Art. 76(2) EPC 1973 stipulated that a European divisional application could not designate contracting states which were not designated in the earlier application.

In G 4/98 (OJ 2001, 131), the Enlarged Board of Appeal held, overruling J 22/95 (OJ 1998, 569), that, without prejudice to Art. 67(4) EPC 1973, the designation of a contracting state party to the EPC 1973 in a European patent application did not retroactively lose its legal effect and was not deemed never to have taken place if the relevant designation fee had not been paid within the applicable time limit.

The Enlarged Board of Appeal further held that since in its opinion no general retroactive effect was attached to the fact that a designation was deemed to be withdrawn, the deemed withdrawal necessarily took effect upon expiry of the time limits mentioned in Art. 79(2) EPC 1973 and R. 15(2) EPC 1973, R. 25(2) EPC 1973 and R. 107(1) EPC 1973, as applicable, and not upon expiry of the period of grace provided by R. 85a EPC 1973.

Art. 76(2) EPC has therefore been amended to ensure that only those contracting states which remain designated in the earlier application at the time of filing of a divisional application are deemed to be designated in the divisional application. (Similarly, the EPO can only act as the "designated Office" for states designated in an international application in respect of which the EPC was in force on the date on which the international application was filed; J 30/90, OJ 1992, 516).