Not too long ago we learned of a referral question from Technical Board of Appeal 3.5.03 regarding the legal basis for holding oral proceedings before the Boards of Appeal in Haar rather than in Munich.

While it does not directly relate to the legal question in the referral, a relevant consideration was recently published in CA/5/19, which relates to an additional lease for further staff, conference rooms and common areas for the EPO in Haar. The document notes that the building in Haar has been leased for a period of 15 years. In CA/82/16, the total budgetary impact of the lease in Haar, including building adaptation costs, was provided as EUR 40.7 million. The further costs laid out in CA/5/19 for an additional lease contract are EUR 4.8 million, for a total of EUR 45.5 million.

Whether the EPO could negotiate its way out of some of these costs in the event of a decision to relocate the Boards of Appeal back to Munich is an open question. In any case, additional costs would undoubtedly be involved in the relocation itself, to say nothing of headaches for staff at the EPO who would be tasked with implementing the move and could be more productively engaged in other duties.

Although this is not explicitly reflected in the EPC, it is incumbent upon the EPO to treat the funds it receives with respect and ensure that they are wisely spent. Shuffling the Boards of Appeal back and forth between Munich and Haar is reminiscent of the “traveling circus” endured by the EU in the migration of its parliament between Strasbourg and Brussels at a cost of EUR 113.8 million per year; this “traveling circus” has been a sad international joke for some time. Even assuming that the EPO leadership was wrong to move the Boards from Munich to Haar in the first place, the damage to the EPO’s reputation that would result from reversing the move seems to outweigh any doubts about the legal basis. Put another way, we probably do not need any further evidence to show that two wrongs do not make a right.


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9 comments

  1. Would it really be so damaging to the EPO to reverse the decision to send the Boards into exile?

    Of course, applicants might not be happy at the cost and any (short term) inconvenience associated with relocation. However, these factors would easily be outweighed by gains in the long term.

    A first gain would be practical, in that applicants would again have a significantly more convenient location (with respect to travel, accommodation and local amenities) for oral proceedings before the Boards.

    Another gain, however, would be much more important. That is, the Enlarged Board of Appeal would establish a precedent for reversing decisions of the EPO’s executive (the President and the AC) that do not respect the rule of law.

    The AC and the President have, upon multiple occasions, effectively demonstrated contempt for the rule of law – as is evident, for example, from the plainly absurd questions referred to the EBA in G3/19. For the EPO to stand any chance of maintaining (or rebuilding) the confidence of applicants and the public, it is imperative that this situation is addressed.

    Whilst it is perhaps possible that the EBA may find nothing wrong with the relocation of the Boards to Haar, they should certainly not be strong-armed into reaching that conclusion. Indeed, the EBA should be free to reach their own conclusion, even if this might cause practical problems for the EPO.

    Let’s be honest, reversing the relocation of the Boards would not damage the reputation of the EPO so much as it would damage the reputation of the INDIVIDUALS (within the EPO’s management and the AC) that were involved in proposing or accepting that relocation. It might just also make the political masters of the delegates to the AC sit up and take notice of the negative consequences of turning a blind eye to the rule of law at the EPO.

  2. Great! So when Mr Adams files the next appeal against a decision of an examining division, the BoA will decline to change the decision because this might be damaging to the EPO´s reputation?

    How damaging to the reputation would be a decision “Haar is not a legal location, but the BoAs can stay there regardless”?

  3. What a strange article this is. Why on earth would a move of the Boards back to Munich do damage to the EPO’s reputation? If the move to Haar was illegal (I personally think it was not), then it should be undone. You could still use the premises by moving other EPO units to Haar.

    In my view, the EPO’s reputation has been damaged much more deeply by the latest referral in which the President of the EPO asked the Enlarged Board of Appeal to reconsider its stance on Broccoli et al. Visitors of the Church of Saint-Sulpice in Paris reported that they heard poor Montesquieu spinning in his grave.

  4. Regarding the EPO and real estate, I found something interesting while researching the immunity of IOs in general.

    Chris de Cooker, Gisela Süss (apparently ESA, no URL found), Chap. III.4: Immunity of International Organisations from National Jurisdiction in Staff Matters, in Chris de Cooker, editor: International Administration Law and Management Practices in International Organisations (TOC), Brill, Nijhoff, 2009, pp. 541-570.

