autonomous framework for assessing priority entitlement, which it duly did.
An informal transfer of the priority right is sufficient.
The Enlarged Board of Appeal reasoned that the EPO's autonomous requirements for the valid transfer of priority rights should not be stricter than national laws and that the EPC does not impose any formal requirements for the transfer of the priority right by agreement.
Crucially, the Enlarged Board of Appeal concluded that the autonomous law of the EPC should not require the assignment of priority rights in writing or be signed by or on behalf of the parties to the transaction.6
Instead, the Enlarged Board of Appeal decided that the EPO should adapt to the lowest standards established under national laws and accept informal or tacit transfers of priority rights under almost any circumstances.
A rebuttable presumption of priority entitlement exists.
The Enlarged Board of Appeal held that the autonomous law of the EPC provides for a rebuttable presumption that the applicant claiming priority is entitled to do so.
Departing from previous EPO practice, this decision shifts the burden of proof from the applicant to the party challenging the priority entitlement, who now has to prove that this entitlement is missing.
The Enlarged Board was clear that this principle applies equally to European patent applications filed directly and derived from Patent Cooperation Treaty, or PCT, applications.
This burden will normally be difficult to discharge because it involves proving a negative, i.e., the absence of an agreement, which is made even more difficult because the agreement may be informal or tacit.
Moreover, the Enlarged Board of Appeal held that since the presumption of entitlement exists on the date that the priority is claimed, developments after that date cannot affect the validity of the rebuttable presumption.7 This approach seemingly restricts the facts on which a challenging party may rely to those in existence at the time the priority was claimed.
A large part of the Enlarged Board of Appeal's justification for this rebuttable presumption relies on the observation that the formal requirements for claiming priority under Article 88(1) of the EPC — such as providing a certified copy of the priority application, the priority application file number and the filing date of the priority application — can usually only be fulfilled with the consent and cooperation of the priority applicant.
This is also because the priority application will normally not have published prior to the 16-month deadline for completing the formal priority requirements.
Other reasons cited in support of the rebuttable presumption included that there is no public interest in striking down patents based on legal flaws relating to priority and the legal certainty that such a presumption provides to third parties.
The rebuttable presumption is strong.
The Enlarged Board of Appeal held that, under normal circumstances, the rebuttable presumption is a strong one since a valid claim to priority meeting the required formalities could usually only be made with the cooperation of the priority applicant.
The Enlarged Board of Appeal explained that this means that it is not sufficient for a party challenging priority entitlement to merely raise speculative doubts; the challenging party must demonstrate that specific facts support serious doubts about the subsequent applicant's entitlement to priority.8
The rebuttable presumption also applies when the applicants overlap.
The Enlarged Board of Appeal also held that it is not relevant whether and to what extent the members of a plurality of co-applicants for the priority application overlap with the applicants for the subsequent application.9
Thus, the rebuttable presumption applies equally in cases where a subset of the applicants for the priority application are also named as applicants on the subsequent application.
This appears at odds with the Enlarged Board of Appeal's reasoning for the strong presumption of entitlement to priority stemming from the necessary cooperation of the priority applicants to complete the priority formalities.
Overlapping applicants would likely have all the information and documents required to fulfill the formal priority requirements without cooperation or agreement of those applicants that are omitted from the subsequent application.
Indeed, the Enlarged Board of Appeal acknowledged “an agreement cannot be implied if not all of a plurality of priority applicants are applicants or co-applicants for the subsequent application,” but nevertheless concluded that “the rebuttable presumption of priority entitlement can [still] be applied.”10
The Enlarged Board of Appeal reasoned that in such circumstances, the missing priority applicant may be in a position to claim title of the subsequent application, or at a minimum, rebut the presumption of priority entitlement with sufficient evidence.
However, the missing applicants still need to prove the absence of any tacit or implied agreement, which may be extremely difficult to do.
Further, since the Enlarged Board of Appeal's rationale for the burden being a strong one in “normal circumstances,” i.e., where cooperation of the priority applicant is required, would appear to fall away, it is unclear whether in such circumstances the rebuttable presumption is less strong.
How such situations are handled by the EPO and the strength of evidence that will be deemed sufficient where there are disputes concerning priority entitlement between co-applicants of priority applications are still to be seen.
The door to retroactive assignments of priority entitlement has opened.
The Enlarged Board also commented that “the requirement that the transfer of the right of priority needs to be concluded before the filing of the subsequent European patent application is questionable … If there are jurisdictions that allow an ex post transfer of priority rights, the EPO should not apply higher standards.”11
The Enlarged Board of Appeal then went on to state that “the EPC explicitly foresees the ex tunc assignment of priority rights.”12
The Enlarged Board of Appeal therefore appears to have opened the door to the ex tunc transfer of priority rights, which is a marked departure from previous established practice.
However, the Enlarged Board of Appeal stopped short of explicitly stating that ex tunc transfers of priority rights are allowable under the EPC, and some of the Enlarged Board's reasoning on this point is questionable.
