The transfer of priority rights
The question of who is a “successor in title” to the right to claim priority has recently been considered again by the UK Patents Court in KCI Licensing. Serious doubt remains over the validity of retroactive (nunc pro tunc) assignments to rectify defects.

Practice points

The entitlement of the intended Convention applicant to the priority rights of all the priority applicants should always be checked before filing the Convention application.

Where necessary, ensure that assignments of the priority rights, that are valid assignments under the relevant national law, have been executed by all the priority applicants in favour of the intended Convention applicant before filing the Convention application.

We recommend that these assignments should at least be in writing, preferably signed by both parties (see T62/05) unless this is clearly not required under relevant national law, and preferably should expressly assign the right to claim priority (in addition to any rights in the invention and the priority application).

If suitable assignments have not been put in place, it may still be possible to establish the Convention applicant’s title as successor through relevant applicable national law e.g. rights may have vested by operation of law or contract or the existence of rights in equity may suffice.

Where there is any doubt, assignments should be completed

If not all the relevant assignments are in place or there is any doubt as to the intended Convention applicant’s entitlement, the applicants for the Convention filing should include those priority applicants (or successors in title through valid assignments, etc.) who have not assigned their rights to the intended Convention applicant.

If the Convention applicant was not the successor in title to all the priority applicants at the Convention filing date, correction may be possible. Correction should be considered at an early stage as it may be more convenient to deal with this under the PCT rather than regionally/nationally. However, correction needs to be approached with caution as it could make public a possible priority problem.

Retroactive assignments may be an alternative route to establishing succession under relevant national law, if these would be treated, as between the parties and in relation to third parties, as entered into prior to the Convention filing date. However these may well not be acceptable to cure a priority problem in the EPO and the UK in light of the approach in T62/05 and the comments in Edwards v Cook.

Relevant provisions

Article 4A(1) Paris Convention (Stockholm Revision):

Any person who has duly filed an application for a patent, or for the registration of a utility model, or of an industrial design, or of a trademark, in one of the countries of the Union, or his successor in title, shall enjoy, for the purpose of filing in the other countries, a right of priority during the periods hereinafter fixed.

Article 87(1) European Patent Convention:

Any person who has duly filed, in or for (a) any State party to the Paris Convention for the Protection of Industrial Property or (b) any Member of the World Trade Organization, an application for a patent, a utility model or a utility certificate, or his successor in title, shall enjoy, for the purpose of filing a European patent application in respect of the same invention, a right of priority during a period of twelve months from the date of filing of the first application.

In the UK, the priority date of an invention is dealt with by section 5 Patents Act which, by section 130(7), is to be construed in conformity with the corresponding provisions of the EPC (including Article 87).

Relevant case law – UK

KCI Licensing Inc & Others v Smith & Nephew Plc – UK Patents Court: Arnold J – 23rd June 2010

One of the issues in this infringement action was the validity of the priority claim to European patents (UK).

The US priority applicant was Mr Lina.  The PCT applicants were Mr Lina and Mr Heaton for the US, Kinetic Concepts Inc (Mr Lina’s employer) for all designated states except the US and Mediscus Products Ltd (Mr Heaton’s employer and a wholly-owned subsidiary of KC Inc) for GB only.

Arnold J found that KC Inc was the sole applicant for the PCT application in so far as it related to the European patents; Mediscus was only a co-applicant in relation to the GB national which was not in issue – see further comments below.

The principal question to be addressed was therefore whether KC Inc was a successor in title for the purpose of validly claiming priority.

Arnold J said that it was common ground that “successor in title” means successor in title to the invention, which was also common ground in Edwards v Cook, referred to below.

A Confidentiality Agreement between Mr Lina and KC Inc contained an express assignment of all his rights in inventions conceived or developed by him during his employment and a further assurance to enable the company to file patent applications for the inventions. Although the Agreement was governed by Texas law, no evidence as to Texas law was put forward and it was therefore common ground that it should be assumed to be the same as English law.

Arnold J held that an assignment of rights in a future invention was effective, under English law, to assign legal title to the invention to KC Inc and that therefore KC Inc was Mr Lina’s successor in title at the date of the PCT Application. Alternatively, if an assignment of a future invention could not convey the legal title, the Agreement had transferred the beneficial interest in the invention, including the right to file patent applications: this was sufficient to make KC Inc the successor in title to Mr Lina for the purposes of claiming priority, even if KC Inc had not acquired the bare legal title; he referred to J19/87 in support, which is discussed below.

