IP Report 2011/V

Reported by Dr. Thomas Friede

In its ruling dated October 18, 2011 the Court of Justice of the European Union (ECJ) had to decide on a referral by the German Federal Supreme Court in a nullity appeal proceedings with respect to a patent of the stem cell researcher Professor Brüstle. The patent relates to neural precursor cells derived from embryonic stem cells, including stem cells produced from the blastocyst stage of human embryos (hES). The claims do not mention the use of embryos for producing the ES cells. As alternative sources stem cells are mentioned which are derived from unfertilized human egg cells, i.e., embryonic germ cells (EGC) and unfertilized eggs in which a cell nucleus from a mature cell has been implanted (“dolly method”). The nullity action against the patent was exclusively based on Section 2 (2) No 3 German Patent Act which is identical to Article 6 (2) lit c Biotech-Directive and stipulates that no patents shall be granted for inventions directed to the use of human embryos for industrial or commercial purposes.

The ECJ ruled that the term “embryo” includes any human egg cell after fertilization and any non-fertilized human egg cell into which either a cell nucleus has been implanted or undergoing parthenogenesis. The ECJ did not decide on the question whether an hES as such represented an embryo (rather, this decision shall be left to the national courts of the Member States).

“Industrial or commercial purposes” cover also scientific research and do not overcome the exclusion from patentability. The exclusion from patentability does not depend on the fact that the prior destruction of human embryos is not contained in the claims. Even if the destruction is not mentioned in the specification at all, exclusion from patentability applies.

The decision of the ECJ does not distinguish between hES inventions which exclusively rely on the destruction of human embryos and hES inventions which can be carried out using hES cell lines. All of them are being excluded from patentability based on the ruling of the ECJ. Furthermore, the ECJ decision does not affect the patentability of iPS (induced pluripotency stem cells) cells which have ES-like pluripotency but which are derived from human reprogrammed adult cells..

Remarks
The decision of the ECJ is especially unfortunate in view of the fact that this year the first clinical trials in Europe for a drug on the basis of hES cells have been approved for the company ACT. The decision may have a negative impact on future research in this field of technology since the research results can no longer be patent protected and the pharmaceutical industry will therefore have a reduced interest in funding hES research in Europe.

Reported by Stefan Burger

When the court issues a notice expressing a legal opinion, the court may only diverge from this opinion in its final decision if the parties are able to discern – based on the course of the oral proceedings, or on a further express notice by the court – that the court is now of an alternate legal opinion that differs from the one originally announced to the parties.

In the decided case, a utility model, concerning a work piece, was challenged with a request for cancellation. In first instance, the German Patent and Trade Mark Office granted the petitioner's request in part, upholding the utility model in limited form as auxiliary requested by the proprietor.

Both parties filed an appeal against this decision at the German Federal Patent Court. With the summons for oral proceedings in this matter, the court also gave the parties notice that “based on the written submissions so far, the court would tend to confirm the decision of the GPTO and that, therefore both appeals should be expected to be rejected”. The same notice was also repeated at the beginning of the oral proceeding. In the decision the Federal Patent Court then cancelled the utility model in its entirety for lack of inventive step.

The proprietor filed a further appeal on the point of law against this decision at the German Federal Supreme Court, arguing that the decision came as a surprise and that it constituted a violation of the right to be heard. The petitioner further argued that further auxiliary requests had already been prepared in order to defend the utility model in more limited form if necessary. However, based on the notice given, these auxiliary requests were deemed unnecessary and, therefore, had not been submitted.

In its decision, the Federal Supreme Court clarified that court notices are intended to serve the purpose of facilitating fair proceedings and reaching the correct decision. Accordingly, the parties have to observe such notices and are expected to address the demands or directions given in such notices. Also, the parties are expected not to elaborate further on points which the court considers unnecessary in its preliminary opinion set forth in the court notice. At the same time, however, the parties may rely on the court notice, irrespective of whether it concerns facts or legal points.

In the decided case, since both parties had been repeatedly informed that both appeals were intended to be rejected, the Federal Supreme Court held that this notice conferred the opinion that the lower instance had decided correctly, at any rate in the result, and therefore the utility model should be expected neither to be cancelled in its entirety, nor upheld in its entirety.

Since there were no indications in the decided case from which the proprietor could have recognized that the Federal Patent Court did not intend to maintain its preliminary legal opinion, and thus the proprietor was allowed to trust that the Federal Patent Court would decide as notified, the Federal Supreme Court held that the Federal Patent Court’s decision, which diverged from the preliminary opinion stated in the notice, violated the petitioner’s right to be heard.

