Clawback under Battistelli assures reduction in quality of staff (reduction in patent quality aside)
Summary: Staff of the EPO is leaving (or retiring) in droves as abusive management continues to be the norm and staff benefits are being taken away or gradually revoked
CRACKDOWNS at the EPO carry on, even when staff is (mostly) on holiday. Don’t be misled by the silence. Things are not rosy at all. Some representatives appear to have gotten exhausted, whereas others are too afraid or away on holiday. Some are on permanent leave or effectively suspended. In the coming weeks we shall reveal some more information, potentially about individual stories as well. It’s not pretty and it serves to show what kind of management runs the European Patent Office these days. Rather than value staff, this management does a fine job driving staff away. Cherishing and respecting people (“assets” or “human resources” as management typically refers to them) is the key to an institution’s long-term success. Highly educated people have plenty of employment options, so they don’t tolerate abuse from their superiors. They have other career possibilities (private and public sectors) and they tend to be principled, not judgmental or overly opinionated. They also know their rights and actively defend these.
“Rather than value staff, this management does a fine job driving staff away.”Earlier this year we mentioned the attack on the pension of Els Hardon — probably an illegal move which Battistelli later had to withdraw/revoke. What kind of justice is that? Hardon was dismissed from the Office for her duties as a staff representative and she wasn’t alone. It is very sad that Battistelli’s war on the staff union left much-appreciated staff having to support their representatives with Broodfonds (literally bread funds). Some of them have entire families to support! What happened to human decency?
The crackdown is far from over as EPO management, notably Bergot (the wife of Battistelli’s former INPI colleague), still threatens staff representatives, even while they’re on holiday. Mr. Topić, for instance, blocked the publication of essential reading material in The Hague, without even notifying the Local Staff Committee The Hague. This was censored using threats of disciplinary measures. So the atmosphere of fear clearly prevails at the EPO and people are rightly afraid of communicating with one another. That’s a recipe for disaster that would certainly drive away the high-profile examiners. They would have no problem seeking and finding alternative employment, e.g. in fine universities or in the industry.
“Cherishing and respecting people (“assets” or “human resources” as management typically refers to them) is the key to an institution’s long-term success.”EPO management, moreover, is trying to punish strikers (perfectly lawful activity) even more severely. The management is getting pretty vicious right now, raising the ‘fine’ by 50% by essentially withdrawing a twentieth (instead of a thirtieth) of one’s salary. They are just taking away more and more of people’s money, so no wonder people flee or formally retire early. Watch what they’re doing to people’s investments, pension changes aside. Based on this document
[PDF], workers’ interests are trampled and stomped on. Quoting from the summary in the PDF: “lowering the probability of reaching the long-term objective for the investment returns, but instead supported initially unfounded and expensive reforms.”
“Therefore,” it also says, “the Office representative’s reasoning appears to be so ill-founded and misaligned with the interests of the main stake-holders that one might conclude that it serves instead to realise another hidden (or at least undisclosed) agenda.”
There is also a part about Bergot: “Further statements made by Ms. Bergot left Staff representatives with the impression that the Office may also try to influence the investment return assumptions made by the three independent actuaries of the AAG. If successful, this might lead to pushing for a reduction in the assumed rate of return on investment in the actuarial study, which could consequently trigger a recommendation by the actuaries either to increase the contributions which the Office could follow and/or lower the benefits.”
“A lot of people are leaving.”“Unfortunately,” they conclude, “whatever the outcome, it is the staff (and only the staff) who will have to pay the bill.”
Well, they might not stick around to even pay the bill. A lot of people are leaving. Consider the aforementioned changes to pensions, which came under criticism in a report commissioned by SUEPO. These pension changes were recently assessed in a legal opinion (mentioned
[PDF] here before
[PDF]) and it’s just one among all sorts of ‘reforms’ that breach the fundamental rules and treat staff like dispensable machine operators. The EPO apparently suffers from a lack of money, as it is operating at a massive loss, which makes one wonder if the pensions will be reduced or become some kind of a Ponzi scheme one day. Later this summer we are going to give more examples of where money gets wasted by the millions (for little and sometimes no benefit/gain). Battistelli is terrible on fiscal terms and even some delegates openly speak about it nowadays (a subject to be explored in depth another day). Some say there is even financial fraud.
“What will their retirement mean in terms of pensions?”The brain drain at the EPO is measurable and it is not a matter of ‘gut feeling’ or intuition. One report we saw gives us a rough idea of who left (or is leaving) other than top management. The report says that numbers are made apparent from the EPO’s own reports. To quote: “The social report shows that the Office could not maintain staffing levels at their overall target despite a vigorous recruitment campaign. 2015 saw a net decrease of 77 staff members; in particular the BoA saw a reduction of 15. Furthermore, there were no new recruits from a number of countries including Sl, CZ, CH, NO, and GB. While up to 2014 typically around 100 staff members would retire, in 2015 this number had nearly doubled. The average retirement age has also decreased from around 63 years to about 61 years.”
What will their retirement mean in terms of pensions? Well, to be frank, I’m no accountant and my knowledge regarding accounting is scarce, but the subject was recently explored in IP Kat comments. For record and future reference, here is what one person wrote about the pensions:
The benefits are not over-generous. I can explain the situation about pensions. I’ll try to do that in non-accounting terms. I’ll use round numbers out of my head to make calculations simpler.
