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07.25.17

How the EPO’s Terrible Decisions May Implicate the Government of Germany and Lufthansa

Posted in Europe, Fraud, Patents at 6:25 pm by Dr. Roy Schestowitz

It’s also alleged that the EPO or Željko Topić bribed journalists

A. Matijevic and Topic by Lufthansa

Summary: The role played by German authorities throughout the scandal involving Željko Topić, a notorious Vice-President at the European Patent Office (EPO)

FOLLOWING the weekend’s important article in English and in German (regarding Lufthansa and the EPO) we received more feedback from informed circles.

“Some people have been systematically discouraged if not intimidated away from covering the EPO scandals. Some observers choose to believe that it’s due to fear of exposure of even broader scandals.”There is certainly a very big scandal at the EPO, possibly bigger than the EPO itself (if it really does implicate the German government). Some people have been systematically discouraged if not intimidated away from covering the EPO scandals. Some observers choose to believe that it’s due to fear of exposure of even broader scandals.

For instance, if seemingly mundane EPO scandals like nepotism lead to potentially massive scandals implicating the German government, why would the German media not choose to keep quiet under pressure from large media owners? We previously wrote about the serious issue of media ownership in Germany. There's also diversion and lies, not just blackout. Remember that a German, with proven connections to his government, will become the Chairman of the Administrative Council of the EPO in a couple of months. So what are the chances that he will pursue a deeper look into all this (the Lufthansa affair and the Vice-President in question)?

“We previously wrote about the serious issue of media ownership in Germany.”Thanks to interested circles, we are gradually accumulating more information that every EPO worker should become familiar with. It can help explain some of the tensions at the upper echelons of management. Some comments and explanations about the “Lufthansa Affair” were handed to us along with translations.

These comments relate to “claims about allegedly criminal collusion between the former Director of the Croatian State Intellectual Property Office and a legal representative of Lufthansa,” our source explained.

“The comments and background information below,” our source continued, “might assist your readers in appreciating what went on in this case.”


The letter of 31 January 2007 is interesting because the lawyer acting for Lufthansa Airplus Servicekarten GmbH acknowledges Rikard Frgačić as the lawful proprietor of the Croatian trademark Ž961074 and the international trademark 682268. The lawyer, Andrej Matijević, explains that the Lufthansa subsidiary is interested in getting Mr. Frgačić to waive his claim to the trademarks and he is invited to get in contact with them to discuss terms and conditions.

“…the lawyer acting for Lufthansa Airplus Servicekarten GmbH acknowledges Rikard Frgačić as the lawful proprietor of the Croatian trademark…”In the second letter of 9 January 2008 which comes directly from the German head office of Lufthansa Airplus Servicekarten GmbH, the company adopts a more patronising and dismissive attitude towards Mr. Frgačić. They refer to a pending trademark cancellation procedure and offer Mr. Frgačić a once-off payment of 1000 EUR if he can prove the legal validity of his trademarks and agrees to transfer them.

So what happened in between the first letter of 31 January 2007 and the second letter of 9 January 2008?

“…Lufthansa subsidiary filed its request on 16 December 2007 and Mr. Frgačić was informed about the DZIV’s intention to cancel his trademark on the very next day.”It seems that in December 2007 Lufthansa Airplus Servicekarten GmbH initiated a procedure for the cancellation of the Croatian trademark.

According to Mr. Frgačić, the Lufthansa subsidiary filed its request on 16 December 2007 and Mr. Frgačić was informed about the DZIV’s intention to cancel his trademark on the very next day.

Given the usual slow pace of administrative and legal proceedings in Croatia the speed with which the DZIV took up and pursued the request from the Lufthansa subsidiary set alarm bells ringing for Mr. Frgačić.

“In its decision of 3 November 2009, the Board of Appeal found in favour of Mr Frgačić and it ordered the case to be sent back to the DZIV for correction.”The procedure initiated by Lufthansa Airplus Servicekarten GmbH resulted in a decision being taken by the DZIV on 21 November 2008 in which the matter was decided in favour of the Luthansa subsidiary and against Mr. Frgačić.

