Four leading patent law firms in Germany – Grünecker, Hoffmann Eitle, Maiwald and Vossius & Partner – have published an open letter expressing ‘great concern’ about the developments at the European Patent Office, particularly ‘the modifications to the incentive systems for the examination of patent applications’.

The ‘overreaching desire for high productivity’ has led to a series of problems, according to the letter, which is directed to outgoing EPO president Benoit Battistelli, the chairman of the Administrative Council Christoph Ernst, principal director user support & quality management Niclas Morey and future EPO president Antonio Campinos (who will start in office on 1 July 2018).

Among others, the firms write that when ‘the aim is to terminate proceedings as quickly as possible (…), the quality of the search and examination of applications must suffer’. The rather high fees, moreover, ‘can only be justified by giving the examiners sufficient time for an indepth assessment of each single application’. Patents with an erroneous scope of protection distort and hinder economic competition and might unhinge the patent system, they write.

More broadly, the law firms question the enormous financial reserves of the European Patent Office, amounting to 2.300.000.000 euros, 650 million euros to fund the pension scheme not included: ‘in contrast to an industrial company, we cannot see why the profit of the EPO needs to be increased beyond the level of self-funding. From our perspective, the high surplus is rather an indication that the fees are too high and that a further, problematic increase of productivity is not appropriate.’

The full text of the letter is published below.

 

Open Letter: Quality of Examination Proceedings at the EPO

Dear President Battistelli, Dear Dr. Ernst, Dear Mr. Morey, Dear Mr. Campinos,

Each year our law firms file more than 9500 patent applications with the EPO.

For several years now we have followed with great concern the developments at the European Patent Office, in particular the modifications to the incentive systems for the examination of patent applications. The incentive systems and internal directives appear to be increasingly directed towards rewarding or even requesting rapid “termination” of proceedings and a correspondingly higher productivity. This has resulted in penalization of detailed and thorough assessment of cases.

While we do appreciate the increased average speed of the proceedings, such an overreaching desire for high productivity has led to the following, specific problems regarding the examination of patents:

a) When the aim is to terminate proceedings as quickly as possible within specific allowed times, the quality of the search and examination of applications must suffer.

b) The fees for search and examination, which are rather high when compared internationally, can only be justified by giving the examiners sufficient time for an indepth assessment of each single application.

c) Patents that have been examined less thoroughly tend to have an erroneous scope of protection. This distorts and hinders economic competition within the EPC Member States.

d) Proprietors of inadequately examined patents are exposed to an increased risk of their patents not being able to be successfully asserted against competitors in their full scope.

e) If the users of the European system gain the impression that granted EP patents cannot be relied upon anymore due to insufficient search and examination, the users may increasingly be discouraged from filing European patents. This might unhinge the entire patent system.

f) The core task of the EPO is the examination and grant of European patents. This is an important public task, where the EPO needs to balance the interests of the public against the interests of patent applicants. The official fees are supposed to self-fund the EPO. However, in contrast to an industrial company, we cannot see why the profit of the EPO needs to be increased beyond the level of self-funding. From our perspective, the high surplus is rather an indication that the fees are too high and that a further, problematic increase of productivity is not appropriate.

We have observed that our perception of endangered quality of the examination of European patent applications is shared by a large number of patent examiners. As you know, a petition was recently published in which more than 900 examiners at the European Patent Office revealed that they are prevented by the internal directives from a thorough, complete search and examination.

In view of this background, we urgently suggest setting up new incentive systems for examining European patents so that the high-quality of searches and examinations for which the European Patent Office used to be known will be guaranteed again.

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38 comments

  1. I can only applaud the companies involved in writing this letter. I could not agree more with the concerns that it expresses. I can only hope that the incoming president realises that the concerns expressed cannot be easily dismissed… not least because the unprecedented nature of the letter indicates that the authors must be very concerned indeed.

  2. MANY THANKS for this brilliant initiative.

    By the way the content of the letter could be taken up by SUEPO as-is!

    Indeed SUEPO (which represents half of EPO staff) denounced since years (so far to no avail) the dangers of Battistelli’s policies (for both the quality of the patents delivered as well as on health of staff)…

    and the Administrative Council remain passive.

    It is 5 to 12.

    In a few weeks, Mr Campinos will arrive in an exhausted office which cannot continue on this path much longer before collapsing.

    Let’s hope that Mr Campinos will understand the poisonous legacy he inherits from his predecessor and in particular, that he has to be very cautious with the teams in place who are directly responsible for this debacle (in particular in HR, and DG1) since something must be done asap to restore both the social atmosphere, the reputation of the EPO AND the quality of the work performed.

