Back to sad old days at the European Patent Office. Last Thursday, hundreds of EPO staff members protested outside the Portuguese Embassy in The Hague against the lack of justice and deteriorating working conditions at the EPO. They are also concerned about the way the management is pushing for reforms without proper consultation of staff representatives.
It was the first time a protest was held in The Hague under the presidency of EPO president António Campinos, who has the Portuguese nationality. Last month, a demonstration was organized in Munich around the meeting of the Budget and Finance Committee.
Campinos has been in office since July 2018 after years marked by unrest and conflicts under his predecessor Benoit Battistelli. Despite many conversations with staff members and pledges to improve the social climate, his presidency has disillusioned many. As the announcement of Thursday’s demonstration, which was organized by the trade union SUEPO, put it:
‘Battistelli and his administration broke the EPO justice system and ignored the rule of law. They disciplined and fired staff representatives and SUEPO Officials on trumped up charges. They have destroyed the career system in a brutal way, not respecting either a decent career progression for young colleagues or a decent transition for older ones. Mr Campinos has not corrected any of the reforms introduced by his predecessor, and now intends to further downgrade the working conditions of ALL staff. (…) We will hand over a petition to the Portuguese Embassy to draw their attention to the legacy Mr Campinos is endorsing and plans to worsen. EPO staff needs to be visible again and pass a clear message to the President. Come, demonstrate and claim your rights in numbers!’
Protesters in The Hague told the regional public broadcaster Omroep West that Campinos has failed to restore the social dialogue with staff members. One of them said: ‘This is because the team around the president is still the same. So even with a new president nothing changes.’ He or she only wanted to speak on condition of anonymity with Omroep West: ‘There is a culture of fear at the EPO. Even giving this interview makes me feel uncomfortable. If I am recognized on photos, this will surely have consequences at work. So we don’t want such photos to be published.’
Staff are particularly concerned about plans of the EPO to cut costs which, according to the Office, is inevitable for the long-term financial sustainability. This conclusion is based on the 2019 Financial Study, carried out by Mercer and Oliver Wyman. The aim of the study was ‘to identify to what extent funded and unfunded benefits in 2038 are covered by pension assets or available cash surplus’. The conclusion: the ‘Financial Study 2019 indicates a coverage gap in all but the Optimistic scenario in 2038 (…). As a crucial next step, potential measures should be identified which the EPO management can consider to close the gap and ensure financial sustainability of the Office. Suitable measures are required to reduce the benefit funding gap, increase the available cash surplus or deliver on a combination of both’.
The Financial Study was criticized earlier on this blog in a post by Thorsten Bausch, who signalled a remarkable contrast between the 2019 Financial Study and the 2018 success report of the Battistelli administration, which stated ‘High cash surpluses have been generated in the 2010-17 period (EUR +2.4 billion) and the EPO is now in a stronger overall financial position both in its ability to finance future liabilities and in its treasury.’
Bausch discussed the Financial Study more in detail before concluding: ‘I would summarize that it is a pure myth that EPO is “poor” and that active measures would therefore be necessary to cut costs, particularly staff costs and pensions. On the contrary, staff has demonstrably become more effective, so if anything, I would argue that they have rather deserved a reward.’
CSC: ‘No contact’
Bausch was certainly not the only one to question the findings of the study. In this document dated 29 October 2019, the Central Staff Committee of the EPO pointed out that the Reserve Fund for Pensions and Social Security (RFPSS) ‘is at an all-time high , and has already reached the level the Financial Study predicted only for 2025. This year’s return is in excess of 11%, and thus the second best in the history of the RFPSS. It more than offsets the losses of last year. The EPOTIF [EPO Treasury Investment Fund] is likely to have had similar results. It is also not apparent how an increasing demand for European Patents fits into a scenario where the EPO can no longer set fees at a level to cover its needs.’
The CSC also pointed out the huge difference between the 2018 and 2019 reports: ‘At the beginning of his term, Mr Campinos contracted two further consultants (Mercer and Oliver Wyman GmbH) to conduct the “Financial Study 2019”, which concludes that the EPO is in serious trouble. This study came just months after his predecessor, Mr Battistelli, presented the results of the previous financial study claiming the exact opposite based on the reforms (read: salary cuts) he undertook.’
