ADMINISTRATIVE COUNCIL
Reports on meetings of the Administrative Council
Report on the 95th meeting of the Administrative Council of the European Patent Organisation (2 to 4 December 2003)
The Administrative Council of the European Patent Organisation held its 95th meeting in Munich from 2 to 4 December 2004 under the chairmanship of its deputy chairman, Mr. Mogens KRING (DK), during the first part and then of Mr. Roland GROSSENBACHER (CH).
The President of the Office, Mr. Ingo KOBER, presented the Office's activities report for the second half of 2003.
Regarding the work situation of the Office, the September figures indicated that the number of applications filed in 2003 would probably be 160 000. At the end of September 2003, 117 800 applications had been registered. Direct European filings were expected to remain at a constant level compared to 2002.
The number of Euro-PCT applications filed had fallen significantly during 2003 and was even below the revised forecast made in the spring. This largely reflected the effect of the limitation of competence in the fields of biotechnology, telecommunications and computers. These three sectors had been down by between 10 and 20% and accounted for almost all of the drop in filings during the period. In turn, all other technical fields had either remained stable or had risen.
The filings development had a direct impact on the search workload, although other factors also affected the amount of search requests. By the end of September, 110 600 such requests had been received. This was 9.2% below the revised plan. A total of 147 500 search requests was expected for 2003. PCT-type searches accounted for about 38% of the work in this area, compared to 41% in 2002.
Total examination incoming workload had lagged slightly behind the previous year's figure by some 2% during the first eight months of 2003, but is still 9% lower than expected; at the end of the year it should be around 123 000 examinations.
A total of around 92 000 European examination requests was expected (68 600 at the end of September). PCT Chapter II demands had fallen by 25%, as expected when the Office embarked on a review of its procedure. In view of the changes in the PCT procedure, the year-end workload figure was likely to be of the order of 30 000 files (21 100 at the end of August).
The number of patents opposed had remained constant at 5.4%. The opposition workload was expected to total 2 600 files, 400 more than in 2002.
The number of technical appeals filed compared with the corresponding figure of the previous year had remained at almost the same level and would reach the forecast figure of 1 235 appeals filed by the end of the year. If legal and disciplinary appeals were added to this figure, the total would amount to 1 280 appeals filed in 2003 (end of September: 1 052, including 1 009 technical appeals).
Although the number of countries allowing extension for European patents has been reduced now that some of them have acceded to the EPC, the Office had registered a small increase in the number of requests for extension, and expected to have received around 27 200 extension fees by the end of the year.
There had been a 10% growth in overall output in terms of searches performed. Production was expected to reach 158 400 files, approximately 64% of which would have been completed under BEST and 1.5% by national offices. On 1 July 2003, the Office had launched the Extended European Search Report for European first filings, under which the first communication as prepared by a BEST examiner at the time of the search is sent together with the search report. Initial feedback from users had been positive, and by the end of 2003 the Office wouldl have delivered 4 500 such reports.
The number of final actions in the EP examination procedure was up by 13% over the previous year. A total of 75 000 final actions, 9 000 more than in 2002, could reasonably be expected. By the end of the year, around 37 500 PCT Chapter II examinations would have been carried out (including those without examiner intervention), compared with 49 400 in 2002, a sign of the considerable success of the initiatives that the Office took in 2001 for this procedure. These initiatives had allowed the Office to re-allocate significant capacity to other procedures such as EP second filing searches.
The recent trend of an increased number of published granted European patents continued throughout 2003 with double-digit growth. The 2003 total of granted patents was expected to reach about 60 000 (55 300 published patents at the end of November), 27% more than in 2002.
By the end of the year the forecast was for 1 400 technical appeals (end of September: 1 044) to have been settled, 165 more than the number of new filings and 3.4% above the corresponding figure for the previous year (1 355).
The Office's efforts to meet the criteria set at the intergovernmental conference in Paris in 1999, namely to achieve a processing time of 36 months, and in mastering the workload had indeed been quite successful.
The search backlogs had continued to decline steadily, from 80 300 in early January 2003 to 73 000 at the end of September. There had been significant differences between the various industrial sectors. The forecast was for a further reduction to 69 000 (or 14%) by the end of the year.
The European second-filing search backlog stood at 41 100 at the end of September and should have been further reduced to 39 000 by the end of 2003. This compared with a figure of 46 750 at the end of 2002, a reduction of 16.5%.
For EP first-filing extended European search reports, EP second-filing searches, PCT ISA searches, national first filings and PCT Chapter II examinations, the problems with timeliness noted in 2002 had given way, as planned. Full control was still on target for the end of 2004. This satisfactory progress was generally in accordance with the targets set in CA/132/02 (Mastering the Workload). The backlog was still a problem with EP second filings in four interrelated industrial sectors.
The number of examination files not fulfilling the Paris criteria had slightly increased by 2.5% since the end of 2002, due to priority being allocated to search procedures. It had declined in six of the 14 industrial sectors. In 2003, the Office would meet the Paris criteria for one in five granted patents, up from one in seven for 2001.
By the end of the year, around 3 000 cases were expected to be pending before the boards of appeal, 6%less than the corresponding figure from the previous year (end of September: 3 157). At the end of September the backlog stood at 1 196.
The pilot phase of the implementation of a more harmonised management structure for DG 1/DG 2, which became necessary as a result of the implementation of BEST, started on schedule on 1 January 2003 and entailed the creation of pilot "joint clusters", Principal Directorates for four technical areas, each comprising about 200-300 examiners in between eight and 14 directorates spread over the three sites (Munich, The Hague and Berlin). A further two such joint clusters were created on 1 October.
Over the past months, progress had been achieved in adapting working methods and procedures and in redefining the responsibilities of those involved in the new structure in view of full-scale implementation in early 2004.
This new DG 1/DG 2 structure is an important instrument for achieving the objectives set in the mission statement, particularly with respect to a more customer-oriented approach, mastering the workload and improved staff management.
The Extended European Search Report (EESR) pilot project was successfully launched on 1 July 2003. The first reactions to the EESR communications had been received.
Plans to give the boards of appeal organisational autonomy, first presented to delegations at the June Council meeting, were now available in the form of a detailed preliminary draft for EPC revision. The idea is to turn the boards and their support services into an independent third organ of the European Patent Organisation. However, on purely administrative matters (logistics, IT, etc.), the new "European Court of Patent Appeals" and the Office would continue to work closely together. Plans were ready for forwarding to the Committee on Patent Law so that a basic proposal for EPC revision can be prepared.
Six cases which had been referred to the Enlarged Board of Appeal under Article 112(1)(a) in the past twelve months were pending. Four of them had been consolidated into two proceedings:
G 2/02 and G 3/02 dealt with entitlement to claim priority in relation to the WTO/TRIPS agreement. G 1/03 and G 2/03 dealt with the allowability of amendments made to patent claims in disclaimers that have no basis in the application as filed. G 3/03, referred to the Enlarged Board in March 2003, dealt with reimbursement of the appeal fee in case of interlocutory revision. Lastly, G 4/03 dealt with whether appeal proceedings may be continued for a third party who intervened at the appeal stage if the appellant withdraws his appeal, and if so, under what conditions.
The Office had continued to pursue its strategic objectives through implementation of automation systems. The automation programme has to cope with a growing volume of complex data and to provide high levels of reliability and security because automation tools support the Office's core activities. That means that the tools (hardware, software and databases) need to be regularly updated.
The roll-out of Windows 2000 and Microsoft Office XP had been completed among administrative staff, together with the installation of highperformance workstations equipped with large flat screens. The deployment of workstations among examiners would be completed with the necessary adaptations of some applications, such as CAESAR and CASEX, in the first quarter of 2004.
Efforts to recruit qualified staff had been further reinforced, and with a total of 555 new employees the recruitment target had almost been met. Harmonisation of recruitment between The Hague and Munich had made significant progress. Thanks to a greatly improved Internet presence, the proportion of applications submitted electronically was steadily increasing.
The financial situation continued to be stable. Operating income would be around EUR 890m, an increase of 6.5% over last year. Operating expenditure would also be close to EUR 890m, so the operating result would be around zero.
