17 Members of the European Parliament raise questions about human rights situation at the EPO

As I reported last week, the human rights conflict at the European Patent Office continues and certain national governments acknowledge that there is an issue (or, more precisely, a host of issues). Political pressure on the EPO leadership, including the Administrative Council (which has so far done a better job at being part of the problem than at being part of the solution), is coming from more and more sides.

For example, 82 members of the Parliamentary Assembly of the Council of Europe (PACE) have signed a written declaration expressing concern over a "rollback of fundamental rights at the European Patent Office." Its signatories include leaders of parliamentary groups and members from all five major political groups in the PACE.

The Council of Europe is not an EU institution. It's a separate diplomatic organization whose members also include major non-EU member states such as Russia. Its focus is on human rights issues. That fact makes a declaration by many of its members relevant. Also, all those signatories are also members of their national parliaments.

But unlike the PACE, the European Parliament--which is an EU institution--has real decision-making power as a European-level co-legislator. While the EPO is formally not an EU institution, the EU has decided to put it in charge of granting the future European "Unitary Patent" and it has furthermore allowed essentially the same group of national government officials who run the EPO to control the future Unified Patent Court. The EU can't turn a blind eye to what's going on at the EPO. If the EU truly were as principled a watchdog of human rights and the rule of law as it claims when dealing with countries like Russia and China, it would rule out working with the EPO and would instead set up an EU patent office. However, despite the great work it does in certain areas, there are contexts in which the EU uses double standards.

17 Members of the European Parliament (MEPs)--2 from the libertarian Alliance of Liberals and Democrats for Europe and 15 from the Confederal Group of the European United Left - Nordic Green Left (a far-left but still democratic group)--have recently submitted official questions to the European Commission concerning the human rights situation at the EPO. The Commission has an obligation to respond, though its answers are typically evasive on any delicate issue. Here, the Commission could respond by denying responsibility for the EPO situation, since it only has observer status and no voting rights on the Administrative Council, but the truth is that the EPO will soon be by far and away the biggest service provider to the EU.

I just wanted to publish those two parliamentary questions here (also to make it easier to find them on Google) without further comment.

Question for written answer E-009256/2015
to the Commission
Rule 130

Fernando Maura Barandiarán (ALDE) and Javier Nart (ALDE)

Subject: Situation concerning the fundamental rights of EPO employees

The administrative council of the European Patent Office (EPO) introduced a new quality and efficiency strategy in 2010, aimed at improving quality and lowering costs. Most of the measures put in place under this new strategy do not appear to respect the fundamental rights of employees under the European Union Charter. The case was taken to the Dutch courts, which ruled that the EPO was violating the right of collective bargaining, the right to strike and the right to freedom of expression and information. Staff at the EPO have also spoken out on a number of occasions against the repressive, authoritarian system of management that has been introduced there, which is being used as a way to drastically restrict their rights.

Is the Commission aware of the situation concerning the rights of those employed by this international organisation, which has its headquarters within EU territory?

Has it undertaken, or is it considering undertaking, any kind of investigation into whether the EPO has violated Articles 11, 12 and 28 of the EU Charter of Fundamental Rights?

Question for written answer E-008382/2015
to the Commission
Rule 130

Kostadinka Kuneva (GUE/NGL), Lynn Boylan (GUE/NGL), Martina Anderson (GUE/NGL), Pablo Iglesias (GUE/NGL), Lola Sánchez Caldentey (GUE/NGL), Stelios Kouloglou (GUE/NGL), Paloma López Bermejo (GUE/NGL), Barbara Spinelli (GUE/NGL), Fabio De Masi (GUE/NGL), Tania González Peñas (GUE/NGL), Helmut Scholz (GUE/NGL), Neoklis Sylikiotis (GUE/NGL), Kostas Chrysogonos (GUE/NGL), Matt Carthy (GUE/NGL) and Miloslav Ransdorf (GUE/NGL)

Subject: Violation of labour and trade union rights in the European Patent Organisation (EPO)

The Dutch appeal court recently ruled (case number 200.141.812 / 01 / 17-2-2015) that the European Patent Organisation (EPO) violated workers' labour rights deriving from the EU Treaties and the EU Charter of Fundamental Rights. Consequently the Dutch court, exceptionally, has not accepted the immunity EPO enjoys as an international organisation, since this immunity cannot allow for human rights violations. Nevertheless EPO declared it would ignore the ruling pleading execution immunity.

• Does the Commission agree with this ruling, according to which, as regards guaranteeing fundamental rights, the EU Treaties and the EU Charter of Fundamental Rights prevail over bilateral and multilateral agreements, including those providing immunity to organisations such as the EPO?

• If so, what does it intend to do to prevent the abuse of immunity rights and defend the EU citizens' and employees' rights and the community acquis in organisations such as EPO which while exercising judicial functions is at the same time breaching the European legal order rules?

