Patent restoration

Inadvertent or accidental loss of patent rights can be distressing for patent holders and indeed for IP practitioners. The most common reason for restoration is when a patent has lapsed due to non-payment of a renewal fee. As soon as you realise a renewal fee has been missed and a patent has lapsed, don’t panic. Mistakes happen and human error does not always mean that your patent rights are irretrievably lost. Provided certain standards and timelines are met, the rights in question can often be restored. Contact HGF to discuss your options.

This article discusses the different situations in the UK and Europe and highlights the importance of establishing the facts early on to avoid any pitfalls.

UK

Renewal fees can be missed for a variety of reasons, including instructions being incorrectly communicated between the people responsible for paying the renewal fees. In the UK, renewal fees are payable after grant and start on the fourth anniversary of filing. If these are not paid in time, they can be paid within a 6-month grace period, with a surcharge. After this grace period, if the fee is still not paid, the patent will lapse and a request must be made to the UKIPO if you wish to have the patent restored. This request can be made within 19 months of the date of the missed renewal fee (i.e., 13 months from the end of grace period).

With the request, the applicant should give the reasons why the renewal payment was not made in time. The standard to be met is that the non-payment was unintentional. In other words, the proprietor needs to demonstrate that they intended to maintain the patent and pay the renewal fee, but something happened which meant that the payment was not made. The reasons must be genuine, and a restoration request will not be allowed if a proprietor had intentionally allowed the patent to lapse, but later changed their mind.

After submitting the request, the patent office may write to the proprietor if they require any clarification or any further information. The patent office may also ask for evidence to support the application for restoration. For example, in a scenario where the renewal fee was missed because instructions were sent to the wrong email address, the patent office may ask for a copy of the email chain to evidence this.

Once the patent office is satisfied with the evidence demonstrating that the applicant did intend to pay the renewal fee but circumstances prevented them from doing so, then the request will be allowed. The applicant must then pay the renewal fee and accompanying surcharge.

While the request may be filed within 13 months from the end of the grace period, it should be made as soon as possible to minimise the risk of third-party rights accruing. It is important to consider third party rights because restoration can be refused if a third party has acquired rights. During those 13 months, any person acting in good faith may carry out an act which would be considered an infringement of the patent had it not lapsed. They will continue to be able to carry out such activities once the patent has been restored. This also extends to those who, in good faith, made serious and effective preparations to carry out such activities. Once the patent is restored, any subsequent infringing acts will be treated as infringement, as if the patent had never lapsed.

Europe

Renewal fees for a European patent application are also payable annually, with the first renewal fee being payable from the 2^nd anniversary of the filing date. After grant, renewal fees are payable annually to each national patent office where the European patent has been validated.

If the renewal feel is not paid to the EPO on time, it can be paid during a 6-month grace period, and a surcharge of 50% of the renewal fee will be applied. If the renewal fee is not paid within this grace period, the application will be deemed withdrawn. A communication under Rule 112(1) EPC will be sent to the applicant informing them of a loss of rights.

Any request for re-establishment of rights must be filed “within two months of the removal of the cause of non-compliance with the period, but at the latest within one year of expiry of the unobserved time limit” (Rule 136(1) EPC). The date that the applicant discovers that the renewal fee has been missed is therefore crucial as it starts the 2-month window in which the request for re-establishment needs to be filed. The application for re-establishment has three requirements:

• the request for re-establishment and the reasoned grounds for the request,
• the fee for re-establishment must be paid, and
• the omitted act needs to be completed (e.g., payment of the renewal fee including the additional fee for the grace period).

Often, but not always, the date of the communication issued under Rule 112(1) EPC is the date when the applicant becomes aware that a payment deadline has been missed. It is important to act quickly for two key reasons. Firstly, it will take time to gather the relevant facts to determine why the payment was not made on time. Secondly, the EPO may conclude that the removal of the cause of compliance actually occurred earlier if facts come to light that the applicant had been aware that a payment had been missed.

At the EPO, Article 122(1) EPC means that a request for re-establishment of rights can be made for applicants or proprietors of a European patent who were unable to meet a deadline “in spite of all due care required by the circumstances having been taken.” You will notice that this requirement of “all due care” is different from the UK requirement of “unintentional” and indeed, it is a higher standard to reach.