Remarks
This decision is a welcome assurance that parties may in fact rely on a court notice without being surprised in the final decision. Parties can thus concentrate their presentation on the relevant aspects of the case as set out in the notice.

At the same time, however, since such a notice does not bind the court to the legal opinion given, parties are well advised to also be prepared to address any other potential aspects if necessary.

It should also be noted that, although this decision concerns a utility model cancellation, it is also expected to be highly relevant for patent nullity proceedings, where the German Federal Patent Court is generally required by law to issue an advance notice about possible aspects that appear likely to be of importance for a decision, or which serve the purpose of concentrating the oral proceedings on discussing the questions essential for the decision (Section 83 [1] German Patent Act).

Reported by Joachim Mader

A modification of the originally disclosed subject to an “aliud” which would lead to a nullification of the patent is not only given if the patented subject matter is an exclusive “aliud”, but also if the modification relates to a technical aspect which in the originally filed documents was not disclosed as belonging to the invention, either in the concrete embodiments claimed or at least in abstracted form.

According to Section 21 (1) No 4 German Patent Act, a patent has to be revoked if its subject matter extends beyond the content of the patent application as originally filed. According to Section 21 (2) German Patent Act, the patent is to be upheld with a corresponding limitation if the reason for revocation only relates to a part of the patent. On the other hand, according to Section 22 (1) German Patent Act, it is not allowed to amend a granted patent in such a way that the scope of protection thereof is extended in comparison to the version as granted.

In the decided case, German patent DE 43 30 031 C2 was attacked in a nullity proceeding with the argument that claim 1 as granted contained several unallowed amendments. The substantial amendments introduced to claim 1 during the examination proceedings contained several unallowed generalizations of originally disclosed content, several non-disclosed limiting features as well as non-disclosed modifications of originally disclosed features. In the first instance the German Federal Patent Court followed the requests of the nullity plaintiff and revoked the German patent due to unallowed amendments.

In the present decision, the Federal Supreme Court confirmed the earlier case law developed with regard to unallowed amendments in patent claims in German nullity proceedings. In this respect, the Court clarified again that not all kinds of unallowed amendments will inevitably lead to the revocation of a granted German patent. This is in particular true for features which contain (non-disclosed) generalizations of disclosed claim features. Such generalizations can often be corrected by exchanging the generalizing features for the narrower originally disclosed features. Further, also the introduction of non-disclosed features, which lead to a mere limitation of the subject matter are not problematic if care is taken that those non-disclosed limiting features are not taken into account when evaluating the patentability of the claimed subject matter.

Claim 1 (as granted) of the German patent contained undoubtedly several features falling under the above cited two categories of unallowed amendments. Thus, the unallowed amendments introduced into claim 1 of the German patent belonging to these two categories of unallowed amendments would not have necessarily led to a revocation of the patent. However, claim 1 of the German patent also contained a further feature, which was considered by the Federal Supreme Court as an aliud. The Court clarified in this respect that an aliud which leads to a nullification of a granted patent is already given if the additional feature relates to a technical aspect which could not have been derived as belonging to the invention when considering the originally filed documents.

In the present case, the respective feature was directed to a new function of the claimed device, which new function could not be derived from the originally filed documents, neither explicitly, nor in abstracted form, as belonging to the invention. In other words, the objected feature introduced an additional new technical aspect, which was not disclosed in the originally filed documents. The Court further decided, that this problem of granted claim 1 cannot be solved by a corresponding declaration added to the patent, stating that no rights may follow from this objected and unallowed feature, since this would make it too difficult for third parties to evaluate the actual scope of protection of such a patent. 

Remarks
With the reported decision the Federal Supreme Court further clarifies the earlier case law developed for unallowed amendments in patent claims specifying in more detail what is considered as a “mere limitation of a claim” compared to an aliud, i.e. a feature that is directed to a different invention. While a mere limitation does not necessarily lead to a revocation of a patent, the presence of an aliud leads inevitably to a revocation due to unallowed amendments.
The decisive difference between a mere limitation and an aliud is that the subject of an aliud is a new technical aspect which cannot be derived from the original documents as belonging to the invention. In contrast thereto, a mere limitation is given if the added feature specifies a teaching for technical action which was, however, disclosed in the originally filed documents as belonging to the invention.