Staff representatives have been excluded from discussions about the financial future, the CSC wrote: ‘During both of these studies, there was no contact with the CSC. As to the “Financial Study 2019”, the CSC is not represented in the newly created Financial Study Steering Group, even as an observer.
After this exercise behind closed doors, the Office presents a Financial Study which contradicts the established consultants, PPCmetrics and the AAG, and uses unprecedented assumptions, thus creating an urgency which even the President admits is not apparent today but only, perhaps, in 20 years’ time.’
‘No gap to be closed’
Remarkably critical, as well, was Curt Edfjäl, Chairman of the EPO Pensioners’ Association and former vice-president of the EPO who was in charge of Administration and Finances. Half October, he sent an analysis to the Budget and Finance Committee and the EPO’s Administrative Council, calling into question the financial coverage gap and the way it has been calculated. The summary says it all: ‘(…) For reasons presented in this document, the Association concludes that the negative size of the coverage gap is largely overestimated. The measures envisaged, which could have a serious financial impact on our present and future members are dependent on the size of the gap calculated. The Budget and Finance Committee and the Administrative Council are requested to ask the Office to make a more realistic calculation of the size of the gap before final presentation of measures to be taken are proposed to the Administrative Council in June 2020.’
And also: ‘Our analysis shows that it could be argued that there is no gap to be closed.’
Circumventing staff representatives
Despite the criticism, the management seems determined to go ahead as planned, and has reportedly found an innovative way to hear what staff members think should be the way ahead. Instead of discussing measures with staff representatives in the CSC or the SUEPO, as would seem the most logical way in this highly complex issue, all staff members have received individual requests to tell the team managers which of the ten proposed measures to cut costs they would prefer. They can file their answers to their managers next week at the latest. It is only after this exercise that four representatives nominated from amongst elected LSC and CSC members are invited to discuss the proposals with four members of the senior management team.
Why the management has chosen to contact all staff members individually has not been made clear, but it seems quite strange and inappropriate to do this without consulting – and a way to circumvent – official staff representatives. If this is the idea of social dialogue of president Campinos and the EPO management, it is very likely discontent among staff will not wither away any time soon and more demonstrations and strikes can be expected.
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Just heard that a huge number of newcomers joined the EPO Academy for examiners in October in The Hague: FIVE.
For youngsters working at EPO makes no sense: a repetitive work to be performed under very unhealthy time/production pressure and no attention to quality, a career with no perspective of personal development, under 5 years’ contracts with no guarantee of permanent employment and all this with the risk of being fired within a click of fingers at HR’s discretion: what a surprise that this does not the masses any longer.
Management has no interest in consulting Staff Representatives.
As SRs work hard to understand the topics thrown at them within the short time given to them (reading the “Financial Study” requires a bit more than a week, understanding it, the methods used, where the numbers came from,… a lotlonger, yet Staff Representatives have done an excellent job in dissecting the “study” within such a short time), but the president wants to confront SR with “faits accomplis”. Budget and Finance Committee has already given the go ahead. The president already started telling staff members that now his hands are bound, as the member states representatives have voted yes on the set of measures. And he wants to divide staff, by telling staff representatives that staff has voted in favour…
There is no gap!
The EPOffice is a monopolist, the “concurrents” mentioned in the financial study as reason why fees cannot be increased cannot issue European Patents, they issue National Patents. To get the same coverage, the fees via the national routes would exceed the route via the EPOffice by far, without any assurance that you would get the same coverage in all of the states you’d actually choose to request a National Patent….
It is sad to see the EPO be run into the wall under the “guidance” of pseudo-managers who consider the EPO as the playground of their desire for power by which they try to hide their disgraceful inability.
Nowadays fake news are not only to be seen in politics, just look over the Atlantic, but one can see them creeping up in an international organisation, but here one wonders to the benefit of whom. The new financial study is just a big fake!
