J 0005/91 (Legal loophole) of 29.4.1992

Summary of Facts and Submissions

I. European patent application No. 90 201 567.6 (publication No. 0 404 241) was filed on 15 June 1990, claiming a priority date of 16 June 1989. In the "Request for Grant of a European Patent" (EPO Form 1001.1 01.90) crosses had been placed in Section 26 (Designation of Contracting States) against the following five States: DE, FR, NL, BE, ES. However, at the same time only a total of DEM 1 120 was paid in respect of designation fees, which was sufficient to cover four designations at the then rate of DEM 280 per State. Under Article 9(2), second sentence, RFees, this meant that the designation "ES" in Section 26 had not been paid for.

II. The proceedings continued as follows:

11 September 1990: despatch of communication pursuant to Rule 85a(1) EPC (EPO Form 1135 04.89);

17 September 1990 (Monday): expiry of two-month period of grace under paragraph 2 of Rule 85a EPC;

21 September 1990: beginning of one-month period of grace under paragraph 1 of Rule 85a EPC;

1 October 1990: payment of a designation fee for Spain amounting to DEM 280 plus surcharge of DEM 140.

11 October 1990: payment of three further designation fees for Italy, Denmark and the United Kingdom totalling DEM 840 plus surcharges totalling DEM 420;

22 October 1990 (Monday): expiry of one-month period of grace under paragraph 1 of Rule 85a EPC;

27 December 1990: publication of European patent application No. 90 201 567.6 with publication No. 0 404 241, indicating the following designations: BE, DE, ES, FR, NL.

III. In a decision dated 19 April 1991, the Receiving Section of the European Patent Office ruled that the designations of Italy, Denmark and the United Kingdom were deemed to be withdrawn because of non-payment of the designation fees and surcharge within the two-month period of grace provided for in Rule 85a(2) EPC. The main reason given was that the fees for these three States had only been paid after this period had expired. In accordance with the applicants' declaration in Section 27 of the Request for Grant form, the designation of these three States was to be regarded as withdrawn by the applicants if the fees had not been paid by the time the period of grace allowed in Rule 85a(2) EPC expired. They furthermore dispensed with notification under Rule 85a(1) EPC.

IV. The applicants' representative filed an appeal against this decision on 14 May 1991, paid the fee and at the same time stated the grounds for the appeal. He submitted that - notwithstanding the declaration made in Section 27 of the Request for Grant - a communication pursuant to Rule 85a(1) EPC had in fact been sent and an extension of time beyond the date resulting from Rule 85a(2) EPC had therefore taken place. He accordingly requested that the contested decision be set aside and the designations of Italy, Denmark and the United Kingdom be accepted as valid.

In a letter dated 7 April 1992 the representative agreed to the present decision being drafted in any of the official languages (see, in this connection, decision J 18/90 dated 22 March 1991, Reasons, point 1, Headnote II, published in OJ EPO 1992, 511).

Reasons for the Decision

1. The appeal is admissible.

2. The present appeal is concerned with how Rule 85a EPC should be interpreted if, in connection with designations of Contracting States in a European patent application, both the time limit under paragraph 1 and that under paragraph 2 of this Rule are applicable and the former expires after the latter. What is required therefore is an interpretation of the new Rule 85a as amended on 8 December 1988, which now comprises two paragraphs and entered into force on 1 April 1989 (OJ EPO 1989, 2). For this purpose, it is first necessary to examine the origins of this Rule (point 3 below) and then the most frequent (or normal) situation, in which all the designations in Section 26 of the Request for Grant form have been paid for and only one time limit is therefore operative, i.e. that referred to in paragraph 2 (point 4). Only then need the exceptional situations be discussed, in which the time limits under paragraphs 1 and 2 are operative and end on different dates. First, the problem must be examined in general terms (point 5); then, the solutions for the exceptional situation at issue here (point 6) and for that in which the circumstances are reversed (point 7) are discussed.

