19 May 2020
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On 14 May 2020, the Enlarged Board of Appeal of the European Patent Office (EBA) released their decision G3/19 ahead of publication.

On the face of it, the decision is very legal in nature and concerns the validity of Rule 28(2) EPC. This rule explicitly prohibits the grant of patents for plants or animals that have been generated exclusively by essentially biological processes, such as crossing and selection.

Since it apparently contradicts the earlier Enlarged Board of Appeal decisions G2/12 and G2/13, an EPO Technical Board of Appeal recently ruled that Rule 28(2) EPC should be ignored (T1063/18 (“Pepper”), despite being part of the Implementing Regulations of the EPC. To resolve this conflict between Rule 28(2) EPC and T1063/18, the President of the EPO made a referral to the EBA under Art 112(1)(b) EPC and G3/19 represents the EBA’s opinion on the issue.

Rule 28(2) EPC was introduced by the Administrative Council in 1 July 2017. It followed lobbying and pressure from the European Union in the form of a resolution by the European Parliament in Dec 2015 and a notice from the European Commission in Nov 2016. Following the issuance of T1063/18, which appeared to overturn Rule 28(2) EPC, the European Parliament issued a second resolution in Sept 2019 re--stating their view that the products of conventional breeding processes “must not become patentable”. The vigour with which EU institutions have pursued this issue reflects the concerns of the plant breeding industry and various pressure groups about the monopolisation of plant genetic resources.

In reaching a decision on the referral, the EBA therefore faced considerable pressure from both inside and outside the EPO to find a way to maintain the validity of new Rule 28(2) EPC despite the existence of their own earlier contradictory decisions G2/12 and G2/13.

The referral is admissible

Many commentators thought that the referral would be found inadmissible. Indeed, the EBA found that the first question referred by the President was “too general and unspecific” and would potentially give the Administrative Council the authority to re-interpret any article of the EPC. The second question was also considered problematic because the EBA felt that it reflected the opinion of the EPO President on the issue. The EBA did not therefore fell able to base a decision on the questions referred by the President.

However, instead of simply rejecting the referral as inadmissible on the grounds that the referral questions were deficient, the EBA adopted a different approach. They attempted to divine the “true object” of the referral and then drafted its own question to address this “true object”. The question as re-drafted by the EBA focussed on Art 53(b) EPC and whether its interpretation can be affected by developments occurring after an EBA decision.

Having re-drafted the question that they were to consider, the EBA swiftly decided that it raised a point of law of fundamental importance, and so met the first criterion for an admissible referral under Art 112(1)(b) EPC. Given that they had taken the trouble to re-draft the question in the first place, this was probably inevitable. The second criterion of Art 112(1) (b) EPC requires that two Boards of Appeal have given different decisions on the referral question. This presented the EBA with more difficulties, since the conflict between Art 28(2) EPC and T1063/18 was not in itself sufficient to meet the criterion. Whilst the EBA rejected arguments that this conflict was analogous to two different Board of Appeal decisions, it ruled that T1063/18 was in fact in conflict with a number of other Board of Appeal decisions (notably T315/03, T272/95, T666/05, T1213/05) that decided that Articles of the EPC can be interpreted by virtue of subsequent case law or legislation, and in particular by changes to the Implementing Regulations.

The re-drafting of the referral questions by the EBA is unusual and the EBA did not explain why it took this approach. Focussing the question on Art 53(b) EPC seems to be an attempt to reduce the downstream impact of G3/19 on other areas of EP law. How successful this will be remains to be seen, given that the decision will almost inevitably to be cited, should similar circumstances arise in the future in relation to other Articles of the EPC.

The identification of Board of Appeal decisions that were in conflict with T1063/18 is also likely to be controversial. None of the cited decisions relates to Art 53(b) EPC or to the conflict between an Enlarged Board decision and a subsequent change to the Implementing Regulations. Insofar as any conflict might exist, it would only seem to be at the high conceptual level that the EBA deliberately excluded from the referral by re-drafting the question. At the level of the specific interpretation of Art 53(b) EPC, as formulated by the EBA, it is very difficult to see any specific conflict between the cases cited by the EBA and T1083/18.

The strained reasoning employed by the EBA to find that the referral meets the criteria for admissibility under Art 112(1)(b) EPC reflects the pressure felt by the EBA to resolve the referral and not to simply kick the can down the road by rejecting it as inadmissible. This may be seen as a pragmatic approach to expeditiously resolve a thorny legal issue. However, it may also pose serious questions about the independence of the EBA. It remains to be seen whether the EBA take a similarly obliging approach to admissibility in subsequent referrals.

New rule 28(2) EPC overrules G2/12 and G2/13

Having found a way of finding it admissible, the EBA turned to the substantive issue of the referral.

The arguments made by the President relating to the EU Biotech Directive were flatly rejected by the EBA. Although Rule 26 EPC indicates that the EU Biotech Directive is a supplementary means of interpretation of the relevant EPC provisions, the EBA decided that the intention of the EPC legislator regarding the interpretation of Art 53(b) EPC could not be divined from the Directive. The European Commission Notice of Nov 2016 provided an additional and more explicit interpretation of the Directive. However, the EBA ruled that this notice is not legally binding. Indeed, the EBA appears to vent its frustration at the various interventions of the EU Parliament and Commission on this issue over the years with a strong statement of the independence of the EPO from European Union law.

