The huge scandal that the corporate media seemingly refuses to cover
Summary: After Brimelow (shown above), with all her flaws and her scandals, an even worse President is installed who then abolishes oversight and seemingly brings his old friends to the EPO, creating a sort of subculture that is impenetrable to outsiders
THE EPO is no stranger to scandals (including some involving Alison Brimelow, as we noted before). We have covered them for years, but these days we are stunned by the degree of inherent corruption inside the EPO (this is the eighth part among many). The chin drops to the floor when one realises the lack of oversight. With no oversight comes great abuse, as revelations about the CIA and NSA, for example, serve to show.
Weeks ago we showed how EPO oversight got dismantled (related original documents are here) and below again is a quick walk-through (original documents):
- CA-140-08-EN – 2008 – Audit Committee: possible models
- CA-32-09-EN – 2009 – EPO Audit Committee: draft terms of reference
- CA-33-09-EN – 2009 – Draft decision setting up an Audit Committee
- CA-D9-09-EN – 2009 – Establishing an Audit Committee of the Administrative Council
- CA-100-11-EN – 2011 – Internal appeal against CA/D 4/11
- CA-D4-11-EN – 2011 – Decision of the Administrative Council
- CA-55-11-EN – 2011 – Disbanding the Audit Committee
Today we would like to tell the much longer story of the EPO’s Audit Committee. “In 2008,” tells us an anonymous source, “possible models for an “Audit Committee” were discussed in the proposal document CA/140/08 presented to the Administrative Council.”
Quoting the relevant document: “The present document follows on from the governance workshop in Ljubljana on 7-8 May 2008, the results of which were summarised in CA/62/08 dated 30.05.08.
One of the priorities emerging from the workshop was “Audit Committee and independence of Internal Audit”. The present document outlines in detail the compelling case for an Audit Committee. Three models are analysed and assessed. The Budget and Finance Committee and the Administrative Council are requested to give their opinion. Thereafter the Office will submit a proposal for the terms of reference of the Audit Committee.”
That was quite a long while back.
CA/140/08, as above, noted the following problems with the existing “Internal Audit” (emphasis added):
B. PROBLEMS RELATED TO INTERNAL AUDIT
a) Independence of IA
22. At the EPO, the internal audit function is separated from operational areas.
IA reports directly to the President and should remain a tool in the hands of the President.
This notwithstanding, an independent mechanism (such as an audit committee) would provide further assurance of the correct functioning of IA, particularly in view of the fact that even at the highest management level situations can occur that call for the independence of IA.
Such an independent mechanism should exist:
• to ensure that IA is equipped with a sufficient budget and resources for the adequate performance of the audit work;
• to prevent any undue limitation of the status of IA within the framework of its audit mission;
• to prevent any unjustified deletion of the proposed audit plan;
• to review the appointment, transfer and dismissal of the head of internal audit and internal auditors;
• to ensure that the supervision of IA does not rely entirely on the President.
As we have shown in previous parts, the President, Battistelli, seems to have gone out of control and is now acting like a tyrant with executive orders, potentially also appointing friends of his for positions of power.
“In June 2009,” explained our source, “the then-EPO President Alison Brimelow (former Director of the UK-IPO) presented the AC with the proposal documents CA/32/09 (“EPO Audit Committee: draft terms of reference”) and CA/33/09 (“Draft decision setting up an Audit Committee”).”
CA/33/09 (available above) proposed the establishment of an Audit Committee as a subsidiary body of the Administrative Council and said:
The present document is based on consultations between the Office and the Board of Auditors and presents a draft decision based on the outlines of the terms of reference for an EPO Audit Committee (cf. CA/32/09) as a subsidiary body of the Administrative Council pursuant to Article 14 of the Rules of Procedure of the Administrative Council of the European Patent Organisation.
CA/33/09 was approved by the AC in June 2009 as decision CA/D9/09.
Now, here is the best bit. At that point in time, Battistelli, Director of the French INPI, was the Chairman of the AC. Yes, no kidding. In July 2010, Battistelli was appointed to succeed Alison Brimelow as EPO President!
In May 2011, in his new role as EPO President he submitted a proposal to the AC to abolish the Audit Committee “for reasons of efficiency”. See CA/55/11, “Disbanding the Audit Committee”, which says: “The present document proposes that the Administrative Council’s June 2009 decision establishing an Audit Committee (CA/D 9/09) be repealed for reasons of efficiency.”