The offices self insures the pensions. It simply pays the pensions out of the budget and write the pensions off the salaries as “contributions”. So if we have, say, 1000 examiners with a salary of 10000€/month and 200 pensioners with a pension of 5000€/month, every examiner needs to contribute 1000€/month for the system to be in balance. They can pay that out of their 10000€ salary.
If suddenly, the office lowers the average pay to 5000€, each examiner still needs to pay 1000€ a month, but out of a lower salary. It looks as if the pension contribution is doubled for them.
If suddenly, the office improves efficiency massively and only needs half the examiners (but they keep their pay), we have the same effect: each examiner needs to contribute 2000€ (out of a 10000€ salary).
If we both halve the salary and the number of examiners, contributions quadruple.
Is the office planing to lower both the number of examiners and their salaries? I don’t know. But it does not appear to be planning to lower the fees on patent or the number of granted patents. So the budget would stays the same and the capacity to pay the pensions out of the budget would also stay the same. The office would just need to keep the contributions of salaries at the same level for the examiners and meet the old obligations out of its budget. They would still save massively on salaries by having less active examiners and paying them less in that hypothesis.
But, if the office says “pensions must be a fixed percentage of the salaries” (10% in the above example) and then lowers the total salary mass, there is a problem. It is an artificial problem, but would be called “increase percentage of liabilities” in accountant speak.
Then we have the so called “pension reserve fund”. This was never designed to be a pension fund, but designed to smooth things in case of changes. It was created because in the first years of its existence, the Office had no pensioners (where would they have come from). So the contributions were put aside in that RESERVE fund. This reserve fund is invested in state bonds, its regulation prevent using investments which would be to volatile. The so called “losses” are simply “smaller gains”, because the interest rates are now very low. 10 years ago, we expected a return of maybe 5%, now we don’t have that.
This reserve fund is massive. I think I have read that it could pay the pensions completely for the next 20 years or so. So it can hardly be described as bankrupt.
Then there is that vision floating around that the office would have a “pension fund”. Like some massive amount of money from which only the interests would be enough to pay pensions forever. That is completely wrong: the pension reserve fund was originally designed to pay the benefits out of the fund itself, when necessary.
RFPSS is then mentioned as follows:
Would the “RESERVE” fund you mentioned happen to be the “RFPSS” fund mentioned in the EPO’s financial statement? If so, I note that the assets of that fund were EUR6,600 million at the end of 2015 (with only EUR1,300 million being in bonds). Is that enough to pay pensions completely for the next 20 years or so? If so, what on earth does the EPO’s financial statement mean when it refers to a “Defined benefit liability” of EUR15,800 million? Could that be a projected total spend on pensions over the lifetime of all current and former employees?
Apologies for all of the questions. Like I said, I am no accountant, and so this is all a bit of a mystery to me.
More on the same subject:
Indeed, as stated above, the sum shown is the pension Reserve fund to cover the eventuality that the EPO is unable (or unwilling?) to pay pensions. Indeed originally, the final burden was to be shared between the member states as a sort of guarantor grouping. As is their won’t, the AC simply decided they didn’t agree anymore and passed the honour to the EPO – I’m not sure the legality of that was ever clarified as it didn’t fall within their right to simply dump the agreement of a international treaty.
With regard to the mysterious 4 billion euros appearing from nowhere, that relates to the future liabilities which are referred back to the current date by applying the notionally agreed interest rate. In good times, the rate is high, in bad times, less so. In layman’ terms,if I need to pay 1000 euros in 12 months time and I can get 10% interest, then I need to have 909 euros or so today. If I can only get 1%, then I need 990.1 today. Of course, the sums and time spans are far greater so that compound interest applies. 2 years at 10% would mean I need about 827 today but 1% means 981 etc.
In practice the rate has been falling quickly from 2011 to 2014 and in 2014 the rate was about 1.65% if my memory serves (you can find it in that link). In 2015 the rate rose and thus the liability of 19 billion in 2015 fell back to 15 billion. The rate changes regularly but is applied long term so that the biggest change to liabilities comes from small interest rate changes! In fact the fund has outperformed the rate (and its target) for 30 years.
Yes, the Reserve fund is the “RFPSS”.
I am not an accountant either, but as far as I understood from suepo documents of the time, the “Defined benefit liability” of EUR15,800 million indeed means that the office closes down today, has no incoming revenue whatsoever (no renewal fees on already granted patents) and still has to pay all liabilities. If memory serves, this liability first appeared under Brimelow who insisted that the office use the IFRS accounting system. The choice of that accounting system was criticised at the time. It makes more sense for, say, a car factory which has to put money aside for the goods it orders (e.g. steel, car parts) in case it goes bankrupt.
If my memory is correct, the idea that the reserve fund could pay pensions for 20 years comes from simply dividing the assets by the pensions that the office pays each year at present, possibly correcting by the expected number of pensioners in future years (I am not sure).
All this is to show that there is a large amount of interpretation in the financial statement. Depending on the chosen accounting rules, one can make the office look very rich or very poor. What is clear, however, is that in the past years the office generated several hundred millions euros profit per year (while paying salaries and pensions and constructing new buildings regularly). This money was partially paid to the reserve fund in “extra payments” (in addition to what is paid each year according to the pension scheme). There have been several documents from suepo analysing the situation, but I am not sure whether they are on the public section of the suepo website.
Last but not least, I insist that the regulation for pensions are not any different than in most companies: accrue benefits each year till one is 65 and then get a percentage of your salary. Early pensioners get a discount corresponding to the projected additional pension years, etc… The pensions are also taxable. There are no “lavish benefits” as one sometimes reads.
“The EPO changed the pension system from “defined benefit” to “defined contribution”,” explains the comment below.
I would not know the precise meaning of the expressions used in the Financial Statements. What I do know is that the discount rate is a key factor.
To my best knowledge, every fund promising a certain return, not just the EPO fund, projects how much money will be needed in the future, usually split by calendar year. The fund normally has already some cash, and every fund manager would like to know whether this cash is sufficient to cover the future obligations. To check this, these future obligations are converted in the currently needed amount of money, to cover them fully or as is frequently the case, to 80%.
This conversion considers how much interest you will get on the cash in the fund. This interest is called “discount rate”, implying that you need less than say 100 euro today if you want to have 100 Euro in 20 years. With the current EU politics, the interest you can get is pummeling down, lowering the discount rate. This, in turn, requires you to have more money today. If the European Central Bank changed their strategy next week, this would impact the finances and funding ratios of all funds relying on discount rates.
The catch of the story is that small variations in the discount rate will have a massive impact. A simple 0.2% more or less of the discount rate, over a projection of say 25 years, will make you bankrupt or filthy rich.
The EPO changed the pension system from “defined benefit” to “defined contribution”. The “old guys” get a percentage of the salary as pension, and the EPO carries the risk if the fund “underperforms”. The “new guys” get what the fund delivers, they carry the risk.
Giving lots of crappy patents to applicants is a recipe not to financial success, as the following comment notes:
I now realise that this has all been discussed before.
With the benefit of hindsight, the predictions at the end of the 3rd (anonymous) comment on that thread now look to have been startlingly accurate. Perhaps the BB phenomenon really is all about balancing the books after all.
Whilst it may be that income from renewal fees represents a missing part of the puzzle, there is one thing I don’t understand. Where is the financial benefit to the EPO in rushing applications through to grant (which appears to be the current mantra)? Does this imply that the EPO gets more (on average) from its share of national renewal fees than it does from a full share of its own internal renewal fees? If not, then is the push for earlier grant all about BB keeping the Member States sweet by giving them an ever increasing share of renewal fees?
Perhaps we will never know. With the full knowledge and approval of the AC, one of BB’s first actions as president was to disband the only body (the Audit Committee) that could have provided transparency / independent oversight in connection with the EPO’s finances. So I guess that those affected (current and former EPO employees, patent applicants and the public) will just have to trust that the EPO’s finances are being handled with the utmost propriety by BB and his cronies… what could possibly go wrong?
Another person added:
My original comment related to the problem created (in many countries) where defined benefit (eg final salary) pension schemes were offered without the companies concerned ensuring that they had adequate funds in hand to cover the anticipated liabilities (eg taking into account increases in average life expectancy). Current examples of where things have gone badly wrong with pension funds are BHS and British Steel.
A similar issue applies to state pensions. In that instance, there is no “pension fund” as such, just a country’s GDP. For those countries offering (relatively) generous pensions and (generally) free healthcare, an ageing population will command an ever increasing proportion of public spending.
Please note that I am not placing any blame at the door of the (soon to be) pensioners concerned. I am merely making the observation that bad judgements made by companies, countries and organisations (ie failing to set aside sufficient resources to cope with the retirement of the “baby boomers”) has led us to the situation where the current workforce is lumbered with the problem of making up the shortfall.
I remember people in the 1980s warning us all about the coming “demographic crisis” in Europe. Well, now that the crisis is upon us, I can honestly say that it is almost impossible to identify any national government that has ever done anything significant in the intervening 30 years to defuse the problem.
At least the EPO has the reserve fund… though, curiously, it appears that it has no intention to use that fund to pay pensions. I would have thought that the whole point to having a reserve fund is to ensure that the pension “tail” does not wag the “dog” that is the everything else that the EPO does. However, I have my suspicions that the tail is indeed beginning to “wag the dog”…
“Anonymous” wrote: “I thought that an actuarial study last year showed that the EPO would only need to resort to the reserve fund briefly at some point in the future and that the amount required would be met by the annual return on the fund rather than depleting its capital. I’ll try to find it – I think Suepo got a copy and published it. Cannot imagine BB would let any good news be released – keep the stick and hide the carrot…”
“As to the future of the EPO,” the following commenter said, “the new career system is a net loss for the majority of the employees,” which is probably true. Here is the full comment:
I don’t think ageing of the population is significant for the EPO. Actually, we will have a younger “population”, because we only hire younger staff. On the other hand, the effect I explained about reduced salaries is probably significant.
It is also interesting that you cite British Steel. The steel industry used to employ lots of people but with modern production techniques a lot less people were needed: productivity per person increased considerably (and we could make a parallel with patent examination here, especially if examination is “streamlined”). What also happened is that the industry was privatized and a select small party of people made huge financial gains by keeping the usable parts and refusing to bear the liabilities, including pensions.
