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10.14.18

USPTO FEES Act/SUCCESS Act Gives More Powers to Director Iancu, Supplying Patents for Litigation ‘Business’ and Embargo (ITC)

Posted in America, Finance, Patents at 11:25 am by Dr. Roy Schestowitz

Athens

Summary: Corruption of the US patent system contributes to various issues which rely on the extrajudicial nature of some elements in this system; companies can literally have their products confiscated or imports blocked, based on wrongly-granted patents

UNLIKE the unaccountable EPO, the U.S. Patent and Trademark Office (USPTO) is loosely connected to the government, it can be sued, and it can be held accountable. This is a good thing.

“Donald Trump is also the person who nominated Iancu after Iancu’s firm had worked for Donald Trump.”Laws that govern the USPTO are also decided upon by courts and politicians, not USPTO managers (who may merely supply guidelines for compliance with these laws, e.g. 35 U.S.C. § 101). Last month we said that USPTO FEES ACT Makes the US Patent Office a Money-Making Machine That Systematically Disregards Patent Quality and days ago patent maximalists rejoiced this:

The SUCCESS Act (HR 6758) has now passed through both the House and Senate and will very likely be signed into law by President Donald Trump within the next couple of weeks.

The key aspect of the bill is extension of USPTO fee setting authority that ended in September 2018 (7 years after AIA enactment). Under the new law, USPTO will retain authority to set its own fee structure until September 2026 (15 years from AIA enactment).

[...]

Within 1 year, the PTO Director will provide a report to Congress on the results.

Donald Trump is also the person who nominated Iancu after Iancu's firm had worked for Donald Trump. We worry that there’s a rather gross attempt to bypass the courts and become more lenient in examination. As we shall cover tomorrow, there’s evidence of this. Nothing good will come out of an office which favours money over reputation. It’s not like some corporation that should strive to meet fiscal objectives and raise revenues on a quarterly basis.

Speaking of Trump and Iancu, how about the following recent photo?

Trump and Iancu

And another one tweeted by the bribed/bought-for politician (for pharmaceutical patents)?

Trump and Hatch

Best policies corporate money can buy?

Wrongly-granted patents are a very big deal because embargoes can be imposed using such patents. Consider what Justin M. Sobaje (Foley & Lardner LLP) wrote some days ago on how to embargo or how to put more blackmailing power/pressure if you’re a patent troll (a.k.a. “NPE”). The National Law Review published this:

Many patent practitioners assume that non-practicing entities cannot obtain permanent injunctions in patent cases. This is attributed to the belief that NPEs fail the four-factor test set out by the Supreme Court in eBay. Given that belief, it is surprising for some to learn that a recent decision from the Northern District of California resurrected decade old case law indicating that non-practicing entities can get injunctive relief. Practitioners having cases involving NPEs would do well to study this line of reasoning to be prepared for arguments surrounding permanent injunctions.

The four-factor test identified by the Supreme Court in eBay for determining whether to award permanent injunctive relief to a prevailing plaintiff requires the plaintiff to demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law are inadequate to compensate for that injury; (3) that considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S. Ct. 1837, 1839 (2006). After the eBay decision in 2006, it has been extremely rare for NPEs to be awarded permanent injunctions, but a recent district court decision has resurfaced the issue.

The ITC is notoriously lax and only a couple of days ago Watchtroll said that “ITC Institutes Section 337 Investigation of ResMed’s Sleep Apnea Masks — a case we covered a month ago. This is the latest twist (from earlier this month): “On Friday, October 5th, the U.S. International Trade Commission (ITC) issued a notice of institution of a Section 337 patent infringement investigation requested by New Zealand-based appliance manufacturer Fisher & Paykel against San Diego, CA-based medical equipment firm ResMed. The ITC instituted the Section 337 investigation after Fisher & Paykel alleged that certain sleep apnea products imported for sale by ResMed infringe upon U.S. patents held by the New Zealand firm.”

“We suppose that in this age of Iancu and Trump, however, business rather than justice is what matters.”The ITC tends to favour the companies from the US, as its own name serves to suggest. It’s a protectionist entity that relies on the false assumption US patents are valid, no matter what the Patent Trial and Appeal Board (PTAB) says. In the case of Cisco the ITC vainly disregarded the PTAB’s decision to invalidate the patent under investigation.

We suppose that in this age of Iancu and Trump, however, business rather than justice is what matters. It’s all about money and authority over finances is back with Iancu now. This is not good.

Over at IAM, the megaphone of patent trolls, SpencePC (US) has meanwhile published this long piece titled “Global patent litigation strategy” (what ITC is enabling). These patent law firms are scheming/planning how to sue the whole world in order to charge their clients and tax everything. They pursue more and more patents for the sake of patent litigation alone. No good will come out of it.

10.06.18

Is Hyatt an Inventor or a Tax Evader?

Posted in America, Finance, Patents at 6:24 am by Dr. Roy Schestowitz

Or innovator in tax evasion?

