Suspensive effect of post-grant appeals: Don’t enact it like this, please … 🙏

Reading time: 4 minutes

I have reported several times about the substantial revision of the Swiss Patent Act that is currently in the making; see e.g. this Blog here.

Back in parliament, the Science, Education and Culture Committee (SECC) of the Council of States has now requested some changes; see the ‘Fahne’ below, p. 22-23 (available online here). The proposed changes are apparently meant to address two issues that have been raised earlier e.g. by Lara Dorigo, Alexandra Bühlmann and Thomas Legler; see here.

But, unfortunately, the issues are anything but fixed.

Suspensive effect of appeals

On a quick read, I was happy to see that the suspensive effect was essentially gone. The Council of States requests that an appeal against the grant of a patent shall not have suspensive effect. At least not as a rule: The IPI may exceptionally (“ausnahmsweise”) issue a grant with suspensive effect. Likewise, the FPC may order suspensive effect when an appeal has already been filed.

The closer I looked, the more grumpy I became.

The default of ‘no suspensive effect’ shall apply to appeals according to paragraph (2) only:

The issue is that this paragraph (2) pertains exclusively to appeals that raise objections with respect to certain exclusions from patentability (the human body, gene sequences, etc.):

In practical terms, this is a complete non-issue. Oppositions have been possible for the very same reasons since 2008 (Art. 59c PatA). Not a single opposition has been filed ever since. Zero. This speaks volumes. The requested change is devoid of any practical relevance.

What really matters for third parties are substantive issues like novelty, inventive step, allowability of amendments, etc. This is where the action is. However, all these grounds are only dealt with in paragraph (3):

Appeals raised on such grounds would still have a suspensive effect. Let’s face it: This will affect essentially all appeals!

I am not aware of any major IP jurisdiction where post-grant opposition/appeal proceedings would make a patent unenforceable by default during pendency of the opposition/appeal proceedings. 

It must not be forgotten that the supposed-to-be revamped Swiss patent is not without alternative in order to get patent protection in Switzerland. A European patent validated in Switzerland gets you exactly there, too. Potential applicants will vote with their feet. Frankly, I simply cannot sell anyone a Swiss patent that is granted with suspensive effect, i.e. which is not immediately enforceable. The revamped Swiss patent won’t be substantially cheaper than a European patent validated in Switzerland, it won’t proceed to grant substantially quicker (if at all), the IPI will first have to earn a reputation for examination on the merits (the EPO is still a benchmark in this respect, despite some concerns) — and on top of all these challenges, Swiss patents shall be granted with leg irons?

This is a very, very bad idea.

I wonder why there should be any possibility for a suspensive effect at all, ever. If we don’t get rid of the suspensive effect, the whole reform might become non-starter. And I really mean this in the sense of ‘Rohrkrepierer’. The suspensive effect is a strong disincentive to choose a Swiss patent. It will end up as a shelf warmer.

I had the slight hope that the reference to paragraph (2) was only a typo. But, apparently, it is not. The press release of the SECC reads as follows:

Ein Verbandsbeschwerderecht, wie es die Revisionsvorlage vorsieht, lehnt die Kommission ab. Sie schlägt eine Regelung vor, welche Dritte berechtigt, mit einer Beschwerde die Patentauschlussgründe gemäss Artikel 1a, 1b und 2 des Patentgesetzes (PatG) geltend zu machen. Grundsätzlich hat eine solche Beschwerde keine aufschiebende Wirkung, wobei die Beschwerdeinstanz diese ausnahmsweise einräumen kann.

I take from this that the exclusive reference to paragraph (2) is intentional.

Further, what I dislike is that third parties have a right to appeal against the grant on substantive grounds such as e.g. novelty or inventive step only in accordance with Art. 48 APA.

Why does it have to be so complicated and restrictive?

A patent has erga omnes effect. Why should a third party need to demonstrate «interests worthy of protection» or to be «specifically affected» by the patent? In substance, the appeal against the grant will be opposition proceedings. Such proceedings are ‘Popularrechtsbehelfe’ all around: At the EPO (Art. 99 EPC, «any person»), in Germany (§ 59 PatA, «jedermann»), etc.

Right for organizations to appeal

The draft bill had included a specific provision for organizations’ right to appeal. The Council of States proposes to delete this.

This makes perfectly sense to me, for all the good reasons given e.g. by Lara, Alexandra and Thomas.

✍ MW

FAHNE 2023 IV S

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Suspensive effect of (administrative) appeals against the grant of Swiss patents(?)

