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09.22.14

European Patent Office/Organisation – Suspicion of Improper Collusion Between EPO President and Chairman of the Administrative Council: Part III

Posted in Europe, Fraud, Patents at 10:50 am by Dr. Roy Schestowitz

Inner circle of Battistelli

Inner circle of Battistelli [PDF]

Summary: A preliminary look at Battistelli’s reign and how regulatory powers got abolished, leaving the EPO reckless and largely unaccountable

THIS is our third (hopefully among many) outline of EPO abuses. It’s the third instalment in a multi-part series about the European Patent Organisation/Office, which is rotten to its core. EPO — like Google — has enjoyed positive public perception for too long. It’s time to shatter the myths of professionalism and innovation.

Having studied dozens of documents and articles about this topic (usually translations because the English-speaking press mostly overlooks these issues), we are shocked to see just to what extent the EPO engages in dirty tactics, conflicts of interest, and revolving doors. It’s no better than the FCC or CAFC.

Readers who saw the first Techrights article on this topic (focusing on Topić’s appointment) sent us some valuable feedback. Alex Weir, for example, told us: “I read with interest your piece on corruption in the EPO, from my personal experience there have been questions regarding the EPO and corruption in relation to EC contracts and relations with China since the late 1990s, I am sure if you dig you will come up with more evidence.”

Today’s article focuses on Battistelli, the EPO’s President. As we keep getting sent more dirt about the EPO it is hard to say just how many future articles will revolve around his own scandals, which are unique because they show how abuses can go all the way up to the top (EPO President is the highest position).

One person told us on Diaspora that “Richard Stallman has said that the EPO is corrupt a few times, before this man [Topić] was put in charge.

“Thanks for bring up the issue.

“It seems to be the fault of the European Commission,” he added, citing this as an example. Quoting Stallman: “The EU administrators said they would let each country decide whether to allow genetically modified crops, but the proposed implementation is a trap. It has legal flaws, so these one-country bans might then be overturned.

“It is not unusual for the European Commission to make treacherous proposals. For instance, the “computer-related inventions” directive was written so it would appear to rule out software patents, but in fact would have authorized them. ”

“He wrote a lot about the EC’s nasty trick at the time,” said the person about Stallman. We too covered it for years, in video form also. The EPO derives its power from an administration which in its own right is relatively immature (like the Union) and ripe for abuse.

So let’s take a look at what Battistelli is not so well known for.

“Here is a link to an interview with Mr. Paul Ernst,” said our source, “who was a member of the (now abolished) EPO Audit Committee.

“His comments on the function of the Audit Committee and its abolition may be of interest.”

Here for example (with emphasis added) is what he said about the Audit Committee:

The dissolution of the Audit Committee at EPO was justified with the argument that the Audit Committee’s tasks are already carried out by Internal Audit and the Board of Auditors (BOA). What is your view on this?

Paul Ernst: The reasoning behind the decision reveals a lamentable ignorance of the fundamental role of an Audit Committee.
The Audit Committee can be seen as an answer to the famous question „who audits the auditor?“
The Audit Committee reports directly to the Administrative Council, whereas Internal Audit reports to the President and has no right to address the Administrative Council directly.
The Audit Committee protects the independence of both audit functions and observes the coordination between Internal Audit and External Audit, and the follow-up given to audit recommendations.

The Audit Committee should also raise its voice if a significant conflict of interest is discovered, e.g. a close relationship between a member of the BOA or the Internal Auditor or the Chair of the governing body and the chief executive.
There is no other institution that plays a similar role. These are significant differences that demonstrate that the Audit Committee does not duplicate the work of the Internal Auditor nor the Board of Auditors.

“Note,” said our source about Battistelli, quoting the following part: “The Audit Committee should also raise its voice if a significant conflict of interest is discovered, e.g. a close relationship between a member of the BOA or the Internal Auditor or the Chair of the governing body and the chief executive.”

“This is precisely the situation that exists between Battistelli (chief executive) and Angermann (member of the BOA),” explains our source. “However, as there is no longer any independent Audit Committee, it cannot raise its voice in the matter … how convenient for Battistelli.

“The problems of EPO governance arising from the abolition of the Audit Committee have been noted by the French Senator Jean-Yves Leconte in an open letter which he sent to French Ministers earlier this year.”

To quote: “En supprimant de facto l’indépendance de l’audit externe des comptes (budget de l’organisation 2 000 M€) la transparence sur les évolutions de l’OEB ne sera plus de mise. Et ceci sera aggravé par l’absence de contrôle interne crédible lié à l’évolution des relations internes à l’institution” (full text of the letter is available in French).

“The point to note here,” says our source, “is that the French Government is fully informed about the various problems at the EPO but it nevertheless supported Battistelli’s re-appointment in June of this year.”

Nationalism first.

“The problems with the EPO’s audit mechanisms were mentioned briefly in a report by WIPR in June of this year,” said our source, pointing us at the article “EPO staff in Battistelli fight”. The article states: “Staff have also claimed that the “overall governance” structure has been weakened by the audit committee being abolished without the administrative council knowing, and that Battistelli has put a “previous collaborator” from the French Patent Office in the “key post” of external auditor.”

Full details of this were made available to us in the form of copies of the Administrative Council documents referred to above (for readers’ information and for future reference).

“These documents are not classified as confidential so in principle they can be made publicly available,” explained our source.

The documents are as follows:

  • CA-140-08-EN – 2008 – Audit Committee: possible models
  • CA-32-09-EN – 2009 – EPO Audit Committee: draft terms of reference
  • CA-33-09-EN – 2009 – Draft decision setting up an Audit Committee
  • CA-D9-09-EN – 2009 – Establishing an Audit Committee of the Administrative Council
  • CA-100-11-EN – 2011 – Internal appeal against CA/D 4/11
  • CA-D4-11-EN – 2011 – Decision of the Administrative Council
  • CA-55-11-EN – 2011 – Disbanding the Audit Committee

Notice the trend based on the chronology. Audit no more!

Next week we are going to show the ‘special relationship’ between Battistelli, the notorious Topić (known for corruption in his home coutry), and other administrative elements that seemingly collude to keep themselves and their networks in power, feeding off the European economy to do a disservice to Europe. In parts 4 and 5 we are going to shed more light on how the EPO was captured by hawks and wolves — people who should have never acquired such positions of power where they exploit a public institution for power and greed.

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