Gil Hyatt
Reference: Inventor battling U.S. over patents from ’70s

Summary: Gil Hyatt deserves to be better known for his innovation in tax avoidance; he does, however, try to come across as a brilliant inventor and USPTO staff views him as nothing but a nuisance

THE examiners at the USPTO are not friends of Hyatt. He likes to portray himself as an inventor, but in reality this charlatan has exploited the US patent system in rather notorious ways. Staff of the USPTO knows this and it knows him personally. Some of them, according to him, just can’t wait for him to die.

“Perhaps therein lies his greatest ‘innovation’: how to evade taxes.”Watchtroll likes these types; Hyatt doesn’t need to be a brilliant person, he just needs to be a patent maximalist in order to impress the Watchtroll crowd/audience (which seems to have gotten rather small and feedble; there are hardly comments in the site and the number of articles fell sharply as well).

Time-bar issues were recalled yesterday by Watchtroll (in relation to the Federal Circuit). To quote: “The Federal Circuit recently vacated and remanded a final written decision by the Patent Trial and Appeal Board (“Board”) holding that a petition for inter partes review was not time-barred under 35 U.S.C. § 315(b) and sanctions were warranted for failing to identify a real-party-in-interest. In vacating the Board’s decision, the Federal Circuit emphasized that there are no exceptions to the statutory time limit for filing a petition for inter partesreview in 35 U.S.C. § 315(b). Because the petition was filed more than 18 months after the statutory time limit, the Board lacked authority to institute reviewand issue a final written decision. Further, because the Board’s award of sanctions was not final, the Federal Circuit lacked jurisdiction to review the award and remanded for reconsideration by the Board. Bennett Regulator Guards, Inc. v. Atlanta Gas Light Co., Nos. 17-1555, 17-1626, 2018 U.S. App. LEXIS 27666 (Fed. Cir. Sept. 28, 2018) (Before Lourie, Clevenger, and Stoll, Circuit Judges) (Opinion for the Court by Stoll, Circuit Judge).”

We wrote about this before; they’re catching up with rather old news, just as they did a short time apart (from the above) when dealing with time-barred challenges in relation to Hyatt, whom we mentioned back in May, last month, and a week ago in relation to tax evasion. This is what Watchtroll wrote:

The Federal Circuit recently issued an opinion in a decades-longbattle over the microcomputer patent applications of Mr. Hyatt, the named inventor on more than 70 issued patents and approximately 400 pending patent applications. The Court ultimately rejected Mr. Hyatt’s challenges to Manual Patent Examining Procedure (“MPEP”) § 1207.04, allowing an examiner to reopen prosecution with a new ground of rejection instead of continuing an already filed appeal. See Hyatt v. USPTO, No. 2017-1722, 2018 U.S. App. LEXIS 27213 (Fed Cir. Sept. 24, 2018) (Before Reyna, Wallach, and Hughes, Circuit Judges) (Opinion for the court, Hughes, Circuit Judge).

Hyatt’s antics are well documented; he derives much money from patent shakedown (using questionable patents) and wants yet more patents. He also tries to avoid paying tax — a rather controversial aspect of patents in general. A lot of money is being passed by calling patents “assets”, passing these around like “property” without having to pay any tax. Some call it “patent boxes”, especially in Europe. Call it fraud, legalised plunder, thievery, tax dodge by oligarchy, or corruption and that might actually be an accurate description of what the press shyly refers to as “tricks” or “haven” or “accounting”. We wrote about this some days ago and now there’s this new article by McDermott Will & Emery, which speaks of the use of patents for tax evasion. It’s composed by a law firm that facilitates these sorts of things, so the headline is rather soft: “When Patent Royalties Go to Tax Havens”

To quote:

Addressing the classic case of a US multinational shifting income to a tax haven, the US Court of Appeals for the Eighth Circuit vacated the US Tax Court’s transfer pricing analysis because it failed to account for key differences between an intercompany patent license agreement and a settlement agreement for patent litigation. Medtronic, Inc. v. Commissioner, Case No.17-1866 (8th Cir. Aug. 16, 2018) (Wollman, J) (Shepherd, J, concurring).

The Internal Revenue Service (IRS) alleged that Medtronic improperly allocated taxable income to its affiliate in a “tax haven.” Medtronic US had entered into various agreements with Medtronic Puerto Rico for the latter to manufacture certain medical devices. These intercompany agreements included IP licenses from Medtronic US to Medtronic Puerto Rico and payment terms related to those IP licenses. The IRS alleged that these payments improperly shifted taxable income to Puerto Rico (IP Update, Vol. 19, No. 7).

Taxable income is allocated properly between related entities when the intercompany agreements are on terms that the parties would have negotiated in an arm’s length transaction. One method for determining the terms of an arm’s length transaction is the comparable uncontrolled transactions (CUT) method. The CUT method finds a similar transaction and uses that transaction to determine the arm’s length deal terms for the related entities.

Last year in summer Hyatt managed to avoid taxes using similar tricks [1, 2]. Perhaps therein lies his greatest ‘innovation’: how to evade taxes. Or how to endlessly sue everyone (the USPTO, the state etc.) to get one’s way.

