06.12.19

Gemini version available ♊︎

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

Posted in Europe, Patents at 3:51 am by Dr. Roy Schestowitz

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.

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

Decor ᶃ Gemini Space

Below is a Web proxy. We recommend getting a Gemini client/browser.

Black/white/grey bullet button This post is also available in Gemini over at this address (requires a Gemini client/browser to open).

Decor ✐ Cross-references

Black/white/grey bullet button Pages that cross-reference this one, if any exist, are listed below or will be listed below over time.

Decor ▢ Respond and Discuss

Black/white/grey bullet button If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

DecorWhat Else is New


  1. Links 18/05/2022: Qt Company Loses Chief; OpenSUSE Leap Micro 5.2 and RHEL 9 Final

    Links for the day



  2. Jim Zemlin's Wife is Funded by Puppies (Microsoft)

    Jim Zemlin — like his wife — is bagging millions from Microsoft, but that’s clearly a conflict of interest for the Linux Foundation



  3. Links 18/05/2022: More Defections From WordPress to Gemini

    Links for the day



  4. Links 18/05/2022: PikaScript and cURL's Annual User Survey

    Links for the day



  5. IRC Proceedings: Tuesday, May 17, 2022

    IRC logs for Tuesday, May 17, 2022



  6. Phoronix: Microsoft and Phoronix Sponsor (and Close Microsoft Partner) AMD All Over the Place

    When you’re taking massive 'gifts' from AMD (and also some from Microsoft) maybe it’s not surprising that editorial decisions change somewhat…



  7. EPO Has No F-ing Oversight

    Earlier today SUEPO mentioned this new article demonstrating that EPO President António Campinos can very obviously and blatantly violate the Code of Conduct of the Office without facing any consequences; there are translations too, so the report is now available in four languages



  8. [Meme] Linux-Rejecting Foundation

    The Linux Foundation never really leads by example; by default, it uses proprietary software



  9. Linux Foundation Almost Never uses Open Source

    The Linux Foundation uses proprietary software (look where they hire and take money from) and be sure they're probably not even aware of it



  10. Links 17/05/2022: Many More Games on GNU/Linux, YaST Development Report

    Links for the day



  11. Links 17/05/2022: Rocky Linux 8.6 and Budgie Desktop in Fedora

    Links for the day



  12. Patent Examiners Rising Up Against EPO Abuse

    Unhappy with the law-breaking autocracy (the EPO‘s management breaks the law as a matter of routine), fast-deteriorating working conditions and rapidly-decreasing quality of work (or lack of compliance with the law), workers have escalated further, topping off strikes and industrial actions with a large-scale petition



  13. [Meme] What Managers (Really) Mean by Acting Professionally

    The myth of 'professionalism' needs to die along with the façade of conformity as prerequisite for employment (Linus Torvalds can work just fine in a bathrobe in his own home)



  14. Internal Poll: 93% of European Patent Office (EPO) Workers Are Unhappy With the EPO

    On top of strike/s and industrial action/s there are now also petitions; at the EPO, almost all staff is "disgruntled" because of utterly corrupt and defunct leadership



  15. Links 17/05/2022: OpenSUSE Leap 15.4 Release Candidate

    Links for the day



  16. IRC Proceedings: Monday, May 16, 2022

    IRC logs for Monday, May 16, 2022



  17. Links 16/05/2022: FreeBSD 13.1 and Inkscape 1.2 Released

    Links for the day



  18. Archiving Latest Posts in Geminispace (Like a Dated Web Directory But for Gemini)

    Earlier today we saw several more people crossing over from the World Wide Web to Gemini; we're trying to make a decent aggregator and archive for the rapidly-expanding Geminispace, which will soon have 2,500 capsules that are known to Lupa alone



  19. Microsoft Vidal Does Not Want to Listen (USPTO is Just for Megacorporations)

    Microsoft Vidal knows her real bosses. They’re international corporations (multinationals like Microsoft), not American people.



  20. Links 16/05/2022: China Advances on GNU/Linux and Maui 2.1.2 is Out

    Links for the day



  21. Jim Zemlin: Chief Revenue Officer in 'Linux' Seat-Selling Foundation

    Board seats in the Linux Foundation are basically a product on sale, based internal documents



  22. Reminder: Linux Foundation's Last IRS Filing is Very Old (Same Year the CFO Left)

    People really need to ask the Linux Foundation, directly, why its filings are years behind; this seems like a sensitive subject



  23. Linux Foundation Does Not Speak for GNU/Linux Users

    There's a serious problem in the "Linux" world as the so-called 'Linux' Foundation claims to speak for us (the GNU/Linux community) while in fact speaking against us (on the payroll of those looking to extinguish us)



  24. IBM's Lennart Poettering on Breaking Software for Pseudo Novelty

    Recently-uploaded ELCE 2011 clip shows a panel with Linus Torvalds, Alan Cox, Thomas Gleixner, Paul McKenney, and Lennart Poettering (relevant to novelty or perceived novelty that mostly degrades the experience of longtime users, e.g. Wayland and systemd)



  25. IRC Proceedings: Sunday, May 15, 2022

    IRC logs for Sunday, May 15, 2022



  26. Links 15/05/2022: Linux 5.18 RC7 and Calls for More Mass Surveillance

    Links for the day



  27. Audio: Mark Shuttleworth Marketed to Young Males, With Sexy Pictures

    The Web is rotting away, old links become broken links within months or years, so I’ve decided to encode a 3-minute segment of the whole as Ogg



  28. What a Difference Half a Decade Makes (When Linux Foundation is 'Having Fun')

    Media shaming campaigns may have taken their toll on the founder of Linux, who is now bossed by someone who rejects Linux and is married to a Microsoft booster. Like Richard Stallman under FSF guidance (and conditions for return, mostly for fear of further media assaults and attack dogs), he has become a more publicity-shy and private person. The Linux Foundation has in effect reduced the founder of what it’s called after (Linux) into a weekly release manager and mascot, whose brand it is gradually diluting/cheapening.



  29. Links 15/05/2022: GNU libiconv 1.17

    Links for the day



  30. [Meme] Unitary Patent and Unified Patent Court (UPC) Cannot Be Reconciled With the Law

    Unitary Patent and Unified Patent Court (UPC)? Impossible. But Team UPC counts on an endless torrent of fake news managing to convince you (and more importantly politicians) otherwise.


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts