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04.10.17

These Terrifying Comments From Patent Practitioners Suggest They Too Believe UPC is Intended to Make EPO Virtually Obsolete

Posted in Europe, Patents at 7:20 pm by Dr. Roy Schestowitz

Filing centre (de facto registration), not a patent examination office… as we had warned for years, even before SUEPO did

“When asked by Ars, the EPO’s spokesperson mentioned the imminent arrival of the unitary patent system as an important reason for revising the EPO’s internal rules…”

Dr. Glyn Moody

Summary: EPO stakeholders too believe that the EPO is heading towards a collapse, whereupon they press for action although it may be too late (the crisis is deep and many EPs have been granted in error)

TEAM UPC is a truly dangerous bunch. It is pushing the same agenda as Battistelli — to the point where earlier today we joked that if IP Kat does yet another UPC lobbying piece (lots of that recently), then we can call it “Katistelli”.

Some of the biggest forces behind the UPC have just promoted their own people’s actions (the so-called Committee which is actually wolves guarding sheep). “The UPC Prep Committee has published the latest draft Rules of Procedure for the Unified Patent Court,” one of them said and Kluwer Patent Blog joined in, spurring the following new comment on it:

Kluwer Patent Blog; new RoP UPC:

New blog post about the UPC Rules of Procedure.
The new draft ‘is yet to come under scrutiny by the European Commission on the compatibility of the Rules of Procedure with Union law´…
Really, all allegations that the UPC is not a EU legal construction are difficult to believe when reading that the Preparatory Committee is running its provisional papers along the European Commission for approval.

Yes, these people get paid for improving all they can before the start of the UPC, but they must feel like riding a dead horse. With the BrExit running, their work looks like it’ll never be used…

More interesting comments, however, are coming out of this series from Thorsten Bausch (also at Kluwer Patent Blog), whose latest and last part has attracted some truly nuclear comments about the UPC. We believe that every EPO employee must read these to better understand what is going on at the EPO these days. Comments are copyrighted but assigned to their posters (typically anonymous), so we have decided to reproduce them below with emphasis added:

Readers I offer two possible explanations, A and B, for the bizarre behaviour of the EPO President.

A: in the interests of the Paris-based UPC getting a flying start, he wants to disable Munich-based DG3.

B: Currently, the Americans are re-stocking the numbers of judges at the USPTO, with staggeringly large numbers involved. But an Enarque can show the Americans what business efficiency looks like, and BB is the man to do it. Every time there is a meeting of the Group of 5, the bosses of the world’s 5 biggest Patent Office, BB is there with ever more impressive statistics to show the other four how, but only during his watch, the EPO has squeezed more output out of the Organisation, with ever higher “quality” and at the same time, ever-reduced costs.

Is there anything in explanations A or B?

Here is a response to that:

To me it is more option A which is valid (80%), whereby option B is not to be neglected as it pushes the ego of mr president ever higher.

In any case it is disgusting to transform a well working and reputable institution in a work floor churning out patents in a form and in a way which is not desirable for its users.

EPO looks more and more to industry as it was known in the former Eastern European countries! Ignore what the customer desires, but adhere to the plan as strictly as possible. We all know were planned economy led to.

I do not wish the EPO to end up in a disaster, but with the present management it will sadly end up in a disaster.

A good friend of the Boards wrote:

It is an absolute disgrace that the backlog in appeals has, by the own figures published by the Boards, increased. The reason is due to a chronical understaffing of the Boards. This chronical understaffing is a deliberate action of the president by not presenting to the administrative council new members and chairpersons in order to replace those leaving. Even the renewal of actual members was put on hold….

Here, like in DG1, emphasis is made on quantity and not on quality. For the president the members of the boards are simply too lazy and need a good push. Have you seen in any country the judges being obliged to give a minimum number of decisions per year in order to retain their job? This is what will happen with the new rules for renewing the contract for members.

The carrier of member of the boards has also been made unattractive, as there is no salary increase in the five years of a contract. A renewed contract will only be granted, and a corresponding increase in salary given, if the performance of the member has been considered “adequate”, not to use a worse word.