Reported by Stefan Bianchin

If the description of a patent discloses several possibilities to achieve a specific technical effect, but only one of these possibilities is included in the patent claim, an infringement under the doctrine of equivalents can only be assumed if the attacked solution in its specific effects corresponds to the claimed solution and differs in a similar manner as the claimed solution from the non-claimed solution which was disclosed only in the description.

The patent-in-suit related to a method for the manufacturing of a reagent. It was claimed, inter alia, that in a first step a solid phase was epoxidized with a diglycidyl compound, i.e. a compound consisting of two glycidyl groups, providing one epoxy group to the solid phase. In the description, an alternative method for providing one epoxy group to the solid phase was disclosed, namely a binding of a polycarboxylic acid to an amino or mercapto-derivatised organic to the solid phase.

In the attacked method, the epoxy group was obtained in a different way, namely by way of a co-polymerization.

Both the Frankfurt District Court and the Frankfurt Appeal Court considered the attacked method as infringing under the doctrine of equivalents. Both courts mainly based their decisions on the argument that the attacked method provided an alternative solution having the same technical effect to the claimed epoxidation with a diglycidyl compound and that this alternative solution had been obvious to the skilled person at the priority date.

The Federal Supreme Court did not confirm these decisions and remitted the case back to the Frankfurt Appeal Court for further proceedings. In its decision, the Federal Supreme Court referred to its former decision “Occlusion Device” of May 10, 2011 – Case X ZR 16/09, in which it stated that an orientation to the patent claim, which is also a requirement for infringement under the doctrine of equivalents, required that the patent claim, in all of its features, formed the decisive basis for the considerations of the skilled person. If the patent claim made a selective decision between several possibilities for providing a technical effect, the considerations of the skilled person on possible modifications must also be in line with this selective decision. In this respect, only such considerations were therefore oriented to the technical teaching protected by the patent claim, which take account of this selective decision.

As a result, the Federal Supreme Court stated that, in the present case, it has to be determined whether the attacked alternative solution, namely to provide the epoxy group by a co-polymerization, belongs to the claimed solution or to the solution only disclosed in the description of the patent-in-suit. In the latter case, a patent infringement under the doctrine of equivalents is excluded. Only if the alternative solution belongs to the claimed solution, an infringement under the doctrine of equivalents is generally possible. For the further determination as to where the attacked solution belongs, the Federal Supreme Court remitted the case back to the Frankfurt Appeal Court.

Remarks
This decision further clarifies the application of the doctrine of equivalents and its limits in German patent litigation and is therefore of important practical value. It confirms the recent tendency in German case law to hesitate assuming equivalent patent infringement.

Reported by Dr. Rudolf Teschemacher  

The European patent system is widely accepted as being user friendly. The revision by the EPC 2000 which entered into force in December 2007 even enlarged the scope of application of further processing which works like the extension of a time limit subject to a fee. However, the reported case shows that there are hidden traps in which the parties may be caught resulting in losses of rights.

The Opposition Division had rejected the opposition. The opponent changed his representative and the new authorized representative filed the notice of appeal. The next day, the EPO informed the new representative by telephone that he had to file an authorization because the previous representative had not informed the EPO that he had ceased to act for the opponent. One month later, the representative faxed a cover letter stating that an authorization signed on behalf of EyeGate Pharma S.A was enclosed. The enclosure confirming that the conduct for the appeal had been transferred to the new representative bears a heading of EyeGate Pharmaceuticals, Inc. Below the signature the name of the signer is repeated in capitals and the function “President and CEO” is added. In the enclosure, there is no reference to the opponent which was EyeGate Pharma S.A. The new authorized representative was entered into the register and further notifications were addressed to him.

Nine months later the registrar of the Board of Appeal issued a communication headed “Inadmissibility of the appeal” with the following text:
“It appears from the file that the appeal in the proceedings mentioned above has the following deficiency:
The required authorization has not been provided. An authorization should be filed for EyeGate Pharma S.A. specifically. It is therefore expected that the appeal will be rejected as inadmissible pursuant to Article 108 in conjunction with Rule 101 (1) EPC. Any observation must be filed within two months from notification of this communication.”

One week before the end of the time limit, an authorization was faxed on EPO Form 1003 signed by the President of EyeGate Pharma S.A. and authorizing the authorized representative to act on behalf of it.