He commented that the operation of Article 4A Paris Convention and Article 87(1) EPC, being provisions of international treaties, could not depend upon the distinction drawn by English law, but not by most other laws, between legal and equitable title.

Thus,“when determining whether a person is a “successor in title” for the purposes of the provisions, it must be the substantive rights of that person, and not his compliance with legal formalities, that matter”.

This appears to be a more relaxed approach than that adopted by the EPO Board of Appeal in T62/05, discussed below.

There was an issue over whether Mediscus was named as an applicant for the EP(UK) or just the GB national (which was not the subject of the proceedings) and whether Mediscus was entitled to rely upon the priority claim.  The case was contrasted with Edwards v Cook (see below) where there had been 3 priority applicants and one PCT applicant which was the successor in title to the rights of only one of the priority applicants. Having found that Mediscus was not a co-applicant of the EP(UK), Arnold J nevertheless went on to consider whether, if he were wrong, this would adversely affect the priority claim.  KCI argued that KC Inc had agreed by conduct to transfer part of its interest in the invention to its subsidiary Mediscus and that this was sufficient to make Mediscus a successor in title for the purposes of claiming priority and that no greater degree of formality was required.  Arnold J accepted this submission and held that the priority claim would therefore not be adversely affected if Mediscus was held to be a co-applicant. Arnold J’s decision appears to be based on the premise that all the PCT applicants had to be successors in title to the priority applicant for the purpose of validly claiming priority.

However, it was accepted that the PCT application disclosed the same invention as that disclosed in the priority application. Mr Heaton had not in fact contributed to the invention and Mediscus, his employer, was named purely as a device for filing the PCT application through the UK-IPO.

Arnold J’s decision does not therefore deal with the situation where the Convention application contains added inventive matter. Since the added inventive matter cannot in any event benefit from the priority, it is reasonable to argue that the addition of a non-successor co-applicant for the Convention filing should not adversely affect the validity of the priority claim for the invention described in both the Convention filing and the priority application.

Edwards Lifesciences AG v Cook Biotech Incorporated – UK Patents Court: Kitchin J – 12th June 2009

The validity of the priority claim was also in issue in this revocation and infringement action. (The subsequent appeal was decided on 28th June 2010 on the issue of obviousness and so it was not necessary to review Kitchin J’s findings on the priority issue.)

The US priority application was filed in the names of 3 inventors: Obermiller, Osse and Thorpe. The applicant for the PCT application, from which the UK patent in suit derived, was Cook Biotech Incorporated.

For the purposes of Article 4A(1) Paris Convention, Kitchin J decided that “successor in title” must mean successor in title to the invention, as the parties before him had agreed. He added that “a person who files a patent application for an invention is afforded the privilege of claiming priority only if he himself filed the earlier application from which the priority is claimed or if he is the successor in title to the person who filed that earlier application”.

It was accepted that Cook was entitled to Obermiller’s rights via his contract of employment. Osse and Thorpe were not employees of Cook; they assigned their rights to Cook after the PCT filing date and before grant of the patent in suit.

The transcript of the hearing shows that the assignments were expressed to be effective from the priority date i.e. they were expressly retroactive. During the hearing, Kitchin J referred to the existence of case law to the effect that retrospective assignments “might be good between the two parties to the assignment but cannot properly affect the interest of third parties”. In the event, Cook appears not to have relied upon the assignments being retroactive but focused on the argument that assignment before grant was sufficient.

Kitchin J held that the priority claim was invalid because, at the filing date of the Convention application, Cook was neither the applicant for the priority application nor the successor in title from all the applicants for the priority application.

The assignment of the rights of Osse and Thorpe to Cook after the Convention application was filed (albeit that the assignments were worded to have retroactive effect) did not help because it remained the case that Cook was not entitled to claim the priority at the Convention filing date.

In his decision, Kitchin J stated that “any other interpretation would introduce uncertainty and the risk of unfairness to third parties”.

Kitchin J considered that his decision was consistent with EPO case law, in particular referring to T62/05 and J19/87 which are summarised below.