• How does the Commission scrutinise that the positions EU Member States' representatives take in the administration of EPO are compatible with the rights enshrined in the EU Treaties and the EU Charter of Fundamental Rights – taking into account that the EU Member States constitute the majority in the organisation?

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Striking structural parallels between the European Patent Office and soccer body FIFA

With all the attention that corruption scandals relating to soccer body FIFA are getting these days after certain arrests due to U.S. criminal investigations, I finally wanted to draw certain parallels between the structural deficiencies of FIFA on the one hand and the EPO on the other hand that had already come to my mind last year. I've worked on policy and antitrust issues relating to patents as well as soccer. In connection with the latter, my focus was on broadcasting rights, but I also worked on some overall governance issues on behalf of Real Madrid, the most famous sports club in the world. Obviously, the opinions I express here are just my own.

Parallel #1: Voting rights

Each member state of the European Patent Organisation (EPOrg) or member association of FIFA, no matter how small, has one vote. Based on my observations of what effects this has at the EPO and in soccer, I'm convinced that this is a recipe for bad decisions and only benefits the executive leadership of those organizations. It's easier to bribe a soccer official from Trinidad and Tobago than one from the UK because of the risk-reward ratio for either one (the absolute amount of money involved being equal). UK soccer executives simply have enough opportunity to make money legally. Similarly, paying a visit to a German dentist on the occasion of an EPOrg Administrative Council meeting won't impress an official representing the German government because his healthcare package would cover this anyway, but it could influence someone from a less developed country such as Albania.

It also gives large and rich countries an excuse for not being able to bring about reform: they can always claim they would be outvoted anyway. (Of course, if the Big Three left the European Patent Organisation, that would be the end of it just like no FIFA World Cup would be taken seriously if Germany, Spain, France, Argentina and Brazil refused to participate. But it takes a lot before someone threatens to leave an organization like that.)

Parallel #2: Officials facing accusations of bribery

FIFA officials have been linked to bribery for many years. If you're interested in the longstanding history of corruption in soccer, I recommend this book: "FOUL! The secret world of FIFA: Bribes, vote rigging and ticket scandals" by Andrew Jennings. One of the officials arrested last month, Jack Warner, also features prominently in that masterpiece of investigative journalism. However, as far as criminal charges (whether they will ultimately be proven is another question in all those cases) are concerned, the EPO also has its Jack Warner and his name is Željko Topić. You can read about the related allegations and accusations on Wikipedia, TechRights, IP-Watch and other sites.

If the Administrative Council of the EPOrg was as concerned about the reputation of the EPO as the supervisory bodies of honorable organizations are, they would have ousted a vice president at the latest after he lost a Croatian court case trying to prevent a journalist from making certain claims. But with little attention in mass media (at least outside of Croatia), he can stay in office, which says a lot about the mentality of the decision-makers there. Do you believe the European Central Bank would let a vice president stay in office after being accused of counterfeiting? What this EPO vice president is accused of is the IP equivalent of what counterfeiting would mean for a banker.

Parallel #3: Supervisors receive allowances and other benefits

The aforementioned book about FIFA discusses the effect of allowances on the individuals sitting on its various committees. Same thing about the EPO (where healthcare is part of the deal). In the private economy there is nothing wrong with that. I've received cash and stock for an advisory board membership, too. However, in the EPOrg's case we are talking about public servants. Government employees. They are already paid for this work by their national governments. When they attend an EPorg Administrative Council meeting, they don't do this in their free time. I'm not aware of any other organization than the EPOrg that would pay the representatives of its member states allowances or healthcare.

As I explained above (voting rights), the impact of this depends on the income opportunities those individuals have in their home countries. For those from small and/or less developed countries, this is a significant incentive to turn a blind eye to a lot of issues and to support the leadership. Regardless of which kind of country someone is from, this is questionable behavior. Public servants? Self-service!

Parallel #4: Opportunities for supervisors to get prestigious posts

FIFA has traditionally set up large numbers of committees so as to give as many people as possible the chance to be chairman or vice chairman of something. This, too, is an incentive to side with the executive leadership, which has a lot of influence over those appointments. At the EPO they do the same thing. They have posts to offer on the Budget and Finance Committee (BFC), Select Committee, Patent Law Committee, Board 28 and whatever else they have there.

The situation is even worse at the EPO than at FIFA. It's not just about ego and reputation. Pretty much everyone on the Administrative Council hopes to get a significant raise one day by becoming an EPO vice president or, ideally, president. After taxes, the income of the EPO's top brass far exceeds that of public servants in its member states. But the best way to become vice president is always to be on good terms with the president. (In soccer, it also happens from time to time that executives of national bodies take jobs at international bodies like FIFA and UEFA, but the financial benefit is not nearly as clear as in the European patent system.)

Parallel #5: Lavish buildings and awards ceremonies

When "non-profits" like FIFA and the EPO control billions of dollars/euros, they inevitably look for ways to spend them in ways that could be characterized as self-aggrandizement. They hire famous architects to design new buildings for them, and they throw expensive parties. Here, again, FIFA's Ballon d'Or award ceremony at least serves an obvious and legitimate commercial purpose, while the EPO's European Inventor Award is a major disgrace in ethical terms. I agree with the criticism voiced in this IPKat post. This is indeed a "dangerous compromise of principle." The EPO must be neutral, but it is not. Instead of taking measures that would really contribute to patent quality, it compromises the process as a whole. It crosses the line all the time between what is appropriate for a governmental organization and behavior that would only be acceptable for a private enterprise.

Parallel #6: Member states/organizations must follow the party line to have certain opportunities

Every four years, FIFA gives the World Cup to another country. This gives FIFA's leadership enormous leverage over member organizations and even national governments. If you don't have Sepp Blatter on your side, your country can forget about a bid for hosting the World Cup. While it's doubtful that this actually benefits a country economically, it's certainly a prestige thing for the individuals (including even top-level politicians) involved.

In the EPO's case it's about money for national patent offices rather than prestige. National patent offices benefit substantially from renewal fees (when renewal doesn't really cost them anything). Moreover, the EPO has various cooperation programs in place with national patent offices, and I've heard stories of how national government representatives were threatened (in Administrative Council meetings and elsewhere) with being precluded from such lucrative projects in the future if they disagreed with the EPO's leadership.

Well, here's a New York Times article on FiFA's generous grants to members. Same thing.

Parallel #7: Compromised access to justice

A big part of the problems at FIFA (and smaller problems at UEFA) is that those soccer bodies have statutes that don't allow teams and players to go to a regular court. They all have to submit to rules that require them to bring any claims in the associations' and federations' own tribunals, with the final judge according to those statutes being the TAS-CAS, which is effectively controlled by the likes of Sepp Blatter. Those statutes are obviously unlawful but regulators like the European Commission don't force sports bodies to change them. One can still go to regular court and prevail, as did Mr. Bosman. But when you do that, they will use threats of all kinds. When Swiss team FC Sion went to court, Switzerland was threatened with its national team being excluded from the World Cup and EURO tournaments and with all of its clubs being excluded from the UEFA Champions League and Europa League.

The people pulling the strings at the EPO also seek to compromise access to justice. The only somewhat independent judicial body its staff has access to in labor disputes is the International Labour Organization's (ILO) Administrative Tribunal. Those proceedings take very long, and justice delayed is (often) justice denied. The members of the EPO's in-house courts called boards of appeal should be independent, but the president suspended one of them last year. And with the Unified Patent Court, essentially the same group of individuals that sits on the Administrative Council will, directly or through subordinate employees, control the appointment and reappointment of judges and limit the ability of the Court of Justice of the European Union (CJEU) to give opinions on patent-related legal issues.

So, who's worse?

One could possibly find even more parallels, especially with an inside track to both organizations. For example, FIFA's "For the good of the game" hypocrisy and the EPO's constant claim to promote innovation (when it actually favors patent quantity over quality) are another similarity, or their controversial autocratic presidents -- "Blatterstelli". But no matter how many parallels one finds, there are certainly also more differences than the ones I've outlined above. I just can't compare each and every aspect of two large organizations in a single post.

I don't mean to say here that the EPO is as bad as FIFA is in many people's eyes now. I just wanted to show that both organizations have similar structural issues that lead to bad decisions and bad behavior. Neither FIFA nor the EPO are corrupt per se, but their structural deficiencies have various corrupting effects.

It's very unlikely (and has never been claimed) that the extent of personal enrichment at the EPO amounts to even a fraction of what FIFA officials have raked in. But even the world's number one spectator sport is dwarved in economic terms by the industries in which patents play a key role (whether positive or negative depends on the industry or industry segment, but there's no denying the importance either way). That's why there can be no doubt about where structural reform is needed more badly.

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EPO president reportedly threatened to resign; Dutch diplomat concedes concern over bad press

Today's EPO staff demonstration in Munich (see my previous post) turned out a lot more interesting than expected.

An estimated 700 protesters marched from one of the EPO's Munich buildings (the closest one to the Oktoberfest venue, for those who may have visited Munich on that occasion) to the Dutch consulate-general:

There was one sign that I particularly liked:

It's unfortunately true that the EPO, claiming immunity, behaves like an enclave that doesn't have to respect European/EU human rights and labor law standards. I don't think the EU institutions can turn a blind eye to this situation. Before the EPO starts granting EU-wide unitary patents, it must at least meet a certain European minimum standard in terms of checks and balances as well as access to justice.

