Bonum Certa Men Certa

An Article Techrights Contributed to Exposes Corruption in Europe's Largest Institutions, Including the EPO and EUIPO

posted by Roy Schestowitz on Jan 04, 2024

Mediapart

The EPO and EUIPO can run, but they cannot hide from simple facts and objective observations

THIS took so long (months) that we began suspecting an editor had prevented publication or spiked it, but it is finally out this year. SUEPO mentioned it yesterday, citing this recent article in English while publishing an English translation (from French in a left-leaning publisher), which we're reproducing below: (it is deficient and partly automated)

EUROPE INQUIRY

Intellectual property: the European agency out of control

Opaque budget management, weak governance, conflicts of interest, questionable recruitment: the European Intellectual Property Office, which handles hundreds of millions of euros, has come in for a lot of criticism. So much so that complaints have been made to the European Anti-Fraud Office, as seen by Mediapart.

Cédric Vallet - 2 January 2024 at 11:42am

Ire is growing within the European Intellectual Property Office (EUIPO).

According to According to information from Mediapart, a former employee has lodged a complaint with the European Anti-Fraud Office (OLAF) alleging "fraud, corruption, harassment and favouritism". He claims to be relying on the testimonies of more than a dozen of his former colleagues. We have been able to contact several of them, but at this stage they prefer to remain anonymous.

The text describes an inner circle where the allocation of positions

The complaint describes the "management" process as a rigged game. According to the complaint, expressing dissatisfaction had become "impossible" within the agency, where a climate of "terror" reigned.

A letter dated 17 March 2023 from Union pour l'unité, a union representing the staff of the institutions, consulted by Mediapart, supports this view. It refers to a "fear of express themselves" within the teams.

The complaint addressed to Olaf focuses on a recent event: the election of the Executive Director of Ouepi, the Portuguese João Negrão. O n 13 July 2023, João Negrão received a large majority of nineteen votes against eight for the French-backed candidate, Étienne Sanz.

De Acedo. According to the text sent to Olaf, the election was marred by "fraud". For his part, Étienne Sanz De Acedo denounced "irregularities". So what is really going on in Alicante, the Spanish headquarters of this European agency?

Governance of the Ouepi: the black box

With its 1,200 employees and colossal budget, EUIPO, a decentralised, self-financing agency, is a magnet for interest. Like all European Union (EU) agencies, the EPO implements European policies, but its budget makes it the largest.

The registration of trademarks, designs or geographical indications (such as protected designations of origin) by companies and individuals is subject to a fee, the revenue from which is incorporated into the EUIPO budget. The protection of intellectual property rights enabled the agency to present a budget of 455 million euros last year.

From a distance, EUIPO is an idyllic agency. A recent article in Politico described glitzy offices with sea views and a taste for comfort, where canteen meals are cooked by local chefs. Up close, the management of the agency is an EU black box. In a recent report, the European Court of Auditors deplored the "deficiencies of the governance arrangements".

Those who determine the direction of the Ouepi are brought together in the Board of Directors. This body operates in a vacuum, or almost. It is made up of the 27 national intellectual property offices, two members of the European Commission and a representative of the European Parliament. The members of the Administrative Board are largely the same as those on the Budget Committee. And therein lies the rub.

It is also this committee that grants the "budget discharge", i.e. the procedure for the annual control of the expenditure of the European institutions, which is normally carried out by the European Parliament. This makes it possible to closing the financial year but, in this case, the people being audited are also the auditors.

If discharge is not granted, in the event of mismanagement, Parliament can force the institution to rectify the anomalies. In the case of EUIPO, MEPs have no budgetary control role. According to the European Court of Auditors, Parliament should be responsible for discharge. Without external control, abuses are possible. Are they effective?

Suspicions of misappropriated votes

At the heart of the grievances expressed in the complaint sent to Olaf are the recruitment procedures. The complaint refers to "exchanges of top management positions in exchange for votes".

For years, members of the Board of Directors (BD) of Ouepi, who sit on a voluntary basis on behalf of their national intellectual property office, have then been hired in Alicante. The salaries at EPO are more than attractive. At the start of their mandate, deputy directors are paid between €16,500 and €18,700 per month.