  3. Had they sent around this letter before, maybe le monsieur would have not dared publishing this last Monday: “Delivering High Quality Services – […] User feedback has been gathered through a multitude of channels and has confirmed increasing levels of satisfaction with the EPO’s products and services, year after year”. http://m.epo.org/news-issues/news/2018/20180611.html

  4. My comments on the perceived “problems” a) to f):

    a) why “must” quality suffer, merely because of a “aim” (which President Brimelow also had) to get to a grant or refuse decision “as quickly as possible”? And as for “within specific allowed times” I never heard it argued that the UK 1949 Patents Act’s hard limit on time to grant has an adverse effect on “quality” in the UK. That said, quality “must” inevitably suffer, if you impose unreasonable productivity targets on hard-working and conscientious Examiners. Worse, the imposition of such targets will generate a shoulder-shrugging “so what” mentality which is the enemy of “quality”.

    b) the EPO is not the only Patent Office where its shareholders milk the Applicant community. That Patent Office fees are used a covert tax revenue operation is a different problem from giving Examiners enough time and resources to do a “quality” job of search and examination.

    c) What, for goodness’s sake, is an “erroneous” scope of protection? Again, consider the UK Patents Act 1949. It required rigorous examination of clarity and novelty but no examination of obviousness. Everybody knew the Rules of the Game. Nobody complained, that the Office was issuing over-wide claims. My problem at the moment is that Examining Divisions of the EPO are setting too high a standard of clarity under Art 84 EPC. To much “quality” here, rather than not enough. Why that? Because the zealous in-house EPO Quality Police have to be seen (by Chairs of Exam Divisions) to be ferocious, and that is easier accomplished under Art 84 than under Art 54 or 56.

    d) What? Patent owners at risk of not succeeding with claim 1 in an infringement action? When in the history of patents was this ever not the case? Upon issue, there is a Presumption of Validity, regardless of whatever level of “quality” the EPO runs at. What more do you want, for goodness’ sake? Spare a thought for the accused infringer, usually smaller than the Big Corp patent owner. Is his protestation, that the asserted claim is invalid, to be greeted with a shoulder shrug and a retort that if the EPO issued it, well then it must be valid? Of course when the Applicant is David and the accused infringer is Goliath, we need a system that delivers “Equality of Arms” to save Little David from obliteration. But merely giving an EPO Examiner unlimited time to examine David’s patent application is nowhere near enough to deliver that necessary objective.

    e) See d) above. To nurture the patent system what is needed is a high level of confidence that, if you have an issued claim that is not invalid, you can enforce it speedily and economically, regardless how Big and Ugly the accused infringer is. Complain somewhere else if, in your country, that is not the case. It isn’t the EPO’s fault.

    f) I agree. This grotesque surplus suggests opacity and corruption on an industrial scale. But hey, with supra-national organisations that’s the rule, not the exception. Nobody knows yet, how to stop it.

    Overall, this Open Letter strikes me as a manifestation of I) German craving for certainty ii) German deference to “authority” and iii) a yearning for the Good Old Days, when if the DPMA granted your patent you were then the proud possessor of an “examined right” which, by definition was valid. Those days are gone. Life today is too complex. There is too much prior art these days, for the Office to know it all. A public prior use somewhere in the middle of Asia is just as novelty-destroying as a patent specification of a German competitor.

    One last comment. I’m puzzled by the reference to “incentive systems”. Is this alluding to the idea of “One point for an allowance but two for a refusal”? Is this what troubles you so much? Or is it the never ending “bar raising” of the output productivity targets being imposed on Examiners? If the latter, I agree with you: it’s counter-productive, Mr Campinos. It has got to stop.

    Thorsten Bausch I admire your work on this blog. My remarks above are deliberately provocative, to try to whip up a vigorous discussion here. I hope you don’t see my remarks as so offensive that they must be suppressed and denied publication here.

  5. @ better late than never

    sure but hey : who believes in Battistelli’s prose ? everybody knows that this is pure PR (euphemism for propaganda) and that the situation is catastrophic.

    Now at least we have reputed, credible IP professionals who know what they talk about, who clear pull the brakes

    So yes, better late than never and again Mr Campinos will face a dire situation with a bloodless EPO in which folly is the new norm.

  6. It is nice to see that applicants now realize what SUEPO has been denouncing for several years.
    However, what they see as happening with search, examination and opposition has extended also to the Boards of Appeal. The pressure for reducing the backlog is leading to measures which clearly have an impact on the quality of the decisions. The quality of a decision is the quality of the reasoning leading to the decision and nothing else. Hastly and badly reasoned decisions are arbitrary and deteriorate the confidence in the judicial system.
    There are still many experienced board members that deliver well reasoned decisions. However, in some years they will retire and be replaced by younger board members that never experienced a working environment in which quality and not quantity is the determining parameter. Reversing this will prove to be a steep mountain.

    1. Whether and to what extent excessive administrative pressure might prevent members of the Boards of Appeal from taking considered and balanced decisions is central to the issue of their statutory independence, as will probably be examined in the pending German constitutional complaints.
      In this respect a very interesting decision by the Bundesverfassungsgericht has just been published, which relates to the constitutionality of the appointment of judges for a limited period of time; see
      https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2018/03/rs20180322_2bvr078016.html
      There are numerous considerations there in relation to the required judicial independence which if applied to the Boards – in view inter alia of Judge Corcoran´s sad fate – might result in very dramatic conclusions in the EPO and UPC cases.
      The decision has been issued by the second senate which is also in charge of the latter complaints, with the participation of Prof. Dr. Huber, the rapporteur in the same ….

  7. Max Drei,
    One correction – in the middle of the year, the 2 counts for a refusal has been removed. Now examiners get one product for a grant and one for a refusal, irrespective of the amount of work required. Since a refusal has to cover all arguments raised and a grant only has to find one reason to grant, you can guess which is easier to achieve per unit time.