For instance, the Enlarged Board of Appeal referred13 to U.S. practice, which permits ex tunc transfer of priority rights, but then cited the 2017 High Court of England and Wales decision in Accord Healthcare Ltd. v. Research Corp. Technologies Inc.,14 which held that the applicant must hold the title to the priority right at the date of the application and therefore does not seem to provide legal basis for ex tunc transfers of priority rights.
Further, the Enlarged Board of Appeal's reference15 to ex tunc assignment of priority rights in the context of the EPC relates to Article 61(1)(b) of the EPC, which permits a person who was entitled to the invention to claim the filing date of an existing application but does not involve the assignment of any priority rights, either ex tunc or otherwise.
It would therefore be prudent not to rely on ex tunc transfers of priority right until further case law develops in this area.
Joint filing of an application implies an agreement between the parties to rely on the priority right.
The Enlarged Board of Appeal was asked whether joint applicants for a PCT application that designates different states for the two different applicants are both entitled to claim priority from an earlier application filed by only one of the joint applicants.
The specific question was whether a party B may validly rely on the priority right claimed in a PCT application, if the PCT application designates a party A as applicant for the U.S. only and party B as applicant for other designated states, including regional European patent protection, and the PCT application claims priority from an earlier patent application that designates party A as the applicant.
The Enlarged Board of Appeal concluded that, in the absence of clear indications to the contrary, the joint filing of the subsequent PCT application sufficiently proves that the parties entered into an implied agreement, allowing party B to rely on the priority right established by the filing of the priority application by party A.
Furthermore, the Enlarged Board of Appeal held that the considerations leading to this conclusion equally apply to co-applicants directly filing a subsequent European application if at least one of the co-applicants was an applicant for the priority application.16
The Enlarged Board of Appeal held that to question the implied agreement, evidence need to show that an agreement on the shared use of the priority right had not been reached or is fundamentally flawed. Specifically, the challenging party must present substantial factual indications putting the implied agreement into question.17
Thus, where an application designates joint applicants for different states, whether a PCT application or a direct European application, an implied agreement is deemed to exist between the parties to rely on the priority right unless there are clear indications to the contrary.
National laws of EPC-contracting states may now set a higher standard than the EPO.
The Enlarged Board of Appeal has effectively adopted the lowest standards established under national laws for assessing entitlement to priority, which is a positive development for patent applicants.18
However, caution should still be exercised because national laws apply to the national patents that arise once the European patent is granted and validated.
This was confirmed by the Enlarged Board of Appeal, which emphasized that “a uniform legal situation in all designated Contracting States can therefore never be guaranteed.”19
These national laws may now be stricter than the EPO's new standards, and priority rights that meet the EPO's standards may fail to meet the standards of national laws of certain EPC contracting states, which could render such priority rights vulnerable during national proceedings.
Furthermore, national courts may apply the national law of other states when assessing priority entitlement. For example, German courts have found that the validity of the transfer of a right to claim priority is subject to the laws of the state of the priority application, or lex originis.
Thus, even in a single EPC-contracting state, the national law of various jurisdictions may be used to assess priority entitlement depending on, for example, where the priority right originates, where the parties to the agreement are resident or the prevailing law governing the agreement.
What should practitioners consider when filing applications?
This decision is welcome news for proprietors facing priority challenges, whether from opponents during opposition proceedings or the EPO during examination, as it introduces a rebuttable presumption that the priority rights are valid and transfers the burden of proof onto the challenging party.
The burden of proof is also a high one, and it is difficult to see how third parties will realistically be able to meet the evidential burden required to demonstrate that a tacit or implied agreement did not exist between the parties.
The rebuttable presumption may be of particular help for cases originating in the U.S. or other jurisdictions where ownership may not initially vest in the applicant absent an express assignment, such as in cases where the priority application was filed in the name of the inventors while the application claiming priority was filed in the name of their employer.
In such cases, there is often an implied agreement, or an obligation, to assign the priority right, which would meet the new standards set by the EPO and would be presumed to exist.
However, applicants must exercise caution when transferring priority rights for European patent applications or PCT applications destined to enter the European regional phase.
Best practice is still to ensure that priority rights are expressly transferred in writing prior to the filing date of the European application or the preceding PCT application. In particular, reliance on ex tunc priority assignments should be avoided as these are not deemed to be valid in at least some EPC-contracting states.
Footnotes
1. EPO decision T 844/18.
2. EPO decision T 62/05.
3. EPO decisions T 1201/14, T 577/11, and T 1946/21.
4. EPO decision G 1/22 and G 2/22, Reasons, point 85.
5. Id., point 86.
6. Id., point 100.
7. Id., point 109.
8. Id., point 110.
9. Id., point 107.
10. Id., point 137.
11. Id., point 100.
12. Id., point 114.
13. Id., point 100.
14. Accord v. RCT 2017. EWHC 2711 (Ch).
15. EPO decision G 1/22 and G 2/22, Reasons, point 114.
16. Id., point 125.
17. Id., point 126.
18. Id., point 99.
19. Id., point 115.
Originally published by Law360.
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