Reading time: 2 minutes

I have reported several times about the substantial revision of the Swiss Patent Act that is currently in the making; see e.g. this Blog here.

Lara DORIGO and Alexandra BÜHLMANN raised an issue in a recent publication that I had overlooked by now (emphasis added):

[I]f the bill were to pass through without changes, a major disadvantage could be caused to applicants: Today’s opposition proceedings do not stop the enforcement of granted patents, whereas an administrative appeal has suspensive effect by default. Under the draft law, filing an appeal would thus give competitors and generic companies an easy tool to considerably delay enforcement measures, regardless of the merits of their arguments. This could put future Swiss filers in a more disadvantageous position in comparison to today and to European patent filings, which runs counter to the objectives of the revision. It is therefore to be hoped that, as part of the parliamentary process, the appeal will be deprived of its suspensive effect by including a special provision in the patent act to this effect.

I am not aware of any major IP jurisdiction where post-grant opposition proceedings would make a patent unenforceable by default during pendency of the opposition proceedings. I don’t mind that the current opposition proceedings (that have never been used) are re-branded as (administrative) appeal proceedings. But, to be clear: I would not recommend a client to choose a Swiss patent over a European patent when is not enforceable immediately after it is granted (in particular when it has been examined on the merits!), just because of some flimsy administrative appeal. To me, this is a no-go.

But, luckily, there is still time to fix this in parliament!

✍ MW

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We are getting closer to a new PatA: Revised draft bill published

Reading time: 8 minutes

Further to the motion Hefti of 21 March 2019 ‘for a more modern Swiss patent’ (see this Blog here), the publication of a first draft bill on 14 October 2020 and a public consultation thereof (see the results here), the Federal Council has published a revised draft bill on 16 November 2022, together with its dispatch. The matter will now be dealt with in parliament. See the Federal Council’s press release here.

The draft bill has been changed quite substantially, taking into account the results of the public consultation.

Mandatory search report

The IPI will conduct a prior art search and issue a search report for every patent application. The search report will be published with the application or as soon as possible thereafter (much like at the EPO).

I like that. The public will learn a lot from this search report about the actual value of the application, and it will be a lot easier to identify mere scarecrow.

full Examination as an option

Requests for examination are a hot topic; draft Art. 58b PatA.

The applicant has to request (at least formal) examination; the new time limit for that will be six months after publication of the search report. In addition, examination on the merits can be requested within the same time limit. Interestingly, the latter can not only be requested by the applicant but also by any third party (similar as, e.g., in Germany; see §44(2) DE-PatA).

Again, I like that. In principle. It will help to prevent scarecrow patents. Interested third parties may trigger examination on the merits, with a smal fee.

Talking about fees: We may catch a glimpse from the dispatch of what is currently being considered for the fee structure. CHF 700,– filing and search fee; CHF 400,– for formal examination; CHF 700,– for full examination.

However, I’m not so sure about the way it has been implemented. I understand from the dispatch that the formal examination has to be requested by the applicant first; i.e., a third party cannot trigger examination on his own.

But the time limit for both requests is six months after publication of the search report. Now, what if the applicant requests (formal) examination exactly after six months?

I do know patent attorneys who work like this. 😇

Interested third parties cannot really know what to do within the time limit of six months. To be on the safe side, they might be tempted to request examination on the merits as late as possible — which may cause cumbersome refund exercises for an abandoned application when the applicant did not file a request for examination. Or, what happens when both the applicant and the third party request examination on the last day? Will the actual time of receipt of the request (and/or the payment?) be decisive for who gets the refund?

Just a thought: All this could be prevented by giving third parties a little more time for their request; e.g. three months after the applicant’s request for (formal) examination has been entered in the publicly accessible Register.

Alternatively, one could keep it very simple, in my view. Why not allowing third parties to trigger examination from scratch, i.e., even if the applicant has not (yet) reqested formal examination in due time? I fail to see why an applicant has to be protected from being dragged into examination proceedings on the merits; he can pull out at any time. An applicant who does not want to engage in examination proceedings can simply request a decision on the basis of the file; or withdraw the application. All this is at no costs. 

FPC will hear the appeals

Ex parte appeals as well as appeals against the grant will be heard by the FPC (not by the Federal Administrative Court); draft Art. 59c.

