19 October 2013

EPO Reverses Controversial Divisional Filing Restrictions

M132/0644The European Patent Office (EPO) has announced that, effective from 1 April 2014, the regulations relating to the filing of divisional patent applications in Europe will be amended to reverse the controversial restrictions in place since 2010, under which divisional applications can only be filed within 24 months of the earliest office action or within 24 months of a new lack of unity objection (i.e. that the claims in the application cover multiple inventions) being raised.

From 1 April 2014, it will once again be possible to file a divisional application at the EPO based on any pending application, i.e. which has not been granted or finally refused.

It will also again be possible to file ‘chains’ of divisional applications (i.e. divisionals of divisionals) regardless of the status of the original application.  However, the EPO Administrative Council has indicated that there will be additional fees for second and subsequent generations of divisional applications, and that these fees will escalate with each generation until some cap is reached.  The amount of the additional fees, and the level of the cap, are yet to be determined.

This reversal is not entirely unexpected, but appears to have (pleasantly) surprised many people in the patent professions.  The EPO conducted a consultation on the 24 month time limit earlier this year, and I understand that the issue has also been under discussion through the Standing Advisory Committee before the EPO (SACEPO).  However, it does not seem that many people expected such a complete reversal from the EPO.

Purpose and Problems of the Current Limits

The current 24 month time limits were introduced at least partly to address what the EPO perceived to be abuses of divisional application practice.  In particular, divisional applications are sometimes filed to prolong or otherwise extend prosecution, for example to enable an applicant to keep its ‘options open’ regarding the final form of granted claims.  Not surprisingly, the EPO considered that such abuse creates legal uncertainty for the public as to what patent protection a given invention might ultimately receive.

Doubtless such abuse occurs, although there is no evidence that it is a primary reason for the filing of divisional applications at the EPO.  In effect, therefore, the restrictive deadlines for divisional filings ‘punished’ the majority of applicants in order to control a minority of bad actors.

Stakeholders – in particular patent practitioners and affected applicants – have raised a number of concerns about the current time limits, including:
  1. that the 24-month deadline is unrealistically short, which forces applicants to make important decisions regarding prosecution without enough information, e.g. it might be necessary to make a decision on the filing of a divisional application before examination of the would-be parent application is anywhere near complete;
  2. that, similarly, the two year period may be insufficient for an applicant to fully explore and identify commercially valuable aspects of their inventions;
  3. that there are additional overheads, expenses and risk involved for applicants to monitor the 24-month deadlines, bearing in mind that if a new lack of unity objection is raised later in the prosecution of an application, multiple deadlines may apply;
  4. that the shorter time limits have not, in any event, prevented applicants from filing chains of several generations of divisional applications; and
  5. that the change in the rules has, in fact, been counter-productive, in that the number of divisional filings has actually increased, due to applicants proceeding with an abundance of caution where there is any doubt as to the requirement for divisional applications once the deadline is approaching.

Conclusion

It seems that the EPO agrees that the ‘experiment’ of restricting divisional filing periods has been a failure, and this decision will make many people happy.

The alternative strategy of charging additional fees as a disincentive to filing multiple generations of divisional applications seems logical, although its effectiveness will depend critically on the level at which the fees are set.  They cannot be made too high, otherwise they will have a punitive effect on applicants with legitimate reasons for filing second or subsequent generations of divisional applications.  On the other hand, if the fees are not high enough they will be unlikely to dissuade applicants who see significant commercial benefits in maintaining pending applications primarily as a means of creating uncertainty for their competitors.

It will therefore be very interesting to see the level at which the EPO sets the additional fees.

2 comments:

arachne said...

The current 24 month time limits were introduced at least partly to address what the EPO perceived to be abuses of divisional application practice. In particular, divisional applications are sometimes filed to prolong or otherwise extend prosecution, for example to enable an applicant to keep its ‘options open’ regarding the final form of granted claims. Not surprisingly, the EPO considered that such abuse creates legal uncertainty for the public as to what patent protection a given invention might ultimately receive.
Doubtless such abuse occurs, although there is no evidence that it is a primary reason for the filing of divisional applications at the EPO. In effect, therefore, the restrictive deadlines for divisional filings ‘punished’ the majority of applicants in order to control a minority of bad actors.

The important thing is the potential for 'abuse', i.e. the uncertainty. (I'm not a fan of the perjorative 'abuse' being used (but I'll go with it for the sake of simplicity), since one man's abuse is another man's 'legitimate business decision'). It doesn't really matter how prevalent the 'abuse' is, since the potential for 'abuse' will always be there. This uncertainty is so corrosive since the patent system is predicated on a transparent 'trade' of disclosure of invention for a limited-term monopoly defined by the claims.

Slow processing of patent applications may suit some applicants and the EPO (or any patent office for that matter), but is inefficient and creates drag on the rest of the economy. Trying to remedy this with increased filing fees may reduce the number of filings, but will not address the more important issue of uncertainty.

Mark Summerfield said...

I do not disagree that uncertainty is a problem, and it seems unfortunate that nobody seems able to find middle ground between a time period which has proven to be unduly restrictive, and no limitation at all! Of course, the 24 month period might have been more workable if the EPO was routinely able to dispose of applications well within this time. Too often we see more than a year go by between filing a response to a first office action and any further action from the EPO.

I am increasingly of the view that we need to revisit the basis of the patent system, i.e. the traditional notion that it 'is predicated on a transparent "trade" of disclosure of invention for a limited-term monopoly...'. If this is no longer a valid principle, it could have a significant effect on the 'ideal' design of the system. This is straying a bit far from the topic of the current post, though. I will make it the subject of another article in the near future.

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