Relevant case law – EPO

T62/05 – Technical Board of Appeal – 14th November 2006

In this EPO case, the priority document was a Japanese filing in the name of Nihon GE Plastics KK, a Japanese company. The Convention filing was a PCT application in the name of a US company, GE Company, which owned a majority share in the Japanese priority applicant.

Under opposition, the validity of the priority claim was questioned.  GE Company then assigned the European patent to Nihon GE (without any retroactive wording or choice of law clause) in an attempt to save the priority claim.

The Board of Appeal said that this assignment was not relevant to the question of whether GE Company was entitled to claim priority from the Japanese priority application as at the Convention filing date. GE Company could only be considered as the owner of the right to claim priority provided it was established that the succession in title from Nihon GE to GE Company occurred before the end of the 12 month period starting from the filing date of the priority application.

Although the assignment did not state that it was retroactive (i.e. nunc pro tunc), this would probably not have made a difference to the outcome in light of the Board’s finding that entitlement to claim priority must be established at the date of the Convention filing or at least within 12 months of the priority date.

It was also argued that there was an understanding that GE Company was entitled to file for European protection and claim priority, with some inconclusive documents said to evidence this. No evidence was put forward asto how this understanding and the documents should be construed under any relevant national law and as to what law would be applicable.

The Board of Appeal said that priority rights are assignable independently of the corresponding patent application and may be restricted to specific countries. It then went on to consider the requirements for assignment of the priority rights in relation to the filing of a European patent application. It decided that the transfer of priority rights must be proven in a formal way and that it was reasonable to apply an equally high standard of proof as required for an assignment of a European patent application by Article 72 EPC i.e. in writing and signed by or for both parties.

The Board of Appeal decided that, even if an intention to transfer priority rights (i.e. before the PCT filing) might have been discerned from the various documents relied upon, this intention had not been finalised in a form that would indubitably establish that the transfer of the priority rights for the filing of a European patent application on the basis of the Japanese priority application had taken place before the end of the 12 months Convention period.

Of interest here is the fact that the Board did not consider whether any relevant national law might be applicable in determining the question of entitlement to the priority rights, by contrast with J19/87 and T1008/96, summarised below. No evidence on the relevant national law having been submitted, the Board considered the matter under the EPC. As the EPC makes no provision for the assignment of the right to claim priority, the Board applied the same standards for the valid transfer of such rights as apply under Article 72 for the valid transfer of a European patent application: in writing and signed by both parties.

J19/87 – Legal Board of Appeal – 21st March 1988

In this case, national law was considered in evaluating the validity of the priority claim.

The priority document was a UK filing by the inventor, Mr Belcher, who then assigned his rights in the invention, the UK application, the right to file further applications and the right to claim priority to National Research Development Corporation (a UK entity). NRDC later signed an assignment back to the inventor of the rights in the invention and the application but this document was not signed by the assignee, as was required at the time for a valid legal assignment of a UK patent application. The inventor subsequently filed the EP Convention application in his own name and then assigned both applications to Burr-Brown Corporation.

The validity of the priority claim became an issue when Burr-Brown sought to correct the EP Convention applicants ab initio to NRDC and Mr Belcher, arguing that the assignment from NRDC to Belcher was not effective as it was only signed by NRDC and that the European application contained additional inventive matter over the UK application for which Mr Belcher was the inventor.

In this case, Burr-Brown was invited to file a legal opinion as to the effect under English law of the assignment from NRDC to Mr Belcher that had only been signed by the assignor. The subsequently filed opinion of Nicholas Pumfrey (then, a UK barrister) was to the effect that the assignment was a valid legal assignment of the rights in the invention (making the assignee a successor in title of the inventor to the invention) and gave the assignee an equitable interest in the UK priority application.

Mr Pumfrey also said that, as an owner in equity of the priority application, the assignee was entitled to claim priority from that application as a successor in title (making the assignee a successor in title to the priority application under Article 87).

The Board relied on this in finding that there was a valid priority claim.

T1008/96 – Technical Board of Appeal –  25th June 2003

Again the Convention applicant differed from the priority applicant and the validity of the priority claim was raised in opposition proceedings. Both applicants were Italian and the priority documents were two Italian utility model applications. The Board stated that the question of entitlement should be answered in accordance with national law. Because of a conflict of evidence as to whether the Convention applicant was indeed the successor in title under Italian law, the priority claim failed.

View PDF