Great. The FPC is simply the right forum. Interestingly, the FPC will not be split into an administrative chamber and a civil chamber:

The time limit for appeals is four months, only. That’s surely (more than) enough time for an appeal against the refusal of the application, but it’s pretty tough for an appeal against the grant of a patent. One does not fit all. I had been so happy when the opposition time limit had been prolonged from three months to nine months in Germany in 2014, i.e. similar to the EPC. This amendment in Germany was made for good reason: Three months was considered much too short.

I wonder: Why is it that we will need to act more than twice as fast against newly issued Swiss patents? Can’t we have a short time limit for ex parte appeals (three months would actually be okay) and a longer time limit for inter partes ‘appeals’ against the grant of a patent (nine months, as in Germany or at the EPO)?

use of the English language

According to the draft bill, patent applications may be published in English language when they have not been filed in an official language of Switzerland (German, French or Italian):

I trust that international applicants will highly appreciate this. And it gets even better: Swiss patents may also be granted in English language; only the abstract and the title need to be translated in an official language:

I would not be surprised about some pushback in parliament, harping on about principles: «No patent in a foreign language!» That does not convince me. First, I do not feel that English really is a foreign language for many Swiss people. In fact, it is the universal language that is typically used in business, technology and science anyway (which is what patents are all about). The dispatch is absolutely right:

Allowing English language for patents would really be a great achievement for the Swiss patent system. I do hope it doesn’t get edited out again.

Patent Court Act

According to Art. 4 PatCA, the FPC is financed by court fees and contributions from the Swiss Federal Institute of Intellectual Property (IPI) taken from the patent fees annually collected by the IPI. This provision has been deleted in the draft. How comes? Well, since the FPC shall hear appeals against decisions of the IPI, someone felt that the financial regulations of Art. 4 PatCA might impair the institutional indepence of the FPC:

Seriously? I don’t think it does. As the dispatch of the PatCA of 7 December 2007 held, Art. 4 PatCA merely stipulates that — within the Swiss Federation — the IPI is responsible to provide the necessary funds for the FPC:

Why shouldn’t this responsibility remain? To me, it makes perfectly sense to have the FPC financed by and within the patent system. It appears that the IPI has more than enough funds to fulfil its duties under Art. 4 PatCA. To put all this in perspective: The IPI’s financial contribution to the FPC over the last years has been CHF 789’000,– (2019/20) and CHF 694’000,– (2020/21). In the respective accounting periods, the IPI’s profits (after the contribution to the FPC) were still CHF 1.491m and CHF 3.163m:

In my perception, the financial contribution for the FPC is money well spent. I really cannot see why this should change. Sure, the IPI’s costs will rise; examination on the merits does not come for free. But, for various scenarios, the IPI expects an increase of costs between CHF 0.6m to CHF 2.1m (with the contribution to the FPC already deduced):

The dispatch notes that this can be compensated with an increase of the patent annuities of between 2 to 8%. Let’s assume that the contribution to the FPC remains, the increase of annuities would have to be between 5 to 11%. Which would still be okay, I think. However, in view of the IPI’s profits in recent years, I am not even sure if the additional costs really need to be compensated with higher annuities — or maybe not to full extent.

An amendment to Art. 8 PatCA will give the FPC more leeway in terms of staffing: Currently, there are two ordinary judges, hard-coded. The amendment foresees two to four ordinary judges:

This will allow the FPC to adapt to the number of administrative appeals flowing in. The current estimate is nine to fourteen appeals per year.

Miscellaneous

The PatA will explicitly codify that the scope of a patent must not be extended after grant, much like Art. 123(3) EPC. See draft Art. 24 (partial waiver) and draft Art. 26 (grounds for nullity) of the draft bill. A clarification that is very welcome.

The requirement of ‘unity of invention’ of a partially waived patent is abolished with; Art. 25 shall accordingly be deleted:

✍ MW

REVISED DRAFT BILL

DISPATCH OF THE FEDERAL COUNCIL

PRESS RELEASE

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PatA revision: The dust is settling (slowly)

Reading time: 3 minutes

The envisaged changes to the Swiss PatA have caused a very intense discussion amongst stakeholders. Opinions could hardly have been more different, ranging from outright damnation of examination on the merits («bureaucratic monster») to wholehearted welcome («overdue»).

See this Blog here for some background information about how it all started; the draft bill is commented on this Blog here.

There had been a public consultation of the draft bill, with a lot of individual contributions. An official summary of the contributions is available here.

Now, the dust begins to settle. The Federal Council has informed the public on 18 August 2021 that some (major) adjustments will be made to the draft bill, as follows.

