Restoration on condition

This article was included in the spring 2011 issue of Innovate - the patents newsletter.

The UK Intellectual Property Office (the "Office") has held that the reinstatement of a patent should be conditional upon the imposition of certain terms to protect potentially affected third parties.

Background

Mario Joseph Charalambous (the "Applicant") filed his patent application on 14 February 1996, which was subsequently granted and published on 30 August 2000. However, the 14th year renewal fee - due on 14 February 2009 - was not paid, and so, six months later on 28 October 2009, the patent ceased.

It subsequently emerged that a notification for a change of address for service, dated 9 January 2009, had been incorrectly processed by the Office. This meant that the change of address had not been recorded and so the renewal reminder letter was sent to the wrong address.

The Law

Rule 107(1) of the Patents Rules 2007 (the "Rules") provides the Office with a discretionary power to "authorise the rectification of any irregularity of procedure". Under the Rules, any such rectification shall be made:

(a) after giving the parties notice; and

(b) subject to such conditions as the comptroller may direct.

The Dispute

Due to its error, the Office indicated that it would be prepared to exercise its discretion under Rule 107 and reinstate the patent. However, the Office felt that it was necessary to impose certain conditions on the application to ensure that the interests of any third parties were protected, as they may have proceeded on the basis that the patent had ceased between the date that cessation was published (28 October 2009) and the date of publication that reinstatement under Rule 107 was being considered (25 November 2009).

After considerable correspondence between the Office and the Applicant, the Applicant was still not prepared to accept the conditions arguing that the imposition of any terms was unfair. The Applicant asked for details of any third parties who may have been affected, and the Office responded informing him that they would not be aware if anyone had started to work the invention and so they could not provide these details. Therefore, the Applicant relied on the fact that if there was no evidence that any third party had been affected, the conditions were unnecessary.

On the other hand, the Office emphasised that when taking the decision to reinstate the patent they had to ensure that they were fair to all potentially affected parties. As such, they needed to be certain that any third party who may have innocently begun to work the patent, thinking they were free to do so, was protected from prosecution.

The Decision

The issue of the imposition of third party terms had arisen previously, notably in Coal Industry (Patents) Ltd's Application [1986] RPC 57 where a failure by the Office resulted in the patent application being advertised as refused. When rectifying the error, Falconer J giving judgment stated that:

"... as a consequence of the announcement of the refusal of the application any member of the public would have been free to take advantage of the disclosure and to exploit the invention. Resuscitation would be a serious blow to such a person and I must have regard to his interest."

The Hearing Officer also noted that references to potential third party terms existed in several places in the Patents Act 1977: not only in the context of reinstatements (sections 20A and 20B) and restorations (sections 28 and 28A) but also in the context of corrections of errors in patents or patent applications. Therefore, the legislator had demonstrated a clear intention to protect third parties who acted in good faith whenever a change to the status of a patent is made.

Although the procedural irregularity was in part due to an error made by the Office, the hearing officer concluded that the principle must remain that the reinstatement of a patent must not adversely impact on any third parties who may have acted in good faith once the patent was advertised as having ceased. He therefore included that it was appropriate to reinstate the patent, and that such reinstatement should be conditional on various third party terms.