Failure to Pay Designation Fees on a European Patent Application
Opinion G 4/98 of the Enlarged Board of Appeal clarifies the legal status of European patent applications in contracting states which have been designated but for which designation fees have not been paid within the required time limit. Article 91(4) EPC states that if a designation fee is not paid within the due time limit, "the designation of that state shall be deemed to be withdrawn". As laid down in Article 79(2) EPC, designation fees must be paid within 6 months of the publication of the European search report, a further one-month grace period being available under Rule 85a.
Previous case law had indicated that non-payment of a designation fee might result in the retroactive withdrawal of the designation, the initial designation of the contracting state thus being deemed never to have taken place. This would have serious implications if none of the designation fees were paid, as the application would lose its filing date and consequently its priority date, and any divisional application based upon it would then also lapse.
In G 4/98, the Enlarged Board of Appeal has confirmed that the deemed withdrawal takes effect upon the expiry of the normal time limits as laid down in Art 79(2), and does not take effect retroactively. Therefore, the designations have their full effects until the expiry of the time limit for payment of the designation fees. A European patent application which designates one or more contracting states for which the fee has not been paid within the time limit thus retains its equivalence to a regular national filing in each of the designated states until the expiry of the time limit. This has important implications for the filing of divisional applications. A divisional application which is filed before the expiry of the time limit for payment of designation fees may validly designate some or all of the states designated in the parent application, regardless of whether or not any of the designation fees for the parent are subsequently paid within the due time limits. In most cases however, a divisional application is filed at a later stage and thus these considerations will not apply.