The number of blockchain patent filings has exploded in recent years at almost every patent office, but as of yet there have been very few decisions on the patentability of blockchain above the level of patent examiners. Patentability has mostly been decided by individual examiners following the guidance for more general computer-implemented inventions – and this has led to a degree of inconsistency between patent offices (though of course this occurs with many types of invention) and between examiners at individual offices.

Fortunately, a recent decision of the Australian Patent Office: Advanced New Technologies Co., Ltd. [2021] APO 29 (21 July 2021) casts some light on the patentability of blockchain in Australia and offers guidance that might be followed by other patent offices.

In short – at least in Australia – it seems as though blockchain is by and large patentable subject matter.

The decision relates to the patent application AU2018243625, an application filed by Advanced New Technologies Co., Ltd with a filing date of 21 March 2018 and a priority date of 28 March 2017.

Chronologically:

• A first examination report issued on 23 January 2020 asserted that all the claims were directed to unpatentable subject matter and lacked an inventive step.
• Following some back and forth, the applicant managed to convince the examiner that the claims were inventive, but in a fourth examination report issued on 7 January 2021, the examiner maintained the position that the claims were directed towards unpatentable subject matter (the examiner also introduced a new objection that the specification did not provide a clear and complete disclosure of the claimed invention).
• The applicant responded on 22 January 2021 requesting to be heard in relation to the outstanding objections and filed submissions explaining why these outstanding objections should be withdrawn.

Turning then to the substance of the application, the application states that: “there is a need to solve the technical problem of how to design a method for verifying a transaction request, such that there is no risk for privacy breach of a blockchain node participating in the transaction”.

The invention proposed to solve this problem is illustrated by figures 3A – 3C of the application, which are reproduced below:

The claim 1 proposed by the applicant’s submissions is rather long, and therefore is not copied here in full, but essentially the claim relates to the generation and broadcasting of a transaction request in order to “caus[e] the consensus nodes to each save the transaction abstract in the transaction request into a blockchain after the transaction abstract passes the consensus verification”.

The examiner was of the opinion that the invention “concerns the mere implementation of an abstract idea in an unspecified manner within a particular computer/computing environment”.

More specifically, the examiner argued that: “it becomes apparent that the substance of the invention lies in the abstract idea of not sending particular information as part of the transaction processing. Moreover, it is evident from the specification that the substance of the invention lies solely in the content of the data rather than any technical intervention on the part of the inventors.”

Turning then to the decision, the delegate of the commissioner did not agree with this view of the examiner. The standout statement made by the delegate is the statement that: “I can see no reason why technical improvements to fundamental mechanisms related to consensus within a blockchain should not be patentable, even though these improvements might not necessarily be addressing technical problems. In my view, the balance of considerations weigh in favour of finding that the claimed invention is a manner of manufacture.”

This is of course good news for patent practitioners looking to patent blockchain technologies and confirms the patentability of even core blockchain inventions (at least in Australia).

It is worth mentioning that this view (i.e. that blockchain inventions are technical and patentable) is not unusual. Most patent offices are amenable to blockchain inventions to some extent at least, though it is notable that the UK Patent Office tends to view blockchain inventions unfavourably (with only a small number of blockchain patents having made it through to grant in the UK). It is however encouraging to receive such a positive decision from a higher authority than an examiner.

Turning back to the decision, the delegate later stated: “However, I have serious concerns about the inventiveness of the claimed invention. I therefore refer the application back to examination in order to reassess the inventiveness of the claimed invention ….” – so while blockchain inventions seem to contain patentable subject matter, they do still need to be inventive! If anything, the fact that the invention was seen as not at all inventive but was still viewed as patentable subject matter should be viewed as very encouraging.

A conclusion that might be drawn from this decision is that for companies seeking blockchain patents, filing an application in Australia is a good idea. Additionally, examiners at many of the Asian patent offices (e.g. Indonesia and Malaysia, etc.) tend to concur with the decisions of examiners of the Australian Patent Office so this decision could be seen as a positive indication of blockchain patentability across much of Asia. When considering previous decisions by patent offices in Europe and the US, western patent offices are less likely to follow the Australian Patent Office so this decision is of less direct relevance, but is of course still an encouraging sign.

In summary, this decision seems to indicate the Australian Patent Office is amenable to blockchain patents – this is not a surprise, but rather is an affirmation of current practices from a significant patent office.

Mathys & Squire is delighted that partners Anna Gregson, Dani Kramer and Martin MacLean have all been identified in the 2021 edition of IAM Strategy 300: The World’s Leading IP Strategists. Highlighting those who are leading the way in the development and implementation of strategies that maximise the value of IP portfolios, the guide lists individuals from service providers, corporations, research institutions or universities.

Heralded as ‘world-class IP strategists’, these individuals are identified through confidential nominations, followed by extensive research interviews with senior members of the global IP community, including senior corporate IP managers in North America, Europe and Asia, as well as third-party IP service providers. Following this process, only those with exceptional skill sets, as well as profound insights into the development, creation and management of IP value, are featured in the IAM Strategy 300.

The 2021 rankings are available via the IAM website.

We would like to thank our clients and contacts who took the time to provide feedback to the research team at IAM Strategy 300. 

We are pleased to announce the appointment of Mathys & Squire’s first Chief Operating Officer (COO) in our 111-year history.

The management board has created the COO role to be responsible for driving forward the firm’s strategic development and growth. The COO will also play a key role in business leadership, improving operational implementation, efficiency and business transformation.

Mathys & Squire has gone through a period of sustained growth in recent years, appointing seven new partners in the last two years. This includes two new partners in the firm’s Munich office as we expand our European footprint.

Appointing a COO to play a larger role in running the business will allow for senior partners to able to spend a larger proportion of their time with clients and growing the firm rather than dealing with day-to-day operational matters.

The firm’s new COO is Jont Cole, who joins Mathys & Squire from property giant JLL, where he held senior roles including Global Strategic Program Director and COO of its Advisory and Alternatives divisions. At JLL, Jont led the coordination and implementation of the firm’s valuation global data strategy and global technology platform. He holds an undergraduate degree in Biochemistry and an Executive MBA from the London Business School.

Chris Hamer, partner and board member at Mathys & Squire, comments: “Jont’s appointment is a significant step in Mathys & Squire’s strategic development. His influence will allow the firm’s experts to focus on growing the business in the long term.”

Jont Cole comments: “I’m thrilled to be joining one of the leading European IP law firms with a superb reputation in the market for both its legal and commercial advice. I’m looking forward to freeing up senior partner time to serve clients even more fully.”

This release has been published in Intellectual Property Magazine, The Patent Lawyer and Legal IT Insider.

In this article for The Patent Lawyer, partner Jeremy Smith provides an update to his earlier comments regarding the South African patent office issuing the world’s first patent for an invention that lists an artificial intelligence (AI) as the inventor (available here), in response to news that the Australian Federal Court has now also handed down a decision that an AI can be named as the inventor in a patent application.

The patent application relates to two inventions: a beverage container having a fractal wall; and a signal beacon, both generated by DABUS (‘Device for the autonomous bootstrapping of unified sentience’) – an AI system created by Stephen Thaler. The patent application was filed with Stephen Thaler listed as the applicant and DABUS listed as the sole inventor, with the inventor field of the application stating that “The invention was autonomously generated by an artificial intelligence”. The court overturned a previous decision by the Deputy Commissioner of Patents of the Australian Intellectual Property Office to refuse the application on the basis that the Australian Patents Act requires the inventor to be human.

In its reasoning, the Federal Court emphasised the difference in requirements between being an owner and an inventor, noting that whilst only a human or other legal person can be the owner of a patent, the inventor is not restricted to being human. Regarding inventorship, the Court commented that “First, an inventor is an agent noun; an agent can be a person or thing that invents. Second, so to hold reflects the reality in terms of many otherwise patentable inventions where it cannot sensibly be said that a human is the inventor. Third, nothing in the Act dictates the contrary conclusion”. This was in disagreement with the Deputy Commissioner, who noted that the ordinary meaning of “inventor” is inherently human, following reasoning similar to that of decisions handed down in other jurisdictions, such as the UK, where the listing of DABUS as a non-human inventor has been rejected.

The court also provided some clarification on the issue of ownership when an AI is listed as the inventor, noting that whilst DABUS is not a legal person and cannot legally assign the invention, the invention was made for Dr Thaler in the sense that Dr Thaler is the owner, programmer and operator of the system that made the invention, and therefore, on established principles of property law, is the owner of the invention.

The news follows the recent development in South Africa, where a patent was recently issued that lists DABUS as an inventor. However, whilst the grant of a patent in South Africa that names an artificial intelligence as inventor also provides for attention grabbing headlines, we need to be careful not to infer too much from this occurrence. Unlike other countries in which patent offices had concluded that an AI cannot be considered an inventor under current legislation, the South African patent office does not carry out substantive examination of a patent application before grant. Instead, potential issues with a granted patent are left to the courts, should the granted patent ever be challenged. Accordingly, the grant of the DABUS patent in South Africa is not an indication that the South African patent office has accepted that an AI can, legitimately, be a named inventor – the patent office may simply not have considered the issue. Nevertheless, the decision by the Australian Federal Court is more significant and seems to open the door for non-human inventors to be named on patent applications in Australia.

As a practical matter, the divergence of approach between the Australian court other those of other jurisdictions raises potential conflicts for applicants wishing to obtain patent protection, in both Australia and elsewhere, for inventions involving the use of AI. For example, there may be scenarios in which it is impossible to name a single set of inventors that is legally correct in both Australia and another jurisdiction, such as the US.

This article was published in The Patent Lawyer Magazine in August 2021.

The recent decision by the European Patent Office (EPO)’s Technical Board of Appeal 3.3.04 in T 96/20 appears, at first glance, to have raised the bar for acknowledging the inventive step of medical use claims in a situation where the prior art discloses that the claimed therapeutic is undergoing clinical trials. However, a broader view suggests that a more nuanced approach is required.  

There have been numerous decisions by the EPO’s Boards of Appeal which have demonstrated how clinical trial disclosures can become an obstacle to the patentability of medical use claims. 

The Boards have repeatedly recognised the novelty of medical use claims over prior art disclosures indicating that clinical trials were underway, but whose results were not yet reported (e.g.T 158/96, T 715/03 and T 385/07). However, the disclosure that a therapeutic is undergoing clinical trials can nevertheless become a bar to securing an inventive step, even where the results of the trial have not been made available to the public (as discussed in e.g. T 2506/12 and T 239/16).

The decision in T 96/20, at first glance, appears to further raise the bar on inventive step. Here, the Board deems that the disclosure of a Phase II clinical trial protocol for eculizumab (Alexion’s anti-complement component C5 antibody; marketed as Soliris®) for the treatment of the neuromuscular disorder myasthenia gravis (MG), in and of itself, provides the skilled person with a reasonable expectation that the treatment would be successful.

The Board considers that this expectation would stand “unless there was evidence to the contrary in the state of the art”. The Board is not swayed by the appellant’s argument that MG was known to be difficult to treat in humans. In view of the complexity of the complement cascade and its implication in a variety of diseases, the Board also rejects the notion that reports in the art of failures to treat other complement-associated disorders using different types of inhibitors would diminish the skilled person’s expectation of success. Of interest, on this point, the Board states that:

“In view of this complexity, the board is satisfied that the failure of other complement inhibitors to treat diseases unrelated to MG did not necessarily call into question the skilled person’s expectation that MG could be treated successfully with Eculizumab. In fact, in the board’s view, only evidence relating to the same compound and disease would be suitable for this purpose”.

(Reasons 13; emphasis added)

Consequently, the appellant’s medical use claims directed to the use of eculizumab in the treatment of MG are deemed to lack an inventive step by the Board.

The notion that a Phase II clinical trial protocol may provide a reasonable expectation of success is not new. In T 239/16 the Board asserted that a reasonable expectation of success arises because clinical trials are known to be based on earlier preclinical studies (thereby suggesting the success of the therapeutic concerned) and because their approval entails ethical considerations which require that a benefit will arise with “reasonable certainty” (see 6.5 and 6.6 of the Reasons). In that case, however, the class of active agents to which the claimed therapeutic belonged was known to be generally effective in treating the condition in question and the Board decided that there was nothing in the state of the art to lead the skilled person to believe that the claimed once-yearly administration regimen (corresponding to one of the arms in the clinical trial) would not be effective.

The facts underlying T 96/20 are different to T 239/16, in that the claimed medical use is not a specific administration regimen and no effective treatment with the same class of active agents (anti-C5 antibodies) was known in the art. The Board nevertheless comes to the same conclusion, namely that the Phase II trial protocol provides a reasonable expectation that the therapy will be effective. Thus, in T 96/20 the Board seems to be further raising the bar because it appears to endorse a very rigid approach to the assessment of inventive step, in which the disclosure of a clinical trial protocol is automatically deemed to provide an expectation of success which is only diminished if there is evidence to the contrary in the prior art pertaining to the same therapeutic and the same disease.

Reaching such a conclusion would, however, mean disregarding much of the existing EPO case law indicating that a more nuanced approach is required and setting out multiple factors which must be taken into consideration and carefully balanced when establishing whether a prior art disclosure provides the skilled person with a reasonable expectation of success. A useful insight into the thought processes which may underpin the Board’s assessment of the skilled person’s expectations in T 96/20 is provided by decision T 33/19 which was issued by the same Board (3.3.04) in the same composition on the same date as T 96/20. That decision also pertains to medical uses of eculizumab, albeit for the treatment of a different condition (aHUS).

In T 33/19 the prior art did not include a clinical trial disclosure. Instead, the art suggested investigating anti-C5 antibodies as a therapeutic option for treatment of aHUS. The Board considered that this teaching in the art was merely speculative because it was not based on in vitro or in vivo experiments (anti-C5 antibodies had not been tested in an animal model for aHUS) and the art also expressed uncertainty as to the outcome of such a treatment. Thus, the Board concluded that a reasonable expectation that aHUS could be successfully treated with eculizumab did not exist.

The factors considered by Board 3.3.04 in T 33/19 align with those in earlier decisions pertaining to clinical trial disclosures, for example asking whether the therapeutic belongs to a class of compounds that was known to be effective in the treatment of the disease (which it was in T 239/16, but not in T 715/03). In T 96/20 the Board does not provide any written reasoning in response to the Appellant’s argument that, by contrast to T 239/16, eculizumab was the first complement inhibitor approved for the treatment of MG. That does not mean, however, that this factor was ignored by the Board in reaching its decision.

Another factor which is not discussed in the reasoning of T 96/20, but which is important to consider, is that the skilled person has at hand their own knowledge of the clinical trial application process and the varying criteria that must be met in order to receive approval for the different phases of a clinical trial. Whilst it might generally be the case that the approval of a Phase II trial indicates some expectation of success, it cannot be assumed that the level of expectation will be high in all cases. Approval of a Phase II trial does not automatically indicate that Phase I has concluded, neither does it imply any positive therapeutic outcome from Phase I. In reality, Phase I and II may overlap (as seen with the recent trials for the Covid-19 vaccines, for example).

The skilled person also has knowledge that certain clinical trials with specific risk factors may require additional experimental evidence and evaluations prior to approval, e.g. if the drug acts via a species specific mechanism such that animal models are unlikely to be predictive of activity in humans or where target expression differs considerably between healthy subjects and those with the disease[1]. On the other hand, the skilled person also knows that there are situations in which the level of supporting evidence required for Phase I approval is low, e.g. trials involving a known therapeutic for a new indication. The skilled person is also aware of situations in which approval of a drug for use in humans is based on minimal pre-clinical data. For example, it is known that the scientific evidence required for orphan drug designation can be minimal and, in some circumstances, may only be based on in vitro data[2]. In such cases, the expectation of achieving a safe and effective treatment is arguably closer to a ‘mere hope to succeed’ than to any ‘reasonable expectation of success’.

Taking all of the above into consideration, it becomes clear that the question as to whether or not the disclosure of a clinical trial protocol provides a reasonable expectation of success is undoubtedly highly subjective and based on a balance of several factors. To assert that there is automatically an expectation of success in every situation which is only diminished by evidence pertaining to the same therapeutic and the same disease seems to set the bar too high. Moreover, it would neglect all of the above considerations and circumstances which are critical to evaluating the skilled person’s ability to make a rational and informed prediction as to whether the envisaged treatment would be successful. The fact that the same Board was clearly aware of these factors in their decision T 33/19 indicates that the reasoning in T 96/20 is not intended to depart from the earlier case law of the Boards of Appeal in this area.

For this reason, we consider that T 96/20 should not be seen as a radical departure from earlier EPO jurisprudence, nor should it be seen as a reason to disregard the above considerations. It should, however, act to highlight the complexities of EPO practice in this area and as further encouragement (if any were needed) to applicants and patentees to provide as much evidence as possible about the low expectation of success of the skilled person based on the state of the art, especially where that includes Phase II clinical trial protocols.

[1] See, for example, the guidance that is provided under the heading “Applications that need expert advice” found here: Clinical trials for medicines: apply for authorisation in the UK – GOV.UK (www.gov.uk)

[2] See e.g. page 5 of the European Medicines Agency’s Committee for Orphan Medicinal Products (COMP) recommendation paper on elements required to support the medical plausibility and the assumption of significant benefit for an orphan designation (EMA/COMP/15893/2009 Final)

In this article written by Intellectual Property Magazine, Mathys & Squire Partner Jeremy Smith provides his commentary in response to the recent news that the South African patent office (Companies and Intellectual Property Commission Department of Trade and Industry (CIPC)) has issued the world’s first patent for an invention that lists an artificial intelligence (AI) as the inventor and the AI’s owner as the owner of the patent.