The “all due care” requirement means that the applicant and their professional representative need to demonstrate that the missed payment was an isolated mistake in an otherwise well-functioning system. We need to show that the relevant systems are usually robust, and that despite measures being in place to mitigate risk, there was an unexpected failure on this occasion. For example, if renewal fee payment instructions were sent to the correct person, but they did not carry out the instruction, the EPO would need an explanation of the reasons why. What measures are in place to ensure that instructions are correctly docketed and acted upon? Why did that not happen on this occasion? Providing the EPO with a timeline of relevant events can be helpful. The EPO may ask for evidence of any assertion made in the request for re-establishment. This could include a witness declaration signed by the person responsible for renewal fee payments, or copies of an email chain in which the facts surrounding the missed payment were established.

Each re-establishment request will be highly dependent on the facts and it is important to convey these fully and accurately to ensure the best chance of the request being successful.

European national patent offices

Having attorneys in France, Germany and the Netherlands, HGF can assist directly with restorations in these countries. Some commonalities exist between the countries, such as a six-month grace period in which to pay the renewal fee with a surcharge. There are also differences: while the UK adopts the standard of ‘unintentional’ regarding a missed deadline, many European national patent offices align with the EPO in requiring that the applicant and their representative demonstrate ‘all due care’.

France

In France, according to the provisions of article L.612-16 CPI, an applicant who has failed to comply with a time limit imposed by the French Patent Office (INPI) may file an appeal to have their rights restored if they can provide a legitimate excuse and if the failure to comply with the time limit has resulted in the rejection of the patent application or request, the forfeiture of the patent application or patent, or the loss of any other right.

The appeal must be filed within two months of the end of the impediment. The unfulfilled act must be completed within this period. The appeal shall only be admissible within one year of the expiry of the unobserved time limit.

Where the appeal relates to the non-payment of a renewal fee, the time limit not observed shall be understood to mean the six-month grace period of Article L.612-19 CPI, and restoration shall be granted only on condition that the renewal fees due on the date of restoration together with the restoration fee have been paid.

The two-month period for the appeal is generally calculated as from the instant when  the removal of the cause that prevented timely payment occurred.

As far as the legitimate excuse is concerned, it must consist of an external cause that is involuntary and not attributable to the patent holder (examples: illness, difficulties within the company, error by a professional representative, etc.).

The error by a professional representative, provided that this error is justified by evidence, is indeed often used as a legitimate excuse to restore a patent right for non-payment of renewal fees.

Germany

A grace period allows for late payment of annuities within 2 months from the original due date without additional payment of a surcharge, and within 6 months from the original due date with additional payment of a surcharge. If these due dates are missed, section 123 (1) and (2) of the German Patent Act provide for re-establishment of rights under certain conditions:

(1) Any person who, through no fault of their own, was prevented from observing a time limit vis-à-vis the German Patent and Trade Mark Office or Federal Patent Court, where non-observance causes a legal disadvantage in accordance with legal provisions, is to have their rights re-established upon request. …

(2) The re-establishment of rights must be requested in writing within two months after removal of the cause of non-compliance. The request must state the facts on which the re-establishment of rights is based; these are to be substantiated when the request is filed or in the proceedings concerning the request. The omitted act is to be completed within the period for making the request. The re-establishment of rights can no longer be requested, and the omitted act no longer be completed one year after the expiry of the period which was not observed.

What is important:

1. without fault:

A deadline is missed without fault if the usual diligence has been exercised. Although the standard is comparable to the “all due care” standard at the EPO as discussed above, the focus here is more on whether the non-observance of a time limit occurred without intent or negligence on behalf of one or more individuals. Lastly, it always depends on the circumstances of an individual case whether it can be argued that the omission occurred “with no fault of their own”.

1. when:

Within 2 months counting from the date on which the cause of non-compliance is removed (obtaining knowledge) and within 1 year counting from the missed time-limit.

1. how:

The request must state the facts on which re-establishment is based. This must happen within 2 months. It is not possible to add facts at a later stage. The omitted act is to be completed within the same period. The case (facts) must be complete from the outset – without derogations. The facts should be substantiated at the same time – if only for avoidance of incurring the risk of altering facts as it may occur when substantiating at a later stage in the proceedings.

