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The EPO Bubble — Part V — Propping Up the Bubble?

Posted in Europe, Patents at 10:51 pm by Dr. Roy Schestowitz

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. The EPO Bubble — Part III — Dividing Up the Spoils…
  4. The EPO Bubble — Part IV — A Cashflow Problem Looming on the Horizon?
  5. YOU ARE HERE ☞ Propping Up the Bubble?

EPO bubble chart
The current grant rate at the EPO is around 69% (2020). Historically, grant rates have been subject to significant fluctuation and they also vary widely across technical fields. Source: Haseltine Lake Kempner.

Summary: EPO management is trying to grant a lot of software patents to make up for the collapse in patent grants overall; this necessarily means a profound decline in compliance with the European Patent Convention, or EPC

The overall “grant rate” at the EPO is the ratio of granted patents to applications averaged across all technical fields. This currently stands at around 69% (based on the published data for 2020).

Historically, EPO grant rates have been subject to significant fluctuation but have tended to hover somewhere between 55% and 65%.

At one point during the 1990s the grant rate rose to a peak of 72% (1997) before dropping back closer to the 60% mark during the early years of the new millennium.

“At one point during the 1990s the grant rate rose to a peak of 72% (1997) before dropping back closer to the 60% mark during the early years of the new millennium.”In 2007, under the presidency of Alison Brimelow, the EPO was reportedly “faced with public perception that the barrier to patenting is too low”. This led to the initiation of a process of “strategic renewal” aimed at “raising the bar on patent quality”. (warning: epo.org link)

As a result of Brimelow’s “raising the bar” initiative, grant rates dropped to a historic low in 2009 – 42% according to official EPO figures from 2016 or 44% according to other sources.

According to official EPO figures, the grant rate started to rise again slightly under Benoît Battistelli from 2010 onwards, coming back close to the 50% mark in 2012, where it remained for a number of years thereafter.

EPO grant rate
Official EPO grant rate figures between 2006 and 2015 (compiled in 2016).

After 2015, the grant rate began to rise again, beginning with the “unprecedented surge” of 2016. Since then it has continued its upward trend, reaching the 69% mark in 2020.

Of course it needs to be borne in mind that the overall grant rate only provides a limited amount of information because it is an “average” figure calculated across all technical fields.

“As we shall see in a later part of the series, one director recently saw fit to point out to his subordinates that grant rates of 99.6% are par for the course in some fields (predominantly in the mechanical sector).”In other words, it conceals the fact that grant rates vary widely across technical fields.

As we shall see in a later part of the series, one director recently saw fit to point out to his subordinates that grant rates of 99.6% are par for the course in some fields (predominantly in the mechanical sector).

Other areas have significantly lower grant rates. For example in 2020, it was reported (warning: epo.org link) that the grant rate in the Biotech sector was around 30%.

Low grant rates are also typical for many areas within the Information & Communication Technology (ICT) sector.

In a puff-piece about “Artificial Intelligence” (AI) published in 2021, IAM reported [PDF] that the number of grants in the this area (CPC class G06N) was increasing but remained significantly lower than in other fields:

The 40% grant rate for AI (G06N) applications in 2020 [is] well behind the EPO’s overall 69% grant rate in the same year, while the 16% refusal rate in 2020 was far higher than the overall 4% EPO refusal rate.

An area of ICT with even lower grant rates is the one covering computer-implemented business and administrative methods (CPC class G06Q), or so-called “business related inventions” as they are referred to at the Japanese PTO.

In book entitled “Patent Law for Computer Scientists: Steps to Protect Computer-Implemented Inventions”, authored by EPO insiders Daniel Closa, Alex Gardiner, Falk Giemsa, Jörg Machek, the grant rate in this area was reported to be around 7% at the time of publication in 2010.

In 2010, EPO insiders Closa, Gardiner, Giemsa and Machek reported on grant rates of around 7% in the area of computer-implemented business and administrative methods (G06Q).

According to the official EPO statistics for “IT methods for management”, even lower grant rates prevailed during the period between 2012 and 2015.

During this time the grant rate remained relatively stable, hovering somewhere around the 2% mark.

In the wake of Battistelli’s “unprecedented surge” of 2016, grant rates in this area rose significantly between 2016 and 2020, reaching a peak of just over 10% in 2020. The latest figures for 2021 indicate that the grant rate remains in the vicinity of the 10% mark.

“During this time the grant rate remained relatively stable, hovering somewhere around the 2% mark.”The point here is that, notwithstanding the “surge” from 2016 onwards, grant rates for G06Q still remain at a very low level compared to the EPO’s overall grant rate of 69%.

However, rumours currently circulating inside the EPO indicate that things may be about to change dramatically in this area.

EPO grant chart
The EPO's fake surge
Despite a significant “surge” from 2016 onwards, grant rates in the G06Q area remain quite low, currently around 10%. However, rumours on the EPO grapevine suggest that this could be about to change dramatically.

In the earlier parts of the present series it was explained how EPO management is currently faced with a deflating “grant bubble”, a development which threatens future cash-flow from the lucrative EPOnian “Dukatenesel”.

EPO management thus has a demonstrable “vested interest” in trying to maintain a high level of grants.

“Under these circumstances, it is not at all surprising that Team Campinos is being forced to explore alternative strategies for propping up the “grant bubble” created by Battistelli.”However, there are limits to the management’s ability to squeeze more “products” out of an already “sweated” workforce.

Under these circumstances, it is not at all surprising that Team Campinos is being forced to explore alternative strategies for propping up the “grant bubble” created by Battistelli.

One idea which has been touted in management circles is to push for a “harmonisation” of grant rates across different technical fields. It goes without saying that the “hidden agenda” here is a push for “upward harmonisation” in areas which historically have low grant rates. A particular focus of attention in this regard is the ICT sector.

The managerial thinking on this score is that, if examiners working in such areas could be “persuaded” to issue less refusals and more grants, this could help to prop up flagging grant numbers.

So far the desire for increased “harmonisation” of grant rates has remained an unfulfilled managerial fantasy.

However, certain personnel changes connected with an EPO-wide “reorganisation” in April of this year [PDF], suggest that efforts are now afoot to transform this managerial “fantasy” into reality.

“So far the desire for increased “harmonisation” of grant rates has remained an unfulfilled managerial fantasy.”More precisely, in the context of the EPO’s latest internal “reorganisation”, the three “Chief Operating Officers” (COOs) responsible for different technical sectors within the Patent Examination Directorate DG1 were replaced by a single COO with global responsibility for all DG1 examination “Operations”.

Previously, examination directorates were grouped into three main technical sectors – Mechatronics & Mobility, Healthcare, Biotechnology & Chemistry and Information & Communication Technology (ICT) – with a separate COO in charge of each sector.

Now there is a single COO who is responsible for all technical sectors from “Agri-Food”, through “Mobility and Space Technologies”, “Electronics and Physics” to “Materials and Production”.


EPO's Chief Operating Officers
Previously there were three COOs, each in charge of a distinct technical sector.


Now there is only a single COO with global responsibility for all sectors.

According to EPO insiders, this is a clear sign that management is gearing up for a concerted drive towards increased “harmonisation” across disparate technical fields.

Reliable sources are predicting a managerial-driven “push” for an increased grant rate which will target selected areas that are perceived as “under-performing” – that is to say, “below average” when it comes to generating national renewal fee cash-flow via granted patents.

The ICT sector is rumoured to be one of the main targets of this managerial initiative, in particular the area of computer-implemented “business and administrative methods” (CPC class G06Q).

In the upcoming parts we will take a closer look at some of the leading protagonists in this affair, starting with the EPO’s new “Chief Operating Officer Operations”.

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