On the basis of the Common Approach of 3 March 2003, work on the Community patent made further progress under the Italian EU Presidency. That applied above all to the draft Regulation on the Community Patent, which now incorporates the chief elements of the political compromise of 3 March 2003.
As far as the reduction of translation costs is concerned – the London Agreement on the application of Article 65 EPC – it seemed that the ratification process was gaining momentum, so that endeavours to lower significantly the cost of patenting in Europe now had prospects of success.
As far as efforts to set up a litigation scheme for European patents are concerned, the Working Party on Litigation had continued its deliberations during 2003. In May, its sub-group had finalised the text of the EPLA, which was then submitted to the full Working Party for further consideration. The only crucial issue that remained was whether there was sufficient support for the project among the contracting states to convene an intergovernmental conference with a view to adopting the proposed EPLA.
All the countries that have joined the European Patent Organisation since the diplomatic conference in November 2000 had acceded to the EPC 2000. Among member states of longer standing, only Spain had so far ratified the EPC 2000.
The situation with regard to the Organisation's eastward enlargement is that the EPC was most likely to enter into force for Poland in early 2004. An extension agreement with the Republic of Croatia had been signed on 16 June 2003, but had not yet entered into force. A similar agreement with Bosnia and Herzegovina was due to be signed in the near future.
This had been an extremely active period for PCT issues. On 1 January 2004 dramatic changes to the PCT procedure would occur with the introduction of a new expanded international search report (EISR). This would bring benefits to users in terms of earlier availability of a report on patentability and greater transparency, as well as eventually diminishing the number of PCT Chapter II demands with consequent workload advantages for the EPO as a PCT Authority. Of great significance here was that a completely revised set of Guidelines for international search and preliminary examination would be in place to coincide with the entry into force of the new system. The new Guidelines would reflect to a very large extent a common approach to search and examination among all of the International Authorities, made possible by intensive discussions amongst the trilateral partners during the course of 2003 and genuine co-operation at the three MIAs (Meetings of International Authorities) that took place that year. To give just one example, a common approach to the treatment of so-called "complex applications" had now been detailed in the Guidelines, something which even a few years ago seemed unachievable. For those few areas where a common approach is still not possible, extensive guidance was given in annexes to the main chapter.
Following intensive internal and external consultations, the Guidelines for Examination in the EPO had been amended. The new edition of December 2003 brought them into line with changed legal provisions, the case law of the boards of appeal and prevailing examining practice.
The number of professional representatives qualified to represent clients before the Office had increased in 2003 from 6 900 to 7 500. This figure includes 215 patent attorneys entered on the list as so-called "grandfathers" from new contracting states in 2003 and 110 from other new contracting states in 2002.
The 21stTrilateral Pre-Conference and Conference took place in Tokyo under JPO co-ordination from 3 to 7 November. Trilateral co-operation continues to evolve following the approach taken by the trilateral partners two years ago, with the three offices pursuing their policies addressed at mastering their respective workloads. At the last Conference experiences and views were exchanged on the results of policy implementations and it was sought to co-ordinate co-operation strategies to the maximum possible extent.
The Conference also made progress in several areas, such as the exploratory discussion on substantive patent law, the exploitation of work results and the harmonisation of e-business solutions.
In July 2003 the EPO signed a contract with the European Commission to manage the CARDS (Community Assistance for Reconstruction, Development and Stabilisation) regional IPR project for the Western Balkan countries of Albania, Bosnia and Herzegovina, Croatia, the former Yugoslav Republic of Macedonia, and Serbia and Montenegro. The project aims to promote regional IPR co-operation, adapt national legislation and promote general awareness of IPR in the region.
The fourteenth meeting between the State Industrial Property Office of China and the EPO was held in Shanghai on 21 October. Co-operation activities this year were partly held up by the SARS outbreak, but gathered momentum during the second half. The emphasis is on automation (EPOQUE) and documentation projects. A closing symposium for the EC-funded China II project was held in Beijing in October.
An extension of ECAP – a project funded by the EC which already covers seven south-east Asian nations – to the Mekong countries (Laos, Cambodia and Vietnam) is under preparation. The total budget will then rise to EUR 7.5m.
