EPO opposition: corporate in-house IP departments' engagement

The third and fourth installments of our European Patent Office (EPO) opposition series discussed the performance of private patent firms. This highlighted cases where (external) professional representation in opposition was sought by a patentee or an opponent (often a company) (for further details please see “EPO opposition: private practice patent firm's engagement” and “EPO opposition: private practice patent firm’s core technologies”). However, some EPO oppositions are handled by companies on their own through in-house patent attorneys (ie, sidestepping the need for external representation).

The fifth and final installment in our series highlights the share, performance and technological expertise of representation by in-house patent attorneys in 2016 EPO oppositions.

Patentee versus opponent representation by in-house patent attorneys
Figure 1 illustrates that in-house representation of companies in opposition (whether as patentees or opponents) was generally low: less than one-fifth of patentee cases and as low as one-tenth of opponent cases were handled by companies’ in-house patent attorneys.

This significantly low share could be the result of companies realising that, in addition to being time-consuming, oppositions require specific skills, expertise and experience to avoid common pitfalls. These aspects of opposition could be reasons for companies to delegate opposition work to specialised private practices that generally handle far more opposition cases than companies and have a wealth of opposition experience to draw on.

Companies were seemingly more likely to represent themselves when acting as patentees than as opponents, which may relate to the need to be in charge of the defence of their own business interests. In-house patent attorneys typically have a more thorough insight into:

• company strategy;
• planned future developments; and
• other commercially relevant, but sensitive information.

The high level of detail of such insights may be useful for informing crucial decisions in oppositions and designing the scope of auxiliary claim requests.

However, such internal knowledge is less important when acting as an opponent (where the aim is clearly to revoke a third-party patent), which may explain why opposing a patent is commonly outsourced to private firms.

Figure 2 identifies the companies which represented themselves most actively in 2016 EPO oppositions (ie, as a percentage of total 2016 oppositions). For clarity and brevity, a company's participation in more than 0.5% of total 2016 opposition cases was used as a cut-off criterion. Within a company’s opposition portfolio, the proportion of cases where it acted as patentee or opponent is also indicated.

Compared with our third installment’s ranking of private patent firms in terms of total oppositions, the company which used in-house representation in opposition most often in 2016 would have been ranked 13th, confirming the relatively low activity of in-house patent attorneys in this regard. In the top five self-representing companies, two were from the fast-moving consumer goods and food sectors: Procter & Gamble (P&G) (first) and Unilever (fourth). Reckitt Benckiser (ninth) and Nestec (12th) were also high-ranked businesses from these sectors, confirming the popularity of in-house representation among such companies.

Companies in the chemical sector also regularly self-represent in oppositions: BASF ranked second by a small margin and other high-ranked companies from this sector included AkzoNobel (seventh), Arkema (10th) and Basell Polyolefine (11th).

Further, the high rankings of Valeo (third), General Electric (GE) (sixth) and ABB (eighth) illustrate that oppositions for companies in the automotive and power and energy sectors are relatively frequently handled by in-house patent attorneys.,

The pharmaceutical industry – where intellectual property traditionally plays a considerable role – was surprisingly absent from the top self-representing companies in EPO oppositions: no pharmaceutical company surpassed the 0.5% cut-off criterion for the number of cases handled by in-house representation; it may be more common for such companies to outsource opposition work to private firms. While para-pharmaceutical companies made the rankings, including Fresenius Kabi (fifth) and Smith & Nephew (13th), this sector handled considerably fewer oppositions by in-house representation than those mentioned above.

In-house patent attorneys of companies tended to focus almost exclusively on either defending their own patents or opposing third-party patents: P&G, BASF, Unilever, GE, ABB and Nestec were among the former, while Valeo, Fresenius Kabi, AkzoNobel, Reckitt Benckiser and Arkema were among the latter. Unlike the involvement of private patent firms in oppositions, there was little middle ground (ie, few companies handled an equal number of patentee and opponent cases using in-house representation). Three of the companies in the top five essentially represented themselves as patentees, underscoring the preference of companies for in-house representation when defending their own patents in EPO oppositions; which is not to say that such companies never or rarely oppose – rather, many may outsource their filed oppositions to private firms.