As to the future of the EPO all I can say is that:
-the new career system is a net loss for the majority of the employees and huge gains for the select few
-if someone tells me on disputable short term interest rate projections that a fund is bankrupt when this fund has increased regularly in the past 30 years and covers at least a decade of liabilities, I consider that a political message and not a financial analysis.
For those who are into accounting and care to explain this to us, feel free to get in touch or leave a comment below. The consensus appears to be that things are getting worse — not better — for EPO pensioners and verified figures show that the number of retirements have doubled in just one year. This doesn’t bode well for Battistelli. He’s ruining the Office he was entrusted to manage. Why was he not fired in June? █
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Summary: Successor of Benoît Battistelli at the Administrative Council, Jesper Kongstad, is rumoured to be hiding something from tax authorities, but lack of transparency in “Eponia” prevents actual verification
THE EPO is no stranger to controversy and scandals. There is virtually no oversight there, no transparency, no accountability. This breeds distrust and often abuse as well. The USPTO is an angel in comparison as it doesn’t enjoy exemptions from European or US laws. There is no “USponia”, only “Eponia”.
“We just read your article with the title "Rumours About Secret EPO Salary of Benoît Battistelli",” some readers told us. “We’re surprised that you didn’t give any mention to the “Rumours About Secret EPO Salary of Jesper Kongstad”…
“If these rumours were true, then as a Danish civil servant he could be in serious trouble if the Danish tax authorities ever happened to investigate the matter.”
–Anonymous“At the end of an interview published by MIP in March of this year Kongstad was quoted as claiming that he does not receive any remuneration for his work at the EPO: “I am now spending about half of my time on EPO-related work, but I do not receive any remuneration for that.”
“In the MIP interview Kongstad was emphatic about the “pro bono” nature of his work for the EPO but not everybody is prepared to buy that storyline.”
Recall this embarrassing recent story. The readers continue: “In fact for some time now there have been persistent rumours circulating that he is somehow “on the payroll” at the EPO although nobody seems to know the precise details about this. Evil tongues have even been heard to say that he does not disclose this additional remuneration for tax purposes in Denmark. If these rumours were true, then as a Danish civil servant he could be in serious trouble if the Danish tax authorities ever happened to investigate the matter.
“It is important to emphasise that these are just rumours.”
–Anonymous“According to this report from 2010, under Danish law intentional and systematic tax evasion can lead to 8 years imprisonment and penalties of twice the unpaid tax liability. However, given the lack of effective oversight at the EPO it’s unlikely that Kongstad has anything to fear. Even if there was an investigation he would probably be whitewashed by the Internal Audit department which operates the EPO’s Investigative Unit and only answers to Battistelli. We are unlikely to see a truly independent audit of Kongstad’s financial relationship with the EPO any time soon.
“It is important to emphasise that these are just rumours. The close symbiosis between Kongstad and Battistelli and the fact that Kongstad is one of the few people privy to the details of Battistelli’s contract lends a certain amount of plausibility to the rumours. But in the absence of an independent audit nobody can say for certain how much substance there is to them. The fact that Kongstad went on record in March to specifically deny that he receives any remuneration for his EPO activities might be an indication that he felt a need to say something in public to counteract these rumours.” █
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Benoît Battistelli is wasting money and is driving the EPO into a wall
And with the UK’s diminishing hopes of UPC, what would he have left to show for it?
Summary: Based on the latest financial statements of the EPO, Benoît Battistelli would have to declare bankruptcy if he wasn’t so unaccountable and dismissive of accounting
THE EPO does not appear to be doing too well under Battistelli’s management, even from a fiscal point of view. He made his contract a closely-guarded secret with some saying that he doubled (or more) his salary (a massive salary in the context of any public office in the EU), he is wasting millions of Euros on his ludicrous lobbying events, he hired PR agencies even from the US (over a million dollars on that alone for just one year), and he pretends all is well and the money flows in like water while many senior examiners take early retirement to escape him.
“Benoît Battistelli will surely be remembered as one who crashed the EPO as we once knew it, emitting lots of worthless patents in haste like Robert Mugabe printing lots of worthless banknotes…”Extensive surveillance (Control Risks) and militarised forces including unnecessary bodyguards that cost a fortune are among other ‘luxuries’ of Battistelli, even if some of these defy European laws. Then there are the massive contracts without tenders (even tens of millions of Euros for each contract), the terrible IT spendings that make it into a black hole, and other budgetary issues that we have covered here over the years.
Suffice to say, those who will pay the price are past and present (and maybe future) employees; none of that stuff, as listed above, is free/gratis after all. Battistelli runs the EPO like Bush ran the US (into debt, into totally avoidable war, and into the ground on grounds of credibility). Here is a comment that showed up today, claiming (with evidence) that “the EPO shows an operating loss (of EUR 145 million), largely due to an increase of over EUR 260 million in “Employee benefit expenses”.” Here is the full comment:
What do you mean by a surplus? I am no accountant, but it appears to me that the latest financial statement (for 2015) produced by the EPO shows an operating loss (of EUR 145 million), largely due to an increase of over EUR 260 million in “Employee benefit expenses”.
