ADMINISTRATIVE COUNCIL
Reports on meetings of the Administrative Council
Report on the 55th meeting of the Administrative Council of the European Patent Organisation (13 to 15 December 1994)
The Administrative Council of the European Patent Organisation held its 55th meeting in Munich from 13 to 15 December 1994 under the chairmanship of Mr Per Lund THOFT (DK).
The Administrative Council elected Mr Ingo KOBER (DE) as President of the European Patent Office for a five-year term with effect from 1 January 1996.
With regard to the Board of Auditors, the Council extended the term of office of Mr BRÜCKNER (AT) for a further three years with effect from 21 December 1994. It appointed Messrs GANSER (FR) and HURKMANS (NL) for a period of five years with effect from 1 January 1995.
The Council reappointed both the Chairman of the Supervisory Board of the Pension Reserve Fund, Mr NIKLASSON (SE), and his Deputy Chairman, Mr WRIGHT (GB), for a further three years with effect from 1 January 1995.
The President of the Office, Mr Paul BRAENDLI, presented his activities report for the second half of 1994.
1994 was dominated by the strategic debate on the future of the Organisation. Various studies by the Office during the year provided valuable insights. A representative survey of almost 9 000 companies on the utilisation of patent protection in Europe clearly showed that European firms - in contrast to their competitors in the US and Japan - tend to underestimate the importance of patents. The Office is working on proposals for remedying this. Another study investigated the cost of patenting in Europe. Annual spending on patents by European industry is over DEM 5bn, including DEM 3.3bn on protection within Europe. Of this DEM 3.3bn, 50% goes on in-house patent departments and external patent agents. Proceedings before the EPO account for DEM 415m, or 13% of the total, national proceedings for DEM 340m (roughly 10%). Patent users were critical in particular of the costs incurred for validation and translation (DEM 400m or 12% of the total) and for patent attorneys. These high costs are deterring small firms in particular from patenting their inventions. Concrete measures are being worked out and will be discussed with user circles. The information resulting from financial assessments currently being carried out should enable the Council to reduce fees. In addition, the Office has for the time being decided to forgo the 3% fee increase originally provided for in the draft budget. This step has been made possible by the Office's sound financial position and shows its commitment to reducing patent costs.
The total number of 1994 filings was expected to be in the region of 72 500, which is 3.6% above the business plan. Of these, 40 500 are European applications, 32 000 Euro-PCT. Approximately 16 000 Euro-PCT applications will have entered the regional phase. This growth is mainly the result of increased filing by US and European applicants as their economies recover. Since this upward trend is generally expected to continue in 1995, there is likely to be a further increase next year in the number of filings.
The number of search requests - at around 85 000 - also exceeded the plan. The examination workload amounted to some 53 000 cases. The number of requests for preliminary examinaton under PCT Chapter II was 12 000, or 45% over plan. The number of oppositions was much lower than estimated (-18%), and will probably total some 2 500 for the year. The number of technical appeals was likely to be 1 020, 430 below plan. This is because refusals by examining divisions, oppositions and PCT protests are all down.
1994 production targets for search, examination and appeal were met. Because the examiner complement is under plan, and there are growing numbers of PCT searches which have to be performed to very tight deadlines, it was not possible to clear the search backlog entirely. In examination the backlog of first communications was down, whilst the appeals backlog rose. The Office's 1995 targets are 81 200 searches, 64 430 examinations and 1 070 technical appeals.
A number of measures relating to the management of expenditure and posts which allowed significant savings to be made in 1994 will be continued by the Office in 1995. In addition to the large automation projects, whose practical implementation is now imminent, the Office's ongoing reviews of its infrastructure services will further increase its efficiency. This will be accompanied by a strengthening of the quality-assurance mechanisms already in place. The introduction in the near future of a total quality management programme will be a further step in this direction.
The BEST project proceeds according to plan: DG 1 now has 240 examiners taking part, DG 2 34. Substantial progress has been made thanks to the use of the electronic search aids which have become essential for DG 2.
On the subject of patent information, the publication of new CD-ROMs has taken the number of standard ESPACE products beyond the twenty mark. The EPIDOS-INPADOC databases and the on-line version of the Register of European Patents are being constantly upgraded. This year's EPIDOS users' meeting was staged in Barcelona in October. Some 300 participants were able to find out more about the products and services available not only from the EPO but also from many other commercial and non-commercial suppliers. The PATLIB symposium took place in Florence in May and was a great success.
Moving on to legal and international affairs, the President drew attention to the record number of candidates (608) who sat the European qualifying examination in 1994. The new rules for the examination were not yet in force, so their full impact, especially with regard to the new modular system for sitting the examination, cannot yet be gauged. Unfortunately, the overall pass rate of 37% was no improvement on the previous year's figure. As a long-term measure, a joint EPO-EPI working party has been set up on the President's initiative to look into ways and means of improving the training available to prospective candidates for the European qualifying examination. It is hoped that the working party's proposals will help fortify the European patent profession throughout the EPO member states. Progress with the Euro-CEIPI training programme has been most satisfactory. The training of new tutors continues.