1. timely action:

A reinstatement case always puts a tight schedule on everyone involved, and it all depends on a party’s diligence to disclose in good time the relevant facts and to procure in good time the relevant pieces of evidence, and to be responsive to any questions we may have, to maximize any prospects of success.

Austria

The time-limits are the same as for Germany. However, the legal provisions (enshrined in Art. 129-131 of the Austrian Patent Act) read slightly differently. Note: Austrian law does not distinguish between facts and evidence or facts and substantiation. The credibility of the facts advanced is to be fully substantiated within the 2 months.

The Netherlands

In the Netherlands, a patent can lapse through multiple causes. In addition to the above-described lapse due to non-payment of renewal fees, failure to perform actions specific to Dutch patents may also lead to lapse.

These include failure to comply with one or more of the requirements for validation of a European patent in the Netherlands, i.e. providing, to the Netherlands Patent Office (Octrooicentrum Nederland, OCNL) a Dutch translation of the granted claims and an English or Dutch translation of the description (if it was not in English) within the specified period, as well as paying the validation fee. These same requirements (filing translations of the claims and, if applicable, the description, and paying fees within the appropriate time limit) also apply to the NL revalidation of a European patent that has been maintained in amended form in opposition proceedings (even if only the description has been amended), and failure to comply with them will also result in the lapse of the Dutch patent.

If a Dutch patent (including the Dutch part of a European bundle patent) lapses due to non-payment of renewal fees or failure to complete other formal requirements, you can file a request to restore the patent (“herstel in de vorige toestand”; Art. 23 Dutch Patent Act). The restoration request must be submitted within the shortest period of one year from the date the patent lapsed and within two months after the first person (e.g., formalities officer, IP manager, patent attorney, renewals service provider) became expressly aware of the lapse. In the event of lapse due to non-payment of renewal fees, the end of the six-month grace period serves as the lapse date.

Alongside the request for restoration, you must pay the fees that would have been payable had the deadline been met (including any surcharges) and a statutory processing fee. The omitted act must be performed at the latest at the same time as the filing of the request. The submission of the relevant facts and arguments supporting the request may take place at a later date; OCNL typically sets a time limit of four weeks after receipt of the request for restoration.

When assessing the allowability of the request for reinstatement, OCNL applies the stricter standard of demonstration of “all due care”. This means that the burden of proof lies with the party requesting reinstatement to provide a detailed, credible account (who did what, when, using which systems) and submit evidence that the omitted act is an isolated mistake made by a properly trained and experienced professional, using an otherwise reliable docketing/monitoring system with appropriate control mechanisms, that have inadvertently failed for excusable reasons. Examples of such evidence include copies of email chains between the parties involved, screenshots of docketing systems showing control actions, and excerpts from internal work procedures; these documents may be edited in such a way that they cannot be traced back to specific individuals, and may be excluded from the OCNL register upon request (in practice, only outgoing messages from OCNL in the proceedings are made public). It is customary for OCNL, during the proceedings, to request written answers to specific questions about the events that led to the lapse (e.g. responsibilities of the persons involved, details of standard procedures) and the submission of additional supporting documents.

If OCNL intends to reject the request for restoration, it will invite the (representative of) the applicant to an oral hearing at the OCNL office in The Hague, at which an OCNL lawyer will request further clarification of critical issues in the application.

If the request for reinstatement is rejected, an appeal may be lodged with OCNL within a period of 6 weeks. Any subsequent appeals may only be lodged outside OCNL, i.e. at the District Court of The Hague, and if still unsuccessful, at the Administrative Jurisdiction Division of the Council of State of The Netherlands.

Unitary patent

Unitary patents are also subject to renewal fees which are payable as a single fee directly to the EPO. If these are not paid in time, a six-month grace period is available during which an additional fee of 50% of the renewal fee is also payable. If the renewal fee is not paid within this period, the  Unitary Patent lapses, but a request for re-establishment can be filed. As with re-establishment of an EPO application, the request must demonstrate that all due care was taken.

This article was prepared by Senior Patent Attorney Fiona Christie.