Mr Frgačić had no intention of allowing himself to be cheated so easily.

So he appealed this first instance decision to the Board of Appeal for Industrial Property Rights which is an independent second-instance body that was set up in 2008. In its decision of 3 November 2009, the Board of Appeal found in favour of Mr Frgačić and it ordered the case to be sent back to the DZIV for correction.

Unfortunately it seems that instead of arriving at a happy ending as one might expect, Mr Frgačić has been “trudging through treacle” since then.

“The finger of suspicion for this state of affairs points mainly at the former Director of the DZIV.”According to what is known about the case from Croatian sources, the DZIV has done its best to stymie Mr Frgačić and to prevent a resolution of the case in his interest despite the ruling of the independent Board of Appeal in his favour. The finger of suspicion for this state of affairs points mainly at the former Director of the DZIV.

Because of his failure to obtain satisfaction at the DZIV, Mr Frgačić filed criminal complaints against those he suspected of being responsible for what he considered to be illegal acts and abuses of authority. However, due to the painfully slow and dysfunctional legal system in Croatia he does not appear to have made much progress there.

Mr Frgačić has also launched legal actions in Germany but the German courts seem to be using the administrative and legal deadlock in Croatia as an excuse for not taking any action. There may also be a question of protecting national interests as well as it would not be good for the image of German business if the allegations about Lufthansa’s subsidiary in Croatia were to be aired in public.

The “David versus Goliath” aspect of Mr Frgačić’s story captured the popular imagination in Croatia and it was the subject of a number of reports by the national television channel HRT [1, 2].

“Mr Frgačić has also launched legal actions in Germany but the German courts seem to be using the administrative and legal deadlock in Croatia as an excuse for not taking any action.”The story was also widely reported on in the Croatian media.

For example, in October 2010 an article appeared under the title “EXCLUSIVE Croatian police in anti-corruption action against Lufthansa”

This article drew forth an angry response from the then Director of the DZIV. He submitted a “request for correction” in which he tried to defend the DZIV’s actions in favour of the Lufthansa subsidiary. He also rejected Mr Frgačić’s claims that the DZIV had a covert policy of “deference” towards foreign big business interests such as Lufthansa.

The spectre of the “Lufthansa-Affair” continued to haunt the Director of the DZIV even after his departure to Munich following his highly controversial appointment as a Vice-President of the EPO in 2012. This led to the publication of a series of critical articles in the Croatian media which questioned the actions of the Croatian government in supporting the appointment.

“The spectre of the “Lufthansa-Affair” continued to haunt the Director of the DZIV even after his departure to Munich following his highly controversial appointment as a Vice-President of the EPO in 2012.”One of Mr Topić’s last acts as Director of the DZIV was to draft a “Press Release” which he ordered to be published on the official DZIV website on his last day of office at the DZIV on 30 April 2012.

In this “Press Release” he tried to settle accounts with his adversaries in his home country and to take the sting out of media reports that a number of criminal proceedings were pending against him in Croatia. Interestingly, the newly appointed EPO Vice-President did not deny that such criminal proceedings were pending against him. He just tried to dismiss them as “unfounded”:

“Concerning the aforementioned criminal charges filed against the Director General of the Office, a key fact has been omitted: criminal charges can be filed by anyone, regardless of the merits of the case and the competent authorities are obliged to start investigative proceedings in relation to any criminal charges filed, no matter how unfounded they may prove to be after the investigation has been carried out. …”

The “Press Release” went on to comment on specific cases including a first criminal charge filed by a former DZIV employee Zdenko Haluza alleging forgery of an official document by the Director which was described as the “malicious filing of a criminal lawsuit”. It was confidently predicted that due to “the evident absurdity of the criminal charges, it is more than certain that the outcome of the aforementioned proceedings will be in Mr Topić’s favour.”