On 1 September, the Office, jointly with EAPO (the Eurasian Patent Office), held a seminar in St Petersburg on patents and the twenty-first century, with participants from throughout the CIS region including heads of office of IP institutions.
In October, the EPO took part in a WIPO-organised seminar on the PCT in Malta, in view of Malta's expected accession to the PCT and of course the EPC during the early part of 2004.
In July the EPO officially opened its new bureau in Brussels. At the opening ceremony attended by more than 70 EU officials, national patent office heads and journalists, Commissioner Bolkestein and the President of the Office gave speeches which marked the official inauguration of the bureau. The Brussels Bureau aims to promote the EPO among EU institutions and raise the profile of the European patent system among the Brussels-based science and research community. Its activities relate especially to new Community legislation, notably the proposed Community patent and the proposed directive on computerimplemented inventions, as well as the role of intellectual property in the EU's policies on innovation and research.
In November the President addressed a joint session of the European Parliament's industry and legal affairs committees, taking the opportunity to explain the functions of the EPO, its position with respect to proposed legislation and its role in supporting the innovation process. The introductory speech was followed by a discussion with MEPs on several patent-related topics.
The International Academy of the EPO organised as scheduled twelve training activities in the second half of 2003, most of them on the basis of farreaching co-operation with member states' offices.
A new CEIPI-epi course on patent litigation in Europe started in Strasbourg in September. The course is intended for European patent attorneys and aims to help them acquire a deeper knowledge of patent litigation procedures in Europe and of future centralised proceedings.
The Office had launched a project aimed at optimising intranet use to support its internal communications and at developing new work-related applications. This project pursues several objectives relating to a common corporate identity, developing an information accountability policy and an adequate presence of EPO organisational units.
The 2003 EPIDOS Annual Conference took place in Luxembourg in November. It was held jointly with the European Commission's PATINNOVA Conference. The Luxembourg Patent Office was closely involved and contributed significantly to the organisation of the event.
The EPO website currently receives about 2.5 million hits each week and delivers about 50 GB of data a month to its end users (about 10 000 distinct IP addresses per day).
Once the President had concluded his activities report, the Council addressed several major issues.
The Council decided to appoint Mr. Alain POMPIDOU (FR) as President of the Office for a three-year term with effect from 1 July 2004, and to appoint Ms Alison BRIMELOW (GB) as President of the Office for a three-year term with effect from 1 July 2007.
Ms Alison BRIMELOW was elected Deputy Chairman of the Administrative Council for a term of three years with effect from 5 December 2003.
The Council unanimously decided to reappoint Mr. Michel CAMOIN (FR) as a member of the Board of Auditors for a further five-year term with effect from 1 January 2004.
The Council appointed and reappointed several chairmen and members of the boards of appeal and of the Disciplinary Board of Appeal.
The Council then approved a draft decision amending the amount of the filing fee under the Rules relating to Fees.
The Council also approved the organisation of an international architectural competition in connection with the proposed new building for the branch at The Hague.
Regarding legal and international affairs, the Council decided to give a formal mandate to the Committee on Patent Law and the Budget and Finance Committee to deal with the proposal aiming at giving DG 3 organisational autonomy in relation to the Office and to draw up a basic proposal for revision of the EPC which could go on the agenda for a Diplomatic Conference.
The Council agreed to convene a Diplomatic Conference for the second half of November 2004. The list of possible topics for the Conference agenda will have to be discussed at the Council's March 2004 meeting, and the basic proposals will be presented at its meeting in June 2004.
The Council decided to set up an ad hoc working party, made up of experts from all the Organisation's member states and with the staff representatives as observers, to analyse all the political and financial implications of a possible revision of the Protocol on Privileges and Immunities of the European Patent Organisation. The group will present its conclusions to the Council in June 2004. On the basis of these conclusions, the Council could adopt a proposal suitable for inclusion in the agenda for a Diplomatic Conference.
The Council approved the 2002 accounts and, after discussing the report by the Board of Auditors and hearing the opinion of the Budget and Finance Committee, discharged the President in respect of the 2002 accounting period.
Finally, the Council adopted the 2004 budget, with income and expenditure in balance at EUR 1 134 550 000. Provision was made in the table of posts for 6 528 employees.