After a 15-minute walk, the protesters arrived at the Dutch consulate-general. They were greeted by the consul-general himself, Mr. Peter Vermeij, who was an EPO vice president (in charge of patent administration and other areas of operational support) from 2007 to 2012. I took this picture of Mr. Vermeij adressing the SUEPO crowd (with the microphone):

Mr. Vermeij acknowledged that the ongoing labor conflict at the EPO and the bad press it has already resulted in have (among others) the member states of the European Patent Organisation concerned. He said that the EPO should usually just go about its work and there should be no noise about it. This official concession of concern over negative publicity was interesting.

Mr. Vermeij invited a few staff representatives to his office to discuss the Dutch government's position (also on the human rights issues on which a Dutch court had sided with SUEPO) in private.

Toward the end of the demonstration, a staff representative said, citing a reliable but unnamed source, that a majority of the EPOrg's member states (at a Council meeting last month) was in favor of appointing an independent mediator to help resolve the sitation but EPO president Benoît Battistelli was adamantly opposed to this idea and threatened with his resignation for the event that mediation would have been imposed on him. The crowd ironically cheered.

As I've said several times before, the EPO has structural governance issues that must be addressed, though Mr. Battistelli's leadership style is certainly unpopular with staff. While I don't think Mr. Battistelli's resignation would in and of itself represent a solution, I also don't feel he's unreplaceable. The Administrative Council should have decided to take the mediation route anyway and should simply have accepted his resignation.

The EPO is clearly in crisis.

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Promise of union recognition insufficient to solve conflict at European Patent Office: new protests

By promising (after approximately four decades) formal recognition of EPO staff unions, the Administrative Council of the European Patent Organisation extended an olive branch, presumably due to a combination of political (with some key member states increasingly hesitant to support EPO president Battistelli) and legal (Dutch court decision) dynamics. Last week the kick-off of the "renewed social dialog" took place. According to SUEPO (Staff Union of the European Patent Office, which published a report on the meeting (PDF), "[t]he atmosphere was such that some frank exchanges about the situation in the Office could take place." But staff representatives still appear to be skeptical of whether any meaningful change will result from all of this.

It's clear that formal union recognition won't solve any problem. It can be seen as a gesture of goodwill, and indirectly it could have positive effects if the talks helped build a consensus, but for now there are no signs of the situation actually improving. In the most critical respects it seems to be "business as usual", with certain reforms being implemented at any rate.

It could be that the Administrative Council hoped staff representatives (particularly, but not only, SUEPO) would soften their stance on the actual issues because of the potential benefits to their organizations from formal recognition. Should that have been the plan, it doesn't appear to have worked out: SUEPO organized a march today from one of the EPO's Munich buildings to the Dutch consulate (PDF flyer).

Again, I don't know whether the Administrative Council overestimated the impact of the promise of formal recognition and the invitation to talks, but in any event the representatives of the EPOrg's member states should consider that they are not dealing with "your average trade union" such as in a traditional manufacturing industry, where there may sometimes be a disconnect between union leaders (and their personal interests) and most of the people they speak for. EPO examiners are very educated people who can tell the difference between window dressing and real change.

The day before yesterday SUEPO published another flyer, which explains some key underlying issues (this post continues below the document):

15-04-28 SUEPO Flyer Brave New EPO by Florian Mueller

There are three key things that this flyer explains:

• The stated reasons for certain reform measures are based on the nonsensical notion that the EPO "competes" with the USPTO, JPO, SIPO and other non-European patent offices. If it competes with anyone, it's with national patent offices, but national patent systems control the EPO through the Administrative Council and milk it (through high renewal fees that have an almost 100% gross margin for national patent systems).

• Increased productivity pressures on staff require and inevitable result in a lowering of patentability standards, particularly with a view to the inventive step. Ultimately, this is a very problematic development that can have negative economic effects (except for the EPO and, especially, the national patent systems controlling it).

• While the EPO is highly profitable, with a budget surplus of €364 million in 2014 and a likely higher one in 2015, it still doesn't lower its fees. Instead, the EPO leadership argues that more (not better) patents must be granted. The question of how many patents Europe needs (or, as SUEPO asks now, how many it can tolerate) came up before. SUEPO now also pointso ut that it would be a fallacy to assume that more EPO patents mean more European innovation or growth:

  "Two-thirds of the applications filed at the EPO are not of European origin and thus are more likely to hinder European industry than benefit it. A flood of badly examined patents could affect in particular the small and medium-sized enterprises that cannot afford expensive litigation."

I agree with SUEPO on all of that. There's only one thing that SUEPO has said in connection with today's protest (in a PDF flyer published on SUEPO's website) that I disagree with:

"Last week Mr Battistelli informed us that the Dutch government will join the EPO in its attempt to overturn the judgment in the next instance ('cassation'). If so then the Dutch government makes itself complicit in violating fundamental rights."

(emphasis in original)

In my opinion, the Dutch government is in its right to express its position on the legal question of EPO immunity, and if it agrees with the EPO on this one, then that's legit, even if staff representatives don't like it. I view the Dutch government's role as, practically, an amicus curiae as not objectionable at all, but it should accept the final outcome even if the previous judgment is affirmed, meaning that a final judgment in SUEPO's favor should also be enforced.

Also, the Dutch government should play a more constructive role on the Administrative Council to ensure that EPO staff have certain human rights. In one of the related contexts the IPKat blog pointed out an interesting fact:

"People who work for the World Intellectual Property Organization (WIPO), the Office for Harmonisation in the Internal Market (OHIM) and the Community Plant Variety Office (CPVO), the Benelux Office for Intellectual Property (BOIP) and the good folk whose job it is in the European Commission to make life difficult for us by thinking up new IP policies, must all have the occasional health issue too, and presumably WIPO, OHIM, the CPVO, BOIP and the Commission must have schemes that govern the health and welfare of their own employees -- none of whom, so far as Merpel is aware, have publicly complained about the health provisions that apply to them."

The EPO situation indeed appears to be unique.

I'd also like to point to this IPKat post on a subsequently-withdrawn European Commission statement (a pretty bad propaganda piece) on the proposed fees for the single European patent. I'll talk about this issue on some other occasion. I know there's a lot of unhappiness about this one in industry and in the legal community.

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Administrative Council offers 'formal recognition of the trade unions within the EPO's legal framework'

My hopes for some progress resulting from this week's meeting of the Administrative Council (AC) of the European Patent Organisation (EPOrg), the multinational body that runs the European Patent Office (EPO), haven't been exceeded by much, but I'm not disappointed either. Late on Thursday, a joint statement by the Chairman of the AC (Jesper Kongstad) and the EPO president (Benoît Battistelli) was published.

They promise to "launch new initiatives to restore social peace" and call for a "renewed social dialogue." The statement gets slightly more specific in that the first step could be "the formal recognition of the trade unions within the EPO's legal framework", and they "invite the trade unions of the EPO to a dedicated kick off meeting on 22 April 2015."

I believe SUEPO as a trade union speaks for the EPO staff at large. There's also an Association of the Members of the Boards of Appeal (AMBA) with a new website. It appears to me that AMBA's focus is on specifically judicial issues.

It could be that the EPO's leadership is pursuing a "divide and conquer" strategy so it doesn't have to face a united front of all EPO staff. If that is indeed the strategy, then it remains to be seen whether it will work out.

The announcement suggests that the EPO must now take some action based on the legal framework it has in place or that some amendment to the EPO's rules could be needed. Either way, yesterday's announcement is a diplomatic gesture and everything depends now on how this will be fleshed out. In the most negative scenario, the stakeholders would fail to agree on the terms of "formal recognition" of the trade unions. In the most optimistic one, there would be a new tone and a sense of partnership, which could lead to significant improvement.

Originally, president Battistelli declared himself unwilling to comply with a Dutch court order after the Dutch government ensured the ruling would not be enforced. The appeals court in The Hague had told the EPO to comply with certain rules that are fundamental human rights of employees of any organization in the civilized world. Enforceable or not, that decision has apparently shown to some of the governments of EPOrg member states that something needed to be done. The announcement of a plan to work toward formal recognition of trade unions suggests that the EPO(rg) at least doesn't want to overtly violate workers' rights and hide behind diplomatic immunity, which is always a last resort. So they say they're going to do something that happened in major EPOrg member states like the UK and Germany almost 150 years ago: to formally recognize trade unions. (Granted, EPO employees have always had the right to strike, so the current rules aren't medieval in all respects, but with recent changes that would require a strike to be approved by the president, the right to strike had also been effectively vitiated.)

That said, progress is progress. Better late than never.

There are still some important questions that need an answer. Judicial independence. Checks and balances. Conflicts of interest of AC members. Patent quality. But Rome wasn't built in a day, and staff input can (we'll see whether it actually will) help to arrive at better decisions in all those areas.

[Update] SUEPO has meanwhile reacted with an announcement of another demonstration (details will be communicated next month) and has expressed what I interpret as skepticism regarding the sincerity of the "social dialog" initative:

15 03 27 SUEPO Comments by Florian Mueller

[/Update]

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This week's EPO Administrative Council meeting: revolution unlikely, progress badly needed

The Administrative Council of the European Patent Organisation, which operates the European Patent Office, still has to decide what to do about the (de facto) suspension of an internal judge (a member of a board of appeal, to be precise), an incident that has raised concerns from various sides, including high-profile judges and professional organizations. This is not the only rule-of-law issue the EPO(rg) faces: a ruling by a Dutch appeals court, even though it won't be enforced (at least for now), found the EPO's leadership in conflict with some fundamental human rights. This, in turn, has ever more politicians concerned.

Tomorrow and the day after (Wednesday and Thursday), the Administrative Council (basically the "shareholder assembly") of the EPO will meet. The IPKat blog (or at least one of its authors) has written an open letter to AC members, and I agree with its substance.

