The Intellectual Property Office (IPO) has refused to restore five patents which lapsed because of a failure to pay the renewal fees by the owner of the patents which was a company in administration.

To keep a granted UK patent in force renewal fees must be paid at specified intervals and failure to pay the fees on time results in the patent lapsing. However, under section 28 of the Patents Act 1977 the IPO can, upon application by the patent owner within a specified timeframe, restore the lapsed patent if it is satisfied that the failure to pay the renewal fees was unintentional.

A company, which owned five UK patents, went into administration. The administrator did not pay the renewal fees for those five patents within the period prescribed for payment and the patents ceased to have effect at the end of that period. An application for restoration of four of the patents was filed some time later. However, one of the patents had been omitted in error from the original application for restoration. The patent agents later informed the IPO of this and filed a formal request to amend the official forms to include this fifth patent in accordance with section 117 of the Patents Act 1977.

The Hearing Officer for the IPO first considered the request to amend the original application for restoration to include the fifth patent. The request failed under section 117 because the applicants’ error was a procedural omission which could not be corrected under this section. The Hearing Officer said that this section was concerned solely with correcting errors in documents and not with procedural errors or omissions. Furthermore, there is a specified period for filing applications for restoration of patents, which by specific provision of the law cannot be extended. This period had passed and the Hearing Officer concluded that if he were to grant this request, he would in effect extend the period for filing applications for restoration of patents which by law cannot be extended.

The Hearing Officer then considered the application for restoration of the four patents under section 28 of the Patents Act 1977. To restore the patents, the Hearing Officer had to be satisfied that the failure to pay the renewal fees was unintentional. The applicants argued that this was the case as the actions of the administrator demonstrated that it was never intended to let any of the patents lapse. The applicants argued that the administrator always intended to pay the renewal fees and was prevented from doing so by forces beyond his control, namely a lack of immediate funds and the absence of any warning as to the final deadlines for payment on each patent.

In assessing whether the failure to pay the renewal fees was unintentional, the Hearing Officer stated that the determination was not to be reached by examining the general surrounding circumstances, but why the failure to renew the patents on time had occurred and then whether the failure was unintentional.

The administrator of the company was responsible for the renewal of the four patents at the time payment of the renewal fees was due. The administrator made attempts to find out the specific dates of the final deadline for payment but without success. In January 2006 a list was sent to him by the patent agents and one reminder from the renewals agents reached him in June 2006. The administrator was therefore aware that the patents had to be renewed some time after June 2006. Whilst he did not know the specific dates involved, the administrator was aware that after June 2006 all of the patents would finally lapse at some point. The administrator was aware throughout the relevant period in which all of the renewal fees for the patents could have been paid that no funds were available to make such payments.

The Hearing Officer said that it followed that this knowledge of the inability to pay the renewal fees, coupled with the knowledge that final deadlines for all the patents existed, meant that the administrator was conscious that the eventual lapse of the patents was inevitable. As such, the failure to pay the renewal fees within the prescribed period could not have been unintentional, even though the outcome was unintended. The Hearing Officer made it clear that the test for section 28 was not concerned with looking at the unintentionality of a consequence which followed from the failure to do the required thing but solely about the unintentionality of the failure to do the thing itself. The Hearing Officer concluded that in those circumstances, the failure to pay the renewal fees on time was not unintentional as required by section 28 and as such the request to restore the patents was refused.

Situations of this kind are becoming more common in the current economic climate. The administrator wanted to sell the patents and did not want them to lapse but he had insufficient funds to maintain the patents until they were sold. However, it is clear from this decision that it is not the consequences of failure to pay which must be unintentional but the failure to pay itself which must be unintentional for the patent to be restored.