10.03.18

More Patents Would Mean More Tax Evasion for Large Corporations and More Taxes/Duties on Society

Posted in Europe, Finance, Patents at 4:04 am by Dr. Roy Schestowitz

Money in post

Summary: The EPO’s love-affair with abstract (e.g. software) patents is good news for those to whom quality/enforceability of patents doesn’t matter, only volume (for cross-licensing, shakedown and tax evasion purposes)

THE ‘plague’ which is patent maximalism has truly invaded Europe and a cabal of clueless officials, very few of whom have any background whatsoever in the sciences, would only listen to large law firms, not local businesses that actually produce things. This is a problem. Policy is being shaped to increase the volume of litigation rather than innovation. Evidence-based studies aren’t taken into account; instead it’s all dogma. It’s a ‘brain virus’. The patent microcosm profits from it.

“Examiners at the EPO are smart enough to see what the management is doing. It’s pressuring staff and compelling the examiners to grant software patents or risk getting sacked (a very high risk now that there are slow-motion layoffs).”As readers may very well know, 35 U.S.C. § 101 at the U.S. Patent and Trademark Office (USPTO) means that software patents are virtually if not practically verboten (courts would not tolerate these) and software patents in Europe aren’t allowed or at severely restricted — a simple fact that doesn’t seem to bother former banker António Campinos, whose experience in this domain is about as limited as Battistelli’s.

Nowadays the EPO allows patenting of software provided you use buzzwords. So says Marks & Clerk’s Darren Hau (paid-for placement in Lexology), coming from a firm of software patents boosters. Hours ago he wrote:

In its annual update of the “Guidelines for Examination”, the European Patent Office (EPO) has provided further guidance for its examiners in relation to the patentability of inventions relating to mathematical methods and computer programs. This updated guidance is of particular relevance to inventions relating to the fast-growing field of Artificial Intelligence (AI). In part 1 of this article, we provide a summary of the key points from the updated guidelines that are relevant to AI inventions. Part 2 will follow, in which we will provide an in-depth assessment of the impact of the new guidelines on the patentability of AI inventions.

By way of background, the patentability of computer implemented inventions at the EPO has long been governed by the general principle of requiring a non-obvious technical solution to a technical problem, as established by the EPO Boards of Appeal in T0641/00 (COMVIK).

[...]

In summary, a claim to an AI algorithm based upon a mathematical or computational model on its own is likely to be considered non-technical. A simple recitation of a type of artificial intelligence model being employed, such as, a neural network, a support vector machine, or reasoning engine alone in the claims is unlikely to overcome such objections. However, restriction of the claim to a specific technical purpose and/or a specific technical implementation may impart technical character onto the AI algorithm and thus the invention may be considered patentable by the EPO.

Examiners at the EPO are smart enough to see what the management is doing. It’s pressuring staff and compelling the examiners to grant software patents or risk getting sacked (a very high risk now that there are slow-motion layoffs).

“The more patents they get, the more ‘tax returns’ (or exemptions) they can get. Therein lies the recipe for a perfect blunder if not plunder.”Who benefits from these patents? Certainly not Europe. Certainly not programmers, either. But it’s all about law firms and their foreign clients, which include patent trolls from other continents.

Also in the week’s early news there’s this is a reminder that France facilitates tax evasion using patents or what’s euphemistically being called “patent boxes”; this is costing billions to the British economy (lost tax), as revealed quite recently in annual figures, and it benefits rich corporations, not small ones. This new article has the details and from its relevant part:

Let’s be honest: France never was famous for its tax attractiveness. Its patent box regime, though quite modern when first enacted in the 1960’s, grew a bit rusty and rigid as compared to those adopted by our EU partners.

It turned out to be non-compliant with the latest OECD recommendations and, more specifically, with its conclusions under Action 8 of the BEPS action plan.

The latter advocated for the implementation of the so-called “nexus” approach, which correlates the benefit of the reduced tax rate applicable to profits derived from licensing, sublicensing, or selling patents and like assets to R&D expenses borne to create them. Surprisingly, such approach was absent from the French regime.

We, together with other tax practitioners and companies, strongly advocated for a thorough revision of the patent box regime. The current draft, unfortunately, suggests rather prudent changes and amendments.

First (and without much surprise), the draft bill proposes to adopt the nexus approach. Direct references to the OECD talks are made in the preparatory work of the bill. Going forward, the reduced rate will be directly correlated to the amount of R&D expenses borne by French taxpayers.

Luckily this regime will continue to coexist with the French R&D tax credit. In addition, the French government suggests expanding the scope of the regime to profits derived from the license or sale of IT software.

Up to now, these flows touching upon software fell out of the ambit of the French patent box regime (which, as its name suggests, was limited to patents and similar intangible property). Yet, patentable inventions would now be excluded from such regime.

One will regret that this regime was not modernized, notably by lowering the rate. The regime will quite certainly remain at 15%, whereas most EU countries have adopted IP tax regimes subject to 10% rates or lower.

So in the name of “tax attractiveness” they basically give tax cuts to the rich and then dress that up as “patents”, saying that it’s something to do with “R&D” — a lie so commonplace that anyone with a clue would likely giggle rather than nod. The more patents they get, the more ‘tax returns’ (or exemptions) they can get. Therein lies the recipe for a perfect blunder if not plunder.

