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The unitary patent, the Spanish challenge and a costly admin error

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EU flagAs IPcopy covered back in June last year, Spain has launched further attacks against the unitary patent system at the CJEU. There are several bases for the complaint including breach of the principles of autonomy and the issue of delegation of powers to the European Patent Office whose acts are not subject to judicial review.

At the always entertaining Wragge & Co. annual patent seminar in December last year, the Virgin v. Zodiac case that recently passed through the UK’s Supreme Court was discussed in the context of res judicata and the end of the Unilin principles. However, this case may also illustrate the issues that can arise when the EPO gets something wrong and there’s no means for appeal.

The Supreme Court case centered on Virgin Atlantic Airways Ltd’s attempts to recover damages exceeding £49 million (!) for the infringement of a European patent that no longer existed in the form said to have been infringed.

What is particularly interesting about the Virgin/Zodiac case in the context of the unitary patent system and Spain’s challenge to that system is that it relates to a patent that should never have had effect in the UK were it not for an administrative mistake by the EPO!

Before we get into the administrative mistake with Virgin’s EP(UK) it is worth briefly reviewing the amount of legal proceedings that have taken place on the patent in suit.

The legal proceedings

  • The patent in question in the Virgin/Zodiac case is a European patent for a “seating system and passenger accommodation unit for a vehicle” which granted in May 2007 to Virgin (EP1495908).
  • The initial action brought by Virgin against Zodiac Seats UK Ltd (as it is now called) started in the High Court with judgment being handed down in January 2009 by Lewison J. The High Court action was followed by an appeal later in 2009 in the Court of Appeal. The Supreme Court case was heard in April 2013 with judgment in July 2013 (link).
  • In parallel to the UK court actions an Opposition was filed at the EPO in February 2008 and this was followed by an appeal to the Technical Board of Appeal (T1495/09).

The patent and the admin error

The patent in question (EP1495908) was in fact a divisional European patent application of an earlier application (EP Application No.: 02751416.5).

In item 6-1 of the “Request for grant of an EP patent” form  (EPO form 1001E) the applicant, for the divisional application, listed the following states that it intended to pay designation fees for:

AT BE BG CH&LI CY CZ DE DK EE ES FI FR GR HU IE IT LU MC NL PL PT RO SE SI SK TR

The eagle eyed among you may have noticed that there is no GB designation in this list. This perhaps could have been considered an oversight were it not for the following note that was added in item 16 of the form:

Re item 6-1: GB is expressly NOT designated in this application. Apart from GB, all other EPC contracting states which were designated in EP 02751416.5 are designated in this application.

So, it seems fairly clear that the Applicant had decided not to designate the UK when filing the divisional application. Just to hammer home the point, this is the same divisional application that would eventually grant and give rise to UK High Court, UK Court of Appeal and UK Supreme Court proceedings and a £49 million claim for damages!

Somehow, however, the EPO missed the Applicant’s note on the GB designation and the application proceeded and eventually granted with a GB designation. Just two months after grant Virgin initiated its UK High Court action on the basis of this EP(UK) patent.

Three Oppositions were filed to the patent at the EPO and the third Opponent (Premium Aircraft Interiors Group Limited who later became Zodiac) argued the EPO should correct the administrative mistake of including the GB designation under Rule 140 EPC (see page 4 of Grounds for the decision (Annex) – opposition dated 18 June 2009).

In a Communication dated 23 February 2009 the Opposition Division noted that it had referred the request for correction of the decision to grant a European patent in respect of GB back to the examining division who had taken the original decision.

In a Communication dated 17 April 2009 the examining division came to the conclusion that it was not necessary to correct the decision with regard to GB stating, among other things, that:

The ambiguity in form 1001 with regard to GB should have been clarified with the application. As such there is no explicit, unambiguous withdrawal.

If the phrase “GB is expressly NOT designated in this application” is not regarded as explicit and unambiguous then one wonders what would have been necessary to convince them that the GB designation was not required!

The Opposition division commented on the examining division’s decision on page 27 of the Grounds for the decision (Annex) – opposition where, in a masterful example of understatement, it said that it regretted “any adverse effect that might result for the third Opponent or, more generally, for the public from the administrative mistake [that] occurred during the examining proceedings leading to grant“!!!

The Opposition division went on to confirm that only the Examining Division was empowered to take an appealable decision on the request to correct the GB designation.

In other words, only the division that took the decision in the first place could rectify its own error and having chosen not to do so the third Opponent was left with no other option but to face up to the EPO appeal case, three UK court cases and a £49 million claim for damages!

A high price to pay for an “administrative mistake” on the part of the EPO!

It is presumably just such situations that the Spanish challenge to the unitary patent system has issue with and it will be interesting to see how the CJEU rules (probably) later this year.

Mark Richardson  7 January 2014


3 Comments

  1. fish says:

    Interesting. I would be curious to know if the UK Courts considered themselves bound by the outcome in EPO regarding designation of GB. During the infringement action in UK, did the defendant argue that the European patent has no effect in UK (disregarding the EPO decision)? Has the UK Court ruled on this issue? Thanks

    • ipcopymark says:

      Thanks for your comment fish

      The UK courts have taken a look at this issue. The full details can be read in this HIgh Court judgment (http://reaction.wragge.com/reaction/PDF/Virgin_Atlantic_Airways_v_Contour_2012_EWHC_2153.pdf) and there is also good commentary from Wragge & Co in their briefing note here (http://www.wragge.com/analysis_8972.asp#.Us0-WdJ7Kok).

      To quote two sections from the Wragge analysis: “Mr Justice Floyd sought to resolve the question of whether a national Court was entitled to give declaratory relief to address the subsequent administrative error by the EPO” and “He concluded, therefore, that the English Courts could not give the declaratory relief sought”

      • fish says:

        Thank you for the explanation and the reference. According to the Wragge analysis GB was not designated due to a domestic prior right (according to A.139(2)EPC I presume). This makes me think that today Virgin would make a big mistake if they opt for a unitary effect.
        But there is something else in the Wagg analysis that deserves a particular attention (perhaps it is the most important): it mentions the eruption of Eyjafjallajökull in Iceland. I thought that the name of the volcano was Eyjafjöll, Eyjafjallajökull being the name of the ice cap.

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