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02.15.15

English Translation of Article About Protest at Danish Consulate Over EPO Abuses

Posted in Europe, Patents at 9:47 am by Dr. Roy Schestowitz

Danish flag

Summary: The Danish protest which targeted Jesper Kongstad helps shed light on what’s really going on at the European Patent Office (EPO)

OUR coverage of a recent article from the Danish newspaper Jyllands-Posten kindly asked for Danish-speaking readers to provide us with an accurate translation. We are glad to say that we now have it. The article is clear and detailed; it attempts to be balanced by letting the accused talk as well.

29.01.2015

[English translation]

War rages at the European Patent Office

Conflict: Accusations of autocratic power, breach of the rule of law, and suppression of the staff union are circulating in the large organization which employs 7000 people and deals with patents for the whole of Europe

Close to the Isar river in Munich is the headquarters of an organisation in which many of the 7000 employees earn more than 1 million DKK per year and pay around 6 % tax on their income.

An organisation which is protected by immunity and to whose buildings the local authorities do not have access.

An organisation which examines and grants patents for billions, irrespective of the currency, and which decides whether a company is to be granted a monopoly on its inventions in as many as 38 European countries.

Welcome to the European Patent Office (EPO).

And welcome to the battlefield.

This organisation, which plays a decisive role in ensuring that innovation pays off is plagued by massive controversy including complaints from European judges and from its staff who have declared their lack of confidence in the President. Add to that the abolition of an independent Audit Committee and a demonstration against the Dane Jesper Kongstad, the Chairman of the governing body, because he is not doing anything to solve the organisation’s problems.

The EPO has a budget of around 2 billion Euros and is the second largest European organisation after the European Union (EU). The EPO is not part of the EU.

French President

This intergovernmental organisation is managed by its President, the Frenchman Benoît Battistelli, who – according to his critics – is behaving like an autocrat by employing former French colleagues in key positions and by introducing new strike regulations etc. which weaken the EPO’s staff union, SUEPO.

Until now, the conflict at the EPO has not been covered in the Danish media. Perhaps because the subject of patents in the 21st. Century is a hypertechnical issue or because no politicians are directly involved in the administration of the Organization.

The Administrative Council is composed of Civil Servants. The Chairman of the Council is the Dane, Jesper Kongstad, who is also the Director of the Danish Patent and Trademark Office in Copenhagen.

The EPO has existed for around 40 years and has 38 Member States. If an inventor has been granted a patent for an invention at the EPO, it can be validated in practically the whole of Europe allowing monopoly rights to be obtained in one of the world’s biggest marketplaces.

Around a third of the 273 000 applications in 2014 originated from European companies, the rest originating mainly from USA, Japan and Korea. Around 1500 – 2000 applications are filed annually by Danish companies.

If there are differences in opinion about patentability, the matter can be referred to a Board of Appeal. Before Christmas, a furore arose in the patent world, when Mr Battistelli decided to suspend a judge from the Board of Appeal and banned him from the EPO premises.

According to his critics, Mr. Battistelli lacks the competence to suspend a judge who must be independent and must be in a position to judge the appeals against the decisions of Mr Battistelli’s Office.

Mr Battistelli explains that the suspension is a temporary measure.

However, this has not put an end to the criticism.

The Office has not explained what exactly the reason for the judge’s suspension was, but in many blogs and specialized media covering the patent world, there is speculation that the judge is accused of personal defamation against one of Mr Battistelli’s “allies”, the Croat Željko Topić, who bears the title of Vice-President and who is not universally popular in his home country.

Amongst other things, Juris Protecta, a Croatian NGO for the promotion of the rule of law, has written to the EPO that Mr Topić’s career in the 1990s was based on his connections to the then government [of the former Prime Minister Ivo Sanader who was convicted of corruption charges by a Croatian court in 2012].

Audit Committee abolished

According to his critics, Mr Battistelli’s autocratic tendency is exemplified by the manner in which he abolished an Audit Committee only one year after it had been established. During its short lifetime, the Committee mentioned that it was “surprised” that the Internal Audit should not monitor the construction phase of a new building, but only perform an audit upon its completion.

The Committee also pointed to the necessity of a whistleblower protection regulation. One of its members, Paul Ernst, mentioned that the lack of anti-corruption rules in the EPO constituted a non-neglible risk.

After the Audit Committee had been abolished, the Chairman of the Internal Audit Department was removed from his position. According to the Staff Union, SUEPO, this would not have been possible if the Audit Committee had still been in place.

After the Audit Committee had been abandoned, an External Audit board remained in place.

In its 2013 report, the External Auditors mentioned that the EPO’s travel rules prevented the use of low-price air companies. In the same report the Auditors mentioned that National Tax Authorities have taxed compensations paid to retired employees who pay tax on their pensions.

According to the EPO, such compensations should not be subject to national tax.

Conflict with staff

By no means the least of the problems is the conflict with the staff at the EPO headquarters in Munich and at the large branch office in The Hague as well as a few smaller sub-offices. The driving force behind the conflict is the Staff Union, SUEPO. SUEPO has officially declared its lack of confidence in Mr Battistelli and last year before the Danish referendum on the European Patent Court, SUEPO wrote to the Danish Minister for Business and Growth, Henrik Sass Larsen, in order to explain that Mr Batistellli’s behaviour had caused the worst crisis in the history of the EPO.

“As President of the EPO, Mr.Battistelli has introduced a dubious style of leadership, which can be characterized as authoritarian and without respect for rights, which are guaranteed, fundamental rights in democratic countries such as Denmark.” stated the letter which continued:

“All of this has happened before the eyes of the Danish delegation in the Administrative Council and its Chairman Jesper Kongstad who has continuously supported Mr Battistelli.” Mr Sass-Larsen never responded to the letter. He also did not wish to comment to Jyllands-Posten.

Jesper Kongstad’s support of Mr. Battistelli was the reason that a SUEPO demonstration last week chose the Danish Consulate in Munich as its target.

SUEPO criticizes many things. The rules of the Investigation Unit, which is an internal investigative department, demand that the employee must cooperate and that the investigated employee cannot bring his or her own lawyer to the hearings. Moreover, the employee does not have the right to remain silent and therefore must incriminate himself.

The EPO explains that the rules for the Investigation Unit are intended to provide a smooth procedure and replies that the employees are not required to incriminate themselves. In the eyes of the EPO management, the employees must act in good faith and with the highest level of integrity.

The EPO employees also feel that their privacy rights are not respected when they are required to remain at their private address at certain time intervals when they are on sick leave because the EPO can send its medical doctors to test whether the employees are really sick.

In addition, Mr.Battistelli has introduced new strike rules which mean that the staff union must request the management to organize the ballot among the employees on whether or notstrike should take place. Mr. Battistelli also determines the percentage of yes votes requiredorder that a strike is permitted and he has introduced restrictions on the maximum length the strike.

The employees have not complained about the salary and employment conditions which are attractive at the EPO.

The substantive examiners, who are practically all specialized scientists and must be capable of working in English, German and French, have a monthly basic salary between 5000 and 15000 Euro.

The only tax is an internal tax of 6% and the employees can retire at 50 years of age atreduced pension and at 60 years of age with full pension which is at most 70% of the last basic salary. If they live in a country in which the pension is taxed, a part of the tax payment is reimbursed.

Nobody wants to speak

No EPO employees want to be quoted by name because they are afraid of being punished, they say. It is also not possible to obtain comments from SUEPO, but the Staff Union has issued a number of communiqués in which it states that the conflict is not about employment conditions, but about the lack of fundamental rights for employees at the EPO.

According to Christian Lyhne Ibsen, who works at the University of Copenhagen as a researcher in Labour Market issues, the introduction of restrictions of strike rights is not excluded in the normal job market and has shown good effects for the employers in many instances.

“In both Great Britain and the USA, it has been observed that regulations, which limit the right to strike, have been very effective because they weaken the resistance of the employees”, he says.

Professor at the University of Roskilde and labour market expert, Bent Greve, considers that from a general point of view the situation at the EPO is extraordinary due to the strike regulations, medical examinations at home and lack of freedom of speech.

For instance, employees may take part in a protest march and express their opinion on banners and fliers, but on the other hand they may not have contact with media. The employees must show the highest level of integrity but may not harm the EPO’s image or interests.

Bent Greve explains that employees in other organisations may generally express their opinion about working conditions as long as they do not speak on behalf of the organisation. The restrictions at the EPO therefore are much stricter than normal.

According to Jesper Kongstad, the reforms at the EPO were necessary because the Staff Union had become so powerful that it was effectively “running the show”.

He adds that all of the changes in the employment conditions have been approved by the Administrative Council, i.e. the Member States, with at least a three-quarters majority. After approval the changes are implemented by the President.

According to Jesper Kongstad, sick leave had been out of control. Employees would report sick and there was no reaction from the Office. It was a “self-service buffet” for the employees. Sometimes the administration did not know where people were on sick leave. This was not an appropriate way to manage things when the public sector was under pressure in the whole of Europe following the financial crisis.

To the great dismay of SUEPO, Mr Battistelli was re-elected for another three years so that his presidency will last until 2018. This has caused the conflict to escalate even further. However, according to Jesper Kongstad, the customers have not been affected yet. He adds that so far the opposite has been the case. A majority of the employees support the Organisation and its management and the productivity has never been higher.

Impossible to satisfy everybody

In a written response to Jyllands-Posten, the President Mr Battistelli states that it is not possible to make everybody happy.

“If I tried to please everybody, I would never be able to decide anything.”

Mr Battistelli explains that he has been given a mandate to implement changes to the working conditions.

“Despite dialogue and discussions, SUEPO has not been willing to go along with the agenda but instead has tried to hold on to its acquired rights”, Mr.Battistelli says and adds: “At some point in time, you just have to make a decision and move on.”

The British Consulate is next, so perhaps we shall see many articles published directly in English, serving to highlight the gripes of EPO staff and the notorious background of EPO management (reportedly, based on comments, now escorted by bodyguards). These people are criticised for corruption, not just the existing misconduct that is self-evident.

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