Home > Insights > Non-payment of EPO and UK renewal fees due to lack of funds

Authors: Jo Pelly and Phil Merchant
8 May, 2013

Upon failure to pay the renewal fee for a UK patent within the grace period prescribed by S25(4) of the Patents Act 1977, a request for restoration of the patent may be filed within 13 months from the end of the grace period. For the request to be successful, the applicant must satisfy the Comptroller that the failure to pay the renewal fee on time was ‘unintentional’.

The meaning of ‘unintentional’ was clarified by the UKIPO in the recent decision BL O/034/13 (of 22 January 2013) in the context of whether a failure to pay a renewal fee due to lack of funds can be considered to fulfil this requirement.

In this case, a patent had ceased due to failure to pay the renewal fee within the six month grace period. The attorney argued that the patent proprietor was under a legal obligation to renew the patent and the presence of this legal obligation was sufficient to prove intent to pay the fee. The non-payment was due to lack of funds and if the proprietor could have paid the fee, they would have. Therefore, the non-payment should be considered unintentional.

The hearing officer at the UKIPO rejected this argument and maintained the view that the failure of a patent proprietor to pay a fee due to a lack of funds cannot be considered to be unintentional. Even though the proprietor knew they had a legal obligation, they still made a conscious decision to not pay. As a conscious decision, the failure to pay the fee cannot be said to be unintentional (1).

Interestingly, at the EPO the inability of the applicant to pay a renewal fee due to lack of funds can sometimes be deemed to fulfil the requirement for re-establishment of rights of a patent.

The key point at the EPO is whether the applicant failed to pay the fee in spite of exercising ‘all due care’. For example, it must be shown that the applicant has tried with all due care to obtain financial support (see J 22/88). Furthermore, it must be shown that the financial difficulties were genuine and due to circumstances beyond the control of the applicant.This seems to be in direct contrast with the position of the UKIPO hearing officer in BL O/034/13, who stated: “…it is tempting to look at the word ‘unintentional’ and decide whether the evidence demonstrates that the circumstances surrounding the facts of the case were outside the applicant’s control and unintentional. However, that is not the test” and going on to assert: “They consciously did not pay the fee because they knew they had no funds to do so. As a conscious decision, it cannot logically be said to have been unintentional”.

Thus, the typically more stringent EPO requirement of ‘all due care’ appears, in this circumstance, to be more readily satisfied than the UKIPO’s ‘unintentional’ requirement.

(1) The result of the case was that the request for restoration was in fact allowed. This was due to the specific facts of the case – the patent proprietor went into administration during the grace period, and the administrators who became responsible for the patent renewal were not aware of the legal obligation. In the absence of this knowledge, the failure to pay the renewal fee was held to be unintentional.

Authors

Jo Pelly

Jo Pelly
Partner

Phone this number +44 (0)118 956 5900

Email this address jpelly@boult.com

The Anchorage
34 Bridge Street
Reading
RG1 2LU

Phil Merchant

Phil Merchant
Patent Attorney

Phone this number +44 (0)118 956 5900

Email this address pmerchant@boult.com

The Anchorage
34 Bridge Street
Reading
RG1 2LU