J 0022/88 (Re-establishment of rights) of 28.4.1989

Summary of Facts and Submissions

I. In this matter concerning Euro-PCT application No. 86 901 024.9 the applicant failed to pay the national and designation fees due under Article 22(1) PCT, Article 158(2) and Rule 104(b)(1) EPC. The time limit for the payment of these fees expired on 10 November 1986.

II. By letter dated 7 January 1987 the Receiving Section informed the appellant that the fees had not been paid within a month after expiry of the time limit and that late payment could only be validly effected within a period of grace of two months and subject to payment of the 50 % surcharge provided for in Rule 85a EPC. The Receiving Section's letter reached him on 10 January 1987, a Saturday. On Monday, 12 January 1987 the appellant sent a letter to the same department, received on 14 January 1987, stating that he was unfortunately unable to comply with the invitation to pay the fees within the specified time limit and requested that out of consideration for this the time limit be extended by 30 days until 13 February 1987. By letter dated 22 January 1987 the Receiving Section informed him of the requirements set out in Article 67(3) EPC for translation and of the date, 4 March 1987, on which the Euro-PCT application would be published. That letter did not deal with the question of the thirty-day extension sought by the appellant who thereupon paid the outstanding fees on 10 February 1987.

III. The next communication from the Receiving Section, dated 17 March 1987, advised him that pursuant to Rule 69(1) EPC the patent application was deemed to have been withdrawn because the national and designation fees had not been paid within the time limits under Rules 104(b)(1) and 85a EPC, and also that under Rule 69(2) EPC he could apply for a decision on the matter by the EPO if he considered that this finding was inaccurate. A postscript also stated that it had not been possible to extend the time limit for payment of the fees but that the appellant had the possibility of applying for re-establishment of rights.

IV. By letter dated 13 May 1987 the appellant requested re-establishment. In the grounds advanced in support of the request it was explained that because he was a stateless person and a refugee who had been out of work for a considerable time, and could not obtain bank credit, he had encountered severe financial difficulties. Since the Receiving Section's letter of 7 January 1987 had not reached him until 10 January (a Saturday) it had been impossible for him to pay the required amount by the date provided for under Rule 85a EPC (12 January 1987). However, he had succeeded in finding employment from the beginning of January 1987 which had enabled him to obtain bank credit and to pay the outstanding fees on 10 February 1987.

V. In an interim communication dated 27 July 1987 the Receiving Section advised the appellant that his claim for re-establishment under Article 122 EPC was ill-founded because financial hardship was not one of the grounds for re-establishment under that article. Merely by asking for extension of time, the appellant had not exercised all due care.

VI. On 26 September 1987 the appellant reiterated his original case for re-establishment and further asked for certain other remedies under Article 90(2) and Rule 84 EPC.

VII. By decision dated 10 March 1988, the Receiving Section rejected:

(a) the request for re-establishment under Article 122 EPC on the basis of established EPO practice because financial difficulties which prevented the applicant from paying fees on time were not acceptable for the purposes of satisfying the requirement of due care. That requirement was only met if the requester had ensured that at any time during the European patent grant procedure he was in a position to pay the necessary fees;

(b) the request under Article 90(2) EPC on the grounds that this provision only applied where a filing date had not been accorded;

(c) the request under Rule 84 EPC on the grounds that this provision only related to time limits set by the EPO and could not be applied to time limits laid down in the EPC which the Office was not at liberty to extend. Accordingly, the Euro-PCT application was deemed withdrawn pursuant to Article 24(1)(iii) PCT in conjunction with Rule 104(b)(1) EPC.

VIII. On 14 August 1988, the appellant duly appealed against the decision of 10 March 1988, relying on the grounds and arguments already submitted by him at first instance and also invoking Article 39(1)(a) PCT.

Reasons for the Decision

1. The appeal is admissible.

2. The appellant seeks relief essentially on three grounds: (a) re-establishment of rights under Article 122 EPC; (b) extension of time to pay fees under Rule 84 EPC; (c) the provisions of Article 39(1)(a) PCT.

3. As the Board is favourably disposed to the appellant's request for re-establishment of rights, it does not propose to deal with grounds (b) and (c), but merely wishes to observe that if his appeal rested only on these grounds it was unlikely to have been successful.

