Bonum Certa Men Certa

The EPO Bubble — Part III — Dividing Up the Spoils...

Overview: [Teaser] The EPO's Deflating Patent Bubble and Pursuit of Illegal Software Patents (With Kangaroo Courts, UPC, and Bullied Examiners)

Series parts:

  1. The EPO Bubble — Part I — An “Unprecedented Surge”
  2. The EPO Bubble — Part II — Signs of a Deflating Bubble?
  3. YOU ARE HERE ☞ Dividing Up the Spoils...


Battistelli and the pigs
The higher the volume of granted patents, the larger cash pool available to be divvied up between the EPO and its contracting states.



Summary: The corrupt presidency of António Campinos sees a sharp decline in the number of patent grants; as a result, it bullies honest examiners and seeks to illegally expand patent scope (read: European software patents and other unlawful monopolies) with help from the Administrative Council, motivated by self-serving overzealous greed; there's a lot of money at stake!

In the preceding parts we looked at the EPO’s "grant bubble" which commenced with Benoît Battistelli’s "unprecedented surge" of 2016 and we saw how this "bubble" has started to deflate over the course of the last two years.



To the outside observer this development probably looks like the natural and healthy "correction" of an undesirable and unsustainable state of affairs.

However, the senior management of the EPO and their "friends" on the Organisation’s governing body - the Administrative Council - are likely to see matters differently.

"The essential point to be grasped here is that every granted European patent application generates "national renewal fees" (NRFs) in all of the designated EPO contracting states during the time that it is maintained in force by its proprietor."Those who are inside EPOnia’s "golden circle" have a "vested interest" in propping up the bubble in order to safeguard the lucrative cash flow from the legendary “Dukatenesel”.

The essential point to be grasped here is that every granted European patent application generates "national renewal fees" (NRFs) in all of the designated EPO contracting states during the time that it is maintained in force by its proprietor.

The NRFs generated by these patents are shared between the contracting states and the EPO in accordance with Article 39 EPC (warning: epo.org link). The current split is takes place on 50-50 basis.

Article 39 EPC foresees that the EPO could be awarded as much as 75% of the overall NRF revenue - subject to the Administrative Council agreeing to a change in the distribution ratio.

"In any event, the bottom line here is clear: the higher the volume of granted patents, the larger the cash pool available to be divvied up between the EPO and its contracting states."However, in practice, an increase of the EPO’s NRF dividend is unlikely to be approved by the Administrative Council because the contracting states jealously guard their own share of the loot. If anything, they would prefer to increase this and reduce the EPO’s slice of the cake if only they could find a plausible pretext for doing so.

In any event, the bottom line here is clear: the higher the volume of granted patents, the larger the cash pool available to be divvied up between the EPO and its contracting states.

An increased grant rate at the EPO boosts the revenue of the national patent offices of the contracting states. All of these national offices are financed predominantly by NRFs from granted European Patents.

As an illustrative example, let us briefly consider what this implies in the case of one of the EPO’s most significant contracting states, Germany.

"All of these national offices are financed predominantly by NRFs from granted European Patents."Back in 2014, Germany’s estimated NRF revenue share was € 149 million.

By 2021 this amount had risen to € 211 million, an increase of around 40% compared to 2014.

To put these figures into perspective, in 2021 the total expenditure of the German Patent and Trademark Office (DPMA) was € 248,5 million and it recorded an operating profit of € 214,7 million which was transferred to the federal treasury.

In other words, the revenue accruing to the DPMA from granted European patents in 2021 (€ 211 million) was sufficient to cover about 85% of its expenditure.

This portion of the DPMA’s revenue was also more or less equivalent to its reported operating profit (€ 214,7 million) which was transferred to the federal treasury.

"In other words, the revenue accruing to the DPMA from granted European patents in 2021 (€ 211 million) was sufficient to cover about 85% of its expenditure."No wonder that the German delegation on the EPO Administrative Council was such an enthusiatic supporter and "enabler" of Battistelli’s "reforms" at the EPO!

The EPO for its part receives a 50% share of the total NRF revenue generated in its contracting states.

This means that an increased grant rate also bolsters the EPO’s own internal "slush fund" for keeping delegates from the smaller contracting states "onside" by means of EPO-financed co-operation projects.

In view of these circumstances it should come as no surprise that the ongoing deflation of Battistelli’s "grant bubble" is a cause for concern in some quarters. We shall look into this in more detail in the next part.

The numbers go down again?

Recent Techrights' Posts

When Abusive Law Firms (Working for Microsofters Against Us) Assert That Someone Writing in Social Media About Himself is Confidential Information
There was no reason to throw "GDPR" into 2 SLAPPs; they know it, but the goal was to increase the cost of a Defence and lessen the incentive to challenge the SLAPPs
 
"Linux" Sites That Went Astray
there are even worse things than shutdowns
Links 16/06/2025: Climate, Wildfires, Breaches, and Monopolies
Links for the day
Links 16/06/2025: Summer in Finland and Misunderstandings
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, June 15, 2025
IRC logs for Sunday, June 15, 2025
Gemini Links 15/06/2025: Rainy Season and OpenDocument Format (ODF)
Links for the day
Links 15/06/2025: Military Games, Parade, and Actions
Links for the day
Links 15/06/2025: Windows TCO, Openwashing, and Wars
Links for the day
Gemini Links 15/06/2025: "AI Fatigue and Crappiness"
Links for the day
Microsoft Attack Dogs Against Watchdogs and Guard Dogs in Software
Last year Microsofters hired attack dogs or "guns for hire"
Slop Cannot Replace Domain Expertise
All this "AI" hype (it's not even intelligence, it's all a misnomer, as many of us have insisted all along) will fizzle and be written off as a failed experiment
IBM's Fresh 'PIPs' (Action Before Layoffs)
At times like these, even once-reputable employers resort to PIPs and other procedures/tricks for denial of workers' rights
Microsoft is a Problem Not Just for Denmark
Every country should consider what Denmark is doing, why Denmark is doing it, and then do the same
The Slopfarms' Self Detonation
If more sites like BetaNews go under, then maybe we can still salvage some of the Web
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, June 14, 2025
IRC logs for Saturday, June 14, 2025
Links 14/06/2025: FDA Changes Priorities, Cassette Data Storage From The 1970s
Links for the day
Gemini Links 14/06/2025: Steam Next Fest and Thoughts on Gemini
Links for the day
Site/Datacentre Maintenance Next Week
speed things up
Bulgaria: GNU/Linux Near 10%
The Bulgarian market seems to be changing
I Never Spoke to BetaNews. But BetaNews Wants to Ensure I Never Will, Either.
Sometimes just the reluctance to talk about it can say a great deal
Throwing Money at Lawyers Can't Stop Us (It Never Did)
Even just trying to censor things can result in the opposite of the desired outcome
Online Search or Large Search Engines Aren't Working Anymore
business models that directly compete with interests of Web users
Holidays and Breaks
I've hardly taken any long breaks since I got married
Danish OpenDocument Freedom
"year of Linux"
Links 14/06/2025: Wars and L.A. Distortion Effect
Links for the day
BetaNews Has More or Less Died After Experiments With LLM Slop, Is Linuxsecurity Next?
It doesn't seem like BetaNews knows what it's doing, let alone what it talks about
Gemini Links 14/06/2025: Historic Ada Design and GeminiSpace.Club to Expire
Links for the day
Links 14/06/2025: India Plane Crash and Middle-Eastern War
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, June 13, 2025
IRC logs for Friday, June 13, 2025