    1. MaxDrei, don’t you get it? These days, the “incentive” is just not getting thrown out. Grant, don’t ask questions, don’t be difficult, OR ELSE. You’re gonna “do” whatever figure we throw at you.

      Many, if not most, who are not anchored down with a mortgage, or are otherwise able to sustain their family, have already left.

      Those who stay on have to put up with micromanagement, perpetual harassment, and contempt.

      The EPO has deep structural problems that long predated BB, and I think that the alleged “good” results obtained from scapegoating and brutalizing the staff are a nothing but a flash in the pan which will be followed by a painful reckoning.

    2. Exactly Cynic, thanks!
      As confirmation, I challange the EPO to publish the number of refusals and grants of 2016, 2017 compared to 2018 when thenumbers are there beginning 2019 (or even for the first half of 2018, if Mr Campinos is really concerned about the future of the EPO.
      A simple comparision of the numbers will show. I know the results already

    3. There is more to that. The complete point system has changed.

      It used to be that examiners got a number of “points” (i.e. searches of grants) to do per “standard” year. That number varied according to a difficulty factor (simple mechanical inventions would get a lower factor than internal computer design, for example). Then, at the end of the year, count would be made on how much time was really spent (e.g. if one was sick or had extra tasks, etc…).

      Our management decided that this was too complicated for their planning abilities. Now we have a system where the number of files planned for the year is simply divided by the number of examiners and if you are sick 6 months, it is your loss. We still have some differences between technical domains, but that is also rapidly disappearing as files are shifted between directorates.

      Management simply wants a large pool of unspecialized examiners who will get a big pile of random files at the beginning of each year and will need a very good excuse if they have not empty the pile in december.

  8. Some of the points in this open letter are well taken. For example, the pressure to increase examiners’ production has led to summons to oral proceedings immediately following the applicant’s response to a first communication of the EPO, which is clearly premature.
    However, the EPO should also be criticised for failing to consider simple measures targeting the practices of applicants and patent professionals :
    – heavily increase filing fees linked to excessive length of applications and/or number of claims
    – subject the 2-month extension of the deadline to a response to a fee
    – make the fee for “continuation of proceedings” much more expensive than today’s derisory amount.
    The EPO should also consider dissuading auxiliary requests, a practice regrettably endorsed by the Boards of Appeal (a patent office has no reason to “baby-sit” applicants).

    1. The claim fee should also count for and/or combinations.
      When in EP regional phase (PCT-bis) has the same claims, but instead of 49 only 15 (compressed through use of “and/or” structures), that is an abuse of the system, and unfair to other applicants who have clear dependent claims. Currently there is no way to attack that.
      I tried (by defining that only a part has been searched (and found), the other alternatives have not been searched, therfore are unavailable subject-matter in future examination steps), and been stopped by my director and others, saying that my search report included the claim, and therefore the claim “has been fully searched”. Next I tried non-unity within claim alternatives, also blocked by my director (“not efficient”…). Now the applicants come back with one of the alternatives not shown in the cited prior art, of course.

    2. EPO observer, I generally agree, except for the last point.

      First of all, I’m making increased use of auxiliary requests, precisely in response to the EPO’s tendency to summon to Oral proceedings immediately after the response to the first communication. If I get only one opportunity to respond, I may as well make full use of it!

      Secondly, this isn’t necessarily a bad thing: better to roll out all arguments and fallback positions of the applicant in a single reply than to have N written exchanges, stretching over several years, haggling over the scope of protection.

      Thirdly, I don’t understand why you consider that this implies “baby-sitting” applicants. While there certainly is an abuse of auxiliary requests, especially late-filed ones, in opposition proceedings, and the EPO should indeed take a sterner approach there, filing auxiliary requests in examination proceedings, especially over contentious, subjective matters such as inventive step or “intermediate generalisations”, rather represents a good compromise between the representative’s duty to the applicant and showing good faith to the office.

  9. It can only be seen positively that some patent attorney firms are now saying that the farce has lasted too long. What has been presented to the public and the users of the system is a succession of Potemkine’s villages. We all know what they were worth.

    Actually, it should not have been necessary for some firms to go out into the limelight. This should have been the task of the Institute of Representatives before the EPO, i.e. the epi.

    One wonders why the people at the head of epi in the last years did not have the guts to say something. They also swallowed the merging of chemistry and non-chemistry in one paper for AB at the EQE, knowing well that the drafting philosophy in chemistry and non-chemistry is fundamentally different. Probably they were too busy organising nice trips across Europe. But I do not think this is the primary function of such an organism.

    That EPO had come into a certain complacency and that it was time to shake it, is an acquired fact, but nothing warranted such an upheaval which might be fatal for the whole system. It is correct to complain that the EPO is not as such a cash machine. But travelling all over the world costs money. After all, Miles and More are not for free.

    What is it good to have validations in countries as far as Moldovia and Cambodia, or even nearer countries like Morocco and Tunisia? The net effect can only to be stifling local production. The major companies which are the only ones which can afford or are interested in such things do not have to wait until the goods are exported to member states of the EPO, they can nip everything in the bud. This is rather perverse.