“Interestingly, the newly appointed EPO Vice-President did not deny that such criminal proceedings were pending against him.”A second criminal charge filed by former DZIV Assistant Director Vesna Stilin was also ridiculed in disparaging terms as an allegedly vexatious legal action by another disgruntled former employee.

The legal action pursued by Mr Frgačić was portrayed in similar terms as an unfounded action being pursued by a disgruntled applicant and user of the DZIV’s services:

“The third criminal charge is the one filed by Mr Frgačić in the so-called “Lufthansa-Affair”. The Office emphasises that it conducts more than 10,000 procedures a year in connection with requests to grant intellectual property rights, a significant part of which are terminated by a decision not to grant the requested right because the prescribed requirements have not been met. There thus exists the inherent possibility that an applicant will be dissatisfied with the decision of the Office no matter how well supported by arguments and based on law it was. The character of the dissatisfied party will determine which legal remedies they rely on to pursue their interests and this does not exclude filing arbitrary criminal charges and making accusations about the alleged corruption of officials.”

“It is almost impossible to believe that the German Ministry of Justice is not fully informed about these matters.”The “Press Release” conveniently glosses over the fact that Mr. Frgačić had in fact won his case before the Board of Appeals for Industrial Property Rights in November 2009 and that the real source of his ongoing grievance was the subsequent failure of the DZIV to respect the decision of the independent Board of Appeals which had found in his favour.

It is almost impossible to believe that the German Ministry of Justice is not fully informed about these matters. But for some reason it does not seem to be prepared to take any action.

For example in October 2015 the German delegation seems to have colluded in a decision of the EPO Administrative Council to extend Topić’s term of office as EPO Vice-President until the end of 2018 as proposed by the EPO President Battistelli.

It can be speculated that the German authorities are worried about the possible repercussions if there was any detailed scrutiny of the “Lufthansa affair” and that they prefer to try to ignore it or sweep it under the carpet.

“It can be speculated that the German authorities are worried about the possible repercussions if there was any detailed scrutiny of the “Lufthansa affair” and that they prefer to try to ignore it or sweep it under the carpet.”Let’s not forget that German industry is still reeling from the fallout of the “Dieselgate” affair. On top of that come embarrassing revelations from a recent historical study which confirms collusion between Volkswagen and Brazil’s 1964-85 military government and shows that the German company worked hand in hand with the regime and helped it to identify and persecute its political opponents.

Under these circumstances it’s perfectly understandable that the powers that be in Germany might be keen to avoid exposure of a further potentially embarrassing scandal relating to allegations of corruption and unlawful manipulation of intellectual property rights in a smaller and economically vulnerable EU state.


Included below are translations of two letters (the originals in Croatian were published here days ago), namely a letter of 31 January 2007 from the attorney representing Lufthansa Airplus Servicekarten GmbH in Croatia and a letter of 9 January 2008 which comes directly from Lufthansa Airplus Servicekarten GmbH. Translations of these letters are included for future reference along with a copy of various documents referred to in the text above (either in-line or by reference).

2007 letter

ENGLISH TRANSLATION

Mr. Rikard Frgačić
Kolorova 11
10000 Zagreb

Zagreb, 31 January 2007

Subject: The possibility of cancellation of the trademark “Air plus”

Dear Sir,

We are addressing you on behalf of our client Lufthansa Airplus Servicekarten GmbH from Germany, which has been present for many years in Europe, offering services for planning, payment and analysis of travel expenses for business users. The company is a partner of leading European and world airlines, carriers and travel agencies.

By searching the international trademark data base we have determined that you are the holder of the right to “Airplus + Air+” Ž961074, and the international registration of the trademark 682268.

By writing this letter, we would like to explore the possibilities for voluntary cancellation of these trademarks from your side and we invite you to contact us to consider this possibility.

Please feel free to contact us if you have any questions or if anything is unclear.

