07.06.21

European Patent Office (EPO) and the EPO’s Administrative Council Both Complicit in Illegal Outsourcing to Microsoft (and Industrial Espionage)

Posted in Europe, Fraud, Microsoft, Patents at 11:12 am by Dr. Roy Schestowitz

Video download link

Summary: It seems like the EPO has just updated a Web page to help cover up its crimes, including gross violations of the GDPR (abuse of privacy of both staff and stakeholders)

THE EPO is totally not functioning. Back in the Benoît Battistelli days it was still possible to see the occasional challenge from the Council; under António Campinos things got even worse! They actively participate in crimes and coverup.

“It’s hogwash, partly misleading, and likely composed jointly with Microsoft.”As we pointed out before, the German government too is part of the problem (passive complicity; turning a blind eye) and there’s no sign of that changing any time soon. It seems like the “EPO – Data protection & privacy” page of the EPO (warning: epo.org link) has just been updated. Notice how in the FIRST THREE SECTIONS (all of them!) it’s all about Microsoft. It’s hogwash, partly misleading, and likely composed jointly with Microsoft. The Council is OK with it.

Does Microsoft now control “IT” at the EPO and moreover, does Microsoft write EPO policies? There’s a fresh scandal similar to this. They write legislation against their rivals in order to distract from their own crimes.

03.23.21

[Meme] EPO Robbed

Posted in Europe, Finance, Fraud, Patents at 11:19 am by Dr. Roy Schestowitz

You don't need to rob the EPO... When you control the EPO

Summary: A toxic mix or dangerous cocktail of diplomatic immunity and greed

03.19.21

EPO and Microsoft Collude to Break the Law — Part XIV: When is a Conflict of Interest Not a Conflict of Interest?

Posted in Europe, Fraud, Microsoft, Patents at 8:17 am by Dr. Roy Schestowitz

Previous parts:

Bill Gates and Campinos

Summary: Could the EPO’s increasing reliance on Microsoft involve a conflict of interest?

If Lewis Carroll’s Humpty Dumpty had ever managed to visit the bizarre “Wonderland” of the EPO he might have been tempted to formulate a new riddle along the lines of: “When is a conflict of interest not a conflict of interest?”

“To begin with there is Microsoft’s chequered history of data protection infractions, anti-trust violations and US FCPA investigations.”The answer, it seems, is: “When it involves the EPO”.

At any rate, this kind of paradoxical “logic” fits the bill when it comes to the EPO’s increasing reliance on Microsoft as a provider of IT products and services.

The casual observer looking at the situation from the outside might reasonably conclude that there are a whole host of legitimate concerns including strong indications of an irreconcilable conflict of interest.

To begin with there is Microsoft’s chequered history of data protection infractions, anti-trust violations and US FCPA investigations.

But even if one were inclined to ignore all that, there is a more fundamental problem.

To put it in a nutshell: due to the company’s position as a significant player in the global IP arena, Microsoft’s role as a key IT provider to the EPO seems to be tainted by an inherent conflict of interest.

The situation might not be so precarious if Microsoft was simply a purveyor of computing hardware or a vendor of client-end data processing software for on-site data processing under the control of the EPO.

But the company’s role at the EPO has now expanded far beyond that to the provision of cloud-based data processing services, including the processing of much if not all of the EPO’s internal communications via Outlook, Microsoft Teams and Skype for Business.

What we have here could be described in simple terms as the large-scale export of operational data, including internal e-mail and video-conferencing communications, from the EPO to an external data processing infrastructure owned by and operated under the control of Microsoft.

It doesn’t need an MBA from the Harvard Business School to realise that placing such sensitive internal operational data directly into the hands of a significant player in the global IP arena is a highly questionable undertaking.

Based on its track record to date, EPO management will undoubtedly defend its actions by arguing that Microsoft can be trusted to “do the right thing”.

Microsoft will undoubtedly “do the right thing”. The only question here is “the right thing for whom?”

