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Common Sense from EPO on Transfer of Employee Inventions

Common Sense from EPO on Transfer of Employee Inventions

European Industry news 15/03/2016

A recent decision published as T0205/14 by the Technical Board of Appeal at the European Patent Office outlines the possibility that an express assignment of the right to priority is not necessary for a Patentee to enjoy a right to priority.

The decision concerned EP1713489 which was based on a PCT patent application filed on 23 August 2005, which in turn claimed priority from two US applications (P1) and (P2). In line with US practice at the time, P1 and P2 were filed in the name of the inventors.

A number of issues were raised during Opposition Proceedings, including the Applicant’s entitlement to validly claim priority to P1 and P2.

There were several limbs to the Opponents’ arguments in respect of priority. For example, the Opponents argued that Article 87 EPC required a separate and express assignment of the right of priority to have been executed by the applicants of P1 and P2 (i.e. the inventors) and the Patentee. Evidence to the effect that the Patentee had acquired the right to the grant of a patent derived from the priority applications was argued not to be sufficient to prove that it had also acquired the rights of priority derived from the first filings. The Opponents cited T 62/05 in support of an allegation that a transfer of a right of priority had to be proven in a formal way, that is, by way of an assignment declaration in writing and signed on behalf of the parties, a burden of proof that the Patentee had failed to discharge. The contractual arrangements submitted by the Patentee only showed that obligations of the individual inventors and employees towards the employer existed. There was, however, no evidence that the inventors and employees had fulfilled their obligations to transfer their rights of priority derived from P1 and P2 to the Patentee. Moreover, it was not clear from the contractual arrangements which of the affiliates of the corporate group of the patentee was to be seen as the transferee.

In response, the Patentee argued that, no matter whether Israeli or US law applied to the validity of the transfer, it had provided clear and convincing evidence which showed that it was entitled, as an employer and successor in right to the three applicants of P1 and P2, to the right of priority deriving from said applications. With respect to Israeli law, it was established that the right of priority derived from the US priority applications had been acquired by operation of Section 132 of the Israeli Patents Law 5727-1967, or by factual circumstances implying such a transfer, namely, through the fulfilment of contractual obligations, in the absence of a formal requirement for the transfer of the right of priority. A transfer by conduct from the transferor to the transferee implying such a transfer under the circumstances was sufficient.

With respect to the question of choice of national law, the Patentee argued that it had provided evidence for succession in title under both Israeli and US national law. In any case, it would be unreasonable and unpredictable to ask an applicant to comply with the law of each and every signatory state for which an application claiming priority of a first application was filed. It would be a reasonable solution to apply, in an analogy to Article 60(1) EPC, the law of the country of employment in case of an employment relationship. Alternatively, the application of the law of the state of the filing of the first application could also be justified.

The Patentee also argued that a right of priority is transferable independently of the corresponding first application which can remain with the original applicant. Furthermore, the right of priority may be transferred to a third person for one or more countries only (T 62/05). It is thus an independent right up and until it is invoked for one or more later applications to which it becomes an accessory. The right of priority has thus to be distinguished from the right to the patent deriving either from substantive law or from the status of being the applicant of the first application.

In coming to its decision, the Board disagreed with the Opponents’ view that the right of priority as a right independent of the right to the priority application implies that the valid transfer of a priority right inevitably requires a separate and express assignment declaration. Instead, the requirements for a valid transfer of rights of priority is a matter distinct from the characterisation as an independent legal right. Article 87 EPC neither requires an express assignment in writing nor excludes a transfer by operation of law or by conduct of the parties concerned implying such transfer.

Thus, the Board ruled that since the provisions of the EPC do not lend themselves to an autonomous determination of the requirements for the transfer of right of priority, the validity of such transfer is a matter of national law and cited a number of previous decisions in support of this conclusion (see T 160/13, J 19/87, T 493/06). Particularly, the Board explained that the law of the state of the employment relationship between the three original applicants and the Patentee determines the transfer of the right of priority. At the time of filing of the Patent, the original applicants were employees of the Patentee. Both the state where the original applicants were employed and the place of business of the Patentee, to which the original applicants were attached, is Israel. Therefore, Israeli law applies.

The Board went on to state that it was reasonable to conclude from Sections 132 and 140 of the Israeli Patents Law, that the right of priority arising from a first filing by an employee-inventor - albeit being a right separate of the right to the invention - will devolve to the employer as a necessary correlate of the employer's entitlement to seek worldwide protection for the invention. The Board was therefore satisfied that the patentee had discharged its burden of proof and provided convincing evidence for the fact that the right of priority derived from P1 and P2 had been transferred to the patentee before the date of filing of the Patent and thus held that the Patent based thereon, enjoys the earliest priority date of 23 August 2004.