    That the quality of the work done at the EPO has gone down over the years is a matter of fact in spite of the self-glorification put to light to by the Napoleon of the 10th floor. The nepotism and favouritism for cronies of the tenant of the 10th floor has also taken outrageous proportions. Naming as responsible for principal director user support & quality management a former examiner who has spent the last 20 years away from examination and who was travelling around the world is a disgrace.

    If at Mac Donald’s it might be worth to reward performance with merely looking at production figures, doing the same at an institution like the EPO shows a profound disdain for the nature of the work done by the examiners! Are the judges in national systems rewarded for absolute production figures? Certainly not, and for good reasons! The consequences of badly granted patents are not immediately apparent. But what it is good for to have a crappy patent when it comes to use it against competitors? Not the paper on which it is printed! But litigation lawyers will fill their pockets. May be this was the aim of the Napoleon of the 10th floor?

    This is topped presently by offering time limited contracts to examiners and reducing training to 2 years! In the past it was officially three years, and not two. The difference is enormous, and only shows that those deciding on such issues have either no idea of the work or could not care a damn about the result of such pseudo training.

    Working in IP is not comparable to work on a project which has a limited life. Here experience plays a big role. Hoping that people with professional experience drop an acquired situation in order to come to Munich is naïve to say the least if they are only given 5 years contracts. This has nothing to do with modern human resources management. The aim is simply to have people who will not oppose the “party line” and achieve at any rate the “plan” concocted by pseudo managers. We all know how centrally planned economies ended up.

    That on top of this the pseudo head manager of the EPO has received a special award for his work in the field of intellectual property is really amazing. What else did he do for IP but be his gravedigger?

    It is high time that this very bad period for the EPO in particular and for IP in general comes to an end. I have only very limited hopes for the future. The turn taken will leave deep scars.

    Without a true reform of the management system of the EPO and a proper conflict resolution mechanism the EPO, be the branch on which the IP system sits will collapse first, dragging the whole profession the same way. The next President of the EPO has to urgently call the conference of ministers of the Contracting States responsible for patent matters provided for in Art 4aEPC, but not just for a self-complacency exercise.

    In this respect, it was brave but very necessary to say something! I hope that the people responsible for the EPO and the IP system realise that it is 5 to 12!

    Techrigts: FINGERS OFF!! I do not want my contribution to be misused.

    1. There was an article in a suepo publication 2 years ago which described the situation at the French patent office. One can imagine French presidents of the EPO to want to apply a similar system.

      The French patent office does not do searches, they outsource them (to the EPO).

      The French patent office does not examine patents either. Officially, they have novelty and inventive step. According to their internal instructions (which were found by suepo), they simply ask the applicants to take position on X or Y documents and to amend the claims if they wish. Then, they file the answer and automatically grant. They never send a second communication.

      They do the job with a handful of examiners who do not need to go into the technical details of the inventions. That is their level of quality.

      One can imagine a future European patent office which simply re-use the US, JP or CN searches and simply grant after a single communication.

  10. EPO Observer makes a good Point: that the Polluter should Pay. Those users who impose unnecessary extra “load” on the system should pay for inconveniencing the EPO and those who pay for EPO Services.

    It remains to be determined what user practices put extra unnecessary strain on the system. On that, my view is different from that of EPO Observer.

    For example, a Summons as second Communication is sometimes legitimate. More than that, necessary, for disciplining any Applicant who is clearly just gaming the system. Do you not agree, Observer?

  11. Dear Kluwer Blog, dear MaxDrei,
    many thanks for publication. Let us start the vigorous discussion.

    As a prerequisite, please bear in mind that the EPO is a kind of its own. The most striking difference from the point of view of staff is the lack of effective legal remedies. The only independent instance in disputes is the Adminisrative Tribunal of the International Labour Organisation, to reach a decision takes years. This is simpy too long for a labour dispute. I believe you all recall the case of the Board of Appeal member who waited more than 2 years for a judgment, got the case against him thrown out, and was subsequently transferred to another location and job. By the same President who should not have been involved in the handling of the case in the first place. A President enjoying diplomatic immunity and therefore outside and above prosecution, even if making public derogatory comments on the Board member concerned.

    The same applies for applicants, opponents and appellants. Early – premature? – summons to oral proceedings, excessive costs for the applicant, the EPO will not cover them. Cancellation of oral proceedings by the EPO, costs incurred, the EPO will not cover them. Financial shenenigans “on industrial scale” as put by Max, nobody aside from the Administrative Council can intervene. And as long as these guys get their renewal fees and some technical cooperation funds, they will not intervene.

    The basic message is: the EPO and its top management may do whatever they want, they are unlikely to have to face any consequences, provided they keep the majority of the Administrative Council flooded with cash.

    a) Of course it is reasonable to aim for “as quickly as possible”. The EPO puts much more emphasis on the second part “within specific allowed times”. It is not relevant whether a particular case would deserve more time. And believe me, the time we examiners get is pretty short. Some of us stopped reading the description. This will have an impact on quality.

    b) I believe the point of the letter is that you pay premium and get mediocre in return. Stated differently, you pay for a Porsche and get a Fiat (no offense intended).

    c, d) The EPO is supposed to grant patents with a high presumption of validity. We cannot determine the full scope of protection conferred by a claim and accordingly we cannot examine in this full scope on novelty and inventive step. And as Max correctly says, in any infringement you risk an attack on the patent based on new prior art. Still, the amount of uncertainty you face will depend on whether search and examination were thorough or sloppy. The letter mentions an “increased risk”.

