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2023 Ⓒ Boston Intellectual Property Law Association

The EPO relaxes its assessment of formal priority entitlement

By Daniel Goodman, James Warner and Cameron Marshall, Carpmaels & Ransford
On 10th October 2023, the Enlarged Board of Appeal (EBA) issued a decision (G1/22 & G2/22) that fundamentally changes how priority entitlement is assessed at the European Patent Office (EPO). The new framework is significantly more patentee-friendly, and puts an end to speculative challenges in EPO opposition proceedings. The Carpmaels & Ransford patent attorneys that represented Novartis AG in the EBA proceedings and argued for change in the EPO’s practice provide a summary below.
Priority entitlement
After a first patent application (“priority application”) has been filed, a later patent application to the same invention (“subsequent application”) may be filed within a year that benefits from the first filing date. A common arrangement involves filing a US provisional application first, and then filing an international (PCT) application one year later. Ensuring that the subsequent application is entitled to priority can be very important because this protects the later patent application from the impact of disclosures that occurred in between the two patent filings. The EPO does not generally provide grace periods prior to filing a patent application during which publications of the applicant are non-prejudicial. Therefore, if the subsequent application is not entitled to priority, the applicant’s own disclosures in the priority year would usually be treated as prior art in Europe. This prior art can present a difficult (or even impossible) challenge to overcome, such that a European patent may not be granted or may subsequently be revoked as a result.
The EPO’s previous approach
Article 87(1) EPC requires that the subsequent application is filed by the person who filed the priority application or their successor in title. A typical example of succession in title is an assignment from an inventor to a company. The EPO previously placed the burden on the applicant (or, after grant, the patentee) to establish that this requirement had been met. This burden was partly based on the principle that “any party claiming a right must be able to show that it is entitled to that right”.1 Not only was the burden on the applicant/patentee to provide evidence of formal priority entitlement, but the EPO’s assessment of that evidence was also often strict, complex and uncertain in nature. In relation to succession in title, the latest edition of the EPO Guidelines for Examination state that: “the transfer of the application including the priority right (or of the priority right as such) must have taken place before the filing date of the later European application and must be a transfer valid under the relevant national provisions”.2 However, the EPC does not contain any conflict of laws rules that are applicable to this assessment, and so there was uncertainty as to which “national provisions” were “relevant”. For example, it was unclear whether the EPO should take into account:
(i) the law of the country where the priority application was filed, (ii) the law of the country where the subsequent application was filed, (iii) the law of the country which is agreed upon in the relevant contract between the parties to the transfer, or (iv) the law of the country where at least one of the parties to the transfer has its residence.3
Therefore, in some cases, an applicant/patentee may have needed to provide evidence that a priority right transfer was valid under various national laws, to cover all bases. Against this patentee-unfriendly background, third parties frequently raised challenges during EPO opposition proceedings when the patent had not been filed by the same applicant(s) as the priority application. These challenges could be raised speculatively, in the hope that a patentee would be unable to provide sufficient documentary proof of the transfer, or unwilling to do so (e.g. for legitimate reasons of confidentiality). Patents were sometimes revoked because of such challenges. Even if ultimately successful, a priority entitlement defence could come with significant financial and administrative burdens for the patentee.
The EPO’s new approach
The EPO’s approach to formal priority entitlement has now changed dramatically as a result of the EBA’s recent decision. The EPO’s highest authority considered this topic because a Technical Board of Appeal had referred a question on whether the EPO has jurisdiction to examine the validity of priority right transfers. The EBA decided that while the EPO indeed has jurisdiction to examine the validity of priority right transfers, the EPO had not been conducting its assessment in the right way. In particular, the EBA concluded that “priority rights are autonomous rights under the EPC and should be assessed only in the context of the EPC, regardless of any national laws”.4 Since the EPC does not impose any formal requirements for the transfer of the priority right, “the EPO should adapt itself to the lowest standards established under national laws and accept informal or tacit transfers of priority rights under almost any circumstances”.5 The EBA noted that, for example, if a PCT application claims priority from a US provisional, and is filed designating the priority applicant for the US and a second entity for Europe, then the “mutual filing demonstrates – absent indications to the contrary – the existence of an implied agreement6 for the second entity to benefit from the priority right in Europe. Partly in view of “the lack of formal requirements for the transfer of priority”, the EBA decided that there “is a rebuttable presumption under the autonomous law of the EPC that the applicant claiming priority […] is entitled to claim priority”.7 The EBA explains that the “rebuttable presumption involves the reversal of the burden of proof, i.e. the party challenging the subsequent applicant’s entitlement to priority has to prove that this entitlement is missing”.8 This rebuttable presumption applies “where the priority applicant(s) are not identical with the subsequent applicant(s)”.9 The EBA has advised that the presumption will normally be strong, and so the hurdle for rebutting it will generally be high. The primary purpose of the rebuttal seems to be those “rare exceptional cases the priority applicant may have legitimate reasons not to allow the subsequent applicant to rely on the priority”.10 The EBA then provides two examples, “bad faith behaviour on the side of the subsequent applicant” and “the outcome of other proceedings such as litigation before national courts about the title to the subsequent application”.
Practice points
Speculative challenges to formal priority entitlement are no longer possible at the EPO. Even in those cases where an opponent successfully rebuts the presumption of valid formal priority entitlement, the patentee may be able to satisfy the EPO by demonstrating that there was “informal or tacit transfer” of the priority right before priority was claimed. The EBA also indicated that completing a retroactive assignment of priority rights might be an effective measure. Nevertheless, it remains important, even from a European perspective, to ensure that the priority right is explicitly transferred (e.g. via a written assignment) before the subsequent application is filed. This is with potential litigation in mind. In particular, some European national courts might take a stricter approach to the transfer of priority rights than the EPO. Indeed, the EBA highlighted that the “EPO’s competence to assess priority entitlement does of course not imply that national courts are bound by the EPO’s assessments”.11
1. T1008/96 (r.3.3)
2. EPO Guidelines for Examination (March 2023)
3. T1201/14 (r.3.1.2)
4. G1/22 & G2/22 (r.85)
5. G1/22 & G2/22 (r.99)
6. G1/22 & G2/22 (r.123)
7. G1/22 & G2/22 (r.105 and Headnote I)
8. G1/22 & G2/22 (r.110) 9. G1/22 & G2/22 (Headnote II) 10. G1/22 & G2/22 (r.108) 11. G1/22 & G2/22 (r.115)