CA/55/11 was approved by the AC in June 2011 as decision CA/D4/11. The decision of the AC to abolish its Audit Committee was appealed by EPO staff representatives (see CA/100/11) and this appeal is currently pending before the Administrative Tribunal of the ILO (ILO-AT) in Geneva.
The letter from the Chairman of the Audit Committee is worth reading. CA/100/11, in pages 13 and 14, states (emphasis added): “The role of the Audit Committee is not an overlap with the internal and external audit but a key component of a balanced auditing and governance structure of the Office as it is in most international organisations.”
What a colossal mess.
A further parallel “thread” to this story concerns the EPO’s external audit mechanism, the so-called “Board of Auditors” which is established under Article 49 EPC. According to Article 49(1) EPC: “The income and expenditure account and a balance sheet of the Organisation shall be examined by auditors whose independence is beyond doubt, appointed by the Administrative Council for a period of five years, which shall be renewable or extensible.”
Again, what an utter joke!
The most-recently appointed member of the EPO’s three-man “Board of Auditors” is Mr. Frederic Angermann.
To quote this page from the EPO (under Munich, 13 December 2013, the 138th meeting of the Administrative Council of the European Patent Organisation):
The Council appointed Frédéric Angermann, Senior Auditor at the French Court of Auditors, as member of the Board of Auditors, with effect from 1 January 2014. Mr Angermann will succeed Michel Camoin, to whom the Council paid tribute.
Under the heading Legal and International Affairs, the Council heard the status report on latest developments concerning the Unitary patent, given by the Head of the Lithuanian delegation, representing the country holding the EU presidency for the second half of 2013. The chairman of the Select Committee (set up by the 25 EPC contracting states participating in the enhanced co-operation on unitary patent protection to supervise the EPO’s activities related to the tasks entrusted to it in the context of unitary protection) reported then on the committee’s 5th and 6th meetings (see Communiqué on the 6th meeting of the Select Committee, to be published shortly on this website). The Council thereby noted that a number of EPC contracting states not taking part in the enhanced co-operation had been granted observer status on the Select Committee. Other EPC contracting states not taking part in the enhanced co-operation will henceforth also be automatically granted observer status upon request.
What the EPO communique doesn’t tell us is that Angermann was previously a senior official at the French INPI. Battistelli must know him. This cannot be treated as merely a coincidence. In other words, he previously worked under Battistelli who was the Director of the French INPI, just prior to his EPO appointment.
Now refer back to Article 49(1) EPC: “auditors whose independence is beyond doubt”
Everyone can see the problem here. It doesn’t take a genius to see that Battistelli may be bringing in cronies.
In summary, the Audit Committee which was established in 2009 as an independent subsidiary body of the EPO’s Administrative Council (and thus independent from the EPO President) was subsequently abolished in 2011 “for reasons of efficiency” (by Battistelli) after barely two years of existence.
The Audit Committee was established by the AC under Battistelli’s chairmanship of that body and the proposal for abolition came from Battistelli in his new role as EPO President (where he would have been subject to the oversight of the Audit Committee).
The consequence of this abolition was to return to the “status quo” prior to CA/140/08: Internal Audit at the EPO is once again completely under the control of the EPO President (i.e. in the hands of one person).
Apart from this, one of the EPO’s external auditors appointed under Article 49 EPC has a previous close professional connection to Battistelli.
All of this indicates that there is no effective independent internal audit mechanism at the EPO. Battistelli killed it.
Furthermore, the integrity of the external audit mechanism under Article 49 EPC has been compromised by Battistelli’s cronyism.
When you consider that the annual budget of the organisation is around 2 billion euros, that should be a cause for public concern. There is no excess of money in Europe right now (Britain is furious this month over demands for a payment of an extra £1.7 billion to the EU) while staff at the EPO is grossly overpaid with virtually no oversight, as we showed in previous parts and demonstrated with strong exhibits of authority.
As readers can see, especially if they follow European media, this is another story that the mainstream media has completely ignored. Unbelievable perhaps, but more likely there is fear of covering it, if not some certain complicity (depending on the media owners).
