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Will the EPO introduce deferred examination?

13th May 2019

The patent application process is not usually considered particularly speedy – three to five years is typical in a lot of countries – but for some applicants it can be too fast. The European Patent Office (EPO) has been considering introducing a system that would give applicants the option of slowing things down somewhat, but following a recent user-consultation it remains unclear whether the system will go ahead.

Why slow down the examination process?

There are a number of reasons why an applicant might want to slow down the patent examination process. These include:

  • A desire to defer costs. This can be a particular issue in the European arena because of the validation process that takes place when a European patent application is granted. Validation can be expensive, especially if the applicant wants Europe-wide protection. Slowing down examination may delay grant, allowing applicants to defer the validation costs and give them time to raise funds.
  • Extra time to determine a commercially valuable scope of protection. It can take years to develop a commercial product or process that embodies the invention described in a patent application. Until that point, the ideal scope of the claims of the application may not be clear. The option to slow down examination would give applicants more time to commercialize their inventions before they must settle on the scope of their claims.
  • The opportunity to channel funds into their best, most commercially important patent applications. The commercial value of an invention may not become apparent until the invention has been commercialized, or perhaps until the relevant market has had time to mature. Slowing down the examination process may therefore allow applicants to identify their most important patent applications and to channel their money accordingly. Important European patents could be validated widely, whereas less important patents could be validated in just a few countries or even withdrawn at the application stage.

UDEC: User Driven Early Certainty

In early 2018 the EPO published a proposal to introduce a system of deferred examination. The system, somewhat confusingly called “User Driven Early Certainty” (UDEC), would give applicants the option of requesting a three-year delay to the start of examination. The applicant would be able to ask for the delay to be lifted at any time during the three-year stop, at which point examination would begin.

The EPO already has an accelerated examination system (“PACE”) which can considerably speed up the examination procedure. Combined with PACE, UDEC would give applicants for European patents more procedural flexibility than is offered in the majority of other countries.

Commercial Uncertainty for Third Parties

While some applicants and users of the European patent system would welcome the additional flexibility that UDEC would provide, others are not so sure. It has been suggested that some applicants – particularly big companies – could use deferred examination to create commercial uncertainty. A pending patent application can be as much of a headache as a granted patent because third parties cannot be sure of what the patent will cover if and when it is granted. UDEC could keep commercially unsettling patent applications pending for longer.

One of the more notable concerns about a deferred examination system relates to divisional applications. The EPO’s divisional applications provisions are very generous, and applicants with the desire and the money can use the provisions to effectively keep applications pending indefinitely. A deferred examination system could make it cheaper for applicants to pursue this strategy. It could also keep applications free from the scrutiny of the examination process for longer and at a lower cost. Some argue that the EPO should only implement a deferred examination system if it introduces rules that limit the filing of divisional applications.

Reducing Commercial Uncertainty

The EPO are aware of these concerns. Their 2018 UDEC proposal did include several measures designed to limit commercial uncertainty, including:

  1. The three year delay to the start of examination would not begin until after the applicant files their response to the EPO’s search report and written opinion. This would, in theory at least, give third parties a reasonable idea of the scope of patent protection that the applicant may be able to obtain.
  2. Third parties could trigger the start of the examination process by filing substantiated observations. This would provide third parties with recourse if they felt an applicant was abusing the system, or if they simply needed commercial certainty sooner.
  3. For divisional applications, the three-year delay would be measured from the deadline for requesting the examination of the ‘first generation’ parent application. This would make deferred examination unavailable for many, perhaps even most, divisional applications.

Will UDEC Ever Happen?

The EPO looked set to implement UDEC in July 2018. However, despite the measures included in the EPO’s UDEC proposal, enough concerns were voiced that the EPO delayed its plans and launched a user-consultation. The results of the consultation have now been published and are available here.

The EPO no doubt hoped the consultation would demonstrate support one way or the other. The answer to the headline question of “Would you be in favour of a procedural option for postponing examination of a European patent application” was, however, anything but definitive: 52% of the 627 respondents answered ‘yes’ and 46% responded ‘no’. Furthermore, the answers to the other questions do not suggest there is any particular change that the EPO could make to its 2018 proposal that would shift opinion more in favour of UDEC.

With these mixed results it is hard to say what the EPO’s next move will be. Introducing UDEC would seemingly benefit the EPO itself: it would allow it to manage its backlog of unexamined applications without a negative impact on its “Quality Indicators” and it could increase its income from renewal fees, whose annual payment would presumably still be required during the three-year delay. Perhaps these factors, combined with the slim 52% majority in favour of the system, will convince the EPO to implement UDEC. We will provide updates on any developments.

This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.

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