Technological focus of companies’ in-house representation
Figures 3 and 4 outline in more detail the strategies of companies for self-representation. Companies are ranked by the number of 2016 EPO oppositions handled by in-house patent attorneys acting as patentees and opponents, respectively; in-house representation of patentees or opponents in more than 0.25% of the total number of oppositions was used as a cut-off criterion. The technological focus of companies’ opposition portfolios of patentee and opponent cases is reflected by the coloured subdivisions which correspond to International Patent Classification (IPC) Classes A to H (Figures 3 and 4).

As in the overall ranking (Figure 2), P&G and BASF were first and second in the patentee ranking (Figure 3), followed by Unilever (third for patentees and fourth overall), GE (fourth for patentees and sixth overall) and Nestec (fifth for patentees and 12th overall). Three of the companies in the top five of the patentee ranking were from the fast-moving consumer goods and food sectors (P&G, Unilever and Nestec) emphasising that companies in this sector tend to focus in-house representation on defending their own patents. Valeo (third overall) dropped to 12th in the patentee ranking, while Fresenius Kabi (fifth overall) was not listed, as the number of its in-house patentee cases did not surpass the 0.25% cut-off criterion, suggesting that these companies focused on opposing third-party patents.

The technological focus of these companies was unsurprising and correlated with their respective business types: fast-moving consumer goods companies such as P&G, Unilever and Nestec, and pharmaceutical and cosmetics companies as Novartis, Pfizer and L’Oréal focused on IPC Class A, although some balanced this with oppositions in IPC Classes B and C (P&G) or IPC Class C (Unilever). Unsurprisingly, the chemical industry was most active in IPC Class C oppositions, as shown by most BASF and Wacker Chemie patentee oppositions. Most GE and Valeo oppositions involved IPC Class F technologies, while ABB and Philips oppositions involved mostly IPC Class H technologies.

Valeo was ranked first in terms of self-representation when opposing third-party patents (Figure 4), followed by Fresenius Kabi (second), Arkema (third), Reckitt Benckiser (fourth) and AkzoNobel (fifth). Two companies in the top five were from the chemical industry (Arkema and AkzoNobel), emphasising that companies in this sector tend to focus in-house representation on opposing third-party patents. Highly ranked fast-moving consumer goods companies in the overall opposition list (eg, P&G and Unilever) were not listed in the opponent ranking, as the numbers of their in-house opponent cases did not surpass the 0.25% cut-off criterion, reflecting their tendency to defend their own patents.

Unsurprisingly, the types of patent (technology wise) which companies oppose on their own by using their in-house patent attorneys corresponded with the core technologies of their business:

• Fresenius Kabi, Smith & Nephew and Kao’s cases involved mostly (or even exclusively) IPC Class A technologies;
• Thyssenkrupp’s cases involved mostly IPC Class B technologies;
• Arkema, AkzoNobel, BASF and Basell Polyolefine’s cases involved mostly IPC Class C technologies;
• Reckitt Benckiser’s cases involved both IPC Class A and C technologies; and
• ABB’s cases involved mostly IPC Class H technologies.

For most companies, the technological focus of their patentee and opponent in-house representation opposition portfolios is approximately similar. However, anomalies emerged. For example, as a patentee, Valeo was significantly more active in cases involving IPC Class F technologies than those involving IPC Class B technologies; however, as an opponent, it was more active in the latter than the former.

Summary
Most of the EPO oppositions in 2016 were handled by private patent firms. When in-house IP departments of companies handle oppositions on their own, there is a clear preference for patentee cases. Opponent cases are usually outsourced. Companies from the fast-moving consumer goods and food sectors, the chemical industry and automotive and power and energy sectors are particularly active in self-representation in opposition. In-house IP departments of companies typically have opposition portfolios that focus almost exclusively on either defending their own patents or opposing third-party patents. Companies are self-representing as patentees and opponents in technological fields that match with their core business activities.

Comment
On the one hand, a company’s detailed knowledge of technology, invention and prior art can be particularly useful when collecting or interpreting prior art and dealing with insufficiency of disclosure objections. On the other hand, private firms specialising in oppositions are well-versed in opposition strategies. Therefore, the strongest opposition team may be a combination of the two: one in which a company uses the broad expertise and experience of private practice attorneys to determine how best to handle an opposition.