The huge scandal that the corporate media seemingly refuses to cover
Summary: After Brimelow (shown above), with all her flaws and her scandals, an even worse President is installed who then abolishes oversight and seemingly brings his old friends to the EPO, creating a sort of subculture that is impenetrable to outsiders
THE EPO is no stranger to scandals (including some involving Alison Brimelow, as we noted before). We have covered them for years, but these days we are stunned by the degree of inherent corruption inside the EPO (this is the eighth part among many). The chin drops to the floor when one realises the lack of oversight. With no oversight comes great abuse, as revelations about the CIA and NSA, for example, serve to show.
- 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
Today we would like to tell the much longer story of the EPO’s Audit Committee. “In 2008,” tells us an anonymous source, “possible models for an “Audit Committee” were discussed in the proposal document CA/140/08 presented to the Administrative Council.”
Quoting the relevant document: “The present document follows on from the governance workshop in Ljubljana on 7-8 May 2008, the results of which were summarised in CA/62/08 dated 30.05.08.
One of the priorities emerging from the workshop was “Audit Committee and independence of Internal Audit”. The present document outlines in detail the compelling case for an Audit Committee. Three models are analysed and assessed. The Budget and Finance Committee and the Administrative Council are requested to give their opinion. Thereafter the Office will submit a proposal for the terms of reference of the Audit Committee.”
That was quite a long while back.
CA/140/08, as above, noted the following problems with the existing “Internal Audit” (emphasis added):
B. PROBLEMS RELATED TO INTERNAL AUDIT
a) Independence of IA
22. At the EPO, the internal audit function is separated from operational areas.
IA reports directly to the President and should remain a tool in the hands of the President.
This notwithstanding, an independent mechanism (such as an audit committee) would provide further assurance of the correct functioning of IA, particularly in view of the fact that even at the highest management level situations can occur that call for the independence of IA.
Such an independent mechanism should exist:
• to ensure that IA is equipped with a sufficient budget and resources for the adequate performance of the audit work;
• to prevent any undue limitation of the status of IA within the framework of its audit mission;
• to prevent any unjustified deletion of the proposed audit plan;
• to review the appointment, transfer and dismissal of the head of internal audit and internal auditors;
• to ensure that the supervision of IA does not rely entirely on the President.
As we have shown in previous parts, the President, Battistelli, seems to have gone out of control and is now acting like a tyrant with executive orders, potentially also appointing friends of his for positions of power.
“In June 2009,” explained our source, “the then-EPO President Alison Brimelow (former Director of the UK-IPO) presented the AC with the proposal documents CA/32/09 (“EPO Audit Committee: draft terms of reference”) and CA/33/09 (“Draft decision setting up an Audit Committee”).”
CA/33/09 (available above) proposed the establishment of an Audit Committee as a subsidiary body of the Administrative Council and said:
The present document is based on consultations between the Office and the Board of Auditors and presents a draft decision based on the outlines of the terms of reference for an EPO Audit Committee (cf. CA/32/09) as a subsidiary body of the Administrative Council pursuant to Article 14 of the Rules of Procedure of the Administrative Council of the European Patent Organisation.
CA/33/09 was approved by the AC in June 2009 as decision CA/D9/09.
Now, here is the best bit. At that point in time, Battistelli, Director of the French INPI, was the Chairman of the AC. Yes, no kidding. In July 2010, Battistelli was appointed to succeed Alison Brimelow as EPO President!
In May 2011, in his new role as EPO President he submitted a proposal to the AC to abolish the Audit Committee “for reasons of efficiency”. See CA/55/11, “Disbanding the Audit Committee”, which says: “The present document proposes that the Administrative Council’s June 2009 decision establishing an Audit Committee (CA/D 9/09) be repealed for reasons of efficiency.”
CA/55/11 was approved by the AC in June 2011 as decision CA/D4/11. The decision of the AC to abolish its Audit Committee was appealed by EPO staff representatives (see CA/100/11) and this appeal is currently pending before the Administrative Tribunal of the ILO (ILO-AT) in Geneva.