3.1 Rule 85a (old version) EPC was introduced in 1979 (see OJ EPO 1979, 451), to allow for the exceptional possibility of paying fees, after the time limit for doing so had expired, in cases where re-establishment of rights under Article 122 EPC was not possible. This is not primarily a matter of designation fees, but concerns the "fees payable on receipt of the application", which include the designation fees as well as the filing fee and search fee. The EPO then adopted the practice of issuing notices indicating, as a "courtesy service", that these fees could still be paid within two months of expiry of the normal time limit and subject to a surcharge. However, these notices were sometimes issued so late that the applicant had little time in which to pay the outstanding sums.

3.2 In response to this state of affairs, the Administrative Council of the EPO replaced Rule 85a by the new version referred to above (point 2). Paragraph 1 of the new Rule refers to all the fees payable on receipt of the application, including the designation fees. For all such fees it makes provision for the EPO to issue a communication allowing a one-month period of grace for payment. As the fees in the case of more than 95% of all applications are paid before expiry of the normal time limit, a communication pursuant to Rule 85a(1) EPC is superfluous if all the necessary or intended payments have been made. Legally, however, it is only possible to refrain from issuing the superfluous communication if the fees unpaid consist entirely of designation fees for States designated as a precautionary measure in respect of which the right to notification has been waived.

4.1 For "precautionary" designations, i.e. those resulting only from Section 27 of the Request for Grant form, the Administrative Council left in place the existing period of grace of two months following on immediately from expiry of the normal time limit. This period is provided for in paragraph 2 of the new Rule 85a EPC. In the normal situation (when all the designation fees under Section 26 have been paid) this last-mentioned time limit is the only one that matters.

4.2 The normal situation is therefore that all the designations in Section 26 have been paid for and some "precautionary" designations under Section 27 have not been paid for. Communications pointing out that payment is still possible would be perceived as an inconvenience in the vast majority of cases, even by applicants. As more than 95% of all applications fall into this "normal" category, such communications would impose a great burden on the Office. In order to avoid this, Section 27 of the Request for Grant form contains three preprinted declarations by the applicant: the first is to the effect that the applicant withdraws designations under Section 27 on expiry of the two- month period of grace allowed in Rule 85a(2) EPC; in the second he then "requests" that no communication under Rule 85a(1) EPC be notified. The EPO thus logically assumes in its printed form that the applicant also has the right to receive a communication under Rule 85a(1) EPC in the case of designations resulting only from Section 27. Finally, in the third declaration, which in fact follows from the first, the applicant furthermore requests that no "communication concerning loss of rights" under Rule 69(1) EPC be notified in the case of non-payment for designations under Section 27. The most important declarations appear to be - in logical sequence - the second, i.e. surrender of the (assumed) right to a communication under Rule 85a(1), and then the first, i.e. that those designations under Section 27 for which the fee has not been paid by the time the period of grace under Rule 85a(2) EPC expires should be regarded as withdrawn. Provisions of this kind are not only perfectly sound but necessary if "precautionary" designation of all the Contracting States is to be in any way feasible. The new Rule 85a and the declarations contained in Section 27 of the Request for Grant form are therefore to be commended in principle. The following interpretation of these provisions relates to exceptional cases which do not put at issue the "precautionary" designation as such.

5. The two exceptional cases arise when, as well as the two-month time limit being activated under paragraph 2 of Rule 85a EPC for the "precautionary" designations under Section 27, a communication under paragraph 1 is issued. In such cases two time limits are operative with respect to one and the same patent application - on the one hand, the standard two-month time limit under paragraph 2 and, on the other, the one-month time limit as from notification of the communication under paragraph 1.

5.1 In the first exceptional case, the time limit under paragraph 1 may expire later than that under paragraph 2, as in the case of the present appeal. This happens when the communication under paragraph 1 is despatched relatively late. That should seldom be the case, but when it does occur the difference in time limits can be considerable (in this case, more than one month).