Remember that we are talking here about a private for-profit business corporation with a well-documented track record of engaging in anti-competitive practices and other ethically dubious activities. Can any sane person be realistically expected to trust a company with such an egregious track record of data protection infractions, anti-trust violations and US FCPA investigations?

There should be more than enough warning signs here to set off alarm bells in the competent centres of oversight and governance. However, going by Steve Rowan’s recent communiqué, nobody in the upper echelons of EPO management seems to be particularly worried.

Unfortunately, past experience over the last decade and a half has shown that the EPO doesn’t deal with conflict-of-interest situations very well.

The rot seems to have really set in (for good) back in 2009 when the Administrative Council voted to appoint its then Chairman, Battistelli, as the executive head of the Office. At the time in question, Battistelli was an elected representative for a political party in France, which should have automatically disqualified him from holding such a position in an international organisation. But the Administrative Council remained oblivious to this glaring conflict of interest.

According to the internal EPO rumour mill, Battistelli had his successor as Chair of the Administrative Council, the Danish delegate Jesper Kongstad, quite literally “in his pocket”. Kongstad reportedly received a secret “emolument” from Battsitelli’s HR department in the form of the equivalent of an EPO principal director’s salary — a generous monthly tax-free sum of five-figure proportions.

One of Battistelli’s first moves as President of the Office was to procure the abolition of the independent Audit Committee which reported directly to the Administrative Council.

It’s highly ironic that one of the intended functions of the Audit Committee was to advise the Administrative Council about potential conflicts of interest. Now that it has been disbanded, there is no longer anybody around to warn the Council.

Given this background, it’s not really surprising that the increasing reliance of the EPO on Microsoft as an IT provider hasn’t generated any visible concern in the ranks of the organisation’s senior management and governance bodies.

Microsoft bribe
Did “foreign corrupt practices” play a role in the award of EPO contracts to Microsoft? The opacity of the tendering process makes it difficult to give an answer to such questions.

Another remarkable aspect of the present case is the total opacity of the process that led to the award of the contract or contracts for cloud computing services to Microsoft.

It’s not clear how much these contracts are worth and whether they were put out to public tender, or whether they were allocated by “direct award”.

We also don’t know who exactly was responsible for the internal vetting of these procurement decisions, although it seems fair to assume that they were ultimately approved and signed off by the President of the Office, António Campinos.

Whether or not Campinos was properly advised in the matter is of course a completely different question.

Readers of Techrights may recall that back in 2015, reports were circulating ([1] and [2]) about a programme of “closer cooperation” between the EPO’s senior management and some of its leading corporate applicants, in particular Microsoft.

This arrangement attracted a lot of criticism at the time and many people quite rightly questioned whether it was appropriate for the EPO to be engaging in what amounted to a favourable treatment of large multinational corporations like Microsoft.

The recent expansion of Microsoft’s business relationship with the EPO has caused some people to speculate about whether the latest developments might not have been influenced by a further programme of “enhanced cooperation” involving “foreign corrupt practices”.

It is important to emphasise that there is currently no hard evidence of any “kickbacks” or “slush funds” operated by Microsoft at the EPO. For the moment, any such suggestions are based purely on speculation.

On the other hand, Microsoft’s well-documented track record in other jurisdictions means that such speculation cannot be dismissed as completely off the wall.

Cxcel issue
The EPO is plagued by an entrenched culture of opacity and non-accountability which makes a credible investigation into suspected irregularities almost impossible

However, the problem here is that the EPO is plagued by such a deeply entrenched culture of opacity and non-accountability that if these procurement decisions had in fact been tainted by corruption, it is highly unlikely that this would ever be investigated and exposed, especially if any members of the senior management were involved.

It is doubtful whether the EPO’s internal investigative procedures are really fit for purpose in such cases, and there is no external anti-corruption agency which would be competent to take appropriate action.

