This recent decision from the EPO’s Board of Appeal serves as a reminder of the importance of the timely assignment of an applicant’s right to claim priority.
The case concerns an appeal by the patent proprietor against the revocation of their European Patent No. 1540227. The European patent at issue was based on a PCT application (subsequent application) filed on 6 September 2003 in the name of Tenaris Connections AG, a Liechtenstein corporation. The PCT application was filed on the final day of the priority period and claimed priority from an Italian application (priority application) filed in the name of Tenaris Connections BV, a Dutch corporation.
The declaration of priority was submitted upon filing of the PCT application. However, Tenaris Connections AG did not file a declaration either upon or after the filing of the PCT application regarding the applicants’ entitlement, at the international filing date, to claim the priority of the earlier application.
An assignment concerning the assignment of the rights of the priority application, the rights to the invention and the priority right was executed on 9 September 2003, three days after filing the PCT application. The assignment included a retroactive clause stipulating that the assignment was effective from 1 January 2003.
During the Opposition proceedings, the Opposition Division held that priority had been validly claimed, since the assignment agreement proved that the transfer of rights, including priority rights, took place with effect from 1 January 2003, which was before the filing date of the PCT application.
During the Appeal proceedings, the respondent (Vallourec Oil and Gas France) contested the validity of the priority claim. The preliminary opinion of the Board of Appeal was that although the retroactive effect of the assignment might be valid under national law, this could not overcome the fact that it had been concluded after the filing date of the PCT application, and so priority was not validly claimed.
The appellant advanced the following arguments in support of the validity of their priority claim, and specifically to establish that Tenaris Connections AG was to be considered a “successor in title” of Tenaris Connections BV for the Italian priority application or the right to claim priority from it.
1. The transfer of the priority application and the priority right which occurred on 9 September 2003, i.e. three days after filing of the PCT application (subsequent application), was sufficient for the priority right to be validly claimed. This date was prior to the 16-month period for filing the declaration of priority and there was no requirement derivable from Article 87(1) EPC 1973 that the subsequent applicant had to be the successor in title when the subsequent application was filed. The 12-month period was relevant only for the filing of a subsequent application and there was no requirement that the subsequent applicant had to prove his entitlement to claim priority.
2. The transfer of ownership had retroactive effect as from 1 January 2003 and therefore the priority application and the right to claim its priority had been transferred from Tenaris Connections BV to Tenaris Connections AG as from 1 January 2003.
With respect to Italian Law, the rights mentioned in the assignment agreement were validly transferred with effect as from 1 January 2003 because on the basis of the principle of freedom of contract enshrined in the Italian Civil Code it was permissible to provide for a retroactivity clause.
With respect to Dutch law, the agreement was to be interpreted in the sense that the parties agreed to transfer with retroactive effect the "economische eigendom" (economic ownership) but not the legal ownership. This was sufficient to make Tenaris Connections AG successor in title for the purpose of Article 87(1) EPC 1973.
3. The transfer of ownership was evidenced by “by carrying out convincing behaviour” within a corporate group. According to Italian law, no particular form is required for the contractual assignment of a patent application or a priority right and such a contract could be entered into “by carrying out convincing behaviour”. In view of the fact the Tenaris Connections BV and Tenaris Connections AG were companies of the same corporate group, the filing of the PCT application in the name of Tenaris Connections AG constituted “convincing behaviour” showing that Tenaris Connections AG was the rightful owner of the priority application and the priority right derived from it.
The appellant also advanced arguments relating to transfer of ownership by way of an oral agreement and also transfer by an agreement “manifested by conclusive active” prior to the filing date of the subsequent application. However, the Board exercised its discretion under Article 13(1) RPBA and did not admit these lines of argument on the ground that they were introduced at a late stage of the appeal proceedings.
In deciding whether the priority claim was valid, the Board established that the EPC provisions were applicable since a PCT application is deemed to be a European patent application as of its international filing date and acknowledged that the PCT explicitly accords primacy to “national law”. Further, the Board stated that since the validity of the priority claim was relevant for determining the relevant state of the art, and thus had a direct effect on the patentability of the invention, the provision of Article 87(1) EPC 1973 (and not Article 8 PCT or Article 4 Paris Convention) may be applied.
As regards the appellant’s first line of argument in relation to the time constraint for succession in title, the Board referred to Article 87(1) EPC 1973 and concluded that the wording "has ... filed" and "shall enjoy, for the purpose of filing a European patent application" makes it clear the succession in title must have occurred at the point at which the subsequent application is filed. This interpretation of Article 87(1) EPC 1973 is in line with Article 4 Paris Convention and the legislative history of these provisions.
In relation to the retroactive effect of the transfer of ownership under Italian law, the Board was not satisfied that the extent to which a retroactive effect would be recognised under Italian law had been established by the appellant. With regard to Dutch law, the Board accepted that it was the "economische eigendom" (economic ownership) that was transferred with retroactive effect rather than the legal title. However, the Board distinguished the present case from that of an earlier decision relied upon by the appellant and did not agree that the transfer of "economische eigendom" on the basis of a contractual agreement is to be considered, under Dutch law, as “succession in title” for the purpose of claiming priority from an earlier patent application.
As regards the alleged transfer agreement “by carrying out convincing behaviour”, the Board accepted that patent applications and priority rights may be transferred under Italian law according to this principle. However, the Board held that, in the present case, such a transfer had not been proven and that the sole act of filing a subsequent application by one company of a corporate group which claims priority from an earlier application of another company of the same corporate group does not clearly imply that there was a mutual agreement between the companies concerning a transfer of ownership of the priority application or the priority right arising from it. The Board referred to the text of the agreement (“hereby assigns and transfers”) and took the view that an ordinary reader would not assume that the transfer of rights had already occurred prior to its conclusion.
The Board therefore concluded that Tenaris Connections AG was not successor in title when the international application was filed and that the priority claim was not valid.
The Board did not consider a referral to the Enlarged Board of Appeal to be necessary since its conclusions were based on the wording of the provisions of the EPC and the Paris Convention and the approach taken was consistent with the existing case law of the Boards of Appeal and national courts.
The patent was subsequently revoked due to a lack of inventive step over prior art that was published between the priority filing at and the filing date of the international application.
The take-home message from this decision is that it is essential that the appropriate chain of entitlement to priority is established in good time before the right to priority is claimed.
Ideally, this would involve a transfer of the priority application and the right to claim its priority into the name of the intended successor in title. However, where this is not possible before the end of the priority period, it is still possible to avoid situations such as in this case. One possibility is to file the subsequent application in the name of the entitled party assign it, together with the other rights, at a later date. An alternative option would be to file the application jointly in the names of both the entitled party (applicant of the priority application) and the intended successor in title.