5.2 In the second exceptional case, the time limit under paragraph 2 expires later than that under paragraph 1. This situation occurs when processing is expedited and the communication under paragraph 1 is despatched early on.

5.3 The legislator, i.e. in this case the Administrative Council of the EPO, did not consider these exceptional cases when amending Rule 85a EPC. The following comments are made in CA/79/88 Add. 1 dated 21 November 1988:

4. Under the proposed alternative the period of grace lasts one month so as not to extend the existing procedure. The communication cannot be issued until the Office's internal actions have been carried out, i.e. 20 days after expiry of the time limit, to which must be added 10 days after which, under Rule 78(3) EPC, notification is deemed to have been effected. The one-month time limit accordingly begins approximately one month after expiry of the normal period and ends at approximately the same time as the previous two-month period after expiry of the normal period.

It can be inferred from the above and from what is said elsewhere in the document that the Administrative Council was mainly concerned (a) to introduce a mandatory communication with a one- month time limit for the "fees payable on receipt of the application" in general (not only for designation fees) in the form of an amendment to Rule 85a and, notwithstanding this, (b) to maintain the two-month period of grace without notification for "precautionary" designations. However, the Administrative Council was not concerned with the exceptional cases set out above.

5.4 The new Rule 85a EPC is thus incomplete in that it fails to take account of two exceptional cases, i.e. it contains a "legal loophole". The question as to whether this loophole is deliberate or not is immaterial, since it must be closed in any event by case law. This now has to be done for the first exceptional case at issue here (point 5.1 above). As it is scarcely possible merely to "half-close" a legal loophole, it is then sought to close it as well for the other exceptional case - which in practice probably occurs more frequently (point 5.2 above). This is necessary in law in order to test the solution sought for the first exceptional case.

5.5 The legal loophole can be closed first and foremost by reference to the existing legislation enshrined in Rule 85a(1) and (2) and to the legislator's intention, which is discernible from the document cited. Only then - depending on the individual situation - are the preprinted declarations in Section 27 of the Request for Grant form also considered.

These declarations provide the legal basis for an appropriate administrative procedure in the normal situation of "precautionary" designation (see point 4 above). The declarations preprinted in Section 27 of the Request for Grant form are designed primarily with this normal situation in mind. In any other situation the preprinted declarations therefore need to be interpreted. Declarations - particularly when preprinted - must always be interpreted according to the discernible intention of the applicant. When exceptional cases arise, neither the presumed intention of the legislator in amending Rule 85a, nor that of the applicant making the declaration (i.e. in pursuit of his own interests), may be disregarded in any consideration of these preprinted declarations. When ascertaining the legislator's and applicant's presumed intentions, account should also be taken of the operative legal position when the time limits under Rule 85a(1) or (2) EPC expire - i.e. in particular re- establishment of rights under Article 122 EPC is not possible in the case of failure to observe a time limit. The legal position being such, in case of doubt the loophole must be closed by ruling that it is the later time limit which should be observed.

6.1 In the first of the two exceptions, as exemplified in the present appeal, the time limit under Rule 85a(1) EPC expires later than that under paragraph 2. The question is therefore whether mere precautionary designations may likewise benefit from the time limit under paragraph 1. To answer this question, the wording of paragraph 1 must first be considered. The text in all three languages ("... a designation fee ...") refers to a n y designation not paid for. This also forms the basis for the preprinted text in Section 27 of the form.