By his latest actions, and by keeping in place the most disgraceful minions as well as the staff policy introduced by his predecessor, the actual president has abundantly shown that he has no interest whatsoever in social peace, and he is only there to continue the deconstruction of the EPO started by his predecessor.
It would be interesting to see the contract signed by the past two presidents in order to see how much money they can expect when behaving like an elephant in a porcelain shop.
As our Friend of the EPO recommends, follow the money. We would if we could but we can’t. And why’s that? Because the former President has helped the members of the Administrative Council of the EPO to see how a conspiracy between those Members and the President can deliver a delightful flow of real money, out of the EPO and into the coffers of the AC Members. In a national organisation there would be a level of legal supervision, transparency, the Rule of Law. But in an international organisation there are no such controls.
If the organisation in question operates in the world of sport, there is public interest. So then there are investigative journalists, whistle-blowers, and lurid headlines in newspapers. No such things worry EPO President and his enablers on the AC though. Not enough public interest to make them even mildly nervous.
Even the users of the EPO couldn’t care less. That’s because they are big corporations (who have more important matters on their minds) and their faithful servants the patent attorneys. They, more than anybody, know who butters their parsnips: their clients, not the taxpayer or the EPO. So they remain knowingly complicit in a swindle, an outrage against transparency, employee rights and the Rule of Law.
The outcome of all this? The AC Members, the President, and those within the EPO who serve them continue to be blithely insouciant.
Like Joni Mitchell warned us: You only know what you’ve got when it’s gone. It’s the things that change so slowly (like the climate) that are hardest to see disappearing. I’ve been watching the EPO for more than 40 years. Until recently, it was something to be admired. But under its immediate past President, it lost a lot. Many had high hopes that the coming into office of the current President could arrest the downward path. What is it that explains his failure? Is he powerless against the AC? Is he too blind to see? Or is he yet another with his snout in the money trough, using his term of office to line his own pockets?
In the past, the UK Member on the AC might have helped the cause. But can you expect that these days, under Prime Minister Johnson.
Corruption is like cancer cells if you look for it, you will find some. At EPO follow the money fine but how?
As you know with a yearly budget of two billion euros and no genuine checks and balances the EPO is immune to corruption. Surely to increase independency, Battistelli managed to have the administrative council selecting one of his former employees at INPI Paris as one of the three “external auditors” see http://techrights.org/wp-content/uploads/2015/07/epo-people.pdf
This «independent» auditor is still active today. Imagine one sec that a whistleblower reports where to look to find malpractice, what do you think would happen?
For instance, technically it is possible today for ex-top managers having left the EPO to cash EPO funds via consultancy companies created – not under their name obviously. To determine if this is the case, you need a truly independent structure allowed to check everywhere in details (the German did such check years ago with the Deutsche Bahn and guess what, they found corruption).
Another interesting study case: the two married principal directors recruited by Battistelli and who under Campinos are running the EPO recently benefited from a change of title. (Wrongly?) informed top managers report in the corridors that this would have been done to allow a discreet increase of their far too low principal directors’ salaries and bring them at the level of what is foreseen for vice presidents.
With Battistelli’s reforms, transparency and safeguards were removed to allow for discretionary decisions by and for those in charge. Before the reforms, a title was linked to a precise grade and the salary scale for this position clearly defined. Now it’s Christmas all year long with for the happy-few double-steps, functional allowances, bonus you name it. This can be of course a naughty rumour but concretely how to ascertain this is not the case?
Battistelli brought to the EPO the absolute worst of french unhealthy practices and unfortunately, Campinos seems happy with it, as are Germany and the Netherlands as host states, as well as all member states which collect millions of euros of EPO money each year.
Thanks for that, Pfui, even though I read it with a sinking heart. Why sinking? Because I think of the UPC and what people want out of it. Even now, 40 years after the start of the EPO, users can by-pass the EPO by using national Patent Offices instead. Today, when it comes to litigation, the national patents courts compete with each other for the business. To replace these national courts (where the Rule of Law still runs) with a supra-national entity with fuzzy (and perhaps) opaque lines of accountability suddenly (given the way things are going at the EPO) seems like the wrong way to go.