To sum up, we are left with a situation in which procurement decisions have been made at the EPO which effectively place sensitive internal operational data directly into the hands of an external IT service provider based in the US and subject to the laws of that jurisdiction — including the US CLOUD Act of 2018.

In addition to this, the IT service provider in question happens to be a significant player in the global IP game.

At the same time, none of those who bear the ultimate responsibility for these procurement decisions seem to have the slightest concern about what appears to be a clear-cut case of a conflict of interest.

As Lewis Carrol’s Alice might have said, “curiouser and curiouser!”

In the final part of the series we will consider whether the EPO’s increasing reliance on cloud computing services hosted by Microsoft has effectively led to a sell-out of the organisation’s “digital sovereignty”.

03.17.21

EPO and Microsoft Collude to Break the Law — Part XII: Corruption Addendum

Posted in Deception, Europe, Fraud, Microsoft, Patents at 9:43 am by Dr. Roy Schestowitz

Previous parts:

Video download link

Summary: A discussion about Microsoft’s long history of crimes and corruption — a tradition that continues until present times (with prosecution that serves to prove it)

THE relationship between Microsoft and dictatorships is well established and shouldn’t be considered news (like “Viktor Orbán in a U.S. Department of Justice corruption investigation“). To cement monopoly Microsoft works to appease and sometimes collude with dictators. It's profitable. Both to corporations and to individuals.

There is no “new Microsoft” and there’s no “Microsoft loves Linux”; both are self-serving lies that facilitate the goal or open the pathway to more crimes.

The DoJ [PDF] and SEC order [PDF] were mentioned in the previous part (or Part XII before this addendum) and we’ve produced a Web version for DoJ [HTML] and for the SEC order [HTML] so as to improve accessibility and assure long-term preservation.

“There is no “new Microsoft” and there’s no “Microsoft loves Linux”; both are self-serving lies that facilitate the goal or open the pathway to more crimes.”The video above starts by discussing “Viktor Orbán in a U.S. Department of Justice corruption investigation” (July 2019) because somebody sent that to us. There’s loads of stuff here. “More background information about the Microsoft Hungarian affair from a Hungarian source,” we’ve been told, should complement what we covered this morning. To quote: “This post is based on the first Hungarian corruption case investigated by a non-Hungarian, non-EU institution, the U.S. Department of Justice. It strongly indicates systemic government corruption at the highest level, going as far as the prime minister’s office.”

“I haven’t heard of it so far at all,” one person from Hungary told us, but “I’m checking if I can find anything on it in Hungarian… only something from 2019… probably doesn’t have anything you don’t know… people around here are either fans of fideath [sic], fans of megacorporations, or both… Hungarians I’m in contact with…”

As noted this morning, Microsoft mostly managed to avert the bad media coverage in Hungary… unlike in Romania and elsewhere (European media covering the Microsoft corruption scandal in Romania). At the start of the video I remind people that Microsoft Hungary was raided for corruption. That was 14 years ago (not Orbán). Links below.

EPO and Microsoft Collude to Break the Law — Part XII: Foreign Corrupt Practices, Bid Rigging and “Slush Funds”

Posted in Finance, Fraud, Microsoft at 5:31 am by Dr. Roy Schestowitz

Previous parts:

FCPA

Summary: Microsoft has come under repeated scrutiny for alleged breaches of the FCPA

In the last part we saw how Microsoft has repeatedly featured on the radar of anti-trust regulators and has come under scrutiny for its anti-competitive practices on both sides of the Atlantic.

But anti-competitive practices are not the only reason why the company has attracted unwanted attention from regulators.

“…anti-competitive practices are not the only reason why the company has attracted unwanted attention from regulators.”In its home country, the Redmond behemoth has also been subject to investigation by the Department of Justice (DoJ) and the Securities & Exchange Commission (SEC) due to suspected violations of the US Foreign Corrupt Practices Act (FCPA) which prohibits US companies, as well as entities acting on their behalf, from bribing foreign officials.

