TESTING THE WATERS EPO: Postponement of the examination for patent applications

This article first appeared in Bugnion Journal – To view the Journal in full click here

The EPO recently launched an online survey about the postponement of examination of pending patent applications.

Postponement of examination is available in some countries, like the USA, Japan, Korea, China, Australia and Russia.

In CN, JP, KR and RU, substantive examination must be requested by the applicant, or by any third party, with payment of an examination fee, at any time within 3 years from filing.

In the USA it is different: after being filed, a patent application joins a queue awaiting examination. The USPTO has established an optional deferral procedure whereby the applicant pays a fee and chooses the number of months of deferral, 36 at the most.

In Australia the examination of an application is carried out only when a request for examination is filed and an examination fee is paid, within 5 years from the filing date. The long period for requesting examination is balanced by the short duration of substantial examination (12 months from the date of the first examiner’s report).

In Europe, Germany has a similar system. Applicants have 7 years from the filing date to request examination and pay the associated fee. Applicants can take advantage of this by filing a German and a Euro-PCT patent application in parallel. Based on the outcome of the latter, the former can be used as a fallback position: the applicant can abandon the Euro-PCT and use the provisional protection granted by the German application. The German case is peculiar, since it fits into a system that doesn’t envisage the postponement of examination. If the EPO introduces deferred examination, the German system’s advantages will disappear.

The purpose of the EPO is to reduce the existing backlog at the EPO by avoiding the examination of applications in which applicants have lost interest or in cases where applicants have decided not to invest further resources in a technology that has become obsolete.

There are also disadvantages tied to deferred examination, since it would stretch the duration of prosecution of a patent application which, in the view of many applicants, is already too long.

The introduction of this system would harm third parties, since the period of legal uncertainty would be extended. Many years could pass between the filing date and the date of grant and third parties wouldn’t know the exact scope of protection of a competitor’s right and would be left in doubt as to whether their new products might infringe a patent granted after a deferred examination. This could potentially freeze the marketplace.

Some applicants, mainly large companies, might take advantage of this system strategically by choosing to defer examination, monitor the market, and tailor their patent around competitors’ successful products. They can file a high number of applications, even weak ones, keeping them pending for years without much financial effort, thereby blocking or increasing the uncertainty of the marketplace. Many patents will remain submerged for years, only to surface and surprise competitors at the right time, harming small and medium-sized enterprises.

Furthermore, some European States allow court infringement proceedings to be initiated on the basis of a national or European patent application, where the State concerned is designated. However, a decision can be issued only after the patent is granted. A postponement of the examination might unacceptably delay the issuance of a decision by the court.

If postponement becomes a reality in Europe, some precautions can be adopted to mitigate the drawbacks: delaying examination only after the publication of a European search report, and giving third parties means to assess the patentability of the application. The request for postponement should be subject to payment of a high fee, in order to ensure that deferral will be sought only if there is a real interest and not just to put a strain on competitors. Third parties should be allowed to trigger an examination even if postponement was requested. Moreover, as in Australia, the examination should be ended quickly, for example within 12 months from the first official action.

Countries having a deferred examination system possess homogeneous legislation and a single economy. Adopting this system should be a matter of national law, considering the national economic environment. Europe, by contrast, is the union of a number of states, each having its own legislation, marketplace and economy. What works for realities totally different from Europe’s could not be applied with equal success in such a heterogeneous bundle of nations. The deferred system could make sense at a national level but not at the European level.