Once again, German journalists have been fully informed about these matters but haven’t written a single line about them despite the fact that according to the German Press Codex
[PDF], “accurate informing of the public” is supposed to be one of the overriding principles of the Press (see preamble to Section 1). Perhaps the German media is preoccupied with other agenda. █
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The golden rule: those who have gold make the rules
Summary: How multinational corporations, joined by the corporate press that they are funding, promote a corporations- but not people-friendly patent policy in north America
Some time after a Reuters article that quotes mostly patent lawyers and speaks for large corporations (we saw it reposted in about a dozen large newspapers, mostly corporate press) the Wall Street media came out with a similar report, repeating some of it later and saying: “Companies that build their business models around aggressive patent litigation are finding that approach less lucrative after a U.S. Supreme Court ruling and stricter government policies.
“Here again we see how large corporations steer policy, irrespective of what the public wants.”“Patent lawsuits filed in the third quarter declined 23 percent from the second quarter, according to the industry coalition Unified Patents. About 88 percent of the drop is because of fewer cases by companies that make more than half their revenue from patent licensing and sue computer, electronics and software companies, the group said yesterday.
““The drop is real and likely permanent given the many structural changes to the patent system and patent litigation over the past couple years,” said Adam Mossoff, a law professor at George Mason University in Arlington, Virginia.”
The site of the CCIA says that articles like these are not helping. They help large corporations, that is for sure. The corporate media typically pushes these talking points. “Alice is helping get rid of some bad patents, but those are just a drop in the bucket,” says Matt Levy, who added this cartoon.
Professor Geist, in the mean time, explains how corporate Canada (his phrase) is interfering with patent reform. To quote: “The Internet Association, a U.S.-based industry association that counts most of the biggest names in the Internet economy as its members (including Google, Amazon, eBay, Facebook, Netflix, and Yahoo), recently released a policy paper on how Canada could become more competitive in the digital economy. The report’s recommendations on tax reform generated some attention, but buried within the 27-page report was a call for patent reform.”
Further down he says: “Yet despite the opportunity to give the green light to combat patent trolls, the Canadian business community urged caution. According an internal summary document on the discussions, Cisco warned that the reforms “could do more harm than good.” Jim Balsille, the co-founder of Blackberry, indicated that he supported the intent of the patent troll reforms, but cautioned about the need to get the details right. The Canadian Chamber of Commerce also expressed concern with the reforms, arguing that the measures could legislate against legitimate assertion of patent rights and that they could create a chilling effect.”
Here again we see how large corporations steer policy, irrespective of what the public wants. Civil disobedience may be in order and in TechDirt there is a new article about those who knowingly and deliberately ignore patents that do not deserve respect or, conversely, those who insist that invalid patents can be infringed on. This system is rigged and it need to be toppled. █
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Summary: How the corporate media chooses to cover the invalidity of many software patents and the effect of that
FOR a number of years we have written a great deal about software patents, hoping for change and hoping for acknowledgement of change in the corporate media, which typically just quotes lawyers when it comes to patent matters. Engineers are rarely part of this debate. The corporate media treats them as passive observers that barely count.
“Engineers are rarely part of this debate.”There was a widely
circulated article at Reuters last week and it spoke about positive developments in the area of patents, pulling together some important facts and figures:
For two decades, companies that buy software patents to sue technology giants have been the scourge of Silicon Valley. Reviled as patent trolls, they have attacked everything from Google’s online ads to Apple’s iPhone features, sometimes winning hundreds of millions of dollars.
But now the trolls are in retreat from the tech titans, interviews and data reviewed by Reuters show.
In the wake of several changes in U.S. law, which make it easier to challenge software patents, patent prices are plummeting, the number of court fights is down, and stock prices of many patent-holding companies have fallen. Some tech firms say they are punching up research budgets as legal costs shrink, while support for major patent reform is under fire as trolls get trounced.
“Their entire business model relies on intimidation, and that has lost its edge,” said Efrat Kasznik, president of intellectual property consulting firm Foresight Valuation Group. “If the patents are not enforceable in court anymore… the troll has no legs to stand on.”
With the headline “Big Tech Winning Battle With ‘Patent Trolls’” it’s clear that they take the narrative of big businesses and mostly ignore the relevance of software patents in this case. It’s all about big business!