Back in March 2013, it was reported that the DoJ and the SEC were investigating Microsoft in connection with an alleged kickback scheme operated by the company in China, as well as irregularities in its relationships between itself and resellers in Italy and Romania.

According to the Wall Street Journal the investigation was started after an anonymous tipster spilt the beans to US investigators in 2012. It was alleged that at least one Microsoft executive in China gave instructions to offer unspecified kickbacks to Chinese government officials in exchange for green-lighting Microsoft contracts.

In Italy, the investigation centered on how Microsoft handled deals with consultants there. The WSJ’s report claimed that Microsoft consultants that worked in customer loyalty-related positions would offer gifts like trips to acquisition officials as barter for government contracts.

“It was alleged that at least one Microsoft executive in China gave instructions to offer unspecified kickbacks to Chinese government officials in exchange for green-lighting Microsoft contracts.”The Romanian investigation related to Microsoft’s involvement with its resellers allegedly offering “bribes” to win large government contracts with the Ministry of Communications.

Later on, in August of the same year, it was reported that federal investigators had extended their inquiry to include Microsoft partners in Pakistan and Russia.

In Russia, an anonymous tipster told Microsoft that resellers of its software allegedly funneled kickbacks to executives of a state-owned company to win a deal.

In Pakistan, a tipster alleged that Microsoft authorized a consulting firm to cover the expenses for a five-day trip to Egypt for a government official and his wife in order to win a tender. The contract Microsoft won in this case was reportedly worth USD 9 million and was signed three months after the paid trip to Egypt.

Giving bribes
The ‘Microsoftgate’ scandal rocked Romania in 2014

There isn’t a lot of information out there about the result of the US FCPA investigations that were launched in 2013. It seems to be almost impossible to find any details about what became of the investigations into the Chinese kickback scheme and the other alleged irregularities in Italy, Russia and Pakistan.

“In Pakistan, a tipster alleged that Microsoft authorized a consulting firm to cover the expenses for a five-day trip to Egypt for a government official and his wife in order to win a tender.”What is a matter of public record, however, is that Microsoft’s shenanigans in Romania led to a domestic criminal investigation and triggered a major political scandal in that country, known as the Microsoft licensing corruption affair or “Microsoftgate” for short.

This was reputed to be the “biggest ever” corruption case in Romania and it rocked the country’s political establishment as local investigations progressed during 2013 and 2014.

Nine government ministers from the education, finance and communication ministries of various governments stood accused of approving contracts selling IT licenses to Romanian schools at highly inflated prices. Damages linked to the case were estimated at €53.7 million.

As things turned out, most of the former government officials were charged with abuse of office after the 10-year statute of limitations had already expired. The contract for the first Microsoft IT licence was signed in 2004 and most of the indictments were not filed until 2015. Whether this was due to incompetence on the part of the prosecutors or the result of corruption is unclear.

“The contract for the first Microsoft IT licence was signed in 2004 and most of the indictments were not filed until 2015. Whether this was due to incompetence on the part of the prosecutors or the result of corruption is unclear.”In any event most of the charges were dropped in 2018 due to this prosecutorial cock-up.

Nevertheless, the case did have some success in terms of convictions. Former communications minister Gabriel Sandu, a former mayor Gheorghe Stefan from the town of Piatra Neamt in northeastern Romania, and businessmen Nicolae Dumitru and Dorin Cocos were jailed after they admitted to accepting bribes from people interested in getting the contracts through.

Sandu, who was Romania’s communications minister between 2008 and 2010, allegedly favoured a company owned by local investors Dinu Pescariu and Claudiu Florica and granted it the contract to supply Microsoft licenses to state institutions for a year without a public tender, according to the prosecutors.

