Bonum Certa Men Certa

Leaked Financial 'Study' Document Shows EPO Management and Mercer Engaging in an Elaborate “Hoax”

Purveyors of 'fake news' inside what's supposed to be a scientific institution

How One Family’s Deep Pockets Helped Reshape Donald Trump’s Campaign



Summary: How the European Patent Office (EPO) lies to its own staff to harm that staff; thankfully, the staff isn't easily fooled and this whole affair will merely obliterate any remnants of "benefit of the doubt" the President thus far enjoyed

THE EPO has been under a (soon) decade-long attack from Campinos and Battistelli, who not only integrated European software patents into their agenda (in defiance of courts and Parliament) but have also attacked the staff and misused EPO money (Campinos might soon give a lot of EPO money to Third Reich goons).



"SUEPO has been too patient with Campinos (strike postponed) in spite of him repeatedly showing that nothing will change, except for the worse."As we recently mentioned here on several occasions, there's a fake 'crisis' being manufactured/claimed (not the real crisis) to push so-called 'solutions'. "The delicious propaganda by EPO top managers to middle managers," a source tells us, can be seen in this Manager Toolkit (English) [PDF].

As it turns out, there's already a response to it. "The aim is here disseminate false information and make the deteriorations -- sorry, the "reforms" to soon come -- more acceptable to joe-average EPO staff although these are new unjustified thus unfair cuts," the source adds. Here is the position of the Central Staff Committee (CSC) on the same financial study.

Zentraler Personalausschuss Central Staff Committee Le Comité Central du Personnel

Munich, 07.06.2019 sc19081cp – 0.2.1/1.3.2

The Financial Study: Yet Another Hoax (part 4)



At the EPO financial studies tend to be a pretext for cuts in staff benefits. The latest study by Mercer and Wyman is no exception. Our previous publications showed that the study deliberately underestimates expected income from fees as well as the return on cash reserves, and overestimates staff costs. The present publication lists these misrepresentations and adds some more.

Recapitulation

The 2019 EPO Financial Study by Mercer and Oliver Wyman assumes1 that:

- between 2018 and 2038 the EPO will not raise its procedural and renewal fees except once, by 4%, in 2020. For the remaining period the fees are assumed to remain constant (page 115). A correction for inflation is not foreseen.

- between 2018 and 2038 the national renewal fees on patents granted by the Office will remain constant (page 116). A correction for inflation is not foreseen.

in sharp contrast during the same period EPO salaries are assumed to increase at a rate of 2.24% above inflation (page 119).

- without providing any underlying data, the study assumes that the costs of pensions and other post-employment benefits (incl. tax compensation) will almost triple over the next 20 years (pages 66-67, page 123).

- The study foresees no further transfer of operational surpluses to the RFPSS, although with a 4.8% return above inflation over the last 20 years (6.3% over the last 5 years) the money would be well placed (RFPSS/SB 41/19, page 2, Fig. 3).

the study assumes that operational surpluses will not be transferred to the EPOTIF either (page 63). The EPOTIF was recently created with the very purpose of shielding EPO capital from inflation and is expected to deliver a return of 4% above inflation (CA/F 10/18 para.10).

- instead expected operational surpluses are assumed to be parked as “other financial assets” with an average annual return of between - 0.03% and 0.78%, i.e. well below the level of inflation2.

- as indicated above, over the last 20 years the RFPSS had a real return of 4.8%. The actuaries who evaluate the RFPSS assume a long-term return of 3.5%. The Financial Study assumes a return above inflation of only 2.1% (FAQs). This transforms today’s 104% coverage (CA/61/17 point 79) into a 2 billion euro gap in 2038.

This is a long list of extremely unlikely assumptions. There may be more, e.g. in the assumptions for the patent processes which we have not checked in detail. We also have doubts about the assumed 2 years increase in longevity (page 122) and the constant 53.87% non-examining staff “as percentage of job groups 1-4” (page 112). At present examiners make up about 64% of our total staff.

___ 1 Unless otherwise indicated, the page numbers in the list refer to the Financial Study. 2 Financial Study pages 120 and 122; the return is not explicitly mentioned but can be calculated from the data in the tables.




What about an effort by the Office?

The EPO’s financial situation is excellent – maybe even too good3 - and this despite the recent high costs of the “New Main” building in The Hague and significant losses in IT. The Financial Study nevertheless wants us to believe that the EPO faces a significant financial gap and that now is the time to do something about it by cutting costs, staff costs. But what about other costs? Is Mercer pointing at possible savings elsewhere? Are the Member States contributing to the effort? Is Mr Campinos leading by example – even if only symbolically? It doesn’t seem so.

The Mercer study assumes 600 million euro in building costs. The real sum may be as much as 1.14 billion euro (CA/43/19, Figure on page 32). Some building maintenance is indeed necessary. But part of the money is for one of Mr Campinos’ pet projects: creating glass-walled offices. Mercer does not comment on these costs.

Mr Campinos strategy document points to another – potentially significant – sink for EPO money: cooperation with the Member States4. The most recent figure that we have seen for cooperation costs is about 25 million euros per year (CA/19/15). Mr Campinos now proposes to “maximize the impact of cooperation” with a new model that will be “all-inclusive and equally open to all member states”. The Council delegates as heads of the national patent offices are all potential beneficiaries of these cooperation activities. For the President the cooperation budget is an efficient tool to reward member states that support him in the Council and punish those that don’t. So we expect the cooperation budget to increase considerably despite the allegedly bad financial situation of the Office.

Finally there is the annual Inventor of the Year event. The sums concerned are relatively modest by EPO standards – a few million euro at most. But is promoting one inventor over the other (with a possible impact on the value of the invention) compatible with the EPO remaining neutral in the exercise of its functions? And is it (to use Mr Campinos’ words) “handling significant amounts of taxpayer’s money with due diligence, due process and careful legal assessment”? We do not think so.

