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Summary: The patent quality crisis at the EPO is related to the recruitment crisis; the EPO rapidly loses a potent patent examination workforce, which it is unable to replace, quite likely by intention

In an "[a]rticle originally written and published by SUEPO Munich," according to insiders, we're clearly seeing a problem that should be widely understood. It is a problem we've long spoken about -- namely inability to attract suitably-equipped patent examiners to study applications for a monopoly. Here is the publication, which is dated 2 years ago but is still very relevant (probably even more relevant now than back then):

25.11.2019 su19026mp – 0.2.1/4.2.1/4.2.2

EPO salaries – hiring for excellence

Mr Campinos, supported by the Administrative Council, seems determined to lower salaries and other benefits at the EPO. This raises the questions: why are the salaries and benefits as they are and should they be lowered? This publication tries to give some answers.

Requirement for recruitment at the EPO Article 5(1) of our Service Regulations sets out the requirements for recruitment at the EPO: “Recruitment shall be directed to securing for the EPO the services of employees of the highest ability, efficiency and integrity, recruited on the broadest possible geographical basis from among nationals of the Contracting States.”

I. Highest ability and efficiency – Language skill and technical knowledge For all employees at the EPO “highest ability” includes language skills: internal and external communications can be in any of the three official languages. For many of us that means the knowledge of three foreign languages in addition to our mother tongue (and Dutch in The Hague). It is obvious that the “highest ability and efficiency” comes at a price.

II. Broadest geographical basis – recruitment from all member states The requirement that staff be recruited “on the broadest geographical basis from among nationals of the Contracting States” also has an impact on the EPO salaries. This requirement is common to most, if not all international organizations (e.g., UN¹) and early on led to the formulation of the so-called Noblemaire principle². Application of this principle has been consistently supported by ILO-AT until nowadays³: “The Noblemaire principle [...] embodies two rules. One is that, to keep the international civil service as one, its employees shall get equal pay for work of equal value, whatever their nationality or the salaries earned in their own country. The other rule is that in recruiting staff from their full membership international organisations shall offer pay that will draw and keep citizens of countries where salaries are highest.”⁴

III. Integrity According to Article 14a(1) of the Service Regulations, an EPO employee is further meant to “carry out his duties with integrity and loyalty, and conduct himself solely with the interests of the Organisation in mind. He shall neither seek nor take instructions from any government, authority, organisation or person outside the Organisation.” A pay that is perceived as a fair reward for the high performance and a permanent post, i.e. the prospect of a future within the EPO, help maintain a high level of integrity.

__________ ¹ The UN obey the Noblemaire principle, which is binding on any organization that belongs to the UN system (here). ² From the name of the Chairman of a Committee of the League of Nations (1920). ³ Noblemaire principle at the ILOAT (here). The ILO-AT recently re-affirmed the principle in Judgment 4134 (consideration 11). ⁴ see Judgment 831 (consideration 1)

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Patent examiners – a special case Patent examiners are among the better paid civil servants in many countries⁵, at least in those countries that take patents seriously. Why should this be so? One is that whenever a new technical field emerges, the patent office finds itself in direct competition with industry for the relevant technical experts. In order to be successful in recruiting such experts, a patent office thus has to offer attractive working conditions.

Another reason for the relatively high level of pay of patent examiners lies in the nature of the job. Searching and examination require a very high level of technical training (engineering or university level). The work further has a strong legal component, in the EPO additionally requiring – as pointed out above – considerable language skills and for many the willingness to leave their home country. The EPO is therefore looking for the rare proverbial “eierlegende Wollmilchsau”.

Is the EPO already in breach of the Noblemaire principle? Let us recall that the Noblemaire principle requires the EPO to set its salaries at a level “that will draw and keep citizens of countries where salaries are highest”. A glance at the latest recruitments listed on the EPO intranet shows that already today the EPO is struggling to attract new staff from across all its member states. The conclusion must be that the Office is breaching the Noblemaire principle and should adjust staff pay upwards, not downwards.

Cui bono? There seems little doubt that jobs at the EPO have become much less attractive in recent years. Mr Battistelli reduced the recognition of previous experience, lowered the starting salaries, introduced 5-year contracts and strongly curbed career progression within the job. Flattening of the hierarchy in the patent administration and patent examination areas virtually eliminated the prospects of a managerial career in DG1. Mr Campinos now foresees further cuts.

ILO-AT has criticized organisations for reducing salaries purely in order save money, see e.g. Judgment 3921 (consideration 11): “While the necessity of saving money may be one valid factor to be considered in adjusting salaries provided the method adopted is objective, stable and foreseeable [...], the mere desire to save money at the staff’s expense is not by itself a valid reason for departing from an established standard of reference [...].” So the Office needed a justification to attack salaries and paid for a controversial report which it then interpreted as negatively as the report allows, and added a two billion euro buffer on top.

EPO staff are dedicated and intelligent. They are perfectly able to recognize a true financial emergency and – if such an emergency occurred – would without doubt be ready to make sacrifices to get the EPO through the crisis. However, they see through the current fake crisis. Note that last year Mr Battistelli still claimed that he had made the EPO fit for the future. So let us suppose that as the years pass it transpires that it was never necessary to save 5.8 billion euro. What will the Office do with all the extra money? Perhaps find a mechanism to give a considerable portion of it to the member states, the member states that sit on the Administrative Council and are the ultimate decision makers in the European Patent Organisation?

What the delegates and Mr Campinos seem to forget is that its highly trained and (until recently) highly motivated staff are the only real asset that the Organisation has. So again: rather than cutting staff benefits, the Organisation should invest in staff in order to be fit for any future crisis. Not investing in staff risks killing the goose that lays their golden eggs⁶.

SUEPO Munich

_______ ⁵ USPTO Examiner brochure 2018 (here) ⁶ Governance of the EPO: https://www.suepo.org/public/ex104034cp.pdf

The video discusses the ramifications for Europe, which is simply being 'sold' piecewise to monopolies from other continents.

"What good is a patent office incentivised to just grant as many patents as possible irrespective of their quality and their compliance with the underlying laws?"Sadly, the EPO as a whole got compromised, and this goes well beyond the examination division. The Office nowadays controls the whole Organisation, which was supposed to oversee the Office. Even the courts are controlled by the Office.

As someone put it the other day, expressing concern about the independence of judges (BA): "It is a disgrace that the AC [Organisation] does not any longer controls the office and its president."

Here's the full comment:

It is farcical to see the president of the BA and the president of the EPO signing a MoU. One should not forget that the former only has the powers delegated to him by the latter. The chair of the BA has to approved by the president even if he appointed by the AC. The day the BA can forward their budget request directly the AC we will be able to see a beginning of perception of independence. But it still remains that the conditions of reappointment have never been published. Only a proper reform of the statute of the BA without any possibility of the president to interfere with the working of the BA will the BA be fully independent. In 2004 an opportunity was sadly missed. As far as the return to Munich is concerned, the person responsible will never have to support the costs implied. The users and the staff are footing the bill. But what can you do when immunity means impunity. And the tail is wagging the dog. It is a disgrace that the AC does not any longer controls the office and its president. But the cooperation budget is in good hands.

What good is a patent office incentivised to just grant as many patents as possible irrespective of their quality and their compliance with the underlying laws? ⬆