This is evidence-based as opposed to emotion-based (like analyses from patent lawyers), but it does quote a lot of people who are in the patent business and have a conflict of interest. █
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Summary: Patent trolls are in the news again and it’s rather important, albeit for various different reasons, more relevant than the ones covered here in the past
THE relentless attempts to redefine “patent troll” — attempts which can be largely attributed to patent trolls themselves (and their lobbyists, such as Bill Gates’ and Nathan Myhrvold’s lobbyists) — were covered here in past years and we continue to see much of the same now that politicians are said to be going after “trolls” (an elusive ‘reform’ that will go almost nowhere). The remedy will most likely necessitate some kind of scope limitation; this scope should be a debate around patents, not the aggressor’s scope or scale. The world’s biggest trolls are often not characterised in the corporate press as “trolls” at all. It is a form of propaganda or a game of words that defames small players and glorifies larger players that engage in the very same behaviour.
As the troll-tracking Steph put it the other day, we cannot rely on politicians. “I’m on record many, many times agreeing that legislation is not the way to curb patent trolling,” she explained. “It’s right there in the name of the offender: “troll”. It may slow them down temporarily, but overall, anyone called a “troll” is going to come back swinging a few months or years later with a whole new set of workarounds. It’s impossible to stay fully head of them with laws.” Whereas by going after the patents themselves would help eliminate abuse, no matter if the abuser is as large as Microsoft or as small those many no-name trolls. Nathan Myhrvold (shown above) is already seeing his massive patent troll imploding (lots of layoffs) and litigation rates have gone down considerably just after the Alice ruling. It was about patent scope. According to those who pursue reform only targeting patent trolls, “It’s been reported in a few places that a recent Lex Machina report states that patent litigation is down 40% from last year. Of course, the patent trolls are trying to use these inaccurate reports to argue that the patent troll problem is essentially solved.”
This is untrue. The reality is, the Alice ruling seemingly weakened many of them. They were reliant on software patents, based on statistics acquired some years back. It shows that by pursuing changes around patent scope we can achieve many of the overall goals; it’s a domino effect.
In other interesting news, China is said to be turning into quite the hotbed of patent trolls and Glyn Moody writes: “The Chinese government’s move is part of a larger story that recapitulates America’s own evolution from a “pirate” nation that fuelled its industrial revolution by ignoring the law and appropriating Western Europe’s patented ideas, to one using the same legal instruments against European companies.”
Here we have yet another reason to narrow the scope of patents. Trolls are a symptom of a scope too broad and China can take advantage of it. Not only trolls are impeded by elimination of “abstract” patents (which include software patents); everything in the patent system (universally) is affected by that, irrespective of the size of the plaintiff. █
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Summary: Another new development shows that more burden of proof is to be put on the litigant, thus discouraging the most infamous serial patent aggressors and reducing the incentive to settle with a payment out of court
THERE have been some victories recently against software patents. The patent lawyers have become either silent or rude. Well, the rude and shameless IP Watchdog is apparently upset by Steph, the patent trolls tracker who writes: “I don’t often get in fights on Twitter, but when I do, it’s with IP Watchdog because he’s a bully (only sometimes, but still) or with inventors who feel that any attempt at curbing patent trolls will adversely affect them and their ability to sue people who infringe on their ideas.”
As Pogson pointed out today, software patents are rapidly eroding in the US and last month there was an important development that Cory Doctorow draws attention to only now, spurring these remarks from Mike Masnick who wrote:
Judges Want To Make Life Harder On Patent Trolls: Want Them To Actually Have To Explain What Infringement Happened
I’d missed this one, but Cory Doctorow over at BoingBoing points our attention to the fact that, last month, the Judicial Conference voted to make a little-noticed change in patent lawsuits that should serve to make life more difficult for patent trolls. The details here are more complex than necessary, but the short version is that, under current rules, to file a patent infringement case, the initial complaint can be almost entirely bare bones: basically naming the plaintiff, defendant, patent and saying there’s infringement, but providing no real details on the infringement. That aids patent trolls, who often will file questionable lawsuits without even telling the defendant where the infringement occurs — leading defendants to have to go into the case a bit blind, and making it more appealing to just settle.
Earlier today IDG published an article by Simon Phipps. It relates to the above and days that “patent trolls have one fewer legal loophole to hide behind” (not just classic trolls, but also megatrolls like Microsoft, which often refuses to publicly disclose even patent numbers).
Things just keep getting better on this front. █
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The rule of low, not law
Summary: The USPTO continues to lower the bar for patents’ acceptance, but on the other hand, many software patents are increasingly being rejected at the courts
Software patents may be on their way down, but patents as a whole are not going down, only their standard goes down. As a relatively benign patent lawyer put it the other day: “The fight for patent reform isn’t about trying to trample on inventors’ rights. It’s about trying to deal with the reality of thousands of bad patents and trying to prevent people from collecting money (and hindering innovation) based on patents that should never have issued.”
On another day he shed light on this troll:
And an Acacia subsidiary was ordered to pay NetApp’s legal fees after suing on patents that turned out to be licensed already.
“Software patents may be on their way down, but patents as a whole are now going down, only their standards go down.”The roundup links to this article about Acacia and it says that this “subsidiary of the patent aggregator had brought suit despite already striking a licensing deal with RPX.”
RPX is another kind of troll, but not quite the aggressive one. Here is some more coverage:
NetApp sticks biggest “patent troll” with $1.4M fee sanction
This summer, the Supreme Court made it easier for defendants to collect fees when they win patent cases. The decision is starting to have an effect—the nation’s largest patent troll just got slapped with an order to pay $1.4 million in attorneys’ fees to NetApp, which it sued in 2010.
The case brought by Summit Data Systems, a branch of Acacia Research Corp., hinged on an accusation that NetApp infringed when its server-based software interacted with an end user on a Microsoft operating system. The two patents-in-suit, 7,392,291 and 7,428,581, relate to “block-level storage access over a computer network.”
Notice the Microsoft connection. Some consider Acacia to be somewhat of a Microsoft proxy for several reasons that we covered before. This again is a software patent. This patent got defeated. Here is the EEF writing about another software patent, dubbing it “stupid patent of the month”:
Blue Spike LLC is a patent litigation factory. At one point, it filed over 45 cases in two weeks. It has sued a who’s who of technology companies, ranging from giants to startups, Adobe to Zeitera. Blue Spike claims not to be a troll, but any legitimate business it has pales in comparison to its patent litigation. It says it owns a “revolutionary technology” it refers to as “signal abstracting.” On close inspection, however, its patents turn out to be nothing more than a nebulous wish list. Blue Spike’s massive litigation campaign is a perfect example of how vague and abstract software patents tax innovation.
EFF is calling out software patents now, not just “stupid patents”.
According to some new numbers, the stupidity of patents only gets worse as it gets easier to have them granted:
Dennis Crouch over at Patently-O reports that for Fiscal Year 2014 (which just ended), the USPTO granted a record number of utility patents, over 300,000. Dennis determines that this results in an allowance rate of about 70%.
“Think about that – 70% of patent applications result in a patent,” says this article, but the real number may be 92% because some reapply until 'success'. This is ridiculous. A patent lawyers’ site says 300,000 patents got granted in one fiscal year. Good luck keeping track of so-called ‘infringements’.
Well, only recently we gave many examples of software patents being eliminated by US courts. Steven Seidenberg, writing for Intellectual Property Watch, claims that the “US [is] Cracking Down On Software Patents” and in his own words:
The US courts are aggressively applying the ruling. So is the US Patent and Trademark Office (USPTO). Thanks to their common interpretation of the US Supreme Court’s recent decision in Alice Corp. v. CLS Bank, it is now open season on software patents.
Software patents are definitely suffering a major blow right now, but the overall problem is far from over. As TechDirt put it yesterday, the USPTO‘s standards are so low that a “Design Patent Granted… On A Toothpick”. It’s not satire. The EPO is corrupt, but the USPTO may not be much better. They are not providing public service; they are a front for corporations and increasingly trolls too. █
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Photo from Reuters
Summary: A long series of abuses in CAFC may as well suggest that this court has become broken beyond repair
THE Court of Appeals for the Federal Circuit (CAFC), a corrupt court which brought software patents to the world some decades ago, is seriously considered rogue and some are calling for it to shut down.
