Practical Strategies for Proactive Risk Management: Patent Oppositions in Europe and Elsewhere

Managing risk is a critical function of all business concerns.  This is certainly true in the realm of intellectual property, where new product and technology offerings pose a risk of infringing rights of others.  A prospective risk will provoke defensive risk management measures when it matures into an asserted business threat.  But it is better to anticipate and sidestep that risk before it matures into a business threat—proactive risk management is the preferred course.

Several tools facilitate proactive risk management in the IP context.  One such tool—the patent opposition—allows parties to challenge suspect patent rights after they are granted.  Recognizing the motivation of interested parties to uncover strong bases to challenge such patent rights, oppositions effectively provide them an opportunity to participate in a final stage of the patent examination process.

The European Patent Office (EPO) is one of several patent examination authorities that provide for opposition proceedings.  Oppositions filed in the EPO can challenge the validity of claims of a granted European patent based on novelty- or inventive step-destroying prior art.  They can also establish that subject matter has been added to the European patent impermissibly or that its disclosure is insufficient. 

EPO oppositions provide an effective tool for proactive risk management.  They may have one of three outcomes—the patent may be upheld as granted, it may be amended to distinguish prior art or to correct deficiencies, or it may be revoked entirely.  EPO oppositions often result in the amendment or revocation of granted patent claims.  In fact, the outcome most severe to the patentee—revocation—occurs in over one-third of all oppositions. 

Additionally, the EPO opposition procedure is a centralized process for challenging European patents on a regional level.  The EPO is unique in that it is a centralized patent examination authority that grants patents that take effect in all selected European countries.  It also provides a centralized opposition proceeding—any party can oppose a European patent within 9 months after it is granted.  A successful EPO opposition therefore impacts the patentees’ rights in every selected European country. 

The use of EPO oppositions for proactive risk management therefore confers significant advantages, especially when contrasted with the business threat posed by an unopposed European patent:

  • One regional EPO opposition can obviate the need to later invalidate a European patent at the national level in each selected country.  If no opposition is filed, however, the validity of a European patent must be challenged under the laws of the selected European countries. 
  • Significant differences among the laws of European countries drive up the cost of patent challenges in each European country.  A strategy employed in one country may not be appropriate or successful in another.
  • Outcomes of litigations in each European country are restricted to that country.  Invalidation of a European patent in France for example will not affect its validity in Germany. 

Though EPO oppositions provide an opportunity to challenge European patents in a regional proceeding, only a small percentage of European patents—about 5 percent—are opposed.  Put simply, the EPO opposition is a powerful yet underutilized tool for proactive risk management. 

When EPO oppositions are adopted as a risk management tool, they should be tailored to meet predetermined objectives.  A three-phase framework has proven to be especially effective.  It includes (1) a targeted monitoring regimen that identifies European patents and applications that pose an actual or prospective risk, (2) a focused search that finds key prior art relevant to a patent selected for opposition, and (3) a strong opposition including grounds tailored to achieve specific risk management objectives. 

Targeted Monitoring Regimen

Targeted monitoring identifies those European patents and pending patent applications that may pose a risk to current and prospective commercial activities.  It should be designed to identify patent properties that are owned by known competitors, that name inventors prolific in the relevant field, that are classified in the technology area of interest, and that are related to previously identified patents of interest. 

Focused Prior Art Search

If a patent is targeted for opposition, a focused search is performed to identify prior art establishing that the invention claimed in the patent lacks novelty or inventive step.  That search should target the key features relied upon by the EPO examiner for patentability.  Those features may be found in a so-called “characterizing clause” of the claims, which separately recites the features that purportedly distinguish the claimed invention from the prior art.  Key features are also revealed in the written communications between the patent applicant and the EPO examiner.  Using such key features as a guide, focused search guidelines are prepared for use by a search professional having relevant experience and technological expertise. 

Strong Opposition Grounds

To prepare an effective EPO opposition, it is important to follow a strategy that can best accomplish specific risk management objectives, whether those objectives are to revoke the European patent entirely, to force amendment of the patent claims in a particular way, or to attack specific claims of the European patent.  This requires an understanding of the objectives, the substantive and procedural laws of the EPO, and the technology claimed in the European patent.  It is also important to confer with European counsel, especially for opposition grounds that challenge the European patent on formal matters such as added subject matter and insufficiency of disclosure. 

An opposition system like that of the EPO is not yet available in the United States, but such a system appears inevitable.  Recent proposed legislation included an opposition system in which a party would be able to request the U.S. Patent Office to cancel or amend a granted patent.  The EPO opposition system served as a model for the proposed U.S. opposition system, although procedural details of the proposed U.S. system remain controversial.  Japan, China and other major countries’ patent systems have included various forms of either pre- or post-grant opposition procedures for some time but the EPO system seems to have avoided some of the disadvantages of other systems.  The only precedent for an opposition procedure in the U.S. has been the U.S. Inter Partes Reexamination system, instituted in 1999.  That system has not been widely used.  Critics of that system usually focus on the procedural limitations it imposes on the parties during reexamination and later in litigation and on the inefficiency of the U.S. Patent Office in administering the system.

Asserted business threats prompt defensive risk management measures, but they also distract businesses from profit-oriented activities, require late-stage technology shifts, and frustrate established business plans.  But proactive risk management in the arena of intellectual property can avoid or reduce risks before they mature into asserted threats.  Thoughtful EPO opposition strategies—such as those developed using the three-phase framework outlined in this article—have proven successful in confronting the risks posed by European patent rights.  Those strategies also provide a powerful tool for proactive risk management in other jurisdictions where patent oppositions are now (or are soon-to-be) available.

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