Regards

Andrej Matijević

2008 letter

ENGLISH TRANSLATION

Lufthansa AirPlus Servicekarten GmbH
P.O. Box 15 52 63235 Neu-Isenburg Germany

Mr. Rikard Frgačić
Kolorova 11
HR – 10000 Zagreb
Croatia

9. January 2008

Trademark “AirPlus”

Your letter of 20 December 2007, received here on 4 January 2008

Dear Mr Frgacic,

We are refer to your letter and we reply as follows:

Deutsche Lufthansa AG is neither the owner of the “AirPlus” trademark nor a party to the pending cancellation procedure against your trademark registration. Please, therefore, refrain from any future correspondence to Deutsche Lufthansa AG. The holder of the “AirPlus” trademark and the party to the cancellation procedure on our side, is exclusively ourselves, Lufthansa AirPlus Servicekarten GmbH.

As already attempted before the start of the cancellation procedure, we, Lufthansa AirPlus Servicekarten GmbH, would like to offer you an agreed settlement – without prejudice and without recognition of any legal obligation. This does not require a personal meeting and is as follows: You transfer your trademark registration entries, that is to say your Croatian trademark Ž961074 as well as your international trademark 682268 “AirPlus + A +” to us after you have proved the legal validity of these trademarks. In return, we will make you a once-off payment of € one thousand (1,000, -) gross to a bank account which you specify.

Best regards

Lufthansa AirPlus Servicekarten GmbH

Roland Paschek
Corporate counsel

Harry Schön
Director of Personnel & Legal Affairs

Appeal decision (2009)

Appeal decision

Appeal decision translation

TRANSLATION

REPUBLIC OF CROATIA
THE BOARD OF APPEALS
IN THE FIELD OF INDUSTRIAL PROPERTY RIGHTS

Class: UP / Il -381-08 / 2008-010 / 0053
Docket No.: 559-09 / 1-09-008 / MHH
No. of appeal: VZ 20080053
Zagreb, 3 November 2009

The Board of Appeals appointed with the composition of Marija Šiša Hrlić, as Chair of the Board, and Krešimir Puškarić and Slavica Matešić, as members of the Panel, on the basis of Article 20 para. 2 of the Law on the Seal (Official Gazette 173/03, 76/07 and 30/09), on the occasion of the appeal of the applicant Rikard Frgačić, Kolarova 11, 10000 Zagreb, represented by the law firm Hraste & Partners from Zagreb, Ribnjak no. 40, and the appeal of the applicant Lufthansa Airplus Servicekarten GmbH, Hans-Bockler-Strasse 7, D-63263 Neu-Isenburg, Germany, represented by the law firm Matijević from Zagreb, Kurelčeva 4, filed against the decision of the State Intellectual Property Office of 21 November 2008, in the procedure concerning the request for revocation of the trademark in administrative case no. Ž961074, issues the following

DECISION

1. The appeal of the applicant Rikard Frgačić, Kolarova 11, 10 000 Zagreb, is hereby accepted and the decision of the State Intellectual Property Office of the class: UP / I-381-04 / 96-010 / 1602, Urgent Number: 559-04 / 2-08-074 of 21 November 2008 is partially annulled, that is in that part which refers to point 1 and 3 of the order of the decision according to which the request of the applicant Lufthansa Airplus Servicekarten GmbH, Hans-Bockler-Strasse 7, D-63263 Neu-Isenburg, Germany for the revocation of the trademark number 2961074 “Air plus” was granted.

2. The appeal of the applicant Lufthansa Airplus Servicekarten GmbH, Hans-Bockler-Strasse 7, D-63263 Neu-Isenburg, Germany, is rejected as unfounded.

3. Pursuant to point 1 of the order of this decision, the matter shall be referred back to the State Intellectual Property Office for a reconsideration of the decision on the application for revocation of the trademark number Ž961074 in relation to services for which the trademark is revoked.

4. The first-instance decision referred to in paragraph 1 of the operative part is annulled in the part where the costs of the proceedings were decided.

The text of the press release from Željko Topić was published here in English two years ago.

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