06.28.18

President Benoît Battistelli is Finished, But the Huge Mess He Has Created is Not

Posted in Europe, Finance, Law, Patents at 12:59 pm by Dr. Roy Schestowitz

Dutch EPO protest

Summary: Benoît Battistelli is leaving the EPO after another ruinous and disastrous week in which he lost all of his cases against staff representatives (more than 2 years after his union-busting crusade resulted in sackings and culminated in a climate of unprecedented terror inside the Office)

IT’S OVER. He’s done breaking things. Will the EPO survive this breakage? Time will tell.

Benoît Battistelli has just published (warning: epo.org link) his “Farewell Message” and it was promoted in Twitter almost immediately.

“Justice can be notoriously slow, as many EPO insiders are abundantly aware, and laws are selectively applied, typically to protect those in positions of power.”Many serious abuses under his belt. Many people think (or hope) he might get arrested in the future, just like Nicolas Sarkozy. Justice can be notoriously slow, as many EPO insiders are abundantly aware, and laws are selectively applied, typically to protect those in positions of power.

The EPO refuses to talk about justice. Still not a word about ILO/ILO-AT. Still publishing yet more Battistelli photo ops in a construction site which was a failed project (massive losses). They have also just retweeted nighttime pictures from an angle that hides how crude and unfinished this project really is.

“The EPO refuses to talk about justice. Still not a word about ILO/ILO-AT.”Battistelli’s blog post is the same old nonsense which requires a bag within reach (in case of vomiting). It remains to be seen whether António Campinos will carry on with the same stained (full of lies) blog.

We’re still trying to find more coverage about yesterday’s protest.There are tweets in Dutch [1, 2, 3, 4] about the protest at the EPO but barely any press coverage (i.e. the usual). There’s the photo shown above (no faces). SUEPO now links to an article about it — the sole one we saw (so far). One more article about ILO-AT has just been published by WIPR, two days after the historic rulings. To quote some bits:

The International Labour Organization’s Administrative Tribunal (ILOAT) reversed the downgrading of one staff member of the European Patent Office (EPO) and reinstated another in decisions handed down earlier this week.

In case 4042, the ILOAT ordered the reinstatement of Malika Weaver, who had challenged the EPO’s decision to downgrade her for misconduct.

[...]

The SUEPO Munich committee chairman was accused of having actively incited Weaver to unduly pressure C and of forwarding the confidential letter to the Munich committee.

While the disciplinary committee found there was insufficient evidence of Brumme’s active involvement in the exercise of undue pressure, it did find that he had disclosed confidential information.

The committee recommended downgrading, but Battistelli dismissed him.

Earlier this week, the ILOAT set aside the EPO’s decision and ordered the organisation to reinstate Brumme. He was awarded moral damages of €30,000 and costs of €8,000.

In case 4047, another complainant challenged the EPO’s decision to dismiss her for serious misconduct.

The ILOAT found that the disciplinary committee and president hadn’t correctly applied the appropriate standard of proof and remitted the case to be “considered afresh”.

The tribunal backed the EPO in another case, dismissing a complaint against relegation in case 4050.

Out of 75 Judgments, 17 concerned the EPO. Of those 17, the ILOAT ruled against the complainants in 10 cases.

Don’t forget Judge Corcoran, whose case demonstrates that the EPO still refuses to obey ILO and implement resolutions. Will Campinos give any jobs back, reinstating fired workers? Time will tell. The EPO has just said: “This year’s conference will update participants on the reform of the structure of the Boards of Appeal and of the Boards’ Rules of Procedure.”

“But worry not, as a former banker who is loyal to Battistelli (since many years ago) Campinos won’t dare investigate.”“They totally lost their independence when Battistelli repeatedly did illegal things,” I told them. “He should be put on trial.”

But the EPO’s PR people, even after Battistelli says “farewell” (technically his last day is tomorrow), are still bossed by Team Battistelli and they push the same toxic agenda, suppressing particular facts while pushing lies. Their account also retweets UPC pushers from CIPA today. What does the future hold? Campinos is indebted to Battistelli, so it doesn’t look bright. Maybe Battistelli will still be around in Munich next week, sharing alcoholic drinks like very expensive wines at the pub he built for himself (and now Campinos). It’s alleged that he misused money dedicated for the building in the Netherlands to secretly build that 'penthouse' of his. But worry not, as a former banker who is loyal to Battistelli (since many years ago) Campinos won’t dare investigate. Besides, he benefits from this ‘inheritance’.

06.26.18

Battistelli is ‘Pulling a Lamy’ With a Lot More Money at Stake (and Examiners’ Future)

Posted in Europe, Finance, Patents at 2:03 am by Dr. Roy Schestowitz

Quietly during the last Christmas holiday when nobody paid any attention: EPO Has Become an ‘Investment Bank’

SIPO Lamy and Battistelli
Saint-Germain-en-Laye as the EPO’s clandestine ‘branch’? Battistelli and Lamy with Commissioner Shen of the Chinese State Intellectual Property Office and Raimund Lutz lurking in the background.

Summary: Benoît Battistelli is gambling with the future of EPO examiners and the EPO at large (applicants and EP holders rely on the EPO’s stability), as even SUEPO belatedly notes in a letter one anonymous source has passed to us

It was exactly one month ago (May 26th) that we concluded our toxic loan series and its relevance to the EPO. Here are all the relevant posts:

Readers may also want to read parts 1, 2 and 3 of St. Germain’s “Système Lamy” and Its EPO Clone.

