User Driven Early Certainty
C. Mercer (GB)
Deferred examination systems have been known for a long time. Perhaps the best known one is the German system where an applicant has a period of seven years from the date of filing in which to request examination and pay the examination fee. Examination can be started before the end of the seven years, for instance by a third party paying the examination fee.
When the EPC was originally drafted, there was a question as to whether the EPO should have a deferred examination system. The answer to that the question was "no" and the EPO was set up with its present system, where examination of EP-direct applications must be requested and the examination fee must be paid within 6 months of the publication of the search report and examination of EP-PCT applications must be requested and the examination fee must be paid, in most circumstances, on entry to the European regional phase. Under this system, the applicant has no control over when examination begins. This is entirely dependent on when the EPO takes up the application for examination.
There had been arguments that, some time ago, there was, in effect, a deferred examination system because the backlogs at the EPO were so large that there was a considerable time between the payment of the examination fee and the beginning of examination. However, any effective deferment of examination was under the control of the EPO, not the applicant. In light of this, some parties argued that it would be better to have a deferred examination system where the deferment is, at least partly, under the control of the applicant.
There was a discussion of introducing deferred examination during the discussions leading to EPC 2000 but, again, it was decided not to do so. However, the topic still did not go away.
In 2009, the topic was again discussed after the Danish, German and Dutch delegations to the Administrative Council ("AC") submitted a proposal to amend Rule 70. This proposal still required that the search and written opinion on patentability ("Extended European Search Report" or "EESR") had to be produced and made available, whether or not the examination was deferred.
The proposal acknowledged that there would be an effect on third parties and proposed that third parties should be given the right to request examination and that such examination would be put on a fast track. The applicant would have to pay the examination fee but the third party would have to provide observations under Article 115 EPC and, in order to avoid abuse, to pay a fee.
At that time, it was also discussed whether it should be possible to defer the production of the EESR. The proposal acknowledged the drawback (an increase in legal uncertainty for third parties because no search report would be available) and suggested limiting the deferral of the EESR to applications for which a search report already existed from a first filing.
In the Committee on Patent Law ("CPL"), which advises the AC on patent law, there was no support from delegations for the idea of deferring the search. It was also agreed that, if deferred examination were to be introduced, the deferral period should be as short as possible, i.e. three to five years, and a review clause would be necessary.
A paper by the EPO proposing a deferred examination system (but not a deferred search system) was presented to the AC. The EPO put forward various reasons why such a system would be useful. epi provided comments to the AC on the proposal. The AC was not convinced, as can be seen from the Summary of Decisions of the 120th meeting of the AC, where it was stated that:
"26. On the basis of the information set out in the document, the outcome of the discussions of the Committee on Patent Law and the Budget and Finance Committee, and the comments of the delegations, the Council concluded that the work regarding the possible introduction of a system of deferred examination of European patent applications should not be pursued further for the time being."
However, yet again that was not the end of the matter. In 2013, the discussion began again. epi was informed by the EPO that the EPO had resumed studying the possibility of introducing deferred examination. The triggering factor was that there were, allegedly, more than 400,000 cases waiting for examination, a large backlog. The EPO appeared to believe that this figure could be significantly reduced in the future with deferred examination.
In response to a request for comments, epi pointed out that, since 2009, numerous changes had been made to the processing of applications at the EPO. In 2010, it had been made mandatory to file a response under Rule 70a or 161(1). Third parties therefore had available the applicant's reaction to the EESR, even if examination had been delayed because of the backlog. Since this is the last opportunity for the applicant to amend the description, claims and drawings of his own volition, it provided useful information to third parties as to the possible outcome of substantive examination.
The EPO had also introduced Early Certainty from Search ("ECfS") and set priorities for both search and examination. One consequence of ECfS was that the start of examination of an application was delayed, unless the application was ready for grant after the EESR (positive opinion) or unless the applicant requested acceleration under the PACE system. It was also the case that submission of substantiated, non-anonymous, third party observations triggered accelerated examination of the application.
For these and other reasons, epi could not see that there was any need to introduce a system of deferred examination.
Yet again, after further consideration, the EPO decided to drop the proposal for a deferred examination system. However, yet again, deferred examination did not go away but resurfaced for other reasons.