Secured by University of Surrey professor Ryan Abbott and his team this week, the patented invention was generated by the artificial neural system DABUS (Device for the Autonomous Bootstrapping of Unified Sentience) and created by CEO of Imagination Engines’ Stephen Thaler.

DABUS is an extensive artificial neural system that combines the memories of various learned elements to create new and complex concepts.

Inventions conceived by DABUS include an emergency warning light and a food container that improves grip and heat transfer.

The patent is the subject of ongoing proceedings including in the US, UK, Germany, Australia and at the European Patent Office.

In September 2020, England & Wales High Court Justice Marcus Smith held that AI cannot be a listed inventor on a patent.

Siding with the UK Intellectual Property Office, Justice Smith ruled that it is “quite clear from the statutory scheme contained in the UK Patents Act 1977 that – whatever the meaning of the term ‘inventor’ – a patent can only be granted to a person”.

Smith said he reached this conclusion “explicitly without considering the meaning of the term inventor” and emphasised that the wording of the ’77 Patents Act “makes clear that the holder of a patent must be a person.”

The justice concluded, “DABUS is not, and cannot be, an inventor within the meaning of the 1977 Act, simply because DABUS is not a person.”

Welcoming the win, Abbot said, “We see this issuance as a key step toward recognition of the importance of encouraging individuals and companies to make, develop and use AI to generate socially valuable innovations.”

He added, “As AI continues to advance and to increasingly perform human sorts of activities, this will result in a host of challenges and opportunities for businesses, including with respect to disputes.”

Mathys & Squire’s Jeremy Smith commented, “Whilst the grant of a patent in South Africa that names an artificial intelligence as inventor provides for attention grabbing headlines, we need to be careful not to infer too much from this occurrence. Unlike other countries, such as the UK and US, in which patent offices have concluded (and the courts have upheld) that an AI cannot be considered an inventor under current legislation, the South African patent office does not carry out substantive examination of a patent application before grant.”

He added, “Instead, potential issues with a granted patent are left to the courts, should the granted patent ever be challenged. Accordingly, the grant of the DABUS patent in South Africa is not an indication that the South African patent office has accepted that an AI can, legitimately, be a named inventor – the patent office may simply not have considered the issue.”

This article was written by Intellectual Property Magazine in July 2021.

At the European Patent Office (EPO), one of the first steps for assessing inventive step of a claim is to determine the closest prior art. For medical use claims, the closest prior art is typically held to be a document relating to the same medical use as that claimed – when selecting the closest prior art, the first consideration is that it should be directed to a similar purpose or effect as the invention (Guidelines for Examination at the EPO, G-VII, 5.1). Thus, where a claim is directed to ‘X for use in treating disease Y’, the closest prior art would normally be a document directed to the treatment of disease Y, which position bears out in the existing case law (e.g. T 2571/12). However, a recent decision – T 2443/18 – issued by a technical Board of Appeal of the EPO, did not follow this approach.

What happened?

In T 2443/18, the claim in question was directed to the known drug tapentadol for use in the treatment of irritable bowel syndrome (IBS). Surprisingly, the Board of Appeal found that a document (D4) relating to tapentadol and confirming its efficacy in the treatment of visceral pain in animal models, was a suitable starting point giving a ‘workable route’ to the claimed invention. This was despite there being another prior art document (D3) on file directed to the use of a compound of the same functional class (another μ-opioid receptor agonist) in the treatment of IBS specifically (i.e. a document relating to the same purpose or effect as the invention). The Board noted that “if inventive step is to be denied, the choice of starting point needs no specific justification”, before going on to find that the claimed subject-matter lacked inventive step starting from D4. It also seems that additional weight was given to the relevance of D4 based on experimental data and comments in the patent in suit which showed the benefits of tapentadol in the treatment of ‘visceral hypersensitivity and referred pain’ as ‘major symptoms’ of IBS.

Why did the Board diverge from the normal approach?

When trying to convince the Board that a document directed specifically to the treatment of IBS should be considered the closest prior art, the patentee argued that a drug developer would typically seek to provide a suitable drug for a given medical indication, rather than investigate new medical indications for a known drug. The latter approach was also alleged by the patentee to risk obscuring the proper assessment of inventive step by impermissible hindsight knowledge of the invention. However, the Board of Appeal did not find these arguments convincing. The Board instead found that:

“either approach may be taken by a person skilled in the art, depending on the stages reached in the development and life of a drug compound and the rationale for its development.”