As we noted a few days ago, Wirtschaftswoche WIWO now covers these issues. Better late than never, right? German media belatedly covers EPO scandals (while Battistelli has 5 days of diplomatic immunity left). SUEPO took note of it (two pages/articles) and we expect translations to show up soon. Petra Sorge authored it and Thorsten Bausch is mentioned in it. We presume they also used our information (as above) in their research; Bausch had certainly read that with interest.

“What would that make stakeholders think (if they all knew about it)?”What will António Campinos, a former banker (at a notorious Portuguese bank), do about all this? He can’t quite defy Battistelli’s will, can he? He knows where his job came from and they’ve long been close. Will he carry on gambling with stakeholders’ money? What would that make stakeholders think (if they all knew about it)?

Well, the main stakeholder in all this is EPO staff, e.g. their pensions. And SUEPO has just written about this as follows:

22 June 2018

The new EPO Treasury Investment Fund – institutionalized gambling with someone else’s1 money?

Dear colleagues,

Through a combination of reduced career progression and extraordinary productivity gains, the Office has made an operating surplus of the order of several hundred million Euros each year as well as paid for in full for its new building in The Hague. Yet the Office’s cash reserve today still amounts to around €2.4 billion.

It was foreseen by a decision2 of the Administrative Council (AC) that any such surplus generated by staff’s work was to be transferred into the Reserve Fund for Pensions and Social Security (RFPSS) to cover future obligations. The RFPSS was set up and financed by staff (1/3rd) and the Office (2/3rd) and has performed very well since its inception: it now has a value of over €8 billion.

However, in more recent years the Office has departed from this decision and instead injected only a fraction of the operating surplus into the RFPSS while retaining large parts of the money within the EPO treasury.

According to the IFRS2 accounting method, the EPO accounts show a negative equity of about €12 billion, mainly due to long term obligations such as pension obligations4. As should be apparent from the example in the footnote below, this negative equity is very sensitive to the discount rate applied to these obligations. The discount rate applied according to the

IFRS depends on the bond markets and is thus inherently volatile from one year to the next. For example, in 2011, this negative equity was €1.9 billion (applying a discount rate of
5.38%), which is less than the start-up capital for the EPOTIF. In 2014, it was calculated at some €12 billion (applying a discount rate of 1,61%),very similar to today’s figure. However, in 2015 some €4,5 billion of the negative equity “disappeared” without any substantive change in the operational income, simply due to applying the higher discount rate of 2,6%. Therefore, there would appear is no reason to now panic and take hasty or rushed decisions.

The President has followed a proposal in the second financial study to invest the present and future office treasury money to cover for these huge, fictive obligations in a new fund under new management. The more straight forward approach would have been to simply invest the money in the existing RFPSS.

However, on the proposal of the President, the Budget and Finance Committee (BFC) approved the setting-up of a new external EPO Treasury Investment Fund (EPOTIF)5.

The staff representation is strongly opposed to the creation of another fund, in particular one that is managed externally and whose investment strategy will lack the necessary internal checks & balances to avoid high risk investments, see sc17207cl, su18038cl and su18039cl (letters sent to AC and Auditors). At the last BFC meeting, the delegations also
asked for more information: the German Delegation requested to review any contracts ahead of any decision on fund management. In 2017, the German Bundesrechnungshof gave a negative opinion on setting up such risky funds in 2017. Perhaps unsurprisingly, the President declined all requests to provide any detailed contract data to the BFC, the very body who are supposed to make informed decisions based on the financial situation of the EPO.

The RFPSS fund management provides already for the appropriate checks and balances and risk limiting mechanisms. Furthermore, the costs of the RFPSS management are only a third of those estimated for the new outsourced EPOTIF. Finally, the RFPSS has to date performed very well, producing higher returns on average than those predicted for the EPOTIF.

It is extraordinary that this far reaching proposal with no meaningful risk limits (the only one contained in the proposal is ill-defined and therefore does not cover a number of risks6) has not been put to the AC for vote, rather only to the BFC in 2017. As such, we believe that this decision was taken ultra-vires by the BFC. Further to the above obvious argument raised by the staff representation, a number of AC delegations stated back in 2017 that this important and far reaching decision should be deferred until the new President takes up office next month. However, the incumbent President stated that it would be only a further loss of time and money if the cash reserves (€2.4 billion) were not be invested as soon as possible. According to his estimates, the gain foreseen for the first year is estimated to €70 million and then €100 million per annum from the next year onwards.

Had the President, however, simply followed the AC decision in the early 1980’s (CA/27/83 point 19) to transfer any surplus into the RFPSS, then the EPO would have already accumulated gains in the order of several hundred million Euros over the past years and the money would have been safely placed in low-risk investments.
SUEPO strongly opposes such risky institutionalized gambling with the staff’s and the applicant’s money. If it all goes wrong, who will foot the bill?

SUEPO have informed the Auditors on the situation and asked them for their opinion.