One month later, the proprietor objected to the correctness of the authorization, noting that an original version had not been filed and that the representative’s address was lacking. Another eleven months later the registrar issued a “noting of loss of rights pursuant to Rule 112 (1) EPC” stating that an authorization fulfilling the necessary requirements had not been filed and that the notice of appeal was deemed not to have been filed in accordance with Rule 152 (6) EPC. In reply, the opponent complained that his right to be heard had been violated. In substance, he argued in particular that the EPC did not require that an original of an authorization be filed, that the Board had not invited him to file an original and that the invitation of the Board was misleading since the wrong form had been used.

After having been informed by the registrar that a noting of loss of rights was not a decision, the opponent requested a decision of the Board in accordance with Rule 112 (2) EPC. In the oral proceedings appointed on his request, he inter alia requested to refer to the Enlarged Board of Appeal the point of law whether he had to be invited to file the authorization as an original.

In the decision of the Board of Appeal of November 29, 2010, the noting of loss of rights is confirmed and the appeal is stated as deemed not to have been filed. The Board notes that the procedure to be followed is governed by Rule 152 EPC in conjunction with the decision of the President of the EPO dated July 12, 2007 according to which in case of a change of representative, and where the EPO has not been notified of the termination of the previous representative’s authorization, “the new representative must file, together with the notification of his appointment, an individual authorization (original and one copy) or a reference to a general authorization already on file. If he does not, he shall be requested to do so within a period to be specified by the European Patent Office.”

Since the first authorization had not been signed in the name of the registered party, the opponent had to be invited to file the required authorization. The Board accepts that the form which was used for the invitation was incorrect. Instead of indicating that the sanction for not providing the required authorization would be that any procedural steps taken by the representative shall be deemed not to have been taken (in accordance with Rule 152 [6] EPC), the invitation made reference to Article 108 EPC and Rule 101 (1) EPC and stated that the appeal would be rejected as inadmissible. Nevertheless, the Board is of the opinion that the invitation was clear and that the action called for was unmistakeable. According to the Board, the invitation does not contain any misleading information in this respect. What was required of the new representative was to file an authorization in the name of the opponent. The instruction on the form was unambiguous, it fulfilled the legal obligation under Rule 152 (2) to invite the representative to file a (valid) authorization and it was indeed effective, insofar as it prompted the representative to file a copy of the authorization, albeit by fax. There was no need that the invitation explicitly specified all formal requirements of an authorization to be filed, nor that the representative should repeatedly be given the opportunity to comply with these requirements.

The opponent could not rely on the principle of legitimate expectations requiring that “communications addressed to applicants must be clear and unambiguous, i.e. drafted in such a way as to rule out misunderstanding on the part of the addressee”. It was not necessary that the invitation made a reference to the necessity to file the original version of the authorization. This detail should not have to be spelled out to a professional representative, since he should know this from the above decision of the President. In addition, also the President’s decision concerning the filing by fax and the Guidelines for Examination A-IX, 2.5 stated that authorizations could not be filed by fax.

Considering the further argument of the opponent that he was misled by the recording of the change of representative which made him believe that the filing of the authorization by fax was sufficient and that he could legitimately expect that the EPO would not later on contradict this conduct of proceedings, the Board notes that the registrar may have overlooked the requirement of filing an original and, due to this oversight may have recorded the change. However, this did not help the opponent’s case since the Board refers to decision J 5/02 holding that even if the EPO provided a professional representative with incorrect information, in his capacity as professional representative, he should not have come to the conclusion that the relevant legal provisions are no longer applicable. If he did not realise that the information was incorrect, he was guilty of a fundamentally inexcusable ignorance of the law; if he did realise it was incorrect, he was not misled.
Nor did the Board agree with the opponent’s argument that the principle of good faith as developed by the Enlarged Board of Appeal in
G 2/97 obliged the EPO to issue a warning of the failure to provide an original of the authorization, considering that there was sufficient time for correcting the deficiency. As a principle, the Board states that responsibility for filing a valid authorization cannot be devolved to the Board. Furthermore, the Board does not see a readily identifiable deficiency within the meaning of G 2/97 in the absence of an indication in the accompanying letter that the representative did not intend to file the original within the remaining seven days of the time limit.

The Board did not see any reason to refer a point of law to the Enlarged Board of Appeal since the legal ambiguities on which the opponent relied did not exist in respect of the relevant questions.

Remarks
The decision leaves the reader with some uncomfortable feeling.