The Board also noted the similarity between IBS and visceral pain and found that:

“Document D4 relates to tapentadol and its confirmed efficacy in animal models of visceral pain… While D4 does not specifically refer to IBS, visceral pain is a typical manifestation of IBS, the therapeutic indication named in claim 1 of the patent in suit. In view of this considerable overlap in technical features and purpose… D4 cannot be ruled out as a suitable starting point for the assessment of inventive step”

Accordingly, the Board appears to have diverged from the usual approach to the selection of the closest prior art in view of the stage reached in the development of tapentadol and the overlap in technical features and purpose of using tapentadol to treat visceral pain.

Outlook – will this have a wider impact on normal practice?

Certainly, T 2443/18 was decided based on the specific facts of that case, and it is clear that the Board gave significant weight to the efficacy of tapentadol in the treatment of visceral pain shown in the prior art and indications in the patent in suit that visceral pain was a symptom of IBS (i.e. the indication claimed), when considering whether D4 was a suitable starting point for the inventive step assessment.

However, this decision may reflect more of a willingness of the Boards of Appeal to consider different possible starting points in considering the inventiveness of medical use claims, including those which may be less relevant to the purpose or effect of the invention than other cited prior art. Indeed, in another similar decision – T 0641/18 – issued by the same technical Board of Appeal, the closest prior art document was again found to be a document directed to the claimed compound for use in a similar (but not identical) medical indication to that claimed.  

In T 0641/18, the Board highlighted the similarity by which the claimed compound exerts its effect in the two medical indications. However, no mention was made of the stage reached in the development of the drug in question. Importantly, the claim in T 0641/18 was still found to comprise an inventive step because the closest prior art document specifically taught that the similar medical indication and claimed medical indication are not expected to be treated using the same compounds.

It remains to be seen whether different EPO technical Boards of Appeal will follow the approach set out in T 2443/18 and whether it will become more difficult in the future to demonstrate an inventive step for a claim directed to a new medical use of a known medicinal compound, particularly where there is any overlap in symptoms of the new indication versus those the compound is already known to treat.

By a press release earlier today, the Enlarged Board announced its decision on the compatibility of oral proceedings by videoconference with the rights of parties under Article 116 EPC, where not all of the parties have consented to that format.

The Enlarged Board has limited itself to answering the referred question in relation to proceedings before the Boards of Appeal (i.e. the situation dictated by new Article 15a RPBA) and to the presence of a ‘general emergency’. In those situations, the ruling of the Enlarged Board states that oral proceedings by videoconference held without the consent of the parties during a period of “general emergency impairing the parties’ possibilities to attend in-person oral proceedings at the EPO premises” are compatible with rights under the EPC.

This arguably leaves open the question of how a ‘general emergency’ is to be defined, and whether this requires a state of general emergency to be formally declared. Nevertheless, the EPO in its own press release this morning (Friday 16 July 2021) has stated that oral proceedings by videoconference will continue to be scheduled in accordance with its current practice, due to the ongoing pandemic situation in the EPO Contracting States and beyond.

We now await the formal reasoned decision, which may yet have implications for the scheduling of oral proceedings by videoconference before the departments of first instance (Examination and Opposition Divisions) as well as the Legal Division and Receiving Section. Indeed, the EPO has indicated that it will be carefully analysing the reasons for the decision once issued for any such implications.

For further information relating to the G 1/21 case up to this point, read our previous article here.

Following delays throughout 2020 (see previous article here), on Friday 9 July 2021, the Federal Constitutional Court ruled on two urgent applications against the ratification of the Unified Patent Court (UPC). In both cases (2 BvR 2216/20 and 2 BvR 2217/20), the petitions were rejected as inadmissible, as – in the court’s view – there was insufficient substantiation.

Thus, the path is finally clear for Germany to ratify the UPC, creating a common court system for patent litigation across European Union member states.

Next steps

There is now hope that ratification can be completed in Germany before the federal elections in September 2021. Directly after that, the ‘Provisional Application Period’ will begin, during which time the UPC will be equipped. For the upcoming tasks, such as the recruitment of judges and the staffing of the administration, a period of at least eight months is initially planned, which can be extended, if required.

The realistic target for the start of the UPC system is likely to be 1 January 2023. Until then, among other things, it must be clarified in which member state the headquarters of the pharmaceutical division of the UPC – which, prior to Brexit, was originally planned to be based in London – will be located. At present, Italy is the most likely option, since it has joined the group of three strongest users following the UK’s withdrawal from the UPC. It can therefore be assumed that the pharmaceutical division will be based in Milan.

The widely anticipated European Patent Office (EPO) decision in case G 1/21 has been delayed thus far by ongoing discussions in relation to partiality of the members of the Enlarged Board of Appeal, which has been the subject of two interlocutory decisions.