I know that the figures presented need to be taken with a pinch of salt, especially due to the lack of oversight in the preparation of the figures. However, even the “sanitised” figures show what appears to be a huge hole in the pension fund. That is, there are liabilities of EUR15,828 million relating to “defined benefits”, which completely dwarfs the EPO’s current equity of less than EUR8,000 million. It also dwarfs the current assets of the pension, which were reported as just under EUR6,600 million.
I would be keen to know what “Remeasurement defined benefit obligations” means, though. This is because the EPO appears to have found over EUR4,750 million down the back of the sofa in 2015 thanks to that little accounting trick.
This does raise an interesting question, though. Has BB been brought in to deal with the black hole in the pension fund? Can the major effects of his policies be understood as being aimed at maximising current operating profit and minimising pension liability? If so, it would appear that EPOnia is a microcosm of society at large, with current workers (and users of the system) effectively paying the price for the over-generous benefits awarded to the generation that preceded them.
A lot of these expenses are associated with early departures — something which, as we pointed out yesterday, happened a lot in the past two years because of Battistelli and his ‘reforms’.
Benoît Battistelli will surely be remembered as one who crashed the EPO as we once knew it, emitting lots of worthless patents in haste like Robert Mugabe printing lots of worthless banknotes (“231 million percent peak hyperinflation in 2008,” according to Wikipedia). █
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Publicado en America, Europe, Finance, Patents at 7:51 pm por el Dr. Roy Schestowitz
“En orden de ayudaa a proteger acountabilidad el Banco Mundial GAP monitorea las actividades prestamistas y prácticas corporativas del Banco al proveer refugio y protección a personas se denuncien malas prácticas dentro del Banco. El Banco al igual que otras instituciones internacionales goza de inmunidad de las leyes nacionales mientras persigue su objetivo de desarollo substancial en países medianos y pobres. El Banco como resultado no puede ser enjuiciado por sus empleados y si es sujeto a retalaciónes después de denunciar corrupción un soplón queda sin protección fundamental. Acountabilidad en el Banco requiere libertad de expresión de sus empleados, sin miedo a represalias. Sin efectiva protección para aquellos que denuncian corrupción los fondos pueden ser divergidos y los objetivos del Banco ignorados.”
Banco Mundial. Fuente/GAP. El Banco Mundial es famoso (or notorio) por muchos déstapes.
Sumario: Una mirada al marco de la revisión externa de las investigaciones en la Oficina Europea de Patentes, donde las investigaciones son un innuendo para atacar al síndicato y la eliminación de puntos de vista diferentes
La EPO continúa mostrando un perfil de militarización (vean algunos reciéntes ejemplos), incluso cuando el Jurado y el Consejo solicitan amistad y reconciliacion. Otro punto de vista digno de notar es que unos pocos en la gerencia de Battistelli (si alguno) son actuálmente científicos.
¿Es esta una oficina de patentes (científica) o simplemente una brigada de multinacionales con antecedentes en financias¿ ¿Es acerca de imposición y dominación o verdadero liderazgo que acompañe a los interéses de los ciudadanos y sus empleados?
“La revisora externa de las Investigaciones de la EPO es Olivia Graham,” nos dijo alguién. “¿Dónde/Cuándo ha sido ella una investigadora?
“Es digno de notar que Sebastian Bauer de la Unidad Investigativa fue “Oficial de Etica” para el Banco Mundial en Washington.”Olivia Graham se llama a sí misma (tengan cuidado, las URL de LinkedIn pueden exponer la identidad de uno a la persona mientras esté conectado) “Consejero de Ética en el Fondo Monetario Internacional, en Washington” y dice haber pasado 8 años de su vida con los Militares de los US, luego el Banco Mundial, UN, el Fondo Internacional Para Desarrollo Agrícol (IFAD), y finalmente el IMF.
Es digno de notar que Sebastian Bauer de la Unidad Investigativa fue “Oficial de Etica” para el Banco Mundial en Washington. Si sólo ética fuese el objetivo… la conección con el IMF (si existe alguna) con la EPO o Pinocho Battistelli ess Christine Lagarde [1, 2, 3, 4, 5, 6].
La UPC no debería caernos como un shock total, parece como si gente en posiciones de poder en la EPO y alrededor de ella están más interesados en intereses corporativos que en ciencia y ellos están dispuestos a usar la fuerza para detener aquellos que se crucen en el camino o cortesmente cuestionen su agenda. █
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Source/GAP. The World Bank is renowned (or notorious) for many whistleblowers.
Summary: A look at the background of the external reviewer of investigations at the European Patent Office, where investigations are often a byword for union-busting actions and elimination of dissenting views
THE EPO continues to show a pattern of militarisation (see some recent examples), even when the Board and the Council ask for amicability and reconciliation. Another noteworthy point is that few in Battistelli’s management (if any) are actually scientists.
Is this a patent office (scientific) or just a brigade of multinationals with background in finance? Is it about imposition and domination or true leadership that accompanies staff interests and citizens’ interests?
“The external reviewer of EPO Investigation is Olivia Graham,” told us someone. “Where/when has she been Investigator?”
“It is worth noting that Sebastian Bauer from the Investigative Unit was “Ethics Officer” for the World Bank in Washington.”Olivia Graham calls herself (be careful, LinkedIn URLs can expose one’s identity to the person while logged in) “Ethics Advisor at International Monetary Fund, Washington” and claims to have spent 8 years in the US Military, then the World Bank, UN, International Fund for Agricultural Development (IFAD), and finally IMF.
