06.12.19

Leaked Financial ‘Study’ Document Shows EPO Management and Mercer Engaging in an Elaborate “Hoax”

Posted in Europe, Patents at 3:51 am by Dr. Roy Schestowitz

Purveyors of ‘fake news’ inside what’s supposed to be a scientific institution

How One Family’s Deep Pockets Helped Reshape Donald Trump’s Campaign

Summary: How the European Patent Office (EPO) lies to its own staff to harm that staff; thankfully, the staff isn’t easily fooled and this whole affair will merely obliterate any remnants of “benefit of the doubt” the President thus far enjoyed

THE EPO has been under a (soon) decade-long attack from Campinos and Battistelli, who not only integrated European software patents into their agenda (in defiance of courts and Parliament) but have also attacked the staff and misused EPO money (Campinos might soon give a lot of EPO money to Third Reich goons).

“SUEPO has been too patient with Campinos (strike postponed) in spite of him repeatedly showing that nothing will change, except for the worse.”As we recently mentioned here on several occasions, there’s a fake 'crisis' being manufactured/claimed (not the real crisis) to push so-called ‘solutions’. “The delicious propaganda by EPO top managers to middle managers,” a source tells us, can be seen in this Manager Toolkit (English) [PDF].

As it turns out, there’s already a response to it. “The aim is here disseminate false information and make the deteriorations — sorry, the “reforms” to soon come — more acceptable to joe-average EPO staff although these are new unjustified thus unfair cuts,” the source adds. Here is the position of the Central Staff Committee (CSC) on the same financial study.

Zentraler Personalausschuss
Central Staff Committee
Le Comité Central du Personnel

Munich, 07.06.2019
sc19081cp – 0.2.1/1.3.2

The Financial Study: Yet Another Hoax (part 4)

At the EPO financial studies tend to be a pretext for cuts in staff benefits. The
latest study by Mercer and Wyman is no exception. Our previous publications showed that the study deliberately underestimates expected income from fees as well as the return on cash reserves, and overestimates staff costs. The present publication lists these misrepresentations and adds some more.

Recapitulation

The 2019 EPO Financial Study by Mercer and Oliver Wyman assumes1 that:

- between 2018 and 2038 the EPO will not raise its procedural and renewal fees except once, by 4%, in 2020. For the remaining period the fees are assumed to remain constant (page 115). A correction for inflation is not foreseen.

- between 2018 and 2038 the national renewal fees on patents granted by the Office will remain constant (page 116). A correction for inflation is not foreseen.

in sharp contrast during the same period EPO salaries are assumed to increase at a rate of 2.24% above inflation (page 119).

- without providing any underlying data, the study assumes that the costs of pensions and other post-employment benefits (incl. tax compensation) will almost triple over the next 20 years (pages 66-67, page 123).

- The study foresees no further transfer of operational surpluses to the RFPSS, although with a 4.8% return above inflation over the last 20 years (6.3% over the last 5 years) the money would be well placed (RFPSS/SB 41/19, page 2, Fig. 3).

the study assumes that operational surpluses will not be transferred to the EPOTIF either (page 63). The EPOTIF was recently created with the very purpose of shielding EPO capital from inflation and is expected to deliver a return of 4% above inflation (CA/F 10/18 para.10).

- instead expected operational surpluses are assumed to be parked as “other financial assets” with an average annual return of between – 0.03% and 0.78%, i.e. well below the level of inflation2.

- as indicated above, over the last 20 years the RFPSS had a real return of 4.8%. The actuaries who evaluate the RFPSS assume a long-term return of 3.5%. The Financial Study assumes a return above inflation of only 2.1% (FAQs). This transforms today’s 104% coverage (CA/61/17 point 79) into a 2 billion euro gap in 2038.

This is a long list of extremely unlikely assumptions. There may be more, e.g. in the assumptions for the patent processes which we have not checked in detail. We also have doubts about the assumed 2 years increase in longevity (page 122) and the constant 53.87% non-examining staff “as percentage of job groups 1-4” (page 112). At present examiners make up about 64% of our total staff.

___
1 Unless otherwise indicated, the page numbers in the list refer to the Financial Study.
2 Financial Study pages 120 and 122; the return is not explicitly mentioned but can be calculated from the data in the tables.


What about an effort by the Office?

The EPO’s financial situation is excellent – maybe even too good3 – and this despite the recent high costs of the “New Main” building in The Hague and significant losses in IT.
The Financial Study nevertheless wants us to believe that the EPO faces a significant financial gap and that now is the time to do something about it by cutting costs, staff costs. But what about other costs? Is Mercer pointing at possible savings elsewhere? Are the Member States contributing to the effort? Is Mr Campinos leading by example – even if only symbolically? It doesn’t seem so.

The Mercer study assumes 600 million euro in building costs. The real sum may be as much as 1.14 billion euro (CA/43/19, Figure on page 32). Some building maintenance is indeed necessary. But part of the money is for one of Mr Campinos’ pet projects: creating glass-walled offices. Mercer does not comment on these costs.