Following the first of those decisions, the composition of the Board was changed by order of 20 May 2021. The appellant (opponent, Rohde & Schwarz GmbH & Co KG) made submissions raising further objections, including requests for replacement of additional members of the Enlarged Board and referencing for the first time the issue of “personal interest” of the members. In a non-public discussion during the originally scheduled (first) oral proceedings of 28 May 2021, the issue of suspected partiality was discussed. The (second) oral proceedings to decide on the referred question was postponed to 2 July 2021, in order that a decision could be issued on the further allegations of suspected partiality. That second interlocutory decision of the Board was issued on 28 June, the week of the oral proceedings, dismissing all of the appellant’s objections.

While the delay of the discussion of the actual legal issue, referred by the Board of Appeal in T 1807/15, may appear frustrating to many, it has been widely accepted that it is essential for the public to have confidence that a fair and unconflicted  decision will be reached by the members of the Board. As put by Siemens AG in their amicus curiae brief: “there is a conflict between a timely decision vs. … a high-quality decision”, and most of the nearly 50 parties who have submitted amicus curiae briefs appear to concur that the importance of a high-quality decision outweighs the desire for expedient certainty.

The first oral proceedings – suspected partiality from involvement with Article 15a RPBA

The suspected partiality alleged by the appellant was based on the involvement of certain Board members in the drafting of new Article 15a RPBA, which entered into force earlier this year – this new Article states that the Boards of Appeal can hold oral proceedings by videoconference without requiring the consent of the parties to this format. The present referral, in which the Enlarged Board will decide whether oral proceedings by videoconference are compatible with the legal right to oral proceedings (Article 116(1) EPC) if all parties to the proceedings have not consented, could be decided in direct contravention with the provisions of that new Article. Thus, there is a question as to whether a legal conflict exists between Article 116 EPC and the new Article 15a RPBA, as the latter appears to be based on the view that oral proceedings by videoconference must be compatible with Article 116 EPC. This conflict would render the particular Board members unable to take an impartial view, because they had performed legislative acts under that assumption which could then be found to contravene the EPC by the decision in this case.

Due to this alleged conflict, the appellant raised objections of suspected partiality against the Chairman and two technical members of the Board in its original composition (X and Y), citing their involvement in bringing Article 15a RPBA into force. One of the legal members (Z) also made submissions about their own involvement in preparing the legislative proposal for amending the RPBA as part of a working party, and requested under Article 24(2) EPC that the Board decide on their continued participation.

The suspicions against X and Y were reasoned with reference to the consultation between the President of the Boards of Appeal and the Presidium (of which X and Y were members) in relation to the proposal for Article 15a RPBA, alleging that the subsequent adoption and approval of that Article signified a positive majority within the Presidium. By a first interlocutory decision dated 17 May 2021, a recomposed Enlarged Board (with all of the objected members replaced pursuant to Article 24(4) EPC) decided that the Chairman and legal member Z were to be replaced in view of their suspected partiality, but technical members X and Y were to remain on the Board in its revised composition. This distinction was made in view of the differences in the level of involvement of each party in the process of bringing the new Article into force, with the Board considering that the Chairman had played an active role in passing legislation and that the visible involvement of legal member Z in drafting that legislation would not inspire confidence in the impartiality of an Enlarged Board comprising Z. The Board concluded that merely sitting on the advisory Presidium of the Boards of Appeal was not enough to objectively justify a suspicion of partiality, as there was no evidence of a majority vote or particular opinion of those members. The revised composition of the Board was adopted by order of 20 May 2021.

The second interlocutory decision – further partiality objections by the appellant

Following the first interlocutory decision, the appellant raised further objections of suspected partiality and personal interest in submissions made in the week leading up to the first scheduled oral proceedings; those additional objections and the non-public discussion are the subject of a second interlocutory decision by the Board dated 28 May 2021 and made available on 28 June 2021. In the further submission filed before the first oral proceedings, the appellant objected that the first interlocutory decision referred to brief comments submitted by the replaced members (Reason 9), providing details of their involvement in drafting/approving Article 15a, to which they had only been alerted at the time the first decision was issued. The further objections are well summarised in the second decision – they essentially relate still to requests for replacement of members X and Y for reasons of suspected partiality, as well as the Rapporteur on the grounds of a new allegation of suspected partiality, and an allegedly improper application of Articles 2(2) and 2(3) of the Business Distribution Scheme of the Enlarged Board of Appeal (BDS) in replacing “members” (i.e. those listed under Article 2(1)(a) BDS, including the replacement members in this case) with their “alternates” (i.e. the additional members listed under Article 2(1)(b)BDS).