The AC will do all that it can to create the appearance of "business as usual," as it tried in December. It will focus on technicalities, which often come in handy as a smokescreen. I doubt that the EPO's president, Benoît Battistelli, will lose any sleep these days over fears he might be ousted. Still, progress is needed (badly, in fact) and there is at least hope (as I also sense in the IP community) that there could be at least some positive development.

A serious shake-up, which is probably inevitable in the mid to long term, would require different political dynamics. Turkeys don't vote for Christmas unless they are forced to. The national government delegates on the AC have reasons for backing Mr. Battistelli's controversial decisions and plans. The EPO is, indirectly, a cash cow for national patent offices (through renewal fees). Germany alone receives about 140 million euros per year in annual renewal fees for the German parts of patents granted by the EPO. National patent offices are given lucrative opportunities in the form of cooperation projects with the EPO, which the president controls. And AC members have frequently been (and some current AC members are rumored to be) given high-level posts at the EPO, where they usually get a much bigger paycheck than at home. More than enough reasons to favor stability over everything else.

So what can get those turkeys to vote for Christmas? Their bosses--the national ministers in charge--would have to order them to vote in certain ways, or there would have to be dynamics that threaten to have that effect (and possibly even worse effects for those who failed to exercise sufficient and responsible oversight). Unfortunately, the ministers have many things on their plate and they, too, want the EPO revenue stream (though they're unlikely to be interested in a VP post at the Office for themselves). But to a far greater extent than the public servants, the ministers will want to avoid bad publicity and critical parliamentary questions.

These past few months have apparently been the worst period in the EPO's history as far as bad publicity and critical parliamentary questions are concerned, apart from occasional debates over patents "on life." The news section of the EPO staff union's website contains links to various articles and official questions asked by members of the European Parliament (such as this document) as well as national parliaments.

For some more aggressive criticism, I recommend this website, which contains fliers written by anonymous EPO employees (thus not affiliated with SUEPO, the EPO staff union).

SUEPO will hold a demonstration tomorrow in Munich in order to draw additional attention to the issues (this post continues below the document):

15 03 23 SUEPO Flier by Florian Mueller

In a recent interview, Mr. Battistelli described the combination of the approach of French unions with German efficiency as a "dangerous cocktail." It's an interesting way to look at this, but those nationalities are found in many other international organizations (European Union, Council of Europe, NATO, and so many others), yet the EPO's labor dispute appears unique. I attribute this in no small part to the fact that some of the other large organizations actually have subscribed to human rights charters. If the European Patent Organisation joined the Council of Europe, as a SUEPO activist demanded at a demonstration I watched last year, EPO employees could take certain matters to the European Court of Human Rights (ECHR). Under the current circumstances, when a court like the one in the Netherlands confirms that even EPO employees have certain human rights, the EPO can use diplomatic immunity as a shield.

It will be interesting to see what comes out of this week's council meeting. Also, I plan to talk about the EPO's fees (the current ones as well as the proposed ones for the single European patent) soon in light of industry concern.

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Pressure mounts on EPO president and administrative council over suspension of patent judge

About a month ago, the Administrative Council of the European Patent Organisation, the international body running the European Patent Office, expressed "concern at an incident unique in the history of [the] EPO" without saying clearly whether this related to the controversial decision by EPO president Battistelli to "suspend" a member of a board of appeal (a judge in all but name) for disciplinary reasons or whatever the suspended judge might have done. I believe that this ambiguity was intended because the Administrative Council needs to keep all options open, as it may ultimately have to oust the president over this scandal. However, I learned later that EPO staff was told the Administrative Council took issue with the alleged misconduct of the suspended judge. The Administrative Council plays a key role in the "reign of terror" that tries to discourage EPO staff, including judges, from fighting for basic human rights and one of the most fundamental values of the civilized world: judicial independence.

If the Administrative Council of the EPO didn't believe that it can get away with things that other political bodies couldn't even dream of committing, the EPO would already have a new president (though, as I said more than once, the real issue here is a structural one) and it would also be unthinkable in other public organizations that a vice president faced with multiple criminal charges (also see this "special report" on criminal charges) could stay in office for this long. All of this shows that something is completely wrong with the Administrative Council itself. Instead of exercising oversight, that body is largely responsible for the banana republic that the EPO has become. Seriously, there is no way that, for example, someone could continue as a vice president of a national antitrust authority, national patent office, or a central bank--except in the Third World--under these circumstances. While everyone is innocent until proven guilty in court (and it's possible that Mr. Topic never committed any wrongdoing that can be proven), a certain amount of smoke is equivalent to fire in a political context. Except, of course, if the decision makers feel they are not going to be held accountable.