I fear that you may be right again.
Another point which upsets me and which illustrates too well the major democratic deficit of the EPO: a diplomatic conference is overdue for more than a decade as delegates of the member states of the administrative council carefully avoid to inform their ministers of its existence and of the legal requirement for it (and abusing its power, Battistelli never called for it to keep his hands free to do what he wanted).
How can this serve the public when a major international organisation is being highjacked by its member states to their own selfish benefit?
How can a dysfunctional and weaker EPO serve Europe? Why is Europe passive and mute although perfectly aware of the mess – all EU member states are members of the EPO and an EU representative sits as an observer at the administrative council meetings.
The question which now arises is how many skeletons, and of which nature, are sitting in the new president’s cupboard for him to keep in place the two worst minions introduced by his predecessor. They might have been shifted a bit around, but their power of nuisance remains. As long as those two minions, and especially the female one, are left in position social peace will remain wishful thinking.
The actual president having brought in not one, but chores of people from Alicante, those will certainly not have any intention to say anything, even should they become aware of something “strange”, as all these people are indebted to the new president for their position.
This applies especially to the new VP4 coming from Alicante. VP5 switched from chairman of the Administrative Council, with only some pay on the meeting days, to a full time job at the EPO and the cosy salary coming with it. Once he retires, he will benefit from medical coverage by the EPO for a fraction of his income. VP1 was responsible for trademarks at the UKIPO, so his dealings with Alicante are obvious. I doubt that all those VPs would have been chosen by the AC if the new president would have had any reservations. In other words, the new VPs are also indebted to the actual president.
I agree with Max Drei, there are enough people external to the EPO, but profiting from it, and they have no interest to any change. Let us get patents by the dozen. Their real value does not matter much, it is simply a lever in negotiations between big players.
I doubt the members of the AC will ever agree with removal of the possibility they have to obtain “emergency” dental treatment when being present at AC meetings, and this at the cost of the EPO. EPO is his own insurer for medical care and only employs an insurance broker for the administrative task of reimbursing expenses. Otherwise, it would not have been possible to give this type of medical coverage to members of the AC.
The cooperation budget is also a very powerful tool, to obtain the “correct” votes from the AC. The former president played a lot with this budget. Why would the new president not continue? And who is in charge of cooperation in the future? You guessed it: the other half of PD inHR. Under the former president it was already one of his minions, now retired, who controlled cooperation. Everything stays thus under control.
The level of multiple dependency has reached such a level that the system works like a closed loop, and none of the actors have the slightest interest in breaking the loop.
I think it was Mao Ze Dong who has said that the fish stinks from the head. We have a perfect illustration here.
As we all know, and as EPO Friend reminds us, with any dead fish, the stink sets in at the head, then travels downwards. EPO Friend invites us to think about the closed loop of venality that has been installed by the former “head” of the EPO. What EPO Friend doesn’t offer is a way to break the loop.
Coincidentally, I have just read in Der Spiegel a long article about the trade in cocaine from South America into Europe. The main port of entry is Antwerp, where the battle to stem the inbound flow of cocaine has already been lost. It seems that those who have used cocaine has risen to 5% of the population in Western Europe. Europe’s enemies, the authoritarian rulers of the world outside democratic Western Europe, are delighted that Europe is killing itself slowly.
Do our politicians care? Not at all, it seems. Grotesquely inadequate money and resources are being made available to reduce cocaine consumption. I suppose our representatives salve their consciences with the thought that nobody is being forced to addict themselves to cocaine. And I suppose they do nothing about the mis-government, mis-management and disregard for the Rule of Law at the EPO because, even if they think about it at all, they cannot see who is being harmed.
Well, politicians, we are all being harmed, by the cynicism, the loss of precious trust. But mostly YOU. If you do not care about the Rule of Law, the angry voters will get more and more angry with you and the society that looks up to you as our representatives in the Parliament, the legislature. So, even if it is only for your own long-term self-interest, at the AC, give the President please a mandate, an instruction, to root out the corruption at the EPO before it spreads further and becomes irreparable, like at Antwerp.