The Board appears to have anticipated such a reaction in the last point of its decision reading “the Board is aware that this decision may appear particularly formalistic and disproportionately harsh”. An authorization is a legal instrument and the principal obligation to file it as an original appears to be clear from the law as it stands and the Board is bound to apply this law. However, the question may be asked whether it is justified to maintain this requirement, considering that the person who is entitled to sign an authorization is also entitled to file an application and to sign the request form without a confirmation being required. In the present case, the opponent was resident within the contracting states. Thus, its CEO was entitled to file the notice of appeal by fax himself and to sign it, without a confirmation being necessary under the relevant rules. Therefore, the question is legitimate whether an authorization needs a more qualified form than the acts for which the power is given.

Turning to the peculiarities of the case, there seems to be some imbalance between the consequences of an improper handling of the situation by the EPO and the omission by the representative, and the question arises whether the result achieved was unavoidable. Starting with the form which the Board interpreted as an invitation to the opponent to file the authorization, not only the indicated legal consequence of the deficiency was wrong but the communication as a whole was confusing. The communication was not drafted as an “invitation to remedy a deficiency” or as an “invitation to file an authorization” which would be a usual and proper terminology in such a situation. The announcement that “the appeal will be rejected as inadmissible” gives the impression that such decision is imminent. There is no indication that this course of action can still be changed. In the last sentence, the opponent is given the opportunity to file observations. This may be understood as giving the opponent the opportunity to be heard before the envisaged decision is taken. The sentence “an authorization should be filed” may be understood as an invitation but also as a mere reference to the legal obligation the non-observance of which caused the deficiency which entails the rejection as inadmissible. The confusing text of the communication may have given reason to the addressee to look at the legal consequences indicated. In this respect, he may have found out that Article 108 in conjunction with Rule 101 (1) EPC deals with deficiencies which may not be remedied after the time limits of Article 108 EPC have lapsed. Thus, it may be plausibly argued that the communication did not make clear to the opponent that the authorization could still be filed. The lack of a proper invitation to file the authorization would have as a consequence that the time limit for filing it has not been triggered.

Also the problems related to the principle of legitimate expectations might have been assessed differently. It is true that a representative should know in which form to file an authorization. Hence, an invitation to file it need not address the required details as to form. However, if a communication addresses a deficiency in detail, one might expect that the indications are correct. This might imply that it is not a proper conduct to address one aspect of the deficiency and to ignore the other. If the party is told how to remedy a deficiency, it may assume that it is sufficient to do what it is told to do.

In the present case, the opponent had twice filed an authorization in copy. Thus, when the second authorization was filed it was almost suggesting by itself that the representative did not realise that an original had to be filed and corresponding information to him might have been considered appropriate. In this respect, it should be kept in mind that checking authorizations is a daily task for the registries of the Boards of Appeal. For authorized representatives the situation is somewhat different: In most situations the filing of an authorization is not necessary and in most situations the use of fax without the need to file an original satisfies the formal requirements for acts to be performed in EPO proceedings. This coincides with a deplorable negligence in observing the formal requirements of an appeal which is reflected in numerous decisions of the Boards of Appeal which have to deal with these requirements (see Case Law of the Boards of Appeal, 6th edition 2010, Chapter 7). This negligence is all the more dangerous since further processing is not available for non-observance of the admissibility requirements in Article 108 EPC and re-establishment is totally excluded for the opponent.

In passing, the decision touches a quite different legal problem which would have deserved more attention. In case of change of representative, who is the legitimate representative until a required authorization is filed? The Board appears to assume that this is the old representative because, according to the Board, the new representative should not be registered before. This position may be based on Rule 152 (8) EPC according to which an authorization remains valid until its termination has been communicated to the EPO. However, on the basis of its own position the Board should have addressed all further notifications to the old representative. On the other hand, in accordance with Rule 152 (6) EPC the acts of the new representative are valid and remain valid, unless the authorization is not filed upon invitation. This seems to imply that the new representative is a legitimate representative even before the authorization is filed. And indeed, the decision of the President stipulates that it is the new representative who has to be invited to file the missing authorization. But conducting the proceedings only with him may lead to the consequence that the rights of a party are lost without any information to the previous representative whose authorization is still valid. This seems to be inconsistent with the purpose of Rule 130 (1) in conjunction with Rule 152 (8) EPC. For reasons of legal security, it should be clear who has to be the addressee of any office action.