    Another illustration for the application of the functional criterion in relation to international organisations is the dispute between Austrian E GmbH and the European Patent Organisation. Austrian E GmbH was the owner of EPO’s premises in Vienna and brought a suit before the Austrian Courts in order to recover rent arrears. The Austrian Supreme Court [11.06.1992] held that the immunity of international organisations is absolute within the sovereign purpose of the organisation and that the lease of premises falls within the scope of this purpose since it is necessary for the organisation to use adequate premises in order to carry out its technical and administrative activities. Some commentators criticise the functional approach arguing that it might result in immunity being granted to international organisations in all circumstances, given that they will always be deemed to act within the scope of their duties.

    From the decision date, that would have been case ECLI:AT:OGH0002:1992:RS0046275 with the following particulars:

    Gericht: OGH

    Dokumenttyp: Rechtssatz

    Rechtssatznummer: RS0046275

    Geschäftszahl: 7Ob627/91; 10Ob53/04y; 6Ob150/05k; 3Ob147/11f; 9ObA73/16z; 8Ob53/17b

    Entscheidungsdatum: 11.06.1992

    Norm: JN §42 Abs1 Ad

    Rechtssatz: Maßgebend für die Beurteilung der Immunität internationaler Organisationen ist der Inhalt des zwischen ihren und der Republik Österreich geschlossenen Abkommens. Im allgemeinen ist die Immunität internationaler Organisationen im Gegensatz zur Immunität von Staaten grundsätzlich als absolut anzusehen.

    I couldn’t locate a full text version of this 27 year old decision. The details would be interesting. I’m particularly interested in knowing whether Art. 5(2) EPC was ever mentioned:

    In each of the Contracting States, the Organisation shall enjoy the most extensive legal capacity accorded to legal persons under the national law of that State; it may in particular acquire or dispose of movable and immovable property and may be a party to legal proceedings.

    Can this article be interpreted asymetrically? I.e., I can sue you all I want, but good luck if you ever attempt to sue me

    I tried reconstructing the facts of this case, but I may be wrong. So here I go:

    According to an official “corporate” account of its history commissioned by the EPO to Sorbonne professor Pascal Griset, in the 1980s patent information became an increasingly strategic asset. The Austrian government had formed together with WIPO a company called INPADOC (“International Patent Documentation Center”) which was feeding an ecosystem of value-added resellers. The EPO felt it had to enter this field, but the competition would have meant a bleak future for the existing entity. In the end, the EPO made an offer the Austrians couldn’t refuse, and officially took over the company on 01.01.1991, and opening an EPO site. My understanding is that the EPO just walked away from the existing lease and rented elsewhere, leaving a rather unhappy landlord behind.

    Again, according to the book, the existing exclusive contracts were also unilaterally cancelled by the EPO on day 1: “Les contrats commerciaux exclusifs signés par INPADOC furent dénoncés [au 01.01.1990] de façon à ce que le nouveau site fonctionne immédiatement“.

    Selling patent information is clearly of a commercial nature (a semi-commercial entity was co-opted; existing private resellers were elbowed out), yet this was somehow considered a sovereign activity by the Austrian supreme court, even though I can’t find any article of EPC1973 (even in EPC2000) that quite covers it (that would be somewhere about Articles 127 to 132)

    I would suppose that the Austrian government eventually stepped in and compensated the landlord. (The former INPADOC logo had an Austrian Bundesadler on its side).

    So why couldn’t the EPO just walk away from its contract in Haar?

    There’s a much older history that went around in my days about a shady, nearly Trumpian, real-estate deal at The Hague in the early 1990s. The EPO was considering moving from the Plaspoelpolder building it inherited from the IIB, and had immediately acquired a plot of land from a local borough, only to sell it back later to its original owner for a hefty discount. I think it may have been in Voorburg, but I’ve never seen anything in writing. Can anyone fill in the details?

    Returning to the subject of staff relations, IIRC, this was the only mention of the EPO in the 1100-odd pages of the book mentioned at the top. The author concludes at the end of his chapter by writing: “The application of immunities may, however, not lead to a denial of justice for staff.” Hear hear! It’s just a pity that pretty much this entire book is a demonstration of the contrary.

    May I suggest that 40M€ over 15y is probably of the same order of magnitude as the so-called Inventor of the Year boondoggle…

  5. All the present discussion and the referral G 2/19 would not have had to happen if the Administrative Council would have done its job, i.e. to control the President and not the other way round.

    The forced exile to Haar was a revenge from the Napoleon of the 10th floor after the EBA did not want to simply rubber stamp the decision by which he trampled on the separation of powers.

    It is nice to say that the EPO should “treat the funds it receives with respect and ensure that they are wisely spent”. However, the silence of the profession was deafening when the decision was taken to send the Boards to Haar in order to “increase the perception of the independence of the Boards”.