6.2 The question is therefore whether in this situation the loss of rights with regard to the States covered only by Section 27 (IT, DK, GB) can be inferred from the preprinted declaration. The preprinted text does indeed say that the designation of such States ("of any additional States thereby included") should be withdrawn on expiry of the period of grace allowed in Rule 85a(2) EPC. The department of first instance bases its decision on such a withdrawal of designation (of all the States covered only by Section 27). However, the preprinted declaration by the applicant cannot be interpreted as implying that the applicant wishes to withdraw a group of designations even before the time limit under Rule 85a(1) EPC expires. Otherwise, the applicant's intention would be interpreted in a manner at variance with the wording of Rule 85a(1) EPC, which quite clearly applies to every unpaid designation and allows a one-month period as from notification for payment to be made, quite irrespective of the time limit (without notification) under paragraph 2. Restricting the communication to States specified under Section 26 to the exclusion of those under Section 27 is therefore incompatible with Rule 85a(1) EPC. Furthermore, if a communication is despatched because designation fees are outstanding, the distinction made in the preprinted text in Section 27 between States for which it is "intended to pay" designation fees and States for which the applicant "reserves the right to pay" them surely no longer makes sense. The wording of Rule 85a(1) EPC makes no provision for differentiating between the legal effect of the communication with regard to such categories of States.

6.3 This gives rise to a first conclusion: if the time limit under Rule 85a, paragraph 1, EPC expires later than that under paragraph 2, the designation fees for all the Contracting States can still validly be paid up to expiry of this later time limit.

7.1 In the second of the two exceptional cases (point 5.2 above), the time limit under Rule 85a, paragraph 1, EPC expires earlier than that under paragraph 2. This exceptional case arises when the expiry date does not coincide exactly with the time limit under paragraph 2. Slight as the time difference is bound to be, it could be crucial - particularly with regard to the bar on re- establishment of rights under Article 122 EPC.

7.2 Paragraph 2 of Rule 85a EPC, which is decisive for resolving this second exceptional case, first of all favours only the States covered by Section 27 of the Request for Grant form, and therefore excludes those chosen in Section 26. However, this gives rise to a very strange situation, because the period for payment applicable to States in respect of which it is stated when the application is filed that payment is "at present intended" would be shorter than the period for payment for "all" other States additionally designated purely "as a precautionary measure". Such an outcome was surely neither intended nor contemplated by the legislator when Rule 85a EPC was revised. And the observations made in the CA document referred to in point 5.3 show that the introduction of the communication was not intended to lead to a reduction of the two-month period under the former Rule 85a or its present paragraph 2. In any case, a shorter period could easily be circumvented by appropriately timing despatch of the communication. However, the legislator wished neither to complicate nor to delay the procedure. Therefore, in the exceptional case of the one-month time limit expiring before the two-month time limit, it is in conformity with his intent to interpret the new paragraph 2 of Rule 85a as befits its purpose. Rule 85a EPC was amended in order to introduce a one-month period of grace after receipt of a communication. In the case of designations however, it was intended that the general possibility of making subsequent payment for "all" States within the two-month time limit be retained. Paragraph 2 of Rule 85a EPC may therefore be applied to the designation of "all" States in the second exceptional case considered here (one-month time limit ending before two-month time limit). This means applying Rule 85a(2) EPC analogously also to States listed in Section 26 of the Request for Grant form. A conclusion may therefore be drawn "de minore ad maiorem": what applies to any State designated merely "as a precautionary measure" must apply with all the more justification to a State in respect of which it was "intended to pay" at the time the application was filed.

7.3 The means found to close the legal loophole in Rule 85a EPC in the case considered here (cf. point 6.3 above) may therefore be inferred in general for both exceptions as follows:

In cases where the time limits for subsequent payment of designation fees under paragraphs 1 and 2 of Rule 85a EPC as amended on 8 December 1988 expire at different times, all designation fees can still validly be paid up to the later date.

8. The designation fees plus surcharges for Italy, Denmark and the United Kingdom have therefore been validly paid. Thus, designations not listed in the published European patent application come into effect - retroactively. A correction to that effect must therefore be published in the European Patent Bulletin. With regard to the protection of third parties, reference is made to decision J 12/80 (OJ EPO 1981, 143).

ORDER

For these reasons it is decided that:

1. The contested decision is set aside.

2. It is ruled that the following Contracting States to the European Patent Convention are validly designated in European patent application No. 90 201 567.6 (publication No. 0 404 241): Belgium, Germany, Denmark, France, Italy, Netherlands, Spain, United Kingdom (BE DE DK FR IT NL ES GB).