SUEPO will urgently address this issue with the new President Mr. Campinos: a swift return to a more meaningful and safe financing of our own social security. Meanwhile, all legal means will be explored to minimise the impact of the new fund on the Office’s finances and any appropriate action will be taken.

SUEPO fights for your rights.

Your SUEPO Central

_____
1 EPO staff and the applicants
2 BFC document CA/27/83 point 19 endorsed by the AC in June 1983 with CA/PV 16 pg 69, para 195ff
3 a method introduced for listed companies and which is not properly adapted for “business models” such as public services, particularly for those of patent offices like the EPO
4 The vast majority of the EPO’s long term obligations are pension obligations whose present value strongly depends on the discount rate applied. For illustration, to pay someone €1000 pension in 50 years’ time, you would have to put aside today either €68,77 [1000/(1+5.5%)50] if you apply a discount rate of 5,5% or €475 [1000/(1+1.5%)50] with a discount rate of 1,5%,a difference of €406. The actuaries who make a recommendation for the EPO’s pension contributions use the same calculation method as IFRS for this calculation, but apply a discount rate of 5.5%. Since the IFRS discount rate is currently much lower than that, the apparent long term pension obligations calculated according to the IFRS method are much higher, thereby suggesting that the EPO should have put much more money aside to cover these pension obligations than it actually did. This over-valued obligation directly inflates the negative equity. Consequently, it is this perceived underfunding that contributes the lion share to the negative equity. This would change drastically through raising discount rates and rates do change considerably with time. For example, in the first years of this century, with higher discount rates, the equity gap was rather small. If the discount rate were to increase to figures like we enjoyed in the 1980’s, then any lingering negative equity due to pension obligations could be transformed into a high surplus.
5 The German delegation voted against as the Bundesrechnunghof had not provided its consensus; three delegations abstained (IT, IE, CZ); two delegations (PT, LI) were absent. All others voted in favour.
6 There, actually, isn‘t a single risk measure which can cover all the aspects of financial risks arising from different assets. This is why the RFPSS and similar funds use a combination of different risk measures.

This won’t end well and we certainly don’t expect Mr. Campinos to do anything about it. Maybe he too stands to benefit from the gamble.

06.25.18

Benoît Battistelli’s ‘Dowry’ From the Administrative Council of the EPO

Posted in Europe, Finance, Fraud, Patents at 8:02 am by Dr. Roy Schestowitz

It might not be the last, either

EPO budget
Image source

Summary: The dreadful state of the EPO, where one man controls everything and mismanages money (sending a huge amount of money to his other employer, giving himself a massive bonus or a “golden parachute”, allegedly paying for national delegates’ votes and gambling with EPO budget), won’t be improved until the entire organisation removes “Team Battistelli” (the manifestation of Battistelli’s 8-year rogue regime)

Battistelli’s very last day at work is this coming Friday. António Campinos will take over after that; he’s more or less Battistelli’s own choice and he too is French.

Another quarterly congregation of the Administrative Council of the EPO will commence in 2 days. Last time it was so secretive that it was hard to confirm that they had given Battistelli a massive bonus (like three years of additional work but without doing anything!).

“It is far worse than FIFA has ever been.”Isn’t it odd that the Administrative Council never said anything (at least not on the record) about Battistelli sending millions of euros (EPO budget) to his other employer? Well, thankfully (albeit very belatedly) German media says something about it (see “Die unheimliche Wette”, as mentioned in our recent post). Just a few hours ago SUEPO wrote: “Publication rights requested and awaiting confirmation…” (so expect an English (and probably French) translation some time soon).

Campinos, a former banker, will likely cover up Battistelli’s financial recklessness and misbehaviour. Remember that a person close to Battistelli (also French) is in the relevant committee. We last mentioned this aspect when dealing with the toxic loans scandals at Battistelli’s other employer. Don’t forget what was mentioned here before in relation to the Greek element in the Finance and Budget Committee (Loredana Gulino). The following comment brought it up again earlier this month. It said this:

What do you expect from someone [Battistelli] with a greek best friend in the Finance and Budget Committee until 2016 (for two years this greek guy was the head of the committee without even having a position in his own country!!!! …and every single one just covered it). However, rumor has it, that during his past tenancy in the greek patent institute (2005-2013) he was a master in bullying….

The EPO is corrupt to the core. It’s worth saying this again: at this stage, considering Ernst’s complicity and Campinos’ ‘selection’ (with Battistelli calling many shots), not to mention Team Battistelli remaining in tact at the very top, the EPO needs to be completely rebooted. High-level management needs to be ‘flushed’ and they need to start all over again to salvage the institution. It is far worse than FIFA has ever been.

06.09.18

Benoît Battistelli Should Have Received an Award for Corruption, But He Completely Controlled the Show in His Own Theatre

Posted in Europe, Finance, Patents at 8:46 am by Dr. Roy Schestowitz

Battistelli has just ‘pulled a Henry Kissinger’

Son of Campinos

Summary: Having abused/misused diplomatic immunity for about 8 years, Benoît Battistelli now passes this immunity to his old friend (António Campinos) and arranges to receive an award in France, for fighting what they call “piracy”

THE king of EPO corruption is about to officially — at least on paper — finish his term, but not before he gets some 'royal' treatments in the unfinished Dutch branch. It’s pretty incredible what he got away with; like a true king, he’s demonstrably above the law and he’s never reluctant to break laws which he subjects others to. The USPTO, which is a federally-enshrined institution, operates differently, so staff does not enjoy the same sort of immunity (not even the chiefs).

“We wish to remind our readers that Battistelli’s immunity expires in a few weeks with no imminent role (anywhere) to expand this thug’s protection from the Rule of Law.”Speaking of immunity, remember what happened at EU-IPO. Caricatures like the above were made about it last year (and circulated inside the EPO).

Currently, the EU-IPO is all about António Campinos, who starts his job at the EPO in about 3 weeks, taking over from another Frenchman whom he knew for many years. He made the EU-IPO 'study' all about himself this past week (we’ve seen him explicitly mentioned in about 50 articles; here’s one in English) — a very Battistelli-like style of personification and self promotion.

We wish to remind our readers that Battistelli’s immunity expires in a few weeks with no imminent role (anywhere) to expand this thug’s protection from the Rule of Law. As for Campinos, he has enjoyed diplomatic immunity for a number of years and 5 years inside the EPO’s management team may mean that it will be impossible to sue him until 2023 (if not much later). Will he exploit such immunity the way Battistelli did? That remains to be seen. Can lawsuits be filed against monsters/mobsters like Battistelli for what he did whilst immune? We’re not lawyers (none of us), so we’re not sure about the scope and limits of diplomatic immunity; we urge EPO staff (past and present) to investigate this matter and consider action. Battistelli and his thugs were very eager to hire several law firms and legally bully me, knowing that they enjoyed disproportionate legal power because they’re resistant to prosecution and probably to subpoenas too.

“Battistelli and his thugs were very eager to hire several law firms and legally bully me, knowing that they enjoyed disproportionate legal power because they’re resistant to prosecution and probably to subpoenas too.”Battistelli won’t leave the Office without insulting everything and everyone associated with the Office. He already tarnishes any remnant of reputation, falsely believing that hiring not one but several PR agencies (external to the EPO itself) will help compensate for it. We’ve quietly and patiently observed puff pieces from “media partners” (as usual) and press releases over the past few days. We would rather not link to these but only point out that the EPO works again (just like last year) with Shepard Fox Communications. From one of the press releases (trying to appeal to the cause of feminism, emphasising an ethical aspect, at least a perceived one after that "diversity" ploy celebrated a day beforehand) we have extracted the role of Shepard Fox Communications, but from another press release we extract the following again:

UK media contact:
Barbara Geier
echolot pr
Tel: 0044 (0)7983 242 195
barbara@bconnects.net

We have mentioned her before [1, 2]; they’re literally writing some of the ‘articles’ (their name remains in the metadata).

Now, on to the event — the one that the EPO wastes a fortune on (European Inventor Award). It’s all about the ‘king’, who is presenting the show in his own theatre that he’s responsible for! From the EPO’s official account: “President Battistelli: “We are here to celebrate these inventors and I would like you to consider that all our nominees deserve our congratulations and out thanks” [] We wouldn’t have been able to produce this shortlist of impressive nominees without our international jury, says President Battistelli. [] President Battistelli officially opens the Ceremony: “I would like to offer you a very warm welcome to the European Inventor Award 2018”…”

So the star of the show is — as usual — the ‘king’ himself.

“…they’re [PR firms] literally writing some of the ‘articles’ (their name remains in the metadata).”Here’s what the EPO wrote at the end (warning: epo.org link), after about 60 (re/)tweets that day. Yes, this charade of Battistelli is all about Battistelli himself. He pays not a dime for it (not his own anyway) and gains financially from it, as do his colleagues in France. We prefer not to heckle scientists who were there, e.g. to accept prizes (they’re not part of the abuse and some may not even be aware of how they’re being used for a money-passing ‘cover’). We prefer not to name them or give ‘free’ publicity to this terrible festival, which Battistelli celebrates for his own personal interests.

Call it laughable or call it outrageous, but crooked Battistelli is ‘giving’ a bogus award to himself on the same day that he loots the EPO (the ‘crime’). We believe that crooks like him and Sarkozy would get away with murder, albeit what happens after he loses his immunity remains to be seen (Sarkozy got arrested some months ago, well after he was leader of France). The award of Battistelli was “presented to him in Paris,” according to the EPO (warning: epo.org link). It looks like a prearranged and staged ceremony, wherein “Global Anti-Counterfeiting Group” (we never heard of it before!) was trying to frame a likely criminal as an anti-crime person. It’s like that Nobel peace prize granted to Henry Kissinger. It took decades for the Nobel ‘franchise’ to recover from that (if it ever recovered at all). Battistelli is trying to legitimise himself while he’s engaging in serious corruption in the theatre which he manages. Yes, published “7 June 2018″ (same day as European Inventor Award) and also in France:

The Global Anti-Counterfeiting Group (GACG) today honoured EPO President Benoît Battistelli with a special award for his services to intellectual property. The 2018 prize in the individual achievement category was presented to him in Paris on the occasion of an Awards ceremony celebrating the World Anti-Counterfeiting Day- which recognises national and international efforts to curb counterfeiting and piracy.