Between 2013 and 2017, the EPO extended ECfS to Early Certainty from Examination ("ECfE"). The idea of this was to reduce the average time for examining an application to 12 months. Some applicants argued that this was not a good thing and so asked the EPO whether it would be possible to defer examination of some or all of their applications. Thus, on the basis of a request from outside the EPO, the EPO raised yet again the question of whether to introduce a system of deferred examination.
The Most Recent Proposal
In the first proposal in this round of which epi became aware, it was presented in the autumn of 2017 as "Early Certainty with Flexibility". Over the rest of 2017 and the beginning of 2018, the title of the proposal changed and eventually settled as "User-Driven Early Certainty" ("UDEC"). The content of the proposal also changed in response to user comments. The EPO also held a hearing of interested parties, including epi, at which the proposal was discussed.
The basic structure of the proposal was that an application, whether EP-direct or EP-PCT, would proceed as before up to the payment of the examination fee. Thus, as usual, the EESR would be produced and the applicant would have to file a response to the written opinion. The applicant would also have to pay the examination fee in good time according to the present rules.
The new part would begin with the payment of the examination fee by the applicant. At this stage, the applicant could file a request to postpone examination for up to three years. The applicant would have been able to lift the postponement on request. Apart from the examination fee, no other fee would have been required.
The new part also included the option for a third party to file substantiated, non-anonymous, third party observations. The effect of doing so would have been to lift the postponement and accelerate the examination of the application. No fee would have been required for lifting the postponement.
One of the EPO's arguments was that all other IP5 Offices provide for postponement of examination, but it remains unclear why the EPO proposal differed from the three year postponement from filing that the other IP5 Offices offer.
The advantages to the EPO are obvious. The EPO could avoid the examination of applications in which applicants lose interest during the deferment. Since examination of less promising applications is likely to start later, it is likely that more applications will be abandoned before examination starts. Moreover, the more promising applications, which the EPO believes would be subject to earlier examination, would allegedly be prosecuted more carefully and so could proceed faster to grant or refusal. The overall effect of this could have been that the backlog will be reduced or at least more evenly distributed. Moreover, as there were no fees involved in the proposal, the EPO considered that it could have been introduced as a change in practice with no need for a change of any rules.
There may be advantages for the applicant, who may have more time: for marketing and commercialization; to determine whether the invention is commercially viable before committing to greater costs; for determining the final choice of countries in which the patent is to be validated; to identify which of potentially a number of inventions in an application should be pursued; and to decide whether to file divisionals and, if so, how many and when.
However, there are clearly disadvantages for third parties. The period of legal uncertainty would be extended by several years. There may be a need to take action to lift the postponement, for instance if a freedom-to-operate (FTO) investigation is being carried out. If third party observations need to be filed, it may be necessary to carry out prior art searches and evaluate the results so that substantiated observations can be prepared. The mere fact that third party observations would need to be filed would allow the applicant to gain useful commercial information from them, a fortiori as these would need to be non-anonymous (although it would be possible to file "Strawman" observations).
At the hearing held by the EPO, all of these points were discussed and a variety of views were put forward. Some parties were overall in favour and some were completely against.
After the hearing, the matter went again to the CPL in the spring of 2018, where there was a significant debate. However, the debate clearly went against the proposal, to such an extent that the Chair of the CPL took the unusual step of issuing a written note of the proceedings and the outcome. In light of this, the proposal was not presented to the next meeting of the AC and so, again, it seems to be no longer under consideration.
However, as we can see from the above, it is a topic which never seems to die. It keeps coming back. Perhaps, by the time any further consideration is given to the idea, the backlogs will be so reduced that there is no incentive for the EPO to introduce such a system? There are many applicants in some geographical or technical areas who are in favour of some sort of deferred examination and perhaps they will argue for reconsideration? Perhaps parties who are usually not applicants will argue against raising it again?
So, at present, no change but keep your eyes and ears open!
- In the Australian system of examination deferral for five years from the filing date, the Patent Office retains the right to set a deadline in a direction to request examination.
- If you have views on deferred examination and would like to communicate them to epi, please send an email to firstname.lastname@example.org.