After his conviction, Sandu filed a denouncement with the National Anticorruption Directorate (DNA) in 2017. In his denouncement which he made public he claimed that former president Basescu, former prime minister Emil Boc as well as former US ambassadors, Nicholas Frank Taubman and Mark H. Gitenstein, pressured him into making payments to the firm represented by Pescariu and Florica and that former Microsoft Romania managers were also allegedly involved in the scheme.

The dust from the licensing corruption affair in Romania had hardly begun to settle when Microsoft was back in the news again.

“The dust from the licensing corruption affair in Romania had hardly begun to settle when Microsoft was back in the news again.”At the end of November 2018, a whistleblower lodged an FCPA complaint with the SEC alleging malfeasance in connection with a South African Department of Defence software procurement contract.

The contract which was worth EUR 6.6 million (ZAR 120 million in local currency) was awarded to EOH Mthombo a subsidiary of the EOH Group, a South African conglomerate specialising in the provision of technology services to businesses and government.

At the time in question EOH Mthombo was a reseller of Microsoft software licences via a Microsoft Channel Partner agreement.

The whistleblower accused Microsoft of being complicit in allowing EOH Mthombo to engage in a “corrupt” licensing transaction with the Department of Defence.

Microsoft extricated itself from the South African affair by terminating its partner agreement with EOH Mthombo in March 2019.

“The whistleblower accused Microsoft of being complicit in allowing EOH Mthombo to engage in a “corrupt” licensing transaction with the Department of Defence.”Some months later, in July 2019, Microsoft hit the headlines again in the USA this time in connection with another FCPA investigation involving its subsidiaries in Hungary, Saudi Arabia, Turkey and Thailand.

According to the SEC, Microsoft’s subsidiary in Hungary provided discounts on software licenses to its resellers, distributors and other third parties. Instead of passing on the discounts to Microsoft’s government customers, the discounts were used to fund improper payments intended for foreign government officials to secure software license sales for Microsoft.

The SEC also found that Microsoft’s subsidiaries in Saudi Arabia and Thailand provided improper travel and gifts to both foreign government officials and employees of non-government customers funded through slush funds maintained by Microsoft’s vendors and resellers. In Saudi Arabia a USD 440,000 “slush fund” was “used to pay travel expenses for Saudi government employees and for gifts, furniture, laptops, tablets and other equipment for government agencies.”

Executives in Microsoft’s wholly-owned subsidiary in Turkey were found to have approved an excessive discount in a transaction involving the Ministry of Culture. Microsoft’s records did not reflect what services, if any, a third-party system integrator provided, and there was no evidence that the discount was passed on to the government customer.

According to the SEC, “Microsoft failed to make and keep adequate documentation related to third party vendors, consultants, distributors and resellers and failed to devise and maintain a sufficient system of internal accounting controls throughout the relevant time.”

On 22 July 2019 the SEC announced that Microsoft had agreed to pay more than USD 16 million to settle charges that it violated the FCPA in connection with its operations in these four foreign based subsidiaries and that it has violated the books and records and internal accounting controls provisions of the Securities Exchange Act of 1934.

Without admitting or denying the SEC’s findings, Microsoft consented to a cease-and-desist order and agreed to pay disgorgement of USD 13.78 million and prejudgment interest of USD 2.78 million.

“The SEC also found that Microsoft’s subsidiaries in Saudi Arabia and Thailand provided improper travel and gifts to both foreign government officials and employees of non-government customers funded through slush funds maintained by Microsoft’s vendors and resellers.”The settlement also included an agreement on the part of Microsoft’s wholly-owned Hungarian subsidiary to pay a criminal penalty of more than USD 8.7 million to resolve the federal investigation into violations of the FCPA connected with the sale of Microsoft software licenses to Hungarian government agencies.

Microsoft appears to have successfully bought its way out of trouble on this occasion.

The negative PR for the company was limited by the fact that the bid-rigging and bribery affair in Hungary didn’t cause any significant domestic political fallout in contrast to the “shit-storm” unleashed by the “Microsoftgate” corruption scandal in Romania in 2014.