“Marking their 20th year, the GACG Awards were held at the Museé de Contrefaçon, housed at the Headquarters of the Union des Fabricants (UNIFAB),” it says. So they didn’t even exist until the late nineties and we never ever heard of them before. Sounds dodgy or what?

“Even the Oscars don’t reach these levels of corruption,” I told this person, who laughably enough wrote (to soon be retweeted by the EPO):

European Inventor Award 2018 – think the Oscars for Patents – EPO put on an incredible program. Block out your calendar for this in 2019. @aipla @EPOorg #inventoraward pic.twitter.com/OiK9TnSrAt

Oscars?!

Got to be joking! It’s not even remotely comparable. The Oscars are watched by hundreds of millions worldwide. How many people tuned in for European Inventor Award? Several thousands on a live feed?

“…this scheme will soon be managed by a former banker, whose employer (the bank) is notorious for corruption. How’s that for EPO hope or optimism?”What the European Inventor Awards are nowadays stigmatised for (past and present) is fraud, scams, and corruption. This is Battistelli’s legacy. He kept placing them in France, in spite of the long tradition of hosting in the EU Presidency’s nation, and he ended up landing the event in the theatre that he’s managing.

Märpel has just brought up the word “corruption” in relation to the lack of accountability at the EPO. To quote:

After the last article, some people approached Märpel with questions. The word “corruption” was used.

Märpel would like to point out that she did not use that word.

Let us just say that there are many ways to win people to one’s cause but that it is always much easier when they believe that your cause is also theirs. Mr. Petrović was always convinced that this cause was just.

[...]

Märpel believes that this is exactly what happened at the EPO. President Battistelli saw the opportunity to seize power and turned the organisation to a ghost of its former self: it does not fulfil its mission of examining patents any more, it is haemorrhaging staff, its financial assets have been seized by what could be a Ponzi scheme (over 2 billions Euros). All what was needed was complacency from the judiciary.

What Märpel refers to as “Ponzi scheme” was recently covered by Märpel. Well, this scheme will soon be managed by a former banker, whose employer (the bank) is notorious for corruption. How’s that for EPO hope or optimism?

05.30.18

Märpel Looks at Benoît Battistelli’s Toxic Financial Affairs at the EPO

Posted in Europe, Finance, Patents at 11:55 pm by Dr. Roy Schestowitz

Recent: Benoît Battistelli the Latest Example of Massive Bonuses Given to People Who Destroyed Their Own Organisation

Financial image

Summary: More and more people/circles raise serious questions about Battistelli’s financial dealings at the EPO

THE scandals at the EPO are greater in number and magnitude than it may seem. Some of them may take years to come to the surface. The USPTO, by contrast, has barely any scandals (we covered one yesterday, but those are rare).

Recently, the ‘gambling’ with EPO funds was brought up again (it happened around Christmas time when almost nobody paid attention). Märpel has just published this long post about it:

Now President Battistelli has decided he needed a blank check to play with that money on the stock and derivatives market. Apparently he did not learn about the toxic loans of Saint-Germain. Or maybe he knows them too well, Märpel cannot say. Usually money lost in risky investments is not lost for everybody.

The Council, in its rubber-stamping majesty, decided to approve the new investment guidelines last December. Lately the budget and finances committee cleared the small details. Interested readers having access to the EPO intranet may look for document CA/F 10/18.

Märpel finds difficult to believe what that document says. Apparently, the EPO is going to set aside “around 250 millions Euros” every year in the next 20 years and expects that the total treasury will reach EUR 12 billions Euros after a period of 20 years, which is lots of money even for cats. The expected long term return on the modelled portfolio is 4,0% and the annual risk is 15,1% of the Net Assets Value, which Märpel understands to mean that the EPO will invest in relatively high risk assets to get that level of return. Märpel’s compound interests calculator also notes that the figures do not match, even if the EPO would invest its complete cash reserve in that risky scheme (2.3 billions Euros) Märpel is short of some money. Märpel also notes that up to 75% can be invested in risk investments (equities, commodities, real estate and “alternatives”), which probably explains the 4% annual return in times when one is lucky to get 0.5%.

Nobody knows what the EPO is going to do with 12 billions Euros in 20 years. If the scheme succeeds (and that is a big “if”), the next-next-next-next President is going to have lots of money to play with. Or will he?

This subject was not too long ago tackled in a series of posts by Thorsten Bausch and recently by us as well. Bausch has just published this post about the Federal Court of Justice of Germany (not to be mistaken for FCC). He said:

The FCJ ordered that the petitioner must be granted access to the entire file wrapper. The objections raised by the plaintiff with regard to parts of the file which allow conclusions to be drawn on infringement proceedings conducted in parallel or which contain information on the designs challenged there were unfounded.

Bausch comes from a different world than yours truly because he works for a law firm, but judging by recent interactions he remains concerned about the financial dealings at the EPO. We’re now just one week away from the massive passage of EPO’s budget (i.e. stakeholders’ money) to Battistelli’s other employer in Saint-Germain. It remains to be seen what happens to all that money and whether Battistelli will be held belatedly accountable after his diplomatic immunity is voided (António Campinos had already enjoyed it under EU-IPO).

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