Dear Max Drei,
There is one way to brake the loop, and that is for instance for the observers at the AC to make things public. They are sitting in the AC, even if they are excluded from some discussions. They see all the AC documents, beside the confidential ones, and are intelligent enough to understand what is written between the lines. I mean rendering public the way the EPO is run. And when I mean public, I do not say publishing libels à la Techrights, as those are deserving the cause he thinks he has to defend. They are unnecessarily polemic.
I hoped for a long time that epi could play this role. as an example, I have been deeply disappointed when there was not even the outline of the draft of a protest when the former president decided to send the boards of appeal to Haar with the cynic comment that it was to improve the “perception of independence” of the boards. The EPO has, and will continue to invest lots of millions in a rented office, whilst one building is empty, and thoughts are given to the sale of another one. Have you heard the epi voicing the murmur of a protest I did not.
The move to Haar is to the detriment of their clients, but did you hear anything against it. Nope. I am sorry to say, but to me, the epi has degraded itself to a travel agency.
It might be satisfactory for representatives to get patents by the dozen, but to see that a lot of patents are revoked or heavily curtailed in opposition (2/3 of the patents opposed), this is not what a call a service to the benefit of the client.
On the other hand, representatives do not want to scare their clients, but between those two extremes there should be a reasonable way to act. By continuing to remain silent, with some rare and noticeable exceptions, I have never heard the profession protesting. When digging your head in the sand, do not wonder that your bottom gets smacked. By digging their heads in the sand, representatives make themselves accomplices of the pseudo-managers deciding over the fate of the EPO. I could also call this cutting the branch on which they are sitting.
It is too easy to put the blame on the politicians. Has epi insisted that the “conference of ministers of the Contracting States responsible for patent matters”, cf. Art 4a EPC 2000, meets at least every five years? I have not heard anything of this kind. This could be a start, and whether a president does not want it is beside the point.
The president should be the guardian of the EPC and not the guardian of his private interests. And this applies also to the AC and its members. They should not be puppets on the string of whatever president. A bit more spine on the side of the representatives of the users and of the members of the AC would not harm.
It is very difficult for staff members to say anything to the outside as this will be considered as being disloyal towards those running the office, even if it running it into the wall. And we all know with which nastiness those offences are retaliated. The pseudo-managers of the EPO can deprive a staff member of his salary if it does not behave “correctly”. It went up to disregarding the separation of powers… The loyalty of staff members is towards the office and not towards the people running it into the wall.
EPO friend points out that DE and NL benefit as EPO Host states. In the carve up of EPO profits, I had overlooked that.
Smaller EPC Member States can benefit from dividends dispensed by the EPO President in return for their support (votes). But what about France. In all of this, might France have been, over the years, asking “What’s in it for me?”
We know the answer now. The stitch-up was to designate France the Host Nation for the UPC.
Europe! What a piece of work! Was it ever anything else but a haggle over which nation gets which piece of the pie?,
Dear Max Drei,
How risqué of you to draw an analogy with the cocaine trade through Antwerp …
Perhaps you are not aware of the stories circulating within the EPO about “snowstorms” in the vicinity of the Isar building … if rumours are to be believed allegations of substance abuse are not limited to C2H5OH these days …
It is to be feared that you will be waiting a long time for the AC to issue the kind of mandate that you would like to see … they are more likely to “snort” contemptuously at your indignation …
I too have been profoundly disappointed by the “silence” of the epi. One could even express concerns about how it has come about that the epi’s spine has been removed… whereby, on occasion, strong objections voiced internally have not been reflected in any “official” submissions to the EPO.
It is true that not all representative bodies have remained silent on all “controversial” issues. But do we really need to place such heavy reliance upon those few individuals that are awake to (and “brave” enough to publicly voice objections against) unlawful and/or unethical actions pursued by one or more of the EPO, the AC and the Contracting States? That seems to me to be taking far too high a risk of plunging the profession into disrepute.
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