EPO bows to pressure from industry

In a draft paper attached to an invitation to biopharma IP stakeholders for a meeting on 9 February the European Patent Office (EPO) proposes substantial improvements to the plan of its outgoing president Benoît Battistelli to speed up patent examination time in order to boost innovation. A new process dubbed „User Driven Early Certainty“ (UDEC) will allow „applicants to postpone the start of substantive examination for a maximum of three years“, the EPO writes pointing to the fact that it Early Certainty Initiative includes several elements to speed up examination and granting of a patent, which should benefit sectors with short product development times, but no proceedures for applicants who need more time before the start of examination and before a patent is granted. This is especially true for the life sciences sector who had voiced concerns over the past year that a 12-months examination time could block innovation and harm the whole sector.

Industry associations had called to exempt the life sciences sector from the EPO’s plan to cut the time for examination of a patent from currently 57 months to 12 months. IP experts from Novartis, biotech companies, and EFPIA said they were concerned that the speed-up of examination could come at the expense of quality or block extensions to patents. As life sciences patents are filed in very early development stage with confirmatory data to be established too early granting of a patent could lead to patents on suboptimal drug candidates. “Early patent issuance would be too early for inventors in 90% of cases to find a licencee,” said biotech industry associations BIO Deutschland and France Biotech stressing that biotech SMEs or tech transfer offices would not have the resources to pay the national validation and translation costs at the moment a patent is granted. Furthermore, IP experts had warned they expected fewer EU patent applications if Battistelli’s plan would go through and called for establishment of a grace period for sectors with long product development cycles.

While 25% of all life sciences patent applications come from the life sciences sector, the EPO assumes “that applicants will in about 10% of cases make use of the postponement option”. According to the EPO, the UDEC procedure will run starting on 1 July 2018 as follows: Under an “EP direct” application, the (life sciences) applicant pays the examination fee and receives a preliminary option on patentability from the EPO within 6 months. Within further 6 months, the applicant can request a postponement of the start of substantive examination using a new Internet form. If confirmed, the EPO will not begin substantive examination of the application before expiry of 3 years. The option will be for free, however, the applicant has to pay the annual renewal fees for an application of some hundred euros to the EPO. For divisional applications the postponement period would be calculated from filing of the earliest application with the EPO, in case of Euro-PCT applications from valid entry into the EP-phase. Applicants will have the option to initiate examination before expiry of the 3-year postponement. Postponed applications will be marked in the European Patent Register to allow third party observations.

According to the EPO, the new UDEC rules have been drafted because „the EPO wishes to promote innovation across all technological fields and to provide the right services for all its users“. However, sources told European Biotechnology that the Early Certainty has not only been drafted for altruistic motives. Taken the fact, that the annual renewal fee to the national patent offices for a patent that has been granted and nationalised in 30 countries is approximately 10-fold higher (not including the attorneys’ fees) compared to the annual renewal cost for a patent not yet granted at the EPO, there might be beneficiaries of accelerated examination (i.e. while the annual renewal fee is €470 (3th year), €585 (4th year) and €820 (5th year) at the EPO, it is €4,100 (3th year), €5,100 (4th year) and €6,150 (5th year) at the national patent offices).

Thus, the UDEC will be a double benefit for the life sciences sector: the expected 10-25% of applicants will benefit from the postponement of nationalisation and expensive renewal costs.