Mr Campinos strategy document points to another – potentially significant – sink for EPO money: cooperation with the Member States4. The most recent figure that we have seen for cooperation costs is about 25 million euros per year (CA/19/15). Mr Campinos now proposes to “maximize the impact of cooperation” with a new model that will be “all-inclusive and equally open to all member states”. The Council delegates as heads of the national patent offices are all potential beneficiaries of these cooperation activities. For the President the cooperation budget is an efficient tool to reward member states that support him in the Council and punish those that don’t. So we expect the cooperation budget to increase considerably despite the allegedly bad financial situation of the Office.

Finally there is the annual Inventor of the Year event. The sums concerned are relatively modest by EPO standards – a few million euro at most. But is promoting one inventor over the other (with a possible impact on the value of the invention) compatible with the EPO remaining neutral in the exercise of its functions? And is it (to use Mr Campinos’ words) “handling significant amounts of taxpayer’s money with due diligence, due process and careful legal assessment”? We do not think so.

Conclusion

The 2019 Financial Study is a very plump attempt to justify a further reduction of staff benefits while the Office continues its spending. Staff is not fooled.

The Central Staff Committee

____
3 Art. 40(1) EPC stipulates that the EPO’s budget should be balanced. We question whether with an operating surplus of about 20% the EPO budget qualifies as « balanced ».
4 Read: cooperation with the national patent offices (NPOs).

“Make your own opinion,” the reader concludes, “who do you think lies here?”

Mercer (sponsor of sites like Breitbart) and professional liars like Campinos, who only a couple of years ago attacked staff at the EUIPO in the name of ‘cost savings’…

SUEPO has been too patient with Campinos (strike postponed) in spite of him repeatedly showing that nothing will change, except for the worse.

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. Links 30/11/2020: GhostBSD 20.11.28, Nitrux 1.3.5, Linux 5.10 RC6, GNOME Circle, Microsoft Collapses Again in Web Server Share

    Links for the day



  2. Alternatives to the World Wide Web, to HTML, to HTTP/S, and to the Internet

    Looking around the Web (yes, the Web) for alternatives to the Web (and the stack underneath the Web), we're finding that IPFS is mature and robust enough for our needs



  3. Management of the EPO Dragged to the International Labour Organisation Over Its Assault on the Right to Strike

    Opinion on strikes challenged by the Central Staff Committee of Europe's second-largest organisation; if strike rights are almost abolished there, what hope is there for the rest of Europe?



  4. [Meme] Management of the EPO Cannot Let the Staff Breathe or Smell Freedom

    Working for the EPO means giving up on one’s human rights; that’s the sort of conclusion many workers have reached



  5. “ViCo” is Nothing New (Not Even the Acronym), Done on 9/11 Last Year, Been Possible as Long as the EPO Has Existed

    Contrary to what many people are led to believe, the EPO isn't embracing innovation, it's just embracing COVID-19 and leveraging lock-downs (de facto house arrest to some) to impose an illegal practice on EPO staff and EPO stakeholders



  6. Release: Early Letters and Documents About Financial Hoax Disguised as EPO 'Study'

    It was over a year ago that staff representation at the EPO expressed concerns about what would later enrage workers — seeing that based on unscientific fabrications the EPO would take away what had been promised to them



  7. IRC Proceedings: Sunday, November 29, 2020

    IRC logs for Sunday, November 29, 2020



  8. Managing IP: Puff Pieces Galore for the EPO's Dictatorship (Complete With Buzzwords and PR Stunts)

    By giving a platform to notorious patent trolls and ‘engaging’ with the EPO‘s dictator (whom only 3% of EPO staff trusts) Managing IP is sort of giving away its real agenda, which isn’t journalism but conducting or assisting misinformation campaigns



  9. Links 29/11/2020: Genode OS Framework 20.11, Linux 5.11 Kernel Changes, and Latest in KDE Itinerary

    Links for the day



  10. Sincere Thoughts About Outreachy

    Outreachy's role in the Free software community and inclusion in the FSF's High Priority Projects, as seen from the eyes of a female coder from a minority group; she used to work for the Free Software Foundation (FSF) and she expresses concerns about what Outreachy has become



  11. Free Software Under Tyranny of Codes of Conduct as the Western Equivalent of Blasphemy Law (Corporations as the New Religion/Sponsors as Deities)

    The free speech crisis in Free software communities has enabled expulsion of opinionated people whose opinions truly matter; in their place we now have companies that bomb people, sometimes even kidnapping children and sterilising women because nothing says “Ethics” like naked fascism and corporate domination everywhere



  12. Release: 4 More Documents and Letters About the Financial Siege at Europe's Second-Largest Institution

    Documents disputing the accuracy of the "hoax" from António Campinos and the Mercers



