07.03.16

Grim Situation at the European Patent Office Following Battistelli’s Latest Lawlessness Tendencies, as Explained by Concerned Insiders

Posted in Europe, Patents at 6:54 pm by Dr. Roy Schestowitz

Lawless state of affairs does a disservice to the services offered by the EPO

Summary: Some of the latest input regarding Battistelli’s (mis)behaviour and the Administrative Council’s passive acceptance of such behaviour

THE USPTO may be notably poor when it comes to patent quality, but at no time in the recent past were there any scandals there that come anywhere close to what happens at Battistelli’s EPO. Battistelli has done so much damage to the EPO that it may take the Office decades to recover from it. The latest Battistelli scandal (among many) is extending to the whole Organisation, as the Organisation’s Administrative Council (AC) foolishly and recklessly plays along with Battistelli. As one person put it over the weekend or just before the weekend:

It appears, that the AC desperately felt the need to do something about the independence of DG3.

There are procedures at the german Bundesverfassungsgericht this year (the link is somewhere above). If the judges there see a lack of independence of DG3, it may cause quite some trouble, like an amendment to the EPC (http://www.stjerna.de/index_htm_files/Unitarypatent_Constitution.pdf, check out point 2).

Maybe this is why the AC felt the need to it quick?

Here is another comment about the massive fee hikes and what they will mean for SMEs, i.e. the large majority of European businesses:

It’s very difficult these days to follow the reforms at the EPO. So many different developments and proposed changes. Which of them are before the AC for decisions is difficult to understand. I hope at least the AC follows the situation.

RE: Considering that the present cost coverage for an appeal is 6.3%, the AC aims at increasing the cost coverage within the next five years to 20 to 25%.

On the one hand, an appeal fee of about 5000-7000 euros probably strengthens the case before national courts on the absence of independent judicial/quasi-judicial review of EPO grant/revocation decisions.

On the other hand, such a new appeal fee effectively diverts from the EPO patenting route small and middle size businesses/innovation, since they need fully disclose and make public their inventions while a review of EPO decision would have a 5000-7000-euro barrier. And this is just to start an appeal, without attorney costs, etc. And this all just for one patent.

Besides, it seems extremely disproportional to me to charge 5000-7000 euros a patentee who validates 3-4 countries and a patentee who validates 20+ countries. At the same time, also SMEs should be able to patent 38 countries.

Last but not least, an increase of BoA appeal fee seems to be indirect increase of patenting costs, given that now an appeal fee is already being paid, i.e. included in an entire series of EPO fees.

This entire policy appears to have been aimed at crushing the appeals process, hence/thereby speeding up examination and not doing the job properly. As one person put it later in the day, “it will be really difficult to get the applicants back to the EPO [...] once the current President has left.” Here is the entire comment:

I cannot help but wonder.

I hear that the Council extended the appointments of some members of the Enlarged Board having participated in the latest disciplinary decision. Nice sign. However, the Council should have suspended or dismissed the President, for interference with proper application of justice. That would have solved the independence issue, too.

It would also have bought enough time to finally organize the conference of ministers, overdue since 2012. Reshaping DG3 would definitely have merited such a conference, as would the UPC.

The impression I get is that all the Council is interested in is cash, i.e. as many patents and renewal fees as possible. As long as the President provides this cash, the Council will not stop him. Downside: once the applicants have voted with their feet and the cash flow drops, it will be really difficult to get the applicants back to the EPO. But that is unlikely to happen in the next one or two years, i.e. once the current President has left.

“Mr. Battistelli,” said some insiders, “appears unable to deliver what the AC has requested from him in its March resolution.” He not only continues his war on DG3 but also on staff representatives. In other words, he attacks both the Office and the Organisation. What a total mess.

Now that Bavarian authorities get increasingly upset or at least worried about the EPO, Team Battistelli pulls a fast one. According to insiders, “cooperation with the local authorities” was recently established as a largely political move:

On 19 April 2016 Mr. Battistelli met the Bavarian Minister of Justice, Mr. Winfried Bausback. According to the report on the intranet signed by Mr. Lutz (VP5) “the meeting participants expressed their willingness to enforce the links and exchanges between the Office and the Land of Bavaria.” In this context we refer to Article 20(1) EPO PPI that reads: “The Organisation shall co-operate at all times with the competent authorities of the Contracting States in order to facilitate the proper administration of justice, to ensure the observance of police regulations and regulations concerning public health, labour inspection or other similar national legislation, and to prevent any abuse of the privileges, immunities and facilities provided for in this Protocol.” In our opinion Data Protection forms part of the “similar national legislation”.

“Thus far we have seen very little of any such cooperation,” note the sources, so it seems like a hand-waving/white-washing exercise, much like the MoU with FFPE-EPO.

More of the same concerns about patent quality or examination/search exhaustion/depth were brought up in The Register. More people now advise other people not to apply for EPO patents. This is the kind of Battistelli-induced damage we have been warning about for years. “Filing a patent application in the USA is so much easier,” one person said, “and has a far greater chance of being granted. There’s a reason the likes of IBM file all their applications there after all. Besides, who really wants an EU patent anyway? Seriously!”