It is worth noting that Sebastian Bauer from the Investigative Unit was “Ethics Officer” for the World Bank in Washington. If only ethics were the goal… the IMF connection (if any exists) to the EPO or Battistelli is Christine Lagarde [1, 2, 3, 4, 5, 6].
The UPC shouldn’t come as a total shock; it seems like people in positions of power at the EPO and around it are more interested in corporate interests than in science and they are willing to use force to stop those who stand in their way or politely question their agenda. █
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“The taxpayers are sending congressmen on expensive trips abroad. It might be worth it except they keep coming back.”
Summary: Microsoft’s long history of tax evasion is finally taking some toll as the US tax authority, the IRS, is going after Microsoft and unravels its international network (or syndicate) of tax avoidance
WE find it amazing (not just interesting) to see a branch of the US government, the IRS, going after ‘big fish’ (for a change). These bodies or branches of government are usually corrupted enough to overlook abuses of powerful entities that are closely connected to the government and thus pose a threat to the career of anyone ‘daring’ to expose and litigate. Remember what happened to the judge who threatened to split Microsoft?
“Remember what happened to the judge who threatened to split Microsoft?”Microsoft is not an ordinary company. Remember that Microsoft actually threatened the IRS [1, 2] for merely ‘daring’ to look into (and potentially expose) organised tax evasion by these arrogant thugs at Microsoft. Microsoft’s avoidance of taxes is a long-explored subject at Techrights, so we are delighted to see the IRS finally tackling the issue. It’s well overdue and belated (by several decades). Never forget that Microsoft literally threatened the IRS for merely doing its job, which was to expose tax evasion. The poor little IRS thought it was big enough to take on Microsoft (like DOJ taking on Wall Street), whereupon Microsoft bullied it with deterrence lawsuits. Interestingly enough, please note that the same legal firm which lobbies alongside Microsoft on the patent front is the same one threatening to sue me over EPO coverage. The EPO started sending threatening legal letters only after (and only regarding) EPO abuses implicating Microsoft. How will Microsoft respond to the IRS other than threaten the IRS with lawsuits?
“Microsoft’s avoidance of taxes is a long-explored subject at Techrights, so we are delighted to see the IRS finally tackling the issue.”Matt Day’s detailed article about it (in the Seattle Times) says: “Court documents in a case between Microsoft and the IRS provide a detailed look at how the company, like other multinational corporations, has created a complex structure that allows it to minimize its tax bill.”
It is worth noting that the Seattle Times was paid by Bill Gates and it showed, so this article may be ‘risky’ for their financial lifeline. We have already shown how sites which receive Bill Gates’ money shortly thereafter remove criticism of Microsoft (even retrospectively!).
There’s a spurious part about “other multinational corporations”. Saying that a lot of other companies (not under IRS probe) evade tax is a Microsoft-serving evasion tactic. Microsoft is, in our experience, more criminal and corrupt than counterparts. We have provided ample evidence of this over the years.
“Remember when a whistleblower exposed Microsoft corruption (financial fraud to be precise) and Microsoft paid him $4 million to shut up and then scuttled the investigation with the SEC?”What the IRS says about Microsoft isn’t a shocking revelation but perhaps the first time (in recent history) that those in positions of (relatively) high power are “brave” enough to say the truth. Remember when a whistleblower exposed Microsoft corruption (financial fraud to be precise) and Microsoft paid him $4 million to shut up and then scuttled the investigation with the SEC? That was back in the late 90s. Microsoft’s financial situation isn’t what it seems and the company does not operate like it publicly claims. Microsoft has been mostly a piggy-bank for Bill Gates, who himself does not pay tax. Bill Gates is avoiding billions in taxes by pretending he runs a charity. Mark Zuckerberg is to latest to imitate this nasty PR ploy and Microsoft was perhaps one of the earliest software giants (if not the pioneer) when it comes to massive-scale tax evasion. Many software companies just thought, “hey, we can do this too.”
“From 2001 to 2006,” Day explains, “Microsoft completed a series of intracompany deals that, in exchange for upfront payments, shifted the rights to software code and other assets developed largely in the U.S., to subsidiaries in Bermuda, Ireland, Singapore and Puerto Rico.
“When Bill Gates bribes large newspapers they just tend to focus on tax avoidance by companies other than Microsoft.”“Those deals reduced Microsoft’s cumulative tax bill in future years by tens of billions of dollars, according to court documents and an analysis of the company’s filings.”
Read it again: “tens of billions of dollars” (and the IRS usually just cracks down on businesses over a few thousands of dollars).
Singapore, as it turns out, continues to enrich itself (by “itself” we mean few corrupt politicians and businessmen) by facilitating such tax evasion, much like Switzerland (Singapore seems to have become the Zurich of Asia, and that’s not meant to be a compliment).
Day has posted some short summaries of his article in Twitter, noting that “on taxes, Microsoft behaves like much of the rest of big Corporate America: they’ve tried to limit the cash they send to governments.”
“Why did it take two decades for the IRS to do something about it?”No, as explained above, Microsoft is quite unique. When Bill Gates bribes large newspapers they just tend to focus on tax avoidance by companies other than Microsoft. We have given examples of this, e.g. The Guardian.