    But I believe the letter means more. Patents place restrictions on competitors, and if your products suddenly fall in the scope of a sloppy patent, you need to take action. You will not necessarily file an opposition or start nullity proceedings, but you will need to check whether the patent is valid in the whole claim range, collect prior art, maybe start negotiations. All that could have been avoided by thorough search and examination. Briefly, an undue scope of protection creates additional overhead costs.

    e) I see a political message here, that the law firms in question may start recommending to their clients to go national with their patents. The EPO is routinely emphasizing the number of applications received and concludes that everything is fine because the numbers keep rising. Well, once the numbers drop it may be too late.

    f) full agreement

    Concerning the “German” aspects touched upon, I seriously disagree. In my opinion, the letter does not include anything in this regard. Looks like Max misinterpreted points c) and d). He appears to have overlooked the impact a patent with erroneous scope has on the competitors, as well as the “increased risk”. The law firms are aware that there is and will always be a risk. They question why this risk should be increased. A fair question, if you ask me, considering in particular the “high presumtion of validity” the EPO shall deliver.

    Coming to the incentives. The reporting of examiners has changed, it is now “products” only, regardless of how much time you have (I never understood this “product” stuff, we deliver a service). As of now, a refusal which takes much longer than a grant wil be rewarded below the time needed. And you will have to deliver at least the same number of products as last year. Do the math: if you had 10 refusals last year, translating into 20 products, you do again 10 refusals this year and you need 10 additional products to keep up. I venture to say this is quite some increase which does not appear on the balance sheet as such. You need to take a look at the details.

    Max mentioned a “shoulder shrugging so what mentality”. I can confirm such a mentality is spreading. If the management decision is to reduce the time we may spend on search, well, we will follow that decision. It is not advisable to deviate or to voice concerns. According to our management, quality is fine, so what? We follow the prescribed routines, and if there is a bit of time left once we are through with that, we do some additional steps – on a good day.

    Rumour has it even EPO management has started to notice a drop in quality. Our in-house metrics, as shoddy or as good as they are, seem to indicate a decline, a quite rapid one over the last two years, from 98% compliance to 92% compliance, with a negative trend for the future. According to what I hear, the countermeasure proposed is to lower the benchmark. The quality indicator must remain above the benchmark, regardless of measured quality.

  12. On the last of MaxDrei’s points:

    By the “incentive system” the open letter may be referring to the EPO’s career system which currently ties any career progression almost exclusively to the number of “actions” delivered in a given year by an examiner (in other departments, i.e. for staff other than examiners, it is more opaque). Someone here has already pointed out that a refusal has the same weicht as a grant which already has implications for quality. In this context, it is not just an examiner’s career that is affected: Any teammanager’s, director’s or principal director’s career depends entirely on whether a team, directorate or principal directorate has reached the expected number of actions (this now also applies for the BoAs btw).

    But worse than the above: Those that are considered to be low performers of underperformers are targeted and threatened with disciplinary measures up to and including dismissal.
    If you bear in mind the rumours that werde going around a while ago that the administration was planning mass lay-offs than it should be easy to understand what is going on and the impact this may have on quality.

    1. Tha is what Mr. Ernst (Chairman of the Administrative Council of the EPOrg) told German representatives: bring statistics, otherwise nothing has changed.
      And the EPO delivers a (self-measured) statistic. As that is the only one readily available, it is the only one he considers to be relevant.

      To ensure a minimum of independence/ability to counter pressure, change from one VP1 to three VPs (imstead of COOs), the office has grown considerably, these two additional VPs are well defendable within the range of the organisations structure. Then the “Chiefs of Operartions” could actually decide themselves and not fear direct repercussions from PD4.1 and her connection to the president.

    2. Funny. EPO trumpets user surveys. Users applaud – that is fact. Users criticise – that is unsubstantiated.

  13. On Point (f) of the letter:
    Why do you firms believe that the EPO makes profits beyond self-funding?

    Only a truly independent audit could proof that point and it yet has to be carried out.

    Maybe Mr Campinos will find the courage to audit the EPO’s finances (and make the results public) but none of you have done that or would be able to.

    You simply lack the means, knowledge, ressources and data required to perform such as task.
    After all, as you have pointed out yourselves: You are leading patent law firms and not leading accounting firms.

    So far, your point is entirely speculative and therefore not helpful.

    1. @Doublechin

      “On Point (f) of the letter:
      Why do you firms believe that the EPO makes profits beyond self-funding?

      So far, your point is entirely speculative and therefore not helpful.”

      No it isn’t speculative.
      The EPO itself has been agonising over how to invest its massive cash surplus of approx. 2.3 billion Euros.

      It was already discussed on this blog back in January:
      http://patentblog.kluweriplaw.com/2018/01/31/flexible-investment-guidelines-european-patent-office/

      The proof of the 2.3 billion Euros figure can be found here – it is no secret:
      https://www.epo.org/modules/epoweb/acdocument/epoweb2/297/en/CA-F_18-17_Rev._1_en.pdf

      For my part I consider that a 2.3 billion Euros could reasonably be construed as “profits beyond self-funding”.

  14. Thanks, guys and gals, for the responses. What do we take from them? That for Applicants at the EPO, the “Game” has changed. So, we as representatives have to plot with our clients how best to “game” the new system.

    Given that the EPO is in a hurry to grant all it can, as fast as it can, all we have to do is to feed their hard-pressed Examining Divisions the bait they crave. ” One hand washes the other” as it is said in Germany or, as we say in England, “You scratch my back and I’ll scratch yours”. In other words, imagine the Examiner mindset to be “Help me to help you”.

    How can we help the Examiner? Answer: draft cases better. First do a search. Then write clear and well supported claims that are novel over the art, supported by a description that sets the claimed subject matter in the context of a realistic prior art starting point. Include a nicely graded set of tasty dependent claims, each partnered by a description of a corresponding enhanced technical effect. Then sit back and wait for the 71(3).

    Do we not see this trend already, for Europe-based corporate Applicants, who get their drafting done by European patent attorneys?

    Just one snag though, isn’t there? I’m looking at you, Grünecker, Hoffmann Eitle, Maiwald, Vossius, with your great bulk of filings being on behalf of Applicants from outside Europe. How will you get your distant clients to draft like that?

    But wait. Brother and sister EPI members, is it the interests of European industry, that corporate Applicants outside Europe start to perfect their EPO-style patent drafting? Imagine that the USA reformed its domestic patent law to be an exact copy of the EPC, its Imp Regs, its Guidelines and its Established Caselaw, and then became perfect practitioners of that EPC law. All those debacles (Palmaz stent, CRISPR tech) , in which Americans lose blockbuster patent positions in Europe through drafting errors would dwindle to nothing and, instead, American owners would increasingly secure dominant patent positions in Europe. Is that what we want?

    Think: is not the EPO’s new Game bestowing a comparative advantage on those Applicants (at least in the engineering arts) who draft in Europe? What’s not to like about that?

  15. Dear Max Drei,

    With due respect, I must confess that your comments are deliberately provocative, may be unnecessary provocative. I do not see here a German craving for certainty, and even less a deference for German authority and a yearning for the Good Old DPMA Days. If this had been the case they would not have dared saying anything at all against an authority.

    That crappy patents are granted, is a reality. I have seen over-broad patents being used big companies with deep pockets against SMEs and nearly killing them. Vice versa, SMEs having patents which were unenforceable for the same reason and which have been revoked or nullified because the search has been botched up.

    The complaint system is not working properly. In the past you got a reasoned reply explaining the position taken in reply to the complaint, nowadays you get a quasi-standard letter merely stating that the Guidelines, which ones is left to your imagination, are respected.

    If you follow case law, you will note that in more and more cases when you look at decisions in appeal after refusal, the Board quotes new prior art, or chooses a totally different closest prior art in order to show that the subject-matter is inventive or not. I do not say that it is the role of the Boards to act like this, but there again it is a reality.

    We are now in the never ending situation of “bar raising” of the output productivity targets being imposed on Examiners, with the result that production figures are requested which cannot be achieved due to a lack of incoming files! That is what I called planned economy.

    That all applications have to be looked at with the same attention irrespective of the name of the applicant is clear, but the deleterious consequences of crappy patents are much more severe for SMEs than for companies with deep pockets.

    That the EPO has to cope with a limited budget is one thing, reducing the work to producing points is another thing. While the first one is to be agreed upon, the work of an examiner is not producing points, but well-reasoned decisions. That aspect has been totally forgotten by the examiners themselves. And this is not good either, but examiners are primarily responsible to that turn of events. They accepted to enter a rat race.

    Furthermore, rather to say no to anything proposed by the management the real representatives should have entered proper negotiations with the management, as it was done in the past, and not insist on illusions. This attitude allowed the management to claim that the staff is a bunch of unsatisfied kids and so to gain support from the Administrative Council, albeit by painting its own views with pink glasses. The tactical ability of the head of the EPO did the rest.

    It is high time to return to a normal functioning of the EPO. For this, the present, stupid, quest for numbers has to stop immediately, and the Administrative Council should control the Office and gobble any gobbledygook put in front of it by the management of the Office.

    Reducing training to a bare minimum and introducing incentives which work like a ratchet mechanism is anything but sound. The EPO is not Mac Donald’s.

    The EPO is too precious to Europe to let it go down the drain for the sake of some pseudo-managers who are just in quest of self-glory. The aim of the EPO is to deliver a service to its users, and not to be an institution to the self-service of its management.

    Techrights: FINGERS OFF!!

  16. I feel obliged to reply to Attentive Observer, who writes:

    ” I have seen over-broad patents being used big companies with deep pockets against SMEs and nearly killing them. Vice versa, SMEs having patents which were unenforceable for the same reason”

    I sympathise but beg to suggest this this confirms my two points, namely that SME’s need I) the services of patent attorneys that deliver high quality drafting, and ii) courts that speedily and economically enforce meritorious claims and revoke bad claims. Only one in a thousand patents is asserted. When that one patent is asserted, no stone is left unturned, to find grounds to hold it invalid. Such scrutiny will almost inevitably bring more relevant prior art to light.

    Meanwhile, such a “no stone unturned” standard is unfeasible, simple as that, for all the other 999 patent applications that, after issue, do not get asserted against a real infringer.

    Don’t blame the EPO for the deficiencies of I) those who draft patent applications for SME’s and ii) the courts who are petitioned by SME’s speedily and economically to enforce their own patents or else speedily and economically to revoke the claims of Goliath asserted against them. For the I in a 1000 patent, the courts must be able to manage, speedily and economically, both SME’s petitions for injunctive relief from infringement and SME’s petitions (based on fresh prior art) to revoke asserted claims. For your complaint, perhaps you should also address yourself to the courts and remind them that Justice Delayed ( through endless deferrals and endless appeals) is Justice Denied.

  17. The EPO is not what it used to be 10, 5 or 2 years ago. Or even nine months ago. The fact that we are in overcapacity is now admitted even by the management. The situation is however MUCH worse, everything is crumbling down. An ever increasing number of technical fields has no more search files. Zero. However, since our production must (!) go up anyway – I was imposed a whopping 25% increase over 2017 – our directors (at least those who have been spared by the ‘reorganisation’) spend their day trying to find us new happy things to do. At the beginning they were looking for files in neighboring fields, now anywhere else. Without giving any technical training, which would be too time-consuming. We are engineers, we can do everything. With the result that we do not understand anymore what we search and even less what you answer us. That is why you get to grant stage so fast, independently of what you write in your replies. And all this madness went completely out of control especially during the last nine months. Quick, fast, faster. Crazy output numbers, at a pace impossible to keep. Ready to explode in the face of Campinos.

    These disgraceful people managed to kill a healthy and smoothly-running organization, where I have been proudly working for almost 10 years and not-proudly working for almost 10 more years.
    Your letter unfortunately came too late, and you heard the reply: “these are just unsubstantiated allegations”.
    Unless the next President gets immediately rid of the whole upper (and most of the middle) management, the EPO won’t make it to 2020.

    I’ll be gone at the end of the year. So sorry for who has to stay in the madhouse.

  18. @ Mr Bean Counter:

    without wanting to go back and forth on our arguments:

    Whilst it seems correct that the EPO has the cash to invest you are mentioning, this does not yet mean that there is anything above self-funding.

    Just as much as national governments are under pressure to find fundings to pay old age pensions, health insurances etc for their national civil servant workforce the EPO has to do the very same for today’s pensioners as well as for those that will one day be pensioners.
    Obviously this means that money needs to be saved, invested and looked after. The question to be answered would be: How much investment is needed in the long term?

    I have not yet seen a well-founded argument (based on numbers and not mere opinion) that would proof point “f” of the open letter.

    Without a proper audit that takes into account the difficult estimations of future financial obligations it is in my view futile to try and discuss the EPO’s financial situation, let alone judging whether (legitimate) self-funding has been (illegitimately) increased to a point beyond that, because everything to this extent stays in the realms of believes which, given their subjective nature, have no room for a proper facts-based debate.

  19. I will not enter a further discussion with Max Drei, as I deep down agree with him, but the whole discussion makes the dilemma of the patent world clearer than ever.

    If only 1 out of 1000 patents is ending up in court, one could merely consider that it is not worth bothering for the other 999 patents who will never end in court. The problem is that it is not possible to know which one is the one who will end up there. Actually I would not say 1/999 but 51 to 949, as roughly 5% of the patents are opposed. As one former president of the EPO said, a patent is an insurance in case of success. But what if your insurance certificate is full of holes?

    It is thus very easy to say why bother, if the patent disturbs, then let the second level, opposition and litigation comes in. The lord will separate the good grain from the chaff. This is often to be heard in EPO buildings and at director level.

    But then we do not need an examination system, expensive on top of it. Then it would be more honest to go back to a purely declarative system, which will be quick and easy. If there is search and examination, it has to be done properly. And this is not any longer the case at the EPO. Either quality work is delivered, and by quality it does not meant timeliness. You cannot claim to sell a Porsche, and deliver a Dacia.

    The “could not care less about the result of my work in examination” is also due to the fact that most examiners do not realise that the outcome of their work is not a piece of paper to be hung in the lounge or the entrance hall of a company, but an economical asset. And since only selected examiners will now deal with oppositions is aggravating this erroneous perception.

    The EPO is not dead, but if nothing happens, this will be the case soon. And the whole IP branch with it. It is high time to act!!

    Techrights: FINGERS OFF!

  20. In my opinion, the differences in fees due for organizations on one side and individuals and SME on the other side should become bigger. That is, fees for SME and individuals should get reduced further and fees for organizations (let’s say 1000+ employees) should be increased such that there is a net increase of the EPO’s income. The additonal income should then be used to increase quality, hire new examiners and BoA members, etc.

    As an inhouse counsel I know that the fees due to the EPO play hardly any role for large cooperations at the moment. On the other hand, as an individual inventor I find that the fees are prohibitivly high when compared to the USPTO or the larger European national patent offices.

  21. I wish to support what Attentive Observer writes. But with a caveat.

    Performing my role competently, looking after the interests of my client, the Applicant at the EPO, to get for him or her a high quality patent right, depends on co-operation between the Applicant and the EPO. The Examining Division is not my adversary but my helper. In the past, the EPO understood that. It doesn’t any more.