Conclusion

The 2019 Financial Study is a very plump attempt to justify a further reduction of staff benefits while the Office continues its spending. Staff is not fooled.

The Central Staff Committee

____ 3 Art. 40(1) EPC stipulates that the EPO’s budget should be balanced. We question whether with an operating surplus of about 20% the EPO budget qualifies as €« balanced €». 4 Read: cooperation with the national patent offices (NPOs).



"Make your own opinion," the reader concludes, "who do you think lies here?"

Mercer (sponsor of sites like Breitbart) and professional liars like Campinos, who only a couple of years ago attacked staff at the EUIPO in the name of 'cost savings'...

SUEPO has been too patient with Campinos (strike postponed) in spite of him repeatedly showing that nothing will change, except for the worse.

Recent Techrights' Posts

Many Articles About Layoffs Are Still Fake, Still LLM Slop, Even About IBM Layoffs
No wonder tech and tech journalism are getting so much worse
Slappification: Using More SLAPP to Cover Up SLAPP and Chaining SLAPPs (From Microsoft) in a Failed Bid to Censor Techrights
How low can a person with a law degree stoop?
Hidden from coroners and the public: tech industry cultural contagion
Reprinted with permission from Daniel Pocock
Richard Stallman on Patents
uploaded a day ago by Aleksandar Popovic
What Happened to the Open Source Initiative (OSI) Elections: Leaking Information of Members (Even in 2025)
More nonsense about Hey Hi (AI), which OSI has been openwashing on Microsoft's payroll
 
Links 21/03/2025: "IBM cuts Thousands" and Outlook Outage Again (Microsoft Looks for Excuses)
Links for the day
Gemini Links 21/03/2025: "Happy Spring" and Leaving "The Enterprise"
Links for the day
Speak More About the GNU Manifesto (40 Years Old This Month), It Helps Remind People That GNU/Linux Was Started by Richard Stallman and the Ultimate Goal is Freedom
We generally encourage people to speak about Software Freedom
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, March 20, 2025
IRC logs for Thursday, March 20, 2025
Recommended New Article From Dr. Andy Farnell and Some Site Miscellany
Andy says he and his daughter successfully avoid GAFAM
Links 20/03/2025: Executions in China and Crackdowns on Science in the US
Links for the day
Gemini Links 20/03/2025: Ubuntu Shafting Common Sense and Blocking of Bots of the Net
Links for the day
Links 20/03/2025: IBM Layoffs (Thousands Reportedly Laid Off) and Lots More Corruption in the White House
Links for the day
Techrights Will Never Capitulate to Threats From Microsofters
Set aside violence against women and all sorts of other things; it's not about personal issues
The Microsoft-Led Open Source Initiative (OSI) is Hurting, It'll Try to Hurt Its Critics and Exposers Now
The OSI's chief meanwhile issues a bunch of meaningless waffle, a sort of "damage control" or "face-saving" platitudes
Apple is Still an Enemy of Open Standards and Software Freedom
Apple did not get any more benign
Gemini Links 20/03/2025: Wanting the Future Back and "Society That Lost Focus"
Links for the day
Fake Articles About GNOME
betanews again
Richard Stallman's Personal Site Says He's Looking for More Opportunities to Speak in Europe
He does not charge people for the talk
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Wednesday, March 19, 2025
IRC logs for Wednesday, March 19, 2025
Debian Pregnancy Cluster, when I stopped using IRC
Reprinted with permission from Daniel Pocock
Mass Layoffs at IBM Confirmed
Thousands believed to have been laid off
Slopwatch: linuxsecurity.com, cybersecuritynews.com, gbhackers.com, and techmonitor.ai (Fake 'Articles' About "Linux")
Almost all of them (75%) show up in Google News
Is Ubuntu Compromised? Push Away From GNU and GPL Led by Army Officers.
Perhaps people should ask Canonical what the thinking behind it was...
Gemini Links 19/03/2025: go-gopherproxy and 'Small Web' as Self-expression
Links for the day
Links 19/03/2025: Attention's Cost and Media Still Besieged by Dictatorships
Links for the day
Phoronix Seems to be Trying to Kill Discussion About "Asahi Lina" and the Anti-Torvalds Brigade
Our informed guess is that by reporting this news Phoronix got caught up in flamewars that divide and fracture the community
Claiming to Love What You Reject or Seek to Totally Own, Control
The Russia analogy is political
LinuxTechLab Became Just LLM Slop and SPAM
Another dead (former "Linux") site
The Rust Song
It's about control
Facts on the Case Already Disclosed by US Authorities
NGOs in the UK (several keep abreast of this, judging every recent move) are truly unimpressed
The Times Group (and The Times of India) Basically Died Again
This time a death by LLM slop/plagiarism
The Death of The Economic Times (India Times): LLM Slop Presented as 'Articles', Containing Errors and Revisionism
They'd be better off shutting down operations with some dignity than resort to bots giving the false impression (illusion) of authorship
In Belgium, Android is Finally Measured as Bigger Than Windows
In Belgium, the lobbying capital of Microsoft, it wasn't easy to get there
"Rust People" Are a Threat to BSD Too (the Licence Isn't the Main Issue, Nor is the Proprietary Microsoft Hosting)
BSDs aren't written in Rust, so BSD developers should buckle up
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, March 18, 2025
IRC logs for Tuesday, March 18, 2025
Sami Tikkanen Explains Rust Language and Its Goals
"Sompi" (the nickname of Sami Tikkanen) has weighed in
Links 19/03/2025: Gardening Season and the Web Without an Audience
Links for the day