According to French financial daily Les Echos, the suspended EPO judge's alleged wrongdoing relates to whatever he may have said about Mr. Topic, viewed by the EPO president as a "defamation campaign." I don't know what exactly the suspended judge said, but this looks like someone merely exercising his freedom of speech. The IPKat blog published a letter from the Intellectual Property Judges' Association (IPJA) to the Administrative Council, and the letter had "near unanimous support" from the IPJA's membership, which means top-notch patent judges from 11 European countries, without any objection or reservation. That letter says about the suspended judge's alleged misconduct: "It is not, as far as we know, suggested that the Member has committed any criminal offence."

The judges call for political action:

"The present events seriously threaten the judicial independence of the Boards of Appeal and by doing that call in question the guarantee of an independent and impartial review of the European Office's decisions by a judicial body. Not tolerating that should be the common interest of all Member States of the European Patent Organisation."

Having watched various political scandals over the years, I consider it a rule of thumb that an affair that results in statements and actions even during the Holiday Season, and that continues with undiminished force after the Holiday Season, tends to result in someone's resignation or ousting. Smaller issues go away and are not carried over into the new year. But the really big issues do survive the Holiday Season.

Even on December 29, at a time when few people are at work, there was a very significant development. EPLAW, the European Patent Lawyers Association, wrote a letter to the members of the Administrative Council expressing concern over judicial independence at the EPO. My favorite part is the seventh paragraph:

EPLAW is of the opinion that [...] judicial independence is guaranteed only when the power to suspend or to remove a judge is with his peers, and not with an executive or administrative body. In this respect Article 11(4) EPC -- which provides the Administrative Council with the power to exercise disciplinary authority over the members of the [boards of appeal] -- falls short.

In the final paragraph, EPLAW therefore "urges the Council to use this opportunity to propose an amendment to Article 11 EPC and in any event to critically review the Guidelines for Investigation [the basis on which the suspension happened] so as to avoid any further concern with respect to the principle of judicial independence at the EPO."

Thanks to the IPKat blog I've become aware of an official response by the UK Government to a member of parliament (liberal democrat Dr. Julian Huppert, from Cambridge) who asked a question about what measures would be taken to ensure judicial independence at the EPO. The answer suggests that the UK government and possibly some other governments do see a need for some improvement:

Officials in the UK Intellectual Property Office are closely and actively involved in discussions relating to the Boards of Appeal of the European Patent Office (EPO), including the Enlarged Board. It is the UK Government position that the Boards of Appeal should be independent of the executive of the EPO, and be seen to be so. This view is shared by other EPO member states and we expect proposals to make this clearer to be considered by the Administrative Council, the Office's supervisory body, in March 2015.

Whether the proposed reforms will go far enough, and whether they will be implemented at all, remains to be seen. I felt last month that there was a crack in the shell, and the UK government's response reaffirms this belief. Let's hope for the best.

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Government delegates express 'concern at an incident unique in the history of EPO': suspension of judge

On its website, the European Patent Office has published a "communiqué" concerning this week's meeting of the Administrative Council (AC) of the European Patent Organisation (the international body running the EPO) that contains a sybilline sentence on the suspension of an EPO-internal judge (member of a board of appeal) for disciplinary reasons. The suspension was widely criticized, including but not limited to a letter by (internal) members of the Enlarged Board of Appeal (EBA) to the AC, a letter by two external EBA members, Lord Justice Floyd and high-ranking Dutch court official Robert van Peursem, which was subsequently endorsed by leading patent judges from six other countries, and an email sent by a German patent litigator to his country's AC member.

The aforementioned sybilline sentence is at the end of a paragraph that says the AC "unanimously decided to suspend [the judge in question] from active duty on full salary until 31 March 2015" and will take further decisions after completion of the investigation:

"The [Administrative] Council expressed its concern at an incident unique in the history of EPO."

If this sentence explicitly mentioned a reprimand of President Battistelli for compromising judicial independence, its meaning and its significance would be clear. However, "an incident unique in the history of the EPO" is vague enough that this could also mean unanimous backing of the executive's action and concern over whatever the suspended judge may have done. That interpretation is less likely to be correct than disagreement with the way the executive leadership handled the matter, but it can't be ruled out completely in light of the unanimous endorsement of the suspension.

Let's take a look at the third paragraph:

"The Council took this opportunity to reiterate its full endorsement of and support for the principle of independence of the members of the Boards of Appeal, as specifically set out in Article 23 EPC and generally embodied in internationally recognised principles of judicial independence."

Article 23 EPC is very clear:

(1) The members of the Enlarged Board of Appeal and of the Boards of Appeal shall be appointed for a term of five years and may not be removed from office during this term, except if there are serious grounds for such removal and if the Administrative Council, on a proposal from the Enlarged Board of Appeal, takes a decision to this effect.

(emphasis obviously added)

Still, what's really missing from the communique is an unequivocal condemnation of the fact that a judge was indeed removed from office without an EBA proposal, let alone a Council decision.