Day says that “Microsoft spent 20 years building a network of subsidiaries that, among other things, avoided a lot of taxes.”
Why did it take two decades for the IRS to do something about it? Could it be Microsoft’s influence in the US government? If it wasn’t a government-embedded company like Microsoft, one would call it organised crime and it would be front page news (many tens of billions of dollars in tax evasion).
“If it wasn’t a government-embedded company like Microsoft, one would call it organised crime and it would be front page news (many tens of billions of dollars in tax evasion).”Day says that “Microsoft officially sells most products from Ireland, Puerto Rico or Singapore. In the U.S., most sales start in Nevada (few biz taxes).”
Yes, and guess who’s facilitating this. It is well documented, as some people have shown for many years, that Microsoft put former executives as moles inside the local government, perhaps in order to facilitate tax-related crime and send everything from Washington to Reno. We named the people involved about half a decade ago. Where was the IRS all this time? It couldn’t defend itself by saying that it hadn’t noticed. People from inside Microsoft complained about this.
Day says: “Each of Microsoft’s global hubs is designed to place some profit in Bermuda, the island tax haven. It’s unclear how much.”
“We named the people involved about half a decade ago.”Well, it’s time to investigate. This is a big case implicating “big” people and involving a lot of money. Don’t expect any arrests though. Rich people rarely go to prison.
Day adds: “That structure, created ~2001-2006, saved Microsoft tens of billions of dollars in taxes. Likely 100s of mill saved in Washington state.”
According to a campaigner from Microsoft — one who left Microsoft and then became a vocal critic of Microsoft’s tax evasion (he even created a whole Web site about it) — we’re talking about well over a billion, not “100s of mill”, ‘saved’ (means evaded) in Washington state. Half a decade ago it was estimated at well over a billion, so maybe it’s already $2 billion.
“It’s a massive international racket and we hope that the IRS will get to the bottom of it rather than spend a lot of time going after “easy” cases and crushing relatively poor people.”As we have said here before, based on over a decade of research, Microsoft is not an ordinary company. It’s more like a clique of power-hungry people. Microsoft continues to conveniently masquerade as “software company” when in reality it has patent trolls (satellites) bullying practicing firms and funneling untold amounts of money to offshore divisions and subsidiaries such as “licensing” (e.g. Android licensing). It’s a massive international racket and we hope that the IRS will get to the bottom of it rather than spend a lot of time going after “easy” cases and crushing relatively poor people.
Apple, to its ‘credit’ [pun intended], seems to have learned Microsoft’s dirty tricks and a new article from the financial press suggests that Apple too is in trouble over taxes, at least in Europe. Well, are governments around the world strong enough to tackle the Big Evaders? As in Big Business? Whose side are they on? Let’s see if we have a real functioning democracy.
The financial crisis of 2008 showed whose side governments tend to be on when they not only failed to arrest a lot of (likely) guilty bankers but actually took taxpayers’ money and gave it out to these bankers as a “bailout” gift. █
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Who can possibly stop such a sloeber?
Summary: Benoît Battistelli’s connections to rich and powerful people in France (and also internationally) are explored, with the aim of explaining the EPO’s current sordid state of affairs, which sometimes seems uninterruptible, no matter the severity of EPO abuses and respected courts’ rulings on them
Several days ago we dropped some hints about this new long series about the EPO's current President. He is connected not just to Christine Lagarde but to a wide array of people whose power is beyond doubt and by far exceeds Lagarde’s. A year ago, on December 12th (2014) to be precise, we mentioned Battistelli’s roots at École nationale d’administration, which was created in 1945 by Charles de Gaulle and boasts a lot of powerful people. François Hollande, Emmanuel Macron, Jacques Chirac and many others are among the better known alumni.
“Our story begins with Battistelli and Lagarde.”In order to understand the EPO‘s ability to get away with almost every conceivable abuse (quite the sloeber as Belgian TV put this) it is imperative that we speak about who it is really serving and who it is run by.
Earlier this month we started to research the sloeber’s background — that’s Battistelli by the way — and investigated various allegations, asking numerous sources around the world in order to verify and ensure nothing leaves leeway for the EPO to threaten me again. We now feel ready and comfortable enough to publicly comment on this sloeber’s past.
In order to add some context to this series, we shall begin with Battistelli’s recent past in INPI, before the suspicious diaspora from INPI to the EPO.
Our story begins with Battistelli and Lagarde. The link between Lagarde and Battistelli is relatively easy to explain. Lagarde was the Minister of Economic Affairs, Finance and Employment from 2007 to 2011 serving in the government of the Prime Minister Francois Fillon. The French National Intellectual Property Office (INPI) came under her ministerial remit so she would have been Battistelli’s political “boss” in his then role of Director-General of the INPI.
“Some background information about Lagarde may be needed for the uninitiated.”Lagarde supported Battistelli’s candidacy as EPO President and issued a congratulatory press release following his election in 2010. See “Christine LAGARDE se réjouit de l’élection de Benoît BATTISTELLI à la présidence de l’Office européen des brevets”.
Some background information about Lagarde may be needed for the uninitiated. Lagarde was appointed as Managing Director of the International Monetary Fund (IMF) on the 5th of July, 2011. Previously she had been Minister of Economic Affairs, Finance and Employment serving in the government of the Prime Minister Francois Fillon from 2007 to 2011. Before pursuing a career in French politics she had worked for about 25 years in the United States for the international law firm Baker & McKenzie (from 1981 to 2005).