The tried and tested ‘unexamined’ Swiss patent is staying

In general, a patent application will not be examined on the merits, i.e. for novelty and inventive step. As a result, an ‘unexamined’ — but less expensive — IP right will continue to be available to inventors, as called for by the motion.

In turn, the unexamined utility model (with reduced term) that was foreseen in the draft bill is off the table.

fully examined Swiss patent on request

It shall be possible to request examination on the merits.

What is not fully clear to me, though, is whether only the applicant may request examination, or whether any third party can also do so (like, e.g., in Germany; §44(2) PatA). I have much sympathy for the latter. It is an element to improve legal certainty, which is an explicit aim of the motion.

Compulsory search reports

To improve legal certainty also for the ‘unexamined’ patent, every patent application shall be supplemented with a compulsory search report. The Federal Council holds that it will therefore be possible to better evaluate whether the invention is patentable.

I doubt that this will really improve legal certainty. A negative search report is mostly not the end but rather the beginning, i.e. the beginning of a thought process on the applicant’s side of how to proceed to grant. In most cases, there is patentable subject-matter. A negative search report might provoke a counter-productive ‘no risk’ illusion for the public.

Further, I wonder how tax authorities might react on a ‘negative’ search report in the context of the patent box. It would be a pity if this creates a ‘presumption of invalidity’ and applicants then have to go the long way through examination on the merits in order to benefit from the patent box.

Streamlined appeal procedure at the FPC

The opposition procedure introduced in 2008 shall be dispensed with altogether. It had never been used anyway.

Instead, the Federal Council intends that IPI decisions be reviewed in appeal proceedings directly through the FPC. I understand that this shall also apply to the decision to grant a patent, i.e. that third parties will be able to challenge the grant directly at the FPC, as foreshadowed by the opinion of Prof. Rainer SCHWEIZER:

It remains to be seen how this will actually be put in place, but with a (very) low threshold for the necessary legal interest of a third party and competitive fees of the FPC for these proceedings, I have no doubt that this will work smoothly.

The Federal Council has mandated the Federal Department of Justice and Police (FDJP) to submit a dispatch by the end of 2022.

Reported by Martin WILMING

SUMMARY OF PUBLIC CONSULTATION

INDIVIDUAL SUBMISSIONS

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The (more) competent court shall decide examination and opposition appeals

Reading time: 2 minutes

A major revision of the Swiss PatA is currently in the making; see this Blog here, here and here. Inter alia, examination on the merits (novelty and inventive step) as well as a full-fledged opposition proceeding is proposed.

According to the draft bill, the Federal Administrative Court should have handled appeals against decisions of the IPI in examination and opposition. This has been criticized by many because the FPC would appear to be the more intuitive choice. The submissions during the public consultation almost unanimously reflect this.

The Supreme Court recommends that the FPC should handle such appeals:

The FPC is apparently willing to do so and proposes itself:

The Federal Administrative Court abstains from taking a position on whether or not it should be the responsible authority (obviously already in knowledge of the Supreme Court’s take on this), but reminds that independence of justice needs to be maintained if the FPC would be responsible for both administrative and civil proceedings:

But this can surely be resolved. INGRES, AIPPI, VESPA, VIPS and VSP have jointly commissioned an expert opinion of Prof. Dr. Rainer J. Schweizer who proposes to install a second administrative department (‘zweite verwaltungsgerichtliche Abteilung’).

In my perception, this addresses — and resolves — the reservations of the Federal Administrative Court. Some amendments to the PatCA will be necessary, but this appears doable. Accordingly, I would be surprised if the FPC would not turn out to be the appeal authority in the final bill.

Reported by Martin WILMING

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Proposed amendment of the PatA: Do you like it?

As mentioned earlier on this Blog here, the draft bill of the new PatA has been published recently, in accordance with the ‘motion Hefti’.

Clearly, the interested circles had been involved early on in the discussion, see e.g. the Polynomics report of 2015 that recommended the introduction of examination on the merits for patents, alongside with a utility model. But participation in the underlying survey had been low at that time (3.8% return rate), and there have also been critical voices (see e.g. here, fulltext available here).

I’d really like to know, in the face of the draft bill with examination on the merits for patents, alongside with a utility model:

Do you support the gist of the draft bill, i.e. the 'motion Hefti'?

  • No (64%, 25 Votes)
  • Yes (36%, 14 Votes)

Total Voters: 39

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The poll has been open 14-22 November 2020.

Thank you very much for taking the time to respond.

/MW

POLYNOMICS REPORT (2015)

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