THE EPO tries hard to hide internal affairs. It does not want matters to boil over or spill over (beyond the blurry boundaries of Eponia), for that might cause Benoît Battisteli to be held accountable for his horrific, jaw-dropping actions.
On 27 October 2017, Claudine Lepage, French Senator, reported again on the social situation in the European Patent Office (in French).
The original Q & A, published by the French Senate can be read here.
Point 10.5 New investment policy for EPO
Chief Financial Officer EPO: [he presents a PowerPoint]
From 850 million euros in 2011, we have come to 2.11 billion euros in cash in 2017. We still manage the funds with guidelines dating back to the 90s. At present, we have invested 90% in bond papers. 10% are fixed in bank accounts. 0.33% was the average for bond papers in recent years. The continuation of this investment policy would be a sign of a poor investment. Deloitte has recommended to make the guidelines more flexible. The cash can be invested over a long-term period. It was recommended to invest 380 million euros per year in long-term debt with 1.17% return per year. The investment mandate must be revised so that the investments can be made more flexibly. For this purpose, For example, shares. The longer investment period would minimize the risk of volatility. Other European investors are widely diversified. We asked Mercer for a study. The potential losses should not exceed the profit from 2017, ie 400 million euros. Mercer has simulated a flexible plant distribution. We want to achieve a return of 4% per year. This would require 35% equities, 55% fixed income investments and 10% alternative products. € 250 million of cash reserves would come from operating surplus. 10.6 billion euros would come together by 2036. Despite a conservative approach, the Office is able to achieve € 12 billion by 2036. For this purpose, an approach in two steps must be selected. First of all, the inventory directive has to be revised. Then you need to select one or several fund managers to generate a 4% return. The document provides you with all the information in the appendix. In the second step an external provider has to be selected. In September, an FAC was set up, which also includes high-ranking external staff. The Office proposes a more flexible stocking directive.
Germany:
A presentation is something different than the document. It is about important decisions. We share the view that the investment policy must change. But there must be more details. The Federal Court of Auditors and the Ministry of Finance have told us that the document is not acceptable. You go to Mercer and show us the result. We should believe you. The parameters must be set precisely in advance. The WIPO shows that it is possible. The distribution of assets and the distribution of risk and governance are all much clearer. In the presentation everything was much more harmless than in the document. The document does not contain a distribution of the investment. 2 billion euros could be invested in high-risk investments. I do not suppose that this is the goal, but I would like to take it from the document. We have nothing in principle against outsourcing. But we are missing information on profitability. The RFPSS is managed internally. Why should the cash now be managed differently? It is currently quite open, who should intervene if and when an undesirable development occurs. It is said that the EPO should still provide documents. We would like to decide in advance. We do not want to give any general authorization and then have to agree piece by piece. We would like to see the overall strategy. WIPO has provided much more precise information. We would like to see this as an orientation. Then, in May, with a modified document, you can hopefully initiate a vote based on sound data (emphasis added).
United Kingdom
We have voted in favor of this document being for information purposes only. Not because the president is no longer responsible, but because there are many elements missing in the document, we have done so. Here the risks are fictive. The resources of the Office must be used transparently. For the first time, I hear a 4% return. I would have preferred that the German CPI plus be taken. I do not see a proper methodology in the document. The investment distribution is also not listed. The guidelines on page 9 allow much greater risks than they can be addressed by the RFPSS. The RFPSS can not buy high-yield bonds. The Office could do so. That would still be something we would approve. We need a much better overview. Without an appropriate framework, this is not acceptable. Similar changes were made in other international organizations and everything was very clear. With this document I can not tell my government that everything is in order (emphasis added).