  13. One Year Ago: The Last EPO Demonstration Before COVID-19

    About a year ago staff of the EPO apparently had its last protest (in front of the Isar building) before staff got ‘herded’ into homes, where workers became more isolated and even illegally spied on



  14. [Meme] Unified Patent Court Agreement (UPCA) is an Attack on Europe and the European Businesses That Don't Do Litigation

    Litigation lawyers and patent zealots want to set Europe ablaze with legislation that they themselves crafted; thankfully, however, they face constitutional obstacles, no matter how many politicians they bamboozle and buy



  15. Reasons EPO Staff Decided to Go on Strike This Year (Before or Until Coronavirus Prevented It)

    An year-old letter from the Staff Union of the European Patent Office (SUEPO) to the President of the EPO; 7 reasons for going on strike are enumerated



  16. EPO Can Save Money by “Dropping Events Like the Inventor of the Year, Reducing the Number of Managers, Throwing Less Money at Consultants or Bringing the Boards of Appeal Back into Office Buildings.”

    Constructive suggestions from EPO staff, made just over a year ago and assembled into a letter to their EPO colleagues



  17. The Real Fate of the UPC 'Stunt' in Germany Will be Known Next Month (or Next Year) and There Are Substantial Constitutional Barriers in the Way

    Contrary to what Team UPC wants people to think, UPC(A) isn’t a “done deal” in Germany; they never actually addressed the substance of complaints and with help from Benoît Battistelli‘s friends in the Commission they’re just attempting a blatant coup



  18. Microsoft Removes Free Software From GitHub Again, This Time for Motion Picture Association (MPA)

    GitHub is proving to be more of a censorship site than a code-sharing site; with the GitHub takeover Microsoft became a 'censorship police' or force of occupation against its ideological competition; just weeks after the YouTube-DL debacle and further take-downs seeking to 'protect' broken DRM schemes (by banning code) we can see that Microsoft isn't defending developers at all; it's just protecting the interests of MPA, RIAA and other Biden circles from the interests of the general population, which sometimes circumvents perfectly circumventable 'DRM' schemes



  19. IRC Proceedings: Saturday, November 28, 2020

    IRC logs for Saturday, November 28, 2020



  20. Help Make Techrights (and Other Technology-Centric Sites) More Robust to Censorship by Setting Up More IPFS Nodes

    We’re trying to improve the site’s availability (ensuring it can never be offline) and make it more censorship-resistant; people who adopt IPFS can make that happen while tackling the “bloated Web” and “centralised Internet” issues — all at the same time



  21. Microsoft Loves Linux and Android Apps Running on Windows Instead of GNU/Linux and Android Devices

    Microsoft loves Linux, they say; but as Microsoft's former VP James Allchin put it: "If you're going to kill someone there isn't much reason to get all worked up about it and angry -- you just pull the trigger [...] We need to smile at Novell while we pull the trigger."



  22. Links 28/11/2020: RenderDoc 1.11, GNOME 40 Scrolling Horizontally

    Links for the day



  23. Nine Documents About the Financial Siege Against EPO Staff (Past, Present, and Future)

    Today we release dozens of pages of letters and documents (internal to Europe's second-largest institution); they all focus on the betrayal and skulduggery, crushing staff in spite of what was originally promised (and what workers actually signed up for)



  24. EPO Senior Management (Cabal) “Essentially Deaf to the Proposals From Staff Representatives.”

    Representatives of EPO staff feel like the management of the EPO is "deaf" and uncaring; there's hardly any meaningful progress (or none whatsoever) when it comes to truly honest dialogue with real participation



  25. EPO Management, Led by António Campinos, Attempted to Stifle or Prevent Staff From Being Surveyed

    Battistelli's cabal, which covers up a lot of fraud and corruption, is attempting to prevent the staff from expressing an opinion (for insiders and perhaps outsiders to assess) because things are really bad and autocratic measures are seen as necessary to keep the lid on issues/abuses



  26. The European Patent Office's Central Staff Committee: Office Cannot Recruit Fit-for-Purpose Patent Examiners Anymore

    One third of EPO recruits are 'locals' (Germans), 0.2% are Swiss, 1% Scandinavian; the EPO as an employer became unattractive and it's unable to attract the staff it needs (as was projected and planned when the EPC was agreed upon)



  27. IRC Proceedings: Friday, November 27, 2020

    IRC logs for Friday, November 27, 2020



  28. Links 27/11/2020: Jolla is 7, Diffoscope 162, MNT Reform Production

    Links for the day



  29. The Time Coronavirus Helped EPO Management Prevent Staff From Protesting and Going on Strike (March 26th)

    "In view of the spreading of the New Corona Virus, the planned General Assemblies have to be cancelled," the Staff Union of the European Patent Office (SUEPO) wrote in the wake of the crisis across Europe back in March (weeks ahead of a planned strike)



  30. Guarding Your Privacy With E2EE: Primer

    "As with all security, there is assumed risk no matter how careful you are. There are no security guarantees but that doesn't mean you shouldn't try."


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts