Restoring lost IP rights: Prevention is better than cure
Unintentional loss of valuable registered IP rights, whether patents, trade marks or other rights can be extremely distressing

The cost of trying to restore lost rights, from the perspective of time as well as money, can be huge. However, even when rights have been lost it is sometimes possible to rescue them.

Some common pitfalls, and how to avoid them

Restoration is most often required when patents have lapsed due to the accidental failure to pay renewal fees (annuities). The two most common situations in which annuity-related lapses occur are as follows:

1. When a European patent application has recently granted

Up until grant of the EP application as a bundle of national patents, the proprietor’s records in some cases include only the EP application and not the individual national validations. These are often added to existing records after post-grant validation has been completed. This approach can cause problems in situations where the payment of the renewal fee falls due shortly after the patent has granted – in this situation a bundle of renewal fees are payable at national patent offices, but there is no reminder set up on the proprietor’s system yet, since individual records have not been created for these national validations.

This can be avoided by creating records for all national validations (which will include the renewal fee due date) as soon as the territories for validation have been decided, and if possible creating these records before grant of the EP application.

If the validation territories cannot be determined until after grant, it is very important when creating records for the validations to ensure that the due date for this first post-grant round of renewal fees is appropriately docketed, to allow for the situation where the renewal payment falls due before the decision on where to validate is made.

The danger in creating records after grant is in a situation where the renewal fee due date has already passed before the national records were created. Since many records systems assume (quite understandably) that reminders are always forward-looking, when the records are created the system might automatically docket the due date for payment of the renewal fee as the following year (since this year’s due date has already passed). In such a situation, anybody checking the system might assume wrongly that the current year’s renewal fee has already been paid (when it actually hasn’t) because the system says that the next renewal fee due is the following year’s. This small docketing error can have severe consequences.

2. When a patent or even more commonly a whole portfolio of patents is being sold by one business to another, and there is a misunderstanding or miscommunication regarding who is responsible for payment of renewal fees

A particularly dangerous situation is where negotiations between the parties end up being protracted and carry on for six or more months – if renewal payments fall due during negotiations and there is a misunderstanding between the seller and the buyer regarding who is responsible for maintaining the patents, the payment of renewals can fall through the cracks. It’s easy enough for this to happen, especially when each side is preoccupied with the details of the deal still being finalised.

This can be avoided by being clear from the outset of the negotiations as to which party is responsible for the monitoring and payment of renewal fees and at which point responsibility is transferred. The issue of renewal fees should not be left at the bottom of a ‘to-do’ list – if it is not identified early on as an important issue, the buyer may well end up in the position of having successfully negotiated a deal only to find that crucial patents or other registered rights have in the meantime already lapsed.

An established reliable records system is vital

Trying to restore lost rights can be a very expensive business, so it is definitely worth having top-notch record-keeping systems in place. Whilst that in itself doesn’t mean that you are immune from completely unexpected events which can result in errors being made and IP rights lost, it is well worth ensuring that all important dates are recorded and maintained in a robust system.

Such a system will include simple but crucial steps, such as the following:

  1. Paying attention to all incoming communications (lapse notices/non-payment notices/notices of the loss of rights). Whilst there are unscrupulous ‘scammers’ out there, it is worth checking with your IP adviser first before disregarding any communications.
  2. Ensuring that all due dates are appropriately docketed (preferably electronically) and that the system in place is capable of generating prompts reminding the proprietor of important deadlines.
  3. Having a system of in-built double-checks, where the process of docketing crucial due dates is monitored by more than one employee to allow for the necessary cross-checks.

Having well-established, reliable systems in place for the docketing and managing of important deadlines is of crucial importance, and not just in trying to make sure rights are not lost in the first place. These also serve as evidence to be provided to IP offices if you do ever find yourself in a sticky position and need to apply for restoration. For example, at the EPO and many national patent offices in Europe, the applicant needs to show, by submitting detailed supporting evidence, that the lapse occurred in spite of due care having been exercised by the applicant (and their representative, if relevant). It is much easier to satisfy the due care criterion if there is an existing deadline-monitoring system in place.

If you discover, or even suspect, that a registered right has lapsed unintentionally, what should you do?

First – don’t panic! The situation might be salvageable if you act quickly. Second – contact your IP adviser (be it external or internal) straight away in order to confirm that it’s not too late to file a restoration application at the relevant IP office. If you are not out of time, docket this deadline once it has been identified.

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