The letter from the Chairman of the Audit Committee is worth reading. CA/100/11, in pages 13 and 14, states (emphasis added): “The role of the Audit Committee is not an overlap with the internal and external audit but a key component of a balanced auditing and governance structure of the Office as it is in most international organisations.”
What a colossal mess.
A further parallel “thread” to this story concerns the EPO’s external audit mechanism, the so-called “Board of Auditors” which is established under Article 49 EPC. According to Article 49(1) EPC: “The income and expenditure account and a balance sheet of the Organisation shall be examined by auditors whose independence is beyond doubt, appointed by the Administrative Council for a period of five years, which shall be renewable or extensible.”
Again, what an utter joke!
The most-recently appointed member of the EPO’s three-man “Board of Auditors” is Mr. Frederic Angermann.
To quote this page from the EPO (under Munich, 13 December 2013, the 138th meeting of the Administrative Council of the European Patent Organisation):
The Council appointed Frédéric Angermann, Senior Auditor at the French Court of Auditors, as member of the Board of Auditors, with effect from 1 January 2014. Mr Angermann will succeed Michel Camoin, to whom the Council paid tribute.
Under the heading Legal and International Affairs, the Council heard the status report on latest developments concerning the Unitary patent, given by the Head of the Lithuanian delegation, representing the country holding the EU presidency for the second half of 2013. The chairman of the Select Committee (set up by the 25 EPC contracting states participating in the enhanced co-operation on unitary patent protection to supervise the EPO’s activities related to the tasks entrusted to it in the context of unitary protection) reported then on the committee’s 5th and 6th meetings (see Communiqué on the 6th meeting of the Select Committee, to be published shortly on this website). The Council thereby noted that a number of EPC contracting states not taking part in the enhanced co-operation had been granted observer status on the Select Committee. Other EPC contracting states not taking part in the enhanced co-operation will henceforth also be automatically granted observer status upon request.
What the EPO communique doesn’t tell us is that Angermann was previously a senior official at the French INPI. Battistelli must know him. This cannot be treated as merely a coincidence. In other words, he previously worked under Battistelli who was the Director of the French INPI, just prior to his EPO appointment.
Now refer back to Article 49(1) EPC: “auditors whose independence is beyond doubt”
Everyone can see the problem here. It doesn’t take a genius to see that Battistelli may be bringing in cronies.
In summary, the Audit Committee which was established in 2009 as an independent subsidiary body of the EPO’s Administrative Council (and thus independent from the EPO President) was subsequently abolished in 2011 “for reasons of efficiency” (by Battistelli) after barely two years of existence.
The Audit Committee was established by the AC under Battistelli’s chairmanship of that body and the proposal for abolition came from Battistelli in his new role as EPO President (where he would have been subject to the oversight of the Audit Committee).
The consequence of this abolition was to return to the “status quo” prior to CA/140/08: Internal Audit at the EPO is once again completely under the control of the EPO President (i.e. in the hands of one person).
Apart from this, one of the EPO’s external auditors appointed under Article 49 EPC has a previous close professional connection to Battistelli.
All of this indicates that there is no effective independent internal audit mechanism at the EPO. Battistelli killed it.
Furthermore, the integrity of the external audit mechanism under Article 49 EPC has been compromised by Battistelli’s cronyism.
When you consider that the annual budget of the organisation is around 2 billion euros, that should be a cause for public concern. There is no excess of money in Europe right now (Britain is furious this month over demands for a payment of an extra £1.7 billion to the EU) while staff at the EPO is grossly overpaid with virtually no oversight, as we showed in previous parts and demonstrated with strong exhibits of authority.
As readers can see, especially if they follow European media, this is another story that the mainstream media has completely ignored. Unbelievable perhaps, but more likely there is fear of covering it, if not some certain complicity (depending on the media owners).
Once again, German journalists have been fully informed about these matters but haven’t written a single line about them despite the fact that according to the German Press Codex
[PDF], “accurate informing of the public” is supposed to be one of the overriding principles of the Press (see preamble to Section 1). Perhaps the German media is preoccupied with other agenda. █