However, the Enlarged Board in their second decision dismissed all of the appellant’s objections of suspected partiality. In particular, the Board did not consider any of those objections to be reasoned and supported by facts or evidence, because some of the allegations were speculative  as to the content of the comments submitted by the members – “we have reason to believe…” – and others made in a general and non-person specific manner. The Board concluded that it had performed its duty in considering the facts available to it at the time of the earlier decision (including the aforementioned comments), i.e. there was no basis for a request of the appellant to be provided with those comments. The appellant extended its objection of suspected partiality to all of the five internal members of the revised Board, who were also present on the original Board, based on allegations that their agreement with the Chairman might be beneficial to them in being selected to remain members of the Enlarged Board; these were, unsurprisingly, deemed late-filed and inadmissible. The appellant had also raised for the first time the question of members having a “personal interest” (Article 24(1) EPC), referencing an alleged bias of the internal members because of their personal preferences for a particular mode of working either remotely or in person. This objection was considered inadmissibly late, overly general, and not substantiated – in particular, the Board noted that no direction of bias was indicated by the appellant. Furthermore, such a general objection would apply to any member of the Board, such that replacement of the objected members could not alleviate the party’s concerns. Finally, in relation to the objection that the replacement of members was improper, the Board did not see any legal provision under which this objection could be considered to be raised; it was not deemed to fall within Article 24 EPC, and so the Enlarged Board was not empowered to change its composition.

The reasoning given in the dismissal of those requests is fully consistent with the first decision, which sets out the legal principles developed in the case law concerning the application of Article 24 EPC (Reasons, point 10):

a. the right to object to a judge for reasons of suspicion of partiality is meant to prevent judges from being influenced in their decision-making … by considerations other than the arguments they consider factually and legally relevant for the case under consideration;

…

e. suspicion of partiality of a judge has to be determined by two tests: firstly, a subjective test requiring proof of actual partiality of the judge concerned, and secondly an objective test, whether the circumstances of the case give rise to an objectively justified fear of partiality;

f. with respect to the subjective test it is presumed that a duly and lawfully appointed judge is personally impartial, unless there is proof of the contrary;

g. with respect to the objective test … [t]his criterion excludes subjective suspicions on the part of the party who makes the objection.

The second oral proceedings

Following a minor delay due to technical difficulties, the Board in its amended composition convened on 2 July 2021, together with three representatives of the appellant and three representatives appearing on behalf of the President of the EPO. The parties were asked to summarise their cases and make any additional oral submissions, with the Board noting the receipt of a further letter of the appellant containing requests addressed only to the Chairman shortly before midnight on 30 June 2021.

The appellant maintained their position on the improper replacement of members of the Enlarged Board with their alternates, and made several allegations about the “diligence” of the Enlarged Board in the proceedings to date: (i) that they had not provided the appellant with a copy of the minutes of the first oral proceedings pursuant to Rule 124 EPC; (ii) that the appellant had agreed to a shorter time limit in a future summons which applied a time pressure to the case, which the Board itself had not “coped” with in issuing a decision so shortly before the second oral proceedings; and (iii) that the Board was not acting fairly in relation to the time it took to provide reasons in a decision as compared with the time made available to the appellant to respond to them, at a direct cost to the party being represented at the proceedings (their client).

The Chairman dismissed these allegations, considering that the second interlocutory decision did not require a response and contained the necessary information which would form minutes of the first proceedings. The appellant was asked to formulate a formal request, should they wish to continue this debate. The first of those requests was that the Enlarged Board declare itself incompetent (!) to deal with the referral by an improper application of Article 2 of the BDS, and that the oral proceedings then be postponed until a new order was issued by the Chairman for a revised composition of the Board to be formed. The representatives of the President of the EPO requested that the appellant’s requests be rejected and a discussion on the point of law be conducted as soon as possible, which was considered to be in the public interest.

After an interruption for deliberation, the Board unsurprisingly dismissed the requests of the appellant and proceeded to the discussion of the referred question.

Finally, the panel entered into the long-awaited discussion of the fundamental legal issues at hand. The scope of the referral, the proper mode of interpretation of Article 116 EPC and purpose of oral proceedings, an assessment of the legal effect, if any, of the modus operandi of the EPO in the circa 40 years to date on the rights of parties, and the question of the effect of consent of parties to proceedings were all discussed. Proceedings were terminated for deliberation of the Board, and we expect a decision in writing in the coming weeks.