Meanwhile, in Thailand, there was a request from the non-governmental organisation Anti-Corruption Organisation of Thailand (ACT) urging the National Anti-Corruption Commission (NACC) to investigate the Microsoft bribery case.

ACT secretary-general, Mana Nimitmongkol, made the call in response to reports of Microsoft’s settlement with the SEC: “Now that the issue is public knowledge, the NACC has a duty to tell the public about what happened, and what it plans to do about it,” Mr Mana said. “They can’t just turn a blind eye to it.”

Unfortunately there is no record of any subsequent investigation by the Thai NACC.

The reluctance of the NACC to investigate might be connected with Microsoft’s role in Thailand which has been described as that of “a key player and partner in Thailand’s digital transformation process” and its lead position in “advising business and government leaders … on AI technology”.

“Microsoft appears to have successfully bought its way out of trouble on this occasion.”That concludes our synopsis of Microsoft’s involvement in alleged violations of the US FCPA.

As we move towards the concluding phase of this series we intend to return to the main focus, namely the questionable nature of Microsoft’s prominent role in the EPO’s current “digital transformation process”.

Before tackling this issue in more detail we will take a look at another aspect of Microsoft’s activities which seems to be of significance here, namely its position as a leading player in the global ‘IP’ arena.

03.14.21

Contacting Your (European) Member of Parliament/Representative to Report EPO-Microsoft GDPR Abuses

Posted in Europe, Fraud, Law, Microsoft, Patents at 1:43 pm by Dr. Roy Schestowitz

Summary: We urge Techrights readers who are European to raise concerns and explain to local politicians why the EPO should enjoy impunity no more; the latest scandal, which we’re exposing, should be sufficient legal ground

THE latest António Campinos scandal concerns privacy violations and illegal contracts with Microsoft, an American company notorious for privacy abuses and bribery.

“Tell them that Europe’s second-largest institution is breaking the law, enabling illegal surveillance on many people.”We urge anyone who is reading this and is a European citizen to contact political representatives. Who represents you? Check this page.

MEPs list

The above is an example for Belgium.

“Time to raid the offices of EPO managers, just as authorities in Europe raided Microsoft’s offices for rampant corruption.”Remember that the UK is also (still) in the EPO (and has historically been outspoken at times regarding Benoît Battistelli), so a partly outdated list of representatives (pre-Brexit, before departure from EU) is available online too. They have contacts and can still sway things inside the EPO, at the very least through UK-IPO and delegates to the Administrative Council of the EPO, set to ‘meet’ again just over a week from now. Here’s an example of UK MEPs for one region of the UK (there are more in the page):

UK MEP

Tell them that Europe’s second-largest institution is breaking the law, enabling illegal surveillance on many people. It’s possible that this has been done for personal financial gain. An investigation is long overdue. There’s no reason to honour diplomatic immunity anymore. Time to raid the offices of EPO managers, just as authorities in Europe raided Microsoft’s offices for rampant corruption.

Meme on encryption

03.11.21

EPO and Microsoft Collude to Break the Law — Primer

Posted in Deception, Europe, Fraud, Microsoft, Patents at 5:57 am by Dr. Roy Schestowitz

Mr. Campinos wonders, “where has all the EPO data gone…?”

EPO data scandal

Summary: There’s a scandal brewing at Europe’s second-largest institution, the EPO; Techrights will publish the details over the coming fortnight

TECHRIGHTS has long been covering the truly problematic relationship between Microsoft and the EPO, two institutions best known for their crimes. The crimes got vastly worse under Benoît Battistelli and his wunderkind António Campinos. In this series, which is long, we’ll look/delve into documents and clear violations of the law. The series will commence later today and run alongside another (unrelated) series, Trolling Community Developers of GNU/Linux Via Patent Trolls.