Here is a response to this:

Having a greater chance of your patent being accepted sounds like a great thing, except that it isn’t.

At all.

You could replace every patent office in the world with a stamping machine – come along, put your patent docs in the machine, get them stamped – Bingo – you have your patent.

Then all that remains is fighting out the validity of that patent in the various courts around the world, with rooms full of lawyers from all of the other companies that self-stamped their patents. The result is zero certainty in the validity of your patent and a fortune spent on lawyers with zero certainty of the outcome.

Patent applications need to be checked very carefully in order to ensure that the applicant can have a very high degree of certainty that their patent is actually valid – with that certainty companies can make decisions regarding investment and further research.

See also https://www.newscientist.com/article/dn2178-boy-takes-swing-at-us-patents/ and somewhat rounded corners.

Well, the EPO could be going down a similar route and some say it already does. See “Increasing the PACE” (MIP article) as a euphemism for prioritising large foreign businesses and granting patents to them in bulk and at a higher pace. Later this week we shall shed more light on how it happens in practice and what it means to examination quality.

“One point has to be made clear,” said this commenter. “All EPO activities are paid by the renewal fees.” Well, Battistelli dooms it and he might finish his term before money runs out and budget dries up. To quote:

One point has to be made clear. All EPO activities are paid by the renewal fees.
None of them (including search, examination and opposition and not even mentioning the PR events of Battistelli or his bodyguards) cover its costs with the procedural fees.
The cost coverage factor of opposition, for instance, is similar (slightly lower) than that of an appeal.
Thus, BB’s [Battistelli] argument about the need for an increase in appeal fees in order to cover the costs is, as usual, completely disingenuous.
If that is not the reason which is the real reason?

“I believe the situation is now so bad and dangerous at the EPO,” wrote the following person:

I believe the situation is now so bad and dangerous at the EPO that it is time that public, patent attorneys, economists and company bosses assemble and act together. Make a petition, use your professional or private network if you know politicians, journalists, economists, write to ministers or representatives. We need to inform them that the whole European Patent System is at risk. Companies, economy, research will be endangered if the EPO continues on this track.
About the other reform voted at last AC, namely “risk of conflict of interest”, it is appalling that it appplies to DG3 members. A very clear conflict of interest exists at the moment at the EPO : the President and VP who force excessively high targets on examiners : EPC vs production and objectives. It is the representatives sitting at the AC : EPC vs money for grants, money for dentists, money for cooperation projects.

Based on comments and articles like the above, it increasingly seems like there’s a gentle avoidance (if not boycott) of the Office by stakeholders. The EPO had to hire (at the expense of millions of Euros) crisis management professionals after Battistelli had hired his mates and thugs. Did he not foresee the backlash? EPO examiners are not as naive as he needed them to be.

We honestly strive to save the EPO rather than destroy it because the current trajectory is a massive threat to current staff and former staff (pensions). It would damage Europe’s leadership and welfare. Former EPO workers, not just stakeholders like attorneys, are rightly concerned about the EPO. The EU’s future may depend on it to some degree. “This procedure which lead to the acceptance of the amended documents is the reason why the UK voted “exit”,” one person wrote about Battistelli’s behaviour. “First day clear NO! Some amendments overnight, and all public input, opinions,… are forgotten and the proposal is accepted anyway. Sounds like Bruxelles….”

The following comment was also posted in relation to this bunch of “amendments” and it said:

Reading the decision of the council linked above:

The last word on budget and information stays with Battistelli.

Proposal for appointments and re-appointments are delegated to the president of the boards. However, they are made dependent on the whim of the president of the board, himself dependent from Battistelli for his appointment or reappointment (the Boac has only a rubber-stamping function because the crucial power to propose the chairman of the Enlarged board and give an opinion on his reappointment is not delegated).

The drafting of the Rules of procedure has been moved from the presidium to the boac where Battistelli is again sitting and the users and the members of the boards . are excluded.

Costs of the appeal (ultimately paid by the users in form of sloppy dg1-style treatment of the appeals and/or higher fees) are going to increase because of the move into a new building.

In summary: the council abandoned the idea of an independent judiciary. They gave control over it to Battistelli(at least previously they could decide who was going to serve as VP3), whose contempt for the rule of law is known and told the users to mind their business.

If it is true that the initial reactions to the office proposal were (rightly) negative one wonders what happened behind the closed doors of the council that led 35 delegates to be satisfied with just a couple of purely cosmetic amendments.

This “contempt for the rule of law,” as the above puts it, is exactly why the EPO under Battistelli’s leadership can continue to degrade/erode trust. This might even mean that foreign investors walk away and foreign companies may become less interested in European patents. Look what a mess or liability Battistelli has become not just for the Office/Organisation but also for Europe as a whole. As a side note, Battistelli's political ally Nicolas Sarkozy has just announced preparations for a 2017 presidential bid. In politics there aren’t quite the same age limitations as in this patent sector. Might Battistelli return to ruinous politics having ruined the excellent EPO in just a few years? █

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