    With a few exceptions, I saw hardly any protest from individual members of the profession, and certainly none from its representative instances when such a ludicrous decision was taken.

    It seems very cheap now to compare the possibility of the Boards to come back to Munich with the “travelling circus” of the European Parliament between Brussels and Strasbourg.

    At least the travelling circus finds its basis in an international treaty, whereas the transfer of the Boards was just a decision taken by somebody wanting to show that he is above the law, and in control of everything.

    In view of the referral G 2/19, any further extension of the lease should not be approved until the EBA has decided on the matter. When all files relating to plants are stayed until the decision G 3/19 is issued, this should also be the case here. That would really be an attempt to treat the funds the EPO receives with respect and ensure that they are wisely spent.

    Any decision relating to the lease of the Haar building taken before the decision in G 2/19 would show implicitly to the EBA the it can decide whatever it wants, the fait accompli will ignore it.

    If there is a scandal, it is to be seen here, and not in a possible spending of money for the Boards returning to Munich.

    Someone has manifestly missed an opportunity to keep quiet!

    Techrights: FINGERS OFF

  6. Interesting approach. The law is the law but if righting a wrong would cost money then overlook it?
    Yes, the EPO has to be prudent with the money it receives, but committing a lot of money to an illegality is not good grounds for perpetuating it. Holding responsible those who got it wrong would be the correct procedure.

  7. All the present discussion and the referral G 2/19 would not have happened if the Administrative Council would have done its job, i.e. to control the President and not the other way round.

    The forced exile to Haar was a revenge from the former head of the EPO after the EBA did not want to simply rubber stamp the decision by which he trampled on the separation of powers.

    It is nice to say that the EPO should “treat the funds it receives with respect and ensure that they are wisely spent”. However, the silence of the profession was deafening when the decision was taken to send the Boards to Haar in order to “increase the perception of the independence of the Boards”. With a few exceptions, I saw hardly any protest from individual members of the profession, and certainly none from its representative instances when such a ludicrous decision was taken.

    It seems very cheap now to compare the possibility of the Boards to come back to Munich with the “travelling circus” of the European Parliament between Brussels and Strasbourg.

    At least the travelling circus finds its basis in an international treaty, whereas the transfer of the Boards was just a decision taken by somebody wanting to show that he is above the law, and in control of everything.

    In view of the referral G 2/19, any further extension of the lease should not be approved until the EBA has decided on the matter. When all files relating to plants are stayed until the decision G 2/19 is issued, this should also be the case here. That would really be an attempt to treat the funds the EPO receives with respect and ensure that they are wisely spent.

    Any decision relating to the lease of the Haar building taken before the decision in G 2/19 would show implicitly to the EBA that it can decide whatever it wants, the fait accompli by the extension of the lease will ignore it.

    If there is a scandal, it is to be seen here, and not in a possible spending of money for the Boards returning to Munich.

    There are more important causes to defend than the present one: restore social peace at the EPO, and let the examiners work properly and not with increasing pressure, so that the EPO can return to the quality it used to deliver.

    Techrights: FINGERS OFF

  8. Dear Samuel,
    I agree with you that the EPO should treat the funds it receives with respect. However, considering the whole picture I arrive at the opposite conclusion.
    I am told that since the Boards moved to Haar about 1,5 years ago the oral proceedings facilities in the Isar building are barely used. The office space that they used in the Isar building is now occupied by staff formerly located in the Pschorr, with the result that half of one of the Pschorr buildings is completely empty. Apparently the EPO has even to pay money for this empty building: cleaning services, maintenance and I am told even penalties for the partly unoccupied canteen. Thus the EPO is actually wasting the money for the location of Haar plus the costs for the maintenance of it empty building and oral proceedings rooms.
    The relocation of the Boards is a perfect example of waste of public money. The longer it lasts the more money will be wasted. And all this for a location that neither the users nor (apparently) the staff like.
    Thus I hope that, whatever the Enlarged Board will decide, Mr. Campinos will end this farce and move the Boards back to one of the EPO buildings in Munich. The sooner the better.

  9. While I take the separation of power issues relating to Board and President very seriously, I think the drama over Haar is a bit artificial. Haar is still quite close to Munich and we should not forget that city limits change over time. While the territory of the city of Munich has grown in the last century, it is also conceivable that a different municipality grows on the cost of Munich at some point. What would happen if a part of the EPO would due to a land reform suddenly be located in the city of Pasing without moving physically?

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