French critics of Lagarde considered her to be a promoter of US and multinational corporate interests in France and Europe rather than a defender of French or European interests. See for example the following article (in French) which was published on Réseau Voltaire in 2005. It says: “En supposant que Christine Lagarde ait abandonné ses fonctions précédentes sans l’intention d’y retourner, on pourrait admettre qu’elle ne se place pas dans un conflit d’intérêts. Cependant, au vu des positions politiques défendues par les groupes de travail qu’elle a présidé, on ne peut que constater qu’elle est en totale opposition avec la position française défendue par Dominique de Villepin à l’ONU.”
“French critics of Lagarde considered her to be a promoter of US and multinational corporate interests in France and Europe rather than a defender of French or European interests.”Well, here is a link to an English version of the “Voltaire Network” article from 2005 about Lagarde. In English it says: “Only supposing that Christine Lagarde abandoned her former duties and that she has no intentions of going back to them, would it be possible to admit that we are not witnessing a case of conflict of interests. However, when the political positions defended by the groups she presided over are analyzed, it is impossible to ignore that they are completely against the French position defended by Dominique de Villepin before the United Nations.”
There is a lot more in that article.
Lagarde appears to have been a regular attendee of the annual Bilderberg Conference from about 2009 onwards when she attended as a member of the French government. More recently she has attended in her capacity as Managing Director of the IMF [1, 2].
In part two we will proceed to speaking more about Lagarde and the current EPO President. It may well go back to INPI. Anyone who can provide additional input as this series proceeds, please come forth… █
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Proprietary software companies like Microsoft, Apple, Oracle etc. want lawyers to run their business
Summary: A decade after Free/libre Open Source software (FLOSS) surpassed its proprietary counterparts on technical terms/merit it is facing an increasing number of patent challenges, as well as disruptive takeover attempts
TECHRIGHTS was born out of the need to tackle Microsoft’s patent war on GNU/Linux. Back in 2006 Microsoft saw innovations such as Compiz whilst it had a lousy operating system called Vista (which even Microsoft executives were internally ranting about). It knew it was only a matter of time until Windows loses dominance outside the server room. Fast forward to 2016 and Android is expected to have nearly 90% of the market. Windows is in a state of disarray and Microsoft now tries to force people to use it, even if they don’t pay for it and don’t want it at all.
“Microsoft promotes lawyers to high management and tries to make patent extortion its new cash cow.”Microsoft tried to evolve, but it was all in vain. Remember the Microsoft Stores? Remember Surface (both the old and the new)? Microsoft is losing a lot of money in the hardware business (faulty by design ) and the online business (promises are being broken now in an effort to raise money ). Microsoft is now borrowing money — a lot of money in fact — to pay debts , confirming what we knew all along about Microsoft’s real financial situation.
As a result of Microsoft’s panic (losing billions of dollars) the company launched patent assaults on various companies (OEMs) that distribute Linux/Android. Microsoft promotes lawyers to high management and tries to make patent extortion its new cash cow. It is also disrupting Android from the inside, in an effort to better control it. Last month we wrote about Xamarin‘s (Microsoft proxy) takeover of RoboVM [1, 2, 3, 4] (still a subject of critical debate). Paul Krill wrote that “Hammond sees the bigger issue as Xamarin’s acquisition of RoboVM and its desire to support RoboVM iOS apps in the Apple App Store, which has taken a dim view of GPL licenses to date.”
Apple — like Microsoft — is also attacking Android backers like Samsung, using software patents that are inherently incompatible with the GPL. Apple is still bickering over patents in an effort to derail the dominant Linux-based platform, Android, according to this new report.
We expect the last remaining barrier for the triumph of Free software everywhere to be patents, and especially software patents. We are changing our site’s focus accordingly. █
Related/contextual items from the news:
IFIXIT HAS taken Microsoft’s first laptop apart and found that it’s probably not a good idea to try to fix it yourself.
Microsoft’s latest device went on sale last week in the US and has yet to see a UK release, but the people at iFixit have cracked it open and explained exactly what’s going on inside. And it’s not good.
There’s already a backlash against Microsoft’s surprise announcement, and it’s not a good look for the company given its impressive focus on mobile and the cloud. Microsoft is fighting a war against Amazon, Google, Salesforce, and many others for the business side of the cloud, but its consumer efforts are starting to look a lot more like Apple’s iCloud offering. Apple offers the bare minimum of free storage and entices consumers to pay more for iCloud by making its apps and operating system make the most of the cloud. Microsoft is now bullying OneDrive users into paying for the free storage it is now taking away.
It’s kind of embarassing to have to borrow money to pay debts… but that’s what M$ continues to do. It has $100 billion in liquid assets but it can’t repatriate them to USA without forking out a ton of money to Uncle Sam for taxes, so it borrows money at this end to pay for what it does day to day. The problem is chickens come home to roost. When the day inevitably comes that the world sees M$ has no clothes and that M$ is not the one true source of IT, the gravy train ends but the debts will have to be paid. At the last 10-Q quarterly report, M$ reported $36billion in short+long term debt. Now about half it’s liquid assets will be needed just to repay that debt.
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