The President also spoke about the conditions governing the right to practise as a European patent attorney. Article 134(6) EPC allows the President in special circumstances to grant exemptions from the requirement that attorneys must be nationals of a contracting state. Under an arrangement with the EPI that has existed since the EPO was founded, and which the EPI does not wish to change, a person who has passed the qualifying examination, has his or her place of business in an EPO member state and has been in patent practice in a contracting state for at least 10 years is exempted from the nationality requirement. This practice is too restrictive. It is losing credibility, especially in countries like the US which operate less stringent conditions for entry into the profession. Increasingly there are calls for the EPO's practice to be brought into line with the principle of non-discrimination enshrined in the GATT/TRIPs agreement. In the President's view, a solution has to be found. This could perhaps be approached on a basis of reciprocity.
The 7th symposium of European patent judges was held in Newport from 7 to 9 September 1994. Participants included national appeal court judges from EPC contracting states, Norway and the US, together with EPO board of appeal members and a representative of the EU Court of Justice. Poland, Slovenia, Japan and China were also represented for the first time. The main topics at this year's symposium were assessing novelty of use claims, use as prior art (and the evidence required), and nullity of European patents in EPC contracting states. One speaker was a representative of industry who, looking at patents in Europe from his own point of view, dwelt on industry's needs in connection with patent enforcement before the courts.
On the subject of the extension system, the agreement with Slovenia entered into force on 1 March 1994, that with Lithuania on 5 July 1994. A similar agreement with Latvia is expected to enter into force early in 1995. The agreement signed on 9 September with Romania is also likely to enter into force during the first three months of 1995. There have been indications of definite interest in the extension system from the RIPP countries; it is therefore likely to continue to grow. The European Union's RIPP programme for the countries of central and eastern Europe has been pursued satisfactorily. Points worthy of mention are the use of the ESPACE CD-ROM and various software developments. Further funding of the RIPP programme was confirmed under an administrative agreement with the European Commission signed in September 1994. An agreement on modernisation of the Ukrainian Patent Office was also signed recently with the European Commission (TACIS project). This project will be launched jointly with the German Patent Office.
Bilateral co-operation between the EPO and the patent office of the People's Republic of China is also proceeding very satisfactorily. A plan for bilateral technical co-operation in 1995 was adopted in October 1994. The EU programme to strengthen industrial property in China is in full swing. Two events proved extremely successful: a Franco-Chinese symposium on industrial property held in Paris on 11 October 1994, and a "China Investment, Patent and Trademark Conference" in London on 13 October.
A very successful 3rd PATINNOVA Conference was organised in Copenhagen in June by the Danish Patent Office, Directorate-General XIII of the European Commission and the EPO. The event focused on patent protection for small and medium-sized firms. It ended with a call to find ways of assisting patentees in infringement proceedings, which SMEs in particular find hard to finance and which are therefore a deterrent to patenting. The Office has had talks with DG XIII on further co-operation.
The Council approved a programme of technical co-operation with the countries of the former Soviet Union (CIS) and the future Eurasian Patent Office. This programme will be implemented jointly by the EPO and WIPO and will be funded by the EU's TACIS programme. With a view to breaking down barriers between eastern and western Europe, a policy supported by the EU, the Council approved the Office's proposal to reduce fees for the reform states of central and eastern Europe (see OJ EPO 1995, 14).
The Administrative Council also agreed that European states, in respect of which an agreement on the extension of the effects of European patents to their territory has entered into force, may be invited by the Chairman to be represented by observers at Council meetings.
The Council set up a Committee on Patent Law which will, in particular, be responsible for advising it on legal matters concerning a revision of the EPC, on matters concerning the harmonisation of national law in the contracting states relating to the implementation of the EPC and on matters of international patent law which may affect the EPC or in respect of which the contracting states may desire to co-operate pursuant to the preamble of the EPC.
The Council approved the 1993 accounts and, having discussed the auditors' report and heard the opinion of the Budget and Finance Committee, approved the President's actions in implementation of the 1993 budget. The Council then adopted the 1995 budget with income and expenditure balanced at DEM 1 091m.
The Council approved a draft decision amending the period under Article 65(1), second sentence, EPC, and the Implementing Regulations (see OJ EPO 1995, 9).
The Council noted a statement by the Norwegian delegation, which had observer status at the meeting. The delegation had pointed out that the Norwegian government had been committed to the European Patent Convention from the very beginning. However, a number of technical and political obstacles to ratification still existed. Despite these obstacles, it was hoped that closer co-operation could be achieved between Norway and the EPO. The situation had not been altered by the referendum on joining the EU (held on 28 November 1994). While abiding by the negative result of this referendum, the Norwegian government would continue to develop relations with the new-look EU in all areas, including patent co-operation.
On the President's proposal, the Council also appointed two board of appeal chairmen and three board of appeal members. It decided to reappoint a number of board of appeal chairmen and members, and it appointed and reappointed certain members of the boards of appeal under Article 160(2) EPC.