I fully agree that the sending of the Boards to Haar will not improve the situation in the slightest. On the contrary it will degrade it. The reason is very simple: the building is too small since it does not have enough rooms for the Boards to hold oral proceedings on the premises. Especially the number of rooms with simultaneous interpretation is anything but commensurate with the needs. So the boards will have to come back to the Isar building in order to hold their oral proceedings. Where is the gain in efficiency?

By now it should abundantly clear that all the actions against the boards and especially the sending of the boards to Haar is a nothing more than a revenge of the president over the boards. The enlarged board has not accepted to simply dismiss a member of the boards as the president wished. It has not accepted that the president has simply disregarded the separation of powers. This is however a basic requirement of any properly working society, which is not governed by an autocratic leader.

In this respect the administrative council, at least some members of it, have been truly accomplices of the president’s endeavour. When one looks at the vote in the administrative council, it is a majority of countries filing hardly any European applications, and hence having hardly refusals or oppositions, which made it possible to take the decision to change the carriers of the members and on top of it to send the boards to Haar. One wonders why?

That some boards apply the rules of procedure, or remit under Art 111, in way which allows to raise eyebrows, has however also to be said. But they are in a similar position as the examiners, and their position can be understood.

That in any system, a judicial institution is not in a situation to cover its costs, should not be taken against the boards of appeal of the EPO. The idea of simply increasing the appeal fee to ludicrous levels is also an attack on the users of the system. If the fee is too high, then the number of appeals will decrease. Is this rendering justice?

The boards of appeal are not any longer allowed to decide on their rules of procedure. The rules of procedure can only be adopted by the administrative council after the Boards of Appeal committee (comprising no members of the boards) has approved them and the President of the EPO had an opportunity to comment……. The only body in which members of the boards are represented is the presidium of the boards, and this body merely advises the President of the Boards of Appeal on proposals for amendments to the Rules of Procedure. Is there more to say?

I can only encourage readers of this blog to have a good look at the changes of the structure of the boards. On the paper, they look more independent, but on reality the contrary is true.

In my opinion the whole attack on the boards, is part of a long strategy. It is to weaken them so that in the long run everything will be dealt with by the UPC. Examination will consist in a quick look at prior art, followed by a quick grant, and any dispute afterwards will come before the UPC. The boards of appeal having more or less disappeared, there will also not be any risks of conflicting case law. Is this not wonderful?

By acting like this the president of the EPO and its followers are not only cutting the branch on which the staff of the EPO is sitting, members of the boards included, they also cut their own branch, and more worrying, they are cutting the branch on which the whole profession is sitting, at least as far as prosecution is concerned. Those firms also doing litigation will suffer much less. And look at the firms who have pushed the UPC through. No surprise…..

A sceptical one writes:

Of course, another way to help reduce the rate of growth of the backlog would be to improve the quality of decision-making at first instance. I don’t mean the EPO’s much-trumpeted “quality” ratings, but *real*, high-quality decision making. Speak to any attorney in private practice and you will find anecdotes by the bucketload confirming the increasing frequency of rushed, slapdash search and examination reports, incomprehensible or unreasoned objections, and opposition decisions taken by evidently inexperienced Opposition Divisions. I have the utmost respect for the EPO examiners and know that they are capable of doing a very thorough job, but it seems that the current focus on conflating speed with quality is severely detrimental to the real quality of work. Bad decisions lead to more appeals: it is as simple as that.

I am sceptical about the rumours that the Boards are being deliberately downgraded to pave the way for the UPC, however. For inter-partes proceedings the UPC can indeed, in principle, take the place of the boards. But the UPC will not have jurisdiction to review ex parte cases in the event of unjustified refusal of a patent application.

In response to that, notice what is said (honestly) about SMEs:

I agree with you about the fact that ex-parte procedures might be reviewed by the boards which cannot be the case of the UPC. But then, it should remain accessible also from a financial point of view.

Why should the appeal fee steadily grow up to a few thousand € just because some manager has decided that the boards should be self-sustaining? In no contracting state of the EPC the judicial authorities are self-sustaining. On top of a high appeal fee, there are also the costs for a representative.