“We’ve been setting up additional safety nets/fallbacks and defenses/safeguards in recent months.”As we noted last night, we encourage readers who have additional information (preferably documents too) to contact us. This is what’s left of reporting in the area; much of the rest tends to be PR these days. That’s where the money is, apparently.

We’ve been setting up additional safety nets/fallbacks and defenses/safeguards in recent months. We’re told this upcoming series might attract DDOS attacks.

12.15.20

This Week We Shall See If the EPO’s Administrative Council, Led by Josef Kratochvil, is Complicit in a Financial Scam

Posted in Europe, Finance, Fraud, Patents at 5:37 am by Dr. Roy Schestowitz

Europe’s second-largest institution is in peril as long as nobody wants to end the corruption (either due to fear or because of personal gain)

Whose servant? Now servant of the person he was supposed to supervise
Reference: Josef Kratochvíl

Summary: The administered-by-the-Office ‘Administrative’ Council is having a webchat this week while EPO staff is on strike; it remains to be seen if it’s merely complicit in the financial scams run by the Office, e.g. Salary Adjustment [sic] Procedure (SAP) and EPOTIF (looting EPO workers for gambling purposes or personal gain by managers and former managers)

“The new Salary Adjustment Procedure (SAP) will already lead in the first year of its implementation to a massive, irreversible salary cut,” the staff representatives of the EPO wrote this morning, then citing selective bits of the letter below, sent 4 days ago to heads of delegations, who now assemble virtually for the Administrative Council’s meeting, ‘attended’ virtually by António Campinos and ‘in spirit’ by his boss, Benoît Battistelli.

Josef KratochvilThe representatives ask: “Will the AC delegations accept being further misguided?”

“…as per a recent survey, a round total of 0% (yes, zero) of staff trusts the Council.”That’s putting it politely as we’ve long suspected some of them were complicit and several stakeholders in member states were personally benefiting — financially or otherwise — from participation in this financial scam/fraud.

Here’s the full letter, which cites for backing the Association of the European Patent Office Pensioners (mostly retired examiners):

Reference: sc20186cl – 0.3.1/1.3.1/4.2.2
Date: 11.12.2020

To the Chairman and
The Heads of Delegation of the
Administrative Council of the
European Patent Organisation

OPEN LETTER

New Salary Adjustment Procedure: need for action

Dear Mr Chairman,
Dear Heads of Delegation,

Staff have already had an eye-opening moment with the new Salary Adjustment Procedure (SAP), which now materialises with CA/66/20. It will already lead in the first year of its implementation to a massive, irreversible salary cut. At the same time, the Office is announcing a massive yearly surplus and massive increases in the Office funds (RFPSS and EPOTIF). Reality is disproving the dystopian assumptions and forecasts that resulted in financial measures unnecessarily imposed on staff.

The Staff Committees have organised virtual general assemblies, virtual floor meetings and mail actions where staff expressed their anger. On 15 December staff will have a symbolic one-day strike (“Enough is Enough”).

The implementation of the SAP in its first year exposes the illegality of decision CA/D 4/20 and the failures of the Office management1, who is still attempting to mislead staff and other stakeholders.

The question now arises. Will the delegations accept being further misguided and persist in a course which ultimately puts the sense of belonging to a common organisation at risk?

____
1 See also the letter sent by the Association of the European Patent Office Pensioners on 8 December 2020 (annexed). Active staff are future pensioners.


It is high time that the delegations open their eyes and exercise their supervisory role.

Yours sincerely,

Alain Dumont
Chairman of the Central Staff Committee

Annex: Comments by the Association of EPO Pensioners on CA/66/20


Vereinigung der Pensionäre des Europäischen Patentamts
Association of the European Patent Office Pensioners
Association des pensionnés de l’Office européen des brevets
Vereniging van de gepensioneerden van het Europees Octrooibureau

Der Vorsitzende
The Chairman
Le Président
De Voorzitter

Curt Edfjäll
curtedfjaell@googlemail.com

8th December 2020

For the attention of:
• Mr Josef Kratochvil, Chairman of the Administrative Council
• Heads and Deputies of Members States Delegations on the Administrative Council
Copy to:
• Mr Antonio Campinos, President of the EPO
• EPO Central Staff Committee
• Council Secretariat
• Board of EPO Pensioners Association.