4. The admissibility of the request for re-establishment of rights is discussed in the decision under appeal but not disputed. The Board would comment only that the slight underpayment of the fee for re-establishment of rights could properly have been dealt with by application of Article 9(1), last sentence, of the Rules relating to Fees since a shortfall of about 10%, as here, can be considered a small amount lacking for the purposes of that article (cf. Case J 11/85, "Small amount lacking/IKAPLAST", OJ EPO 1986, 1). The fact that the appellant was, until the beginning of January 1987, unable to pay the fees due under the PCT and the EPC is undisputed. This may not, however, avail him if, as a matter of law, financial hardship is not a ground for re-establishment under Article 122(1) EPC and/or if as a matter of fact it is not established that he exercised all due care in all the circumstances of the case. The Board finds that the appellant did exercise all due care required by the circumstances. This is clear from the sequence of events as set out in the Statement of Facts and Submissions, namely, that the Receiving Section's letter of 7 January 1987 only reached him on 10 January 1987, a Saturday, and that the period of grace under Rule 85a EPC was due to expire on Monday, 12 January 1987. In this situation, there is really nothing more that he could have done than to write to the Receiving Section asking for an extension of time to pay, to seek to borrow the money immediately and to effect payment within the shortest reasonable time. It must be remembered that he had only been able to obtain employment at the beginning of January 1987. It therefore stands established both that he had financial difficulties which were beyond his control and that in the circumstances he had exercised all due care within the meaning of Article 122(1) EPC.

5. Accordingly, the case falls to be decided on the question of law whether or not financial hardship leading to the procedural default of failing to observe time limits constitutes adequate grounds for re-establishment. Article 122 EPC operates in relation to Euro-PCT applications by virtue of the provisions of Article 150 EPC and Articles 22 and 48(2)(a) PCT, the latter of which requires any Contracting State, as far as that State is concerned, to excuse, for reasons admitted under its national law, any delay in meeting any time limit. In the present context, national law means the law of the regional patent treaty, i.e. of the EPC.

6. As was pointed out in the contested decision, Article 122 EPC does not expressly mention financial difficulties as constituting grounds for re-establishment of rights. On the other hand, there is no provision of the EPC that specifically excludes the possibility of relief under that article in cases of financial hardship. It is therefore necessary to turn to the working papers of the Munich Conference as evidence of the intention of the authors of the Convention. Was it or was it not their intention to exclude poor applicants, or applicants who temporarily fell on hard times, from obtaining European patents? All that can be inferred from those parts of the working documents of the Munich Diplomatic Conference that deal with "Armenrecht" or Poor Law, is that express provisions in the EPC dealing with applicants' financial difficulties were thought to be superfluous because it was considered that such financial hardship should where possible be relieved by the Contracting States themselves. It follows that the intention could not have been to exclude poor applicants from obtaining European patents. On the contrary, the references to provision of financial assistance by the authorities of the Contracting States clearly point to an intention to alleviate, wherever possible, cases of hardship. This, in the Board's judgment, is the reason why the EPC neither expressly excludes nor admits of the possibility of financial hardship constituting grounds for relief under Article 122 EPC. The question whether Article 122 EPC can be relied on in cases of long-term financial hardship was raised before the Legal Board of Appeal in an unpublished case (J 11/83), but was left open because on the facts of that case the appellant had not in fact exercised "all due care": cf. point 7, Reasons for the Decision.

8. In the present case, however, the appellant had exercised "all due care". Given the Board's finding that the Contracting States intended that poor applicants should be assisted, and given that situations may arise in which poor applicants will not be able to obtain financial assistance quickly enough to meet time limits laid down by the EPC which cannot be extended, it is only just that such applicants should be entitled to obtain relief in the form of re-establishment of rights under Article 122 EPC, provided they can satisfy its stringent conditions.

9. The Board is unable to agree with the view expressed in point 6 of the decision under appeal that an applicant only meets the requirements for the exercise of all due care if he has ensured that throughout all stages of the prosecution of a European patent application he has financial resources adequate to pay the necessary fees. A requirement that he should be continuously in such a financial situation during the whole duration of the procedure which, experience shows, may extend over several years is manifestly unreasonable and is not required by Article 122 or any other provisions of the EPC. For "all due care" to be sufficiently proven, it must, of course, be clear that the financial difficulties were genuine and were due to circumstances beyond the reasonable control of the applicant. The Board considers that in such a case it is also necessary that the applicant should exercise all due care in seeking financial assistance. A lack of diligence in seeking it might be a basis for refusing relief under Article 122 EPC.

10. In the present case, the Appellant has met all the necessary requirements and there is no reason why he should not be re-established in his rights.

ORDER

For these reasons, it is decided that:

1. The decision of the Receiving Section is set aside and the appellant is re-established in his rights in respect of failure to observe the time limits for payment of the national and designation fees.

2. The case is remitted to the Receiving Section for further prosecution.