It can become rapidly prohibitive for a SME, but no, the whole system is to help the SMEs, isn’t it?

Here is a very important observation by “Observer”:

‘Appointments’ this time was actually a single external legal member (MC?) appointed to the EBoA. All others announced were re-appointments.

Thorsten Bausch himself was stunned by this, as apparently he was not aware; he had been misled by the Liar in Chief. He then wrote:

Whow. What a big disappointment. So if this true, even the language of the communiqué (“The Council made a number of appointments (…) to the Boards of Appeal”) is wrong and misleading. I would really like to know what is going on in this “Administrative Council” and why they do not care more about a functional European Patent Office.

The UPC will clearly not be a solution to this problem. Firstly, it will be unaffordable for and has not been designed to serve the interests of SME. Secondly, the territorial scope of its decisions will not nearly match the territorial scope of an EPO decision, which covers all EU members without exception in addition to several important non-EU member states (Turkey, Switzerland, Norway to name but a few).
Why do the AC members of at least these states not stand up and protest against the President’s inactivity?

Thirdly, if the UPC had to deal with more than 1000 new cases per year, as the BoA currently have to, the entire system would very quickly break down completely. We cannot allow this to happen.

Then it veers off in another direction:

Slarti thinks that top quality decisions at first instance (ED or OD) will take the pressure of cases off DG3. I disagree.

However good the decision at first instance, whenever the case is important the loser will appeal (and then perhaps try harder to settle with the other side). No way is there going to be any diminution of the flow of new cases to DG3.

In England only one in three losers appeal though. How can that be? I say it is for reasons that don’t apply in civil law jurisdictions like mainland Europe.

What are those reasons. Fact-finding under English law is not usually appealable. With judges at first instance who do not get the law wrong, and with the facts not alterable on appeal, it is pointless. In addition, it’s horrible expensive.

And watch the response:

With respect, Max, I disagree to some extent.

Let me say at the outset that I completely agree that the understaffing and excess pressure on the Boards is nothing short of a complete scandal and it is both baffling and concerning that the AC continues to tolerate this.

However, let’s take as a proposition that many European patent applications are being (erroneously) refused due to undue pressure on the Examining Division leading them to cut corners and fail to consider applications properly. I’ve had several where I’ve been through a frustrating round of prosecution where the Ex.Div. simply keeps reiterating old objections without telling me why they disagree with my counterarguments. In such cases a final refusal can be expected and the only way to get the case looked at properly is by filing an appeal. If the pressure on the Ex.Div. and the “managerialism-by-numbers, high turnover equals high quality” is dropped, fewer applications will be wrongfully refused and so there will be no need to appeal against such refusals.

Finally, there’s this:

Slarti, you say nothing about oral proceedings before the ED. Some say that this is the first time that the work of the First Member gets scrutinised properly. Engage with all three ED members? Does that ever work?

But I am inclined to agree with you, that management these days in DG1 thinks that efficiency dictates making the decision (allow or refuse) early, indeed when issuing the EESR. Then, if it is to be a refusal, one should get the case out of DG1 and onto DG3’s docket as soon as possible

“Michel” said this, in the absence of criticism from stakeholders until it was too late to salvage the EPO:

You are perfectly right, but your complaints come much too late. Why did you not put pressure on the German representative before the vote? Germany did not vote against this disaster, did they? And, incidentally, why did epi not protest at all?

Unbelievable as this may seem, whenever I discuss with German attorneys, they appear to discover that there might be a problem. Is the whole profession asleep? You get what you deserve.

They too recognise that this system is rotting if not collapsing. Who would suffer as a result? It’s almost a rhetorical question. This is why we spent so much time covering these scandals.

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8 Comments

  1. john said,

    April 11, 2017 at 4:06 am

    Gravatar

    A slight tangent here.

    You know that Minnoye retires as vice-president. You may also know he will not be replaced by a new vice-president, but with a different structure. The structure puts in place 3 “chief operation officers” in place of the vice-president. This is official.

    (The less official parts is that the present management structure will be dismantled. Directors are sent back to examining and Principal directors will be essentially powerless. The COO are recruited from outside.)

