A trump card for challengers

As we bear witness to the rising popularity of the new post-grant proceedings in the US, we can reflect upon the long-standing procedures for pre-grant observations and post-grant oppositions at the European Patent Office (EPO).

These procedures remain very popular today, not just for challenging applications and patents at the EPO, but also as a tool in litigation worldwide.

The EPO places a high priority on its quality control procedures and its ability to grant high quality, valid, patents. It encourages third parties to assist the EPO’s examiners by filing observations or oppositions relating to the patentability of European patent applications or patents.

The procedures for commenting on European patents and applications are simple and cheap and are taken seriously by the examiners at the EPO. This makes the EPO a useful forum for companies that are considering entering into patent litigation around the world, and that want to test their strategy or attacks at a relatively low cost.

The opposition procedure is regularly used at the EPO, with about 4% to 5% of European patents being opposed. The opposition rate is higher in the biotechnology and chemical fields, with an opposition rate of around 8%.

The usefulness of third party observations

One procedure for providing comments to the EPO is to file third party observations. These can be filed on paper, via the EPO’s online filing software, or using a simple form available on the EPO’s website. They can relate to any aspect of patentability, and can be accompanied by additional documents such as prior art documents or declarations. Third party observations can be filed in relation to any European patent or application for which proceedings are pending at the EPO.

A particular benefit to third parties who use such observations as part of a more general offensive strategy is that, pre-grant, they may be filed anonymously. There is no need to identify the party behind the observations, or even to provide a name or contact details in the documents filed.

In some cases there may be some strategic advantage to identifying the party behind the observations. For example, if third party observations are filed during EPO prosecution, then the EPO will accelerate the production of the next office action as long as the observations were not filed anonymously. Therefore it appears possible to file observations in the name of another party, such as an external attorney, and have this accelerated processing while effectively retaining anonymity.

EPO examiners are obliged to consider third party observations as long as a final decision on the case has not yet been made. In this regard, a communication under article 71(3) of the European Patent Convention indicating that the application is allowable is not considered to be a final decision. Third party observations should be taken into account by the examiner even if they are filed after allowance, and can cause examination to be reopened even at that late stage. Third party observations are therefore a powerful tool for influencing EPO proceedings.

The third party observations, and any comments filed by the applicant/proprietor in reply to them, are made publicly available on the EPO’s online file. This may force the applicant/proprietor to submit the contents of such observations to other intellectual property offices, such as in the US where strict disclosure requirements exist.

EPO third party observations can therefore be used to draw prior art or other evidence to the attention of a US examiner. They can also be used to test arguments and see how the applicant/proprietor responds to them. Statements made on the public file at the EPO may be of use in preparation for, or during, contentious proceedings elsewhere in the world.

A low-cost alternative

Similar advantages can be achieved using the EPO’s opposition procedure. Filing an opposition at the EPO is much cheaper than entering into litigation in most countries.

Even with procedures such as the inter partes review (IPR) in the US, costs can be very high, with official fees of at least $23,000. In contrast, the EPO charges a flat fee of just €775 ($842), irrespective of the number of claims that are opposed and the number of attacks that are raised. There is also no discovery/disclosure procedure available at the EPO.

"A particular benefit to third parties who use such observations as part of a more general offensive strategy is that, pre-grant, they may be filed anonymously."

Many of the advantages of third party observations will also apply to an EPO opposition.

Although an opposition cannot be filed completely anonymously, the formally identified opponent does not need to be the real party behind the opposition. The use of ‘straw man’ opponents is permitted as long as they do not hide a self-opposition. In effect, therefore, the true opponent can keep its identity secret throughout the opposition proceedings. A straw man can also be used to file third party observations in an EPO opposition or appeal proceeding to which the observer is not a party.

Documents and arguments filed during EPO oppositions are published on the EPO’s online file, meaning that the patent proprietor may be required to disclose those documents in other IP offices. The arguments, amendments and evidence submitted by the proprietor in its defence are also made public.

Unlike the IPR procedure in the US there is no substantive threshold for institution in an EPO opposition. The opposition will proceed as long as the opposition is filed in time, the basic formal requirements are met, and a reasoned argument is filed relating to at least one of the grounds for opposition (added subject matter, novelty, inventive step, sufficiency of disclosure, patentable subject matter).

Even a weak opposition will be fully considered by the EPO. An EPO opposition can therefore be used to test the strength of attacks before using them elsewhere.

Claim amendment is common during EPO oppositions, and amendments filed early in the opposition proceedings are generally admissible. It is common for patent proprietors to pre-emptively file multiple different claim amendments early in the opposition procedure, providing fall-back positions for use later in the proceedings. These amendments can reveal information about the proprietor’s intentions and interests, as well as clarifying which issues are likely to be hard-fought and which will be more easily conceded. Amendments used in an EPO opposition can also provide useful information in preparation for an IPR in the US, where amendments are rarely permitted.

The information gained from an EPO opposition can help to plan a strategy for use in proceedings elsewhere. There is no upper limit on the number of attacks, the number of pages or the number of documents filed in an EPO opposition. This allows an opposition to be used to screen possible attacks and arguments. This may reveal the defensive arguments and evidence that the patent proprietor has available, and allow the selection of the strongest or preferred attacks for use elsewhere. This can be particularly useful when planning proceedings such as IPR or post grant review in the US, where strict page limits apply.

EPO opposition is also the preferred route for attack within Europe. An EPO opposition is currently the only way to obtain pan-European patent revocation in a single action. Even when the new Unified Patent Court (UPC) comes into force, an EPO opposition will remain the only route of attack that encompasses states outside the EU such as Norway, Switzerland and Turkey and states such as Spain which have not signed up to the new system. Accordingly, the scope of oppositions covers more than the EU’s market size of €11.3 trillion GDP and population of 500 million.

An EPO decision to revoke a patent will trump all litigation decisions in territories that the European patent designates including, in future, decisions of the UPC. For example, if the UK or Dutch national courts find a patent to be valid, a subsequent EPO opposition decision to revoke the patent would in effect overturn the national decisions and the patent would be revoked in those countries.

Some national courts automatically stay proceedings pending a corresponding EPO opposition, such as France and Germany. The UK courts may also stay national proceedings but this depends on a number of factors, as seen in Actavis v Pharmacia [2014] EWHC 2265 (Pat) and [2014] EWHC 2611 (Pat). Even if an opposition is unsuccessful, there is no litigation estoppel and so national court proceedings are still available and the same prior art and arguments can be used.

Based on the most recent statistics issued by the EPO, 31% of oppositions result in revocation and 38% of oppositions result in the patent being upheld only in an amended form.

Overall, around 70% of opposed European patents are at least ‘injured’ by the opposition procedure.

It is clear that EPO oppositions represent a very cost effective, popular and reliable tool for challenging patents in Europe. They also carry the trump card of being able to revoke patents regardless of the outcome in national or UPC litigation in Europe.

Many of these courts including the UPC may also stay their proceedings pending opposition outcomes. Additionally, documents and arguments filed at the EPO are public and so along with duty of disclosure requirements should make their way through to corresponding US proceedings.

Hazel Ford is a partner and European patent attorney in the London office of Finnegan, Henderson, Farabow, Garrett & Dunner. She can be contacted at:  hazel.ford@finnegan.com

Leythem Wall is a European patent attorney in the London office of Finnegan, Henderson, Farabow, Garrett & Dunner. He can be contacted at:  leythem.wall@finnegan.com