Dear Mr Kratochvil,
Dear Heads and Deputies of Member States Delegations on the Administrative Council,

Subject: Comments by the Association of EPO Pensioners on CA/66/20, “Adjustment with effect from 1 January 2021 of salaries… and of pensions paid by the Office.”

With CA/D4/20 the Administrative Council approved the new methodology for adjustment of salaries and pensions. Article 10 of CA/D4/20 reads: ”Any positive adjustment resulting from the application of Article 9 and carried forward after three annual salary adjustments will be paid out to employees as a lump sum in proportion to the basic salaries and allowances they received over the three-year period.”

With document CA/66/20 the Office is now presenting the results of the implementation of the methodology from the decision of CA/D4/20. The Association has only recently been made aware of the existence of CA/66/20 and of the negative and unequal effects it will have on pensioners in comparison to active staff.

In point 24 of CA/66/20, the Office presents the excess adjustment not applied in January 2021 for the four countries in which the Office employs staff. CA/66/20 does not specify which excess adjustments have not been applied in countries where EPO pensioners use the salary scale of the country in which they are resident. CA/66/20 states that the remaining balance is carried forward to a redistribution pool which will be used in next year’s adjustment and for a potential one-off payment after 3 years of application of the salary methodology.

Pensioners Association Comments on CA/66/20
Page 1 of 2


The Association has on several occasions asked the Office for explanations as to how the redistribution pool works for pensioners. Only by mail to the Chairman of the Association dated 7 December 2020 did the Office clarify that although the mechanism of excess adjustment is applied to pensioners, the lump sum will not be paid out to pensioners at the end of the 3-year period. I quote from the mail from VP4: “Any remainder of the carried forward adjustment will be paid as a lump sum only to employees in return for their active contribution to the Office’s success in these difficult times.” I wish to recall that today’s pensioners have all also contributed to the success of the EPO and should therefore not be treated unequally to active staff.

VP4 further states: “the principle of equal treatment has been respected.” It is evident that this is not correct. By not according any payment from the redistribution pool to pensioners, there is no equal treatment.

It is thus clear from the Office’s statement above that the Office intends to use the redistribution pool as a kind of bonus payment for active staff, which was certainly not the intention behind the new methodology. However, any money in the redistribution pool resulting from the excess adjustment applied to pension payments will not paid out to pensioners although this money has been taken from their pension payments.

EPC Article 33(2)c states: “The Administrative Council shall be competent to adopt or amend the Pensions Scheme Regulations and any appropriate increases in existing pensions to correspond to increase in salaries.”

The proposal to implement the new methodology so that pensioners do not benefit from the payment of a lump sum at the end of the 3-year period is thus in contradiction to the EPC itself and constitutes an unequal treatment of pensioners compared to active staff.

The Association assumes that the Administrative Council was also not aware of the way the Office intends to apply Article 10 of CA/D4/20 and its negative effects on pensioners.

The Association therefore respectfully requests the Administrative Council to instruct the Office to apply EPC Article 33(2)c correctly so that also pensioners will be given treatment equal to that applied to active staff such that the pensioners will also benefit from a lump sum payment.

Curt Edfjäll
Chairman of the EPO Pensioners’ Association

Pensioners Association Comments on CA/66/20
Page 2 of 2

The likely correct perception that the Council is complicit in it all (seeing the current role of Ernst and previous role of Kongstad, before he was removed for scandals) means that, as per a recent survey, a round total of 0% (yes, zero) of staff trusts the Council. It’s seen as a big part of the problem, incapable of correcting it (because it is unwilling to).

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