    Battistelli did not ask the Council their opinion. He said they are only entitled to elect the vice-president, but since there is none, he does as he pleases. That is the way he is running the office. Do you think he will be stopped by applicant’s opinion about the UPC?

    Dr. Roy Schestowitz Reply:

    He is violating the EPC again. Applicants need to organise and consider a boycott or some other form of sanctions.

    john Reply:

    He is acting as if the EPO and the EPC with it are dead. And maybe they are. It is now a pure question of power. Let me explain.

    Just check: the 3 new COO will be replacing the vice-president this summer. The Council did not object in their last meeting and now it is a “fait accompli”: the tender to hire them is out and the council can do nothing until their next meeting in June, when it will be too late anyway. In June, they won’t have the time to replace Minnoye by another vice-president any more.

    The council was told in March, that this change was a temporary measure and that it is better to elect the new vice-president with the new president. The council thinks that Battistelli will step down in 2018. Of course he won’t.

    Except that the COO will be on a 5-years contract, which is not “a temporary measure” at all.

    There is a system in Battistelli’s strategy. As I know a bit about what is taught at ENA, I can say that this system is exactly what is taught there. Going from fait accompli to fait accompli is telling.

    What I can also say, unfortunately, is that nobody at present has enough power to stop Battistelli. And power is the only think which is important at this point: the EPC or whatever law you want to apply does not count, as Battistelli does not respect it in complete impunity. The lobbying efforts of techrights, ipkat (nice people there, contrary to what you believe), or Kluver are wasted, since the readers do not have the power to force Battistelli to do anything. Suepo and any semblance of trade union are out of the game. The efforts of the council are blocked by a minority. What is there left?

    I wish I had a better idea how to stop this systematic dismantling of the EPO, but I am at loss as to what to do.

    Dr. Roy Schestowitz Reply:

    I still think that collective action by the applicants is necessary now. They are, after all, what keeps feeding this monstrosity, which enjoys a monopoly it no longer deserves.

    john Reply:

    I forgot: about a boycott from the applicants. That won’t work. Think fait accompli again.

    The UPC will happen. Without the UK because of Brexit, but nevertheless. It does not matter than the UPC is not good for SME, they are not part of the decision process so that they are, in effect, powerless. When Germany and Spain will be presented with the fait accompli they will face a simple alternative: ratify or don’t have a patent system at all (and maybe destroy the EU in the process). Not palatable, as an alternative.

    The applicants face the following alternative: apply for patents or don’t. But the one kind of applicants who will continue to apply en masse are the patent trolls. Practicing entities will need more patents than ever to defend themselves, here again: no real alternative.

    Next on the line will be the attorneys. With the examiners out of the picture, they are the only ones left in the picture. The obvious solution to crush any resistance from them will be to change the requirements under which the new Patent system accepts to register them as european patent attorneys. I would expect that to change in the near future as well.

    Dr. Roy Schestowitz Reply:

    Applying for patents would not protect anyone from patent trolls, so either way, we need to highlight the issues associated with the UPC, the issues with low patent quality, etc. We should not accept the UPC as inevitable, either. I’ve fought many battles over the years and one thing I’ve learned is that induced or learned helplessness (or defeatism) is the most powerful weapon of our idealogical rivals.

    john Reply:

    I am not a defeatist. I am convinced that Battistelli can be stopped. I just have not found how yet.
    I am not a defeatist when I point out the ways which have been tried for the past years and which are effectively blocked. For example, there is little use in pointing out that Battistelli does not respect the EPC, because the EPC has effectively been rendered irrelevant in recent times.
    OTOH, the main weakness I see in Battistelli is that his strategy is becoming clearer. We now have a pretty good idea of what is in store for the EPO in the next two years. Replacing the vice-president by 3 chosen COO is a telling move. That, and the fact that examiners will run out of files within 2 years. And you could also ask how many DG3 members are near the age of retirement, Haar may be bigger than one thinks soon.
    Anyway, I’ll live the discussion at that. I am not here to convince you, you already are convinced that the situation is serious. Take care.

    Dr. Roy Schestowitz Reply:

    Thank you for the thoughts and the input.

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