Insights: Apportionment of costs at oral proceedings

Oral Proceedings are a common occurrence during the opposition procedure at the European Patent Office.  Importantly, these proceedings provide the patentee and the opponent (both at first instance and at appeal) an opportunity to present arguments to the EPO in favour of either maintaining a patent, or revoking a patent.  Such proceedings can be complex and can involve discussions of great technical detail.  Accordingly, significant time and effort can be spent preparing for, and attending, oral proceedings – both by the parties themselves and by the EPO Opposition Division (or Board of Appeal).

It is therefore not surprising that the Boards of Appeal look unfavourably on parties who indicate too late, or not at all, that they will not be attending oral proceedings, since “such conduct is inconsistent both with the responsible exercise of rights and with the basic rules of courtesy” – Case Law of the Board of Appeal III-R-2.2.1.

The Boards therefore consider there is an equitable obligation upon summoned parties to inform the EPO as soon as they know that they will not be attending and, furthermore, if a party who has been summoned to oral proceedings fails to attend as summoned without notifying the EPO in advance, that an apportionment of costs (including travel expenses and attorney costs) in favour of another party, who has attended as summoned, may be justified.

The EPO recognizes that the non-attendance of one party at an oral proceedings does not necessarily disadvantage another party, so the essential factor in apportioning costs is not merely due to lack of attendance at oral proceedings, but whether the applicant’s failure to attend rendered those oral proceedings unnecessary.  For example, in the case where a Board of Appeal is minded to entirely agree with one party, then the oral proceedings are at the convenience of the disagreeing party.  If that disagreeing party were then not to attend, those proceedings would have been unnecessary.

Decision T2350/15
In the recent decision T2350/15, the Board apportioned costs due to non-attendance of the opponent at oral proceedings. However, notably, in this case the opponent not only did inform the Board that they would not be attending oral proceedings, they also did so well in advance of the oral proceedings (around three months). The Board nevertheless apportioned costs in favour of the patentee because they deemed the oral proceedings to be unnecessary.

During the appeal process, the Board summoned both parties to oral proceedings.  Very shortly after the summons was issued, and around three months before the oral proceedings, the opponent informed the Board that they would not be attending the oral proceedings, but that this did not amount to the withdrawal of their appeal or of their request for oral proceedings.  Since the opponent did not explicitly withdraw their request for oral proceedings, the oral proceedings were held as scheduled.

The Board set aside the decision under appeal and maintained the patent as granted, in line with a preliminary opinion formed from relevant facts as appearing from the file.  The Board furthermore allocated costs to the patentee.  In doing so, the Board stated:

…since the Board intended to maintain the patent according to the main request of the appellant/patent proprietor (the patent as granted), the oral proceedings (in the absence of the appellant/opponent) served no purpose and could have been cancelled, had it not been for the request of the appellant/opponent. Indeed, the appellant/patent proprietor is not adversely affected by the decision to maintain the patent on the basis of its main request, and would thus not have needed any oral proceedings to defend its case.

By maintaining its request for oral proceedings, the appellant/opponent thus not only obliged the Board to hold the oral proceedings but also obliged the appellant/patent proprietor to come to the oral proceedings and to prepare for them.

Under these circumstances, pursuant to Article 104(1) EPC and Article 16(1)(e) and 16(2) RPBA 2020, the Board finds it equitable that the appellant/opponent bears the costs (for preparation, travel and presence) incurred by the appellant/patent proprietor for the oral proceedings before the Board.

Thus, in T2350/15, even though the opponent had given an early, clear and unambiguous indication of non-attendance at the oral proceedings, the Board appeared to consider this unimportant to the allocation of costs, because the opponent had not explicitly withdrawn their request for oral proceedings, therefore obliging the (unnecessary) proceedings to take place. Notably, the opponent was required to pay the costs of the patentee despite the fact that the patentee does not appear to have made such a request.

Often a Board will issue a preliminary opinion with the Summons to oral proceedings setting out its views on the issues to be decided. This allows the parties to assess the likely outcome of the oral proceedings and to react accordingly. However, in this case, the preliminary opinion was issued separately from the Summons and appears to have ‘crossed’ with the opponent’s letter indicating their non-attendance. Even so, it was by no means obvious from the preliminary opinion that, in the words of the final decision, “the Board intended to maintain the patent according to the main request.” Indeed, while the preliminary opinion suggested that, in the view of the Board, the objection of insufficiency was not well founded, the Board reserved its judgement on other objections relating to added subject-matter, novelty and inventive step, saying only that these objections, “will have to be discussed.” Accordingly, the fact that the proceedings were ‘unnecessary’ was only apparent on the day of the oral proceedings.

Earlier decisions and EPO practice
As indicated above, under EPO practice, costs may be allocated if “a party who has been summoned to oral proceedings fails to attend as summoned without informing the EPO in advance”.  From this language, it might appear that a mere statement of non-attendance well in advance of the oral proceedings would be sufficient to avoid costs being allocated.  Indeed, earlier Board of Appeal decision T0301/12 hinted at the possibility that even if oral proceedings were held in the notified absence of the appellant, “[the respondent] could have made an informed decision whether or not to attend them at its own costs”.

However, it is clear that the Board in T2350/15 did not take this view, and appear to have considered an indication of non-attendance at oral proceedings to not provide the same certainty as an explicit withdrawal of the request for oral proceedings, no matter how far in advance the Board were informed of the non-attendance.  Thus, they found it equitable to award costs.

Accordingly, any party that maintains a request for oral proceedings without actually attending them therefore runs the risks of costs being awarded to the other party, should those proceedings be considered ‘unnecessary’ (and, as has been noted above, whether the oral proceedings are unnecessary or not may not become apparent until the day of the hearing). Furthermore, that party may need to pay the other side’s costs even if the other side have not actually requested such an award.

It is an understandable desire of parties to maintain a request for oral proceedings, even when they currently have no intention of being in attendance on the day (to allow for a change of mind – for example, in the event that the contested patent assumes an increased importance).  However, this desire must be balanced against the continued obligation to keep the EPO informed as to a party’s intentions.