Having established its authority by rejecting the President’s arguments and confirming its own earlier decisions in G2/12 and G2/13, the EBA develops a principle that it calls “dynamic interpretation” in order to accede to the purpose of the referral and prohibit the patenting of plants and animals generated by essentially biological processes. “Dynamic interpretation” means that the interpretation of an EPC Article can vary over time if there are changes in the legal and factual situation. In this case, the implementation of Rule 28(2) EPC was seen to be a decisive change in the legal and factual situation. The fact that the vast majority of Contracting States represented in the Administrative Council voted in favour of Rule 28(2) EPC was sufficient to convince the EBA that the intention of the Contracting States had changed since the EBA’s earlier decisions G2/12 and G2/13 were issued. The introduction of Rule 28(2) EPC was therefore found to necessitate a change in interpretation of Art 53(b) EPC, to prohibit patents on plants and animals produced by essentially biological processes.

Dynamic Interpretation

The “dynamic interpretation” of Art 53(b) EPC allows the EBA to both have its cake and eat it. The validity of its earlier decisions G2/12 and G2/13 is confirmed, whilst at the same time, contradictory new Rule 28(2) EPC is also found valid on the grounds that the correct interpretation of Art 53(b) EPC was altered by the implementation of new Rule 28(2) EPC. According to the EBA, the interpretation set out in new Rule 28(2) EPC only applies to applications filed after the rule was implemented in 1 July 2017. Applications filed before 1 July 2017 will not be affected by Rule 28(2) EPC and will continue to follow the interpretation of Art 53(b) EPC set out in G2/12 and G2/13. Since the decision cannot be appealed, the “dynamic interpretation” of Art53(b) EPC by the EBA gives rise to a clear-cut date for the prohibition on plants and animals produced by essentially biological processes and provides a welcome degree of certainty on the issue of patent eligibility for patent applicants in the Agritech space.

Although banning patents on plants and animals produced by essentially biological processes filed after 1 July 2017, G3/19 also confirms the validity of patents covering such plants and animals that were filed before this date, and these patents will be in force for some years to come. Since this was a key concern of the EU Parliament and EU Commission, it remains to be seen how these institutions react to the continued existence of these patents and the confirmation of their validity in G3/19.

G3/19 represents a pragmatic solution to the issue that attempts to satisfy parties pressing for a prohibition on patents covering plants and animals produced by essentially biological processes, whilst minimising the consequences on the subsequent interpretation of EPC law. However, despite the attempt to avoid granting wide ranging authority to the Administrative Council by focussing the referral question on Art 53(b) EPC, this is one of the likely consequences of the decision. In particular, the EBA’s view that the implementation of Rule 28(2) EPC by the Administrative Council demonstrates represents the clear legislative intent of the EPC Contracting States seems to inevitably lead to an increase in the influence of the Administrative Council on the interpretation of EP law.

The dynamic interpretation of Art 53(b) EPC in G3/19 is the core principle at the heart of the EBA’s attempt to reconcile Rule 28(2) EPC with G2/12 and G2/13.

However, the suggestion that an Article of the EPC should be interpreted “dynamically” in accordance with the prevailing legal and factual situation is contrary to the justification for bringing the referral in the first place. In particular, the President argued that T1063/18 was contrary to the legislative intent behind the EU Biotech Directive and its incorporation into the EPC. However, if “dynamic interpretation” of the Articles of the EPC is the correct approach, then it is the prevailing legal and factual situation that is decisive and the original intention of the legislator is irrelevant, in the same way that G2/12 and G2/13 were irrelevant to the interpretation of Article 53(b) EPC that was endorsed by the EBA in G3/19.

A changing interpretation of an Article of the EPC over time depending on the legal and factual situation may bring further problems. If the EBA can take completely opposing positions on the interpretation of an Article of the EPC at different times, there can never be any certainty about the definitive interpretation of that Article. The EBA may even interpret Article 53(b) EPC in a totally different manner to G3/19 in a future decision if the legal and factual situation changes again. Whilst G3/19 brings an element of legal certainty to the patent eligibility of plants, this comes at the cost of lessening the authority of EBA decisions in general, and the introduction of more widespread uncertainty. Indeed, if the Administrative Council can overturn G2/12 and G2/13 by simply amending the Implementing Regulations, can they overturn other EBA decisions by simply rewriting the rules?  The approach of the EBA in G3/19 therefore introduces a lack of legal certainty that extends beyond Article 53 EPC to all of the other Articles of the EPC. EBA decisions that touch on politically sensitive areas, such as biotechnology, may be particularly vulnerable.

The decisive factor for the EBA in overruling T1063/18 and supporting the validity of new Rule 28(2) EPC was the perceived intention of the EPC Contracting States. This was inferred from the decision of Administrative Council to implement Rule 28(2) EPC, because all Contracting States are represented on the Administrative Council. The extent to which a vote of the Administrative Council to implement a rule can really be said to reflect the intention of the EPC Contracting States is open to question. Statutory procedures exist for revising the EPC; either a diplomatic conference under Art 172 EPC or a unanimous vote by the Administrative Council under Art 35(3) EPC. If all the Contracting States were in favour of new Rule 28(2) EPC, as the proponents of the rule allege, then either of these routes would have been an appropriate route confirm its valid implementation. Instead, the willingness of the EBA to accept the referral in G3/19 and the way in which it reconciles new Rule 28(2) EPC with its earlier decisions puts at risk the legal certainty of other Articles of the EPC and brings into question the independence of the EBA.

Nick is a Partner, Patent Attorney and Litigator at Mewburn Ellis. He works across the full range of patent activity in the life sciences sector, from pre-drafting advice and drafting of applications to worldwide portfolio management, prosecution and appeal. Nick is also experienced in defensive and offensive European oppositions and due diligence work.

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