There's a part I don't understand, at least not without further explanation. In the very same communiqué, the Council emphasizes Article 23 EPC and announces a unanimous suspension decision. Article 23(1) allows a removal from office of a judge only "if the Administrative Council, on a proposal from the Enlarged Board of Appeal, takes a decision to this effect." (emphasis added)

The letter from the Enlarged Board of Appeal to the Council, however, contains no indication whatsoever that the EBA proposed such a removal from office. If anything, it suggests the opposite.

The EBA letter refers to other articles, and Art. 10(h) allows the president to propose disciplinary action to the AC, which then decides under Art. 11(4). In this case, the suspension quite apparently occurred before the AC decided. So for the time between the suspension taking effect and the AC endorsing it, it appears to me that the removal from office had no legal basis whatsoever--at least none that I'm aware of.

But if this is all about Articles 10 and 11, why does the AC emphasize Rule 23? The standard under Rule 23 is higher: it takes (besides a factual basis) an EBA proposal and a Council vote, not just a presidential proposal and a Council vote. Is this an attempt to mislead the general public? Or did they just want to avoid any direct references to the article(s) the president violated?

In my opinion, the Rule 23 standard is the right one and even the combination of Articles 10 and 11 is too low a standard. But even that lower standard apparently wasn't met.

Officials have been forced to resign over smaller things than this. But in politics it's not unusual at all that those who appoint someone stand by the appointee for as long as possible, hoping that the storm will subside. If it doesn't, they can still take further action. The AC definitely keeps an important door open. If they want to sack Battistelli, they can do so whenever the investigation has been completed and it turns out that apart from the president acting ultra vires, the alleged misconduct by the suspended judge fell clearly short of anything that would justify a removal from office even if the proper procedures had been followed.

All in all, despite the unanimous endorsement of the suspension and my disappointment over it, I tend to see a significant crack in the shell here. The next few weeks and months will prove decisive. For now, Battistelli remains in office. But for how long is uncertain.

Coverage of this scandal in the general press will also play a key role. I heard that a Munich area center-right newspaper, Münchner Merkur, published an article in yesterday's print edition, entitled "Die letzte Diktatur auf deutschem Boden" ("the sole remaining dictatorship on German soil"). Things can't stay that way forever. The AC's "communiqué" should be interpreted by the IP sector and by innovative companies depending on high-quality patents (I heard from an unofficial source that a compensation scheme with potentially disastrous implications for European patent quality was approved yesterday) as an invitation to push even harder for serious reform. It shows that all these recent efforts, by EPO staff and by others, didn't go unnoticed, but they will one day have been in vain unless there's even more pressure now.

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European Patent Office: examiners fear they won't "be able to ensure appropriate quality standards"

This morning, the EPO-FLIER team, an anonymous group of European Patent Office employees who send independent information to private email addresses of colleagues and are not affiliated with the official staff union (SUEPO), distributed two PDF documents that I thought warranted publication with a view to the meeting of the Administrative Council of the European Patent Organisation on Thursday (December 11).

I've previously reported on the fight of EPO staff for certain rights (at least some of which are considered fundamental and inalienable human rights that require no discussion, let alone strikes or protests, anywhere in democratic Europe except in this context) and a demonstration in Munich last Tuesday. I won't be able to cover this labor conflict in all respects and from all angles, and you can find some interesting information on other sites, such as the World IP Review and the IPKat blog (which also reported on the alleged suspension, without what would be considered due process in European countries, of a judge, which I haven't been able to verify but which would be disconcerting if confirmed). But I've been saying for a long time that patent quality is key, so I'm concerned when I read an open letter from EPO employees warning that "EPO examiners will no longer be able to ensure appropriate quality standards" if a so-called New Career System (NCS) was put in place. Those staff members oppose an "entirely performance-based career proposal" and say it runs counter to core European Union policy positions. For example, the European Commission's Industrial Property Rights Strategy for Europe of 2008 document noted that "[h}igh quality rights are an essential requirement for all aspects of the system – support for business including SMEs, facilitation of knowledge transfer and effective enforcement of rights to combat counterfeiting and piracy."

Here's the open letter to national delegations to the Administrative Council of the EPOrg (this post continues below the document):

EPO Examiners Can No Longer Ensure Appropriate Quality Standards by Florian Mueller

I don't have an opinion on examiners' pay and will never express one, except that these are obviously highly-qualified people (advanced technical education, training in patent law, and at the EPO they must be fluent in three working languages in addition to their native tongue). But regardless of how much these examiners earn, it's one of the most crucial questions of patent policy (in my opinion, at a level with or arguably even more fundamental than such questions as access to injunctive relief, damages theories, bifurcation etc.) whether quality or quantity is incentivized at the examination stage. Therefore, the above open letter warrants consideration.

On a completely nonjudgmental basis (except for opinions I've previously expressed) I'd also like to show you the latest "EPO-FLIER" (again, it's completely unofficial), which is entitled "The spirit of the regulations" and focuses on human rights and rule-of-law/governance questions:

EPO-FLIER 13 - The Spirit of the Regulations by Florian Mueller

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