Mike Masnick names another reason to shut down CAFC: “Back in 2004, when I first read the book Innovation and Its Discontents, I was convinced that the Court of Appeals for the Federal Circuit, better known as CAFC, or the “patent appeals court” was a huge part of the problem with the patent system. It was the special court that had been set up in the early 80s to handle all patent appeals, based on the totally misplaced notion that because patent issues were so technical, regular appeals courts wouldn’t be able to handle the nuances. What we got instead was a court that became “patent specialists” in that they spent much of their time with the patent bar — who tended to be lawyers who profited handsomely from an ever expanding patent law. It didn’t help that one of the original CAFC judges was Giles Rich, a former patent attorney who almost single-handedly wrote the Patent Act of 1951. Rich more or less made it his lifetime goal to expand the patent system to cover “everything under the sun made by man,” and he came close to succeeding.”
The article is titled “CAFC: The Rogue Patent Court, Captured By The Patent Bar, Needs To Go Away” and it very much reflects on what we see much of the time.
The numbers of controversies or corruption (as we have covered before) surrounding CAFC indicate that it should not be unthinkable or controversial to suggest shutdown. When is a court deemed “above the law”? █
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More fraud and abuse in the monopolies-granting bodies that large corporations are utilising
Photo credit: Center for American Progress
Summary: Corruption is found at the heart of the USPTO and the USPTO works hard to hide it, despite attempt by whistleblowers to bring this corruption to light
OVER the years we have covered many issues and scandals in the USPTO. Not only the copyright system is rigged (managed by and serving the large copyright monopolies); the USPTO is more or less the same. It is a government body that is run by corporations and their minions (like David Kappos). Some months ago we showed that the USPTO was approving 92% of all applications, which makes it little more than a rubber-stamping establishment.
Well, how can it be that so much prior art and triviality got overlooked by the Kappos-run USPTO?
Perhaps now we know.
“For quite some time now, we’ve discussed how the USPTO had a massive backlog,” says Mike Masnick, “and that former boss David Kappos solved this “problem” by getting examiners to approve more patents faster, mainly by lowering their standards and granting more patents.”
“Whenever we write about this, we hear about overworked patent examiners who are really trying their best. Except, it appears that the system is actually rife with abuse and fraud by patent examiners,” Masnick added, linking to a highly-cited report.
To quote the report: “Prompted by multiple whistleblower complaints, the U.S. Patent and Trademark Office began an internal investigation two years ago of an award-winning program that’s been praised in and outside government: Employees are allowed to work from home.
“What the inquiry uncovered was alarming.
“Some of the 8,300 patent examiners, about half of whom work from home full time, repeatedly lied about the hours they were putting in, and many were receiving bonuses for work they didn’t do. And when supervisors had evidence of fraud and asked to have the employee’s computer records pulled, they were rebuffed by top agency officials, ensuring that few cheaters were disciplined, investigators found.”
Here again we see whistleblowers in action and cover-up attempts by the USPTO.
The attempted cover-up attempts show that rather than deal with the abuses the USPTO became very much complicit. Perhaps it’s time to shut down the USPTO in its current form and annul all the patents approved in the past few years, revising and reviewing them as they may never have been reviewed at all, just blindly approved. To quote Masnick: “So, we just wrote about the fact that there was apparently fairly widespread abuse and fraud by patent examiners, mostly those working from home, in lying about the hours they put in and getting paid for work they didn’t do. However, what may be much more concerning was the fact that the USPTO tried to hide this from the Inspector General who was investigating this. As the Washington Post notes, an initial internal report detailed many more examples of fraud and abuse, which disappeared from the final report that was handed over. ”
The whistleblowers at the USPTO deserve some credit and they remind us the importance of whistleblowers, who so often rely on Free software.
The CCIA's Matt Levy now admits in his belated disclosure that “my wife is a patent examiner who teleworks.” Teleworking has been the source of abuse, but Levy keeps chastising “The PTO’s Culture of Poor Quality Patents” rather than corruption.
“The problem,” he says, “is not simply a bunch of crooked people trying to get away with something. There is clearly a cultural problem at the USPTO.”
No, the problem is that the USPTO — just like CCIA — is serving corporations. It does not serve public interests. Patent scope is one of the symptoms.
We currently talk to someone who wishes to blow the whistle on the EPO but it trying to set up encryption. It is clear that the NSA and its partners in Europe have done a lot to deter whistleblowers. █
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