    I think that is because of the infection of Mainland Europe with the corrosive effects of i) notions of “Quality” peddled by outside management consultants, who know F-All about the patent prosecution businessbut do know how to charge mega fees and make themselves indispensible , and ii) the hyper-adversarial legal environment one observes elsewhere in the world.

    Be that as it may, what I need from the EPO is an excellent, focussed prior art search and an intelligent and well-informed opinion on patentability. After that, I’ll do the rest (bringing the case to issue in good shape to fend off any post-issue challenges to validity). Attentive focusses on Substantive examination but my concern is more with the “quality” of the EPO search.

    That’s what I used to get from the EPO, until very recently. A top search report, prepared by an out-and-out experienced specialist in the (very specific and esoteric) technical field of my client’s claims.

    And what do I get now, increasingly? A crap search performed by an Examiner with little or no knowledge of the field, to which is annexed an increasingly artifial, unworldly and superficial opinion. Given the price my client has to pay, the service from the EPO, if it carries on like this, with the fees as they are, will soon be worse than useless.

    Shame on you BB, shame on you AC, shame on you EPC Member States.

    1. Rumor has it that the current Chairman of the AC, Mr Christoph Ernst, will take over as VP of DG5 as of July 1. Can anybody confirm ?

  22. Although it has nothing to do directly with the present blog, I would like to come back to the decision quoted by Darius III (thanks to him) a few days ago. It is a decision taken by the 2d Chamber of the GFCC who will also deal with the complaints against the EPO and the UPC.

    https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/DE/2018/03/rs20180322_2bvr078016.html

    This decision may be summarised as follows:

    A civil servant may be appointed as a temporary judge under two conditions: he must be a lifetime civil servant and may not be reappointed after his time as judge.

    If this rule should also apply mutatis mutandis to the members of the Boards of Appeal of the EPO or the members UPC, I am curious to see what the answer to the four complaints concerning the EPO’s Boards of Appeal and Mr Stjerna’s complaint concerning the UPC will be.

    That national judges can be temporarily sent to the ECJ, or to the Boards of Appeal of the EUIPO in Alicante, to then return to the national judiciary in their country of origin would therefore not be objectionable, if the nomination is only once.

    But certainly not if they are not appointed for life, and when a reappointment is to be decided by the Administrative Council of the EPO, on some obscure rules regarding their production/productivity, or by the Administrative Committee of the UPC. As long as the budget of the Boards of Appeal of the EPO will be submitted to approval by the President of the EPO, they are anything but independent.

    This decision sheds a different light on the complaints before to the BVerG about the EPO’s Boards of Appeal and Mr Stjerna’s complaint about the UPC. They appear prima facie in line with Prof. Bros’ position.

    If the GFCC is coherent, I am therefore curious to see what the outcome of those complaints will be.

    I see here a new challenge to the UPC.

    Techrights: FINGERS OFF!!!!

    1. Dear Attentive Observer,

      thank you for pointing this out. This is not really a new challenge to the UPC, as lack of independence of its judges is one of the objections raised in the complaint. The facts underlying the quoted new decision are somewhat specific, but the general constitutional requirements as regards judicial independence as set out in it by the court are not.

      Should the BVerfG apply these reqirements to the UPC 1:1 – and it is difficult to see why it should not -, the UPCA might not be allowed to enter into force at least unamended.

  23. Dear Max Drei,

    I fully agree, a good search is the basis of a good examination and for a patent with a high presumption of validity. But examination is not a mere, according to a former VP1, unnecessary, play on words. It is there to shape the monopoly granted according to the actual contribution to the art.

    In order to perform a good search, you need to know what is to happen with your search, not just to search. But the initial training is just about searching, and newcomers are more or less left in the lurch, when replies come in. When replies come in there is a quantum leap in knowledge. But by then the training is more or less over.

    In view of the official training time having been reduced to 2 years, one thing is clear: newcomers are trained at using global search statements, and to assemble standard clauses whether they fit or not.

    The BEST effect lies there: make a quick dirty search in the hope of finding a minimum of relevant prior art, so that grant can follow immediately. Even if there are 5 X documents on the search report and the opinion is negative, just answer something and your patent will be granted. That is the tragic situation today. But the plan is fulfilled! That is all what matters.

    Sad, very sad.

    Nothing more need to be said.

    Techrights: FINGERS OFF!

  24. If you carry on with your criticism, will you keep your accreditation as an European patent attorney?

    Pardon the question, but this is exactly what happened to union representatives. They critiicized the EPO downward spiral, the office constructed a dismissal case over basically nothing and harassed about 10 of them. 3 were dismissed, other downgraded. They now slowly find out that they have no recourse as neither ILO not even the court of human rights want to touch the President “independence” (see the new rip-kat blog).

    Is accreditation as an European patent attorney something that the EPO can take back? I am pretty sure that the EPO investigation unit would have little difficulty in finding something in your past dealings as an attorney. They have experience in mounting a case out of nothing.

    I am not writing this to frighten you, it simply is a question. I really wonder. Can they do that and what recourse would you have? Where do the President vast powers really stop?

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