The recruitment of Board members is viewed with suspicion by the staff, as these same members vote for the agency's three top jobs, the Executive Director, his deputy and the Chairman of the Boards of Appeal. The Council of the EU must then take a decision, but it does so on the basis of a prior vote and a pre-selection of the directors of the EUIPO. The members of the Board therefore vote for directors who then have the power to hire them.

This mix of genres is causing tension within the agency. In 2019, a letter sent by the staff committee to the management of EUIPO, consulted by Mediapart, called for "legal guarantees against conflict" of interest" be put in place. Their proposal, hitherto ignored, was to make it impossible to hire a member of the board of directors or the budget committee for at least two years after holding a position on these governance bodies.

Several cases are highlighted in the complaint sent to Olaf. Some have been the subject of internal challenges by staff representatives. One example: Sandris Laganovskis sat on the Board of Directors of the EUIPO until 2021 as a representative of the Latvian Office. He was then recruited as Director of Cooperation and Legal Affairs, replacing João Negrão who had just been promoted. Negrão had won his new post, Chairman of the Boards of Appeal, thanks to the support of a pre-selection committee that included... Sandris Laganovskis.

In a March 2023 e-mail from an attaché at the Polish embassy in the Netherlands, consulted by Mediapart, we read that Poland had "decided to appoint" Edyta Demby- Siwek to the position of deputy director of the EUIPO. However, the creation of this post was not announced until six months later. The EPO, contacted by Mediapart, said that no post had been created for Edyta Demby-Siwek.

This is a "promise", given that, ultimately, it is the Council of the EU that has the final say. A final say based on a pre-selection and ranking of directors...

The contested rise of João Negrão

It is in this context that João Negrão's name emerges. After working at the Portuguese Intellectual Property Office, he joined the EPO in 2010 as chief of staff to the director, another Portuguese, António Campinos. Campinos left EUIPO in 2018 to become President of the powerful European Patent Office (EPO), an international organisation with 38 member states that grants "European patents", thereby protecting inventions and companies' technical processes (while Ouepi protects a company's external image, brand names and the design of certain products). The members of the EPPO Board of Directors also sit on the EPO Board of Directors.

João Negrão's rise within Ouepi has been rapid. In 2011, he became Director of Legal Affairs and International Cooperation. It was in this capacity that in 2015 he launched the "cooperation funds", which enable part of the EPO budget to be paid back to the national offices to launch projects such as the maintenance of software for the registration of trademarks and designs. In theory.

In practice, the key to distributing this money is guarded like an industrial secret: the Cour des Comptes has mentioned "weaknesses" in the allocation of these sums and "inequalities" between Member States.

Opacity reigns. In 2023, 34 million euros were distributed under this heading. These are vital sums for the offices of small states. On the Board of Directors, one seat equals one vote.

In 2021, João Negrão continued his progress and became the new Chairman of the Boards of Appeal. His selection is fraught with uncertainty. When such a recruitment is made, the Board of Directors must, according to European regulations, send a "list of candidates" - the plural is important - to the Council of the European Union, which endorses the final choice. In 2020, the directors did submit such a list, on the basis of internal procedural rules drawn up by João Negrão's staff. But it was a list made up of a single candidate: João Negrão.

This practice is the subject of debate. EUIPO, contacted by Mediapart, believes that everything took place according to the rules. However, a confidential memo from the European Parliament's legal service dated 28 September 2020, which Mediapart was able to obtain, questions the legality of this procedure. This rule, it says, "allows or facilitates the selection of a single candidate [...] and raises concerns about its legality", because such a selection This "limits the Council's decision-making power".

The controversial interpretation of the rules by the Board of Directors was again evident in the ousting of the last Executive Director, Belgian Christian Archambeau. In June 2022, Archambeau announced his intention to reappoint himself for a further five years. On 22 November, the Board of Directors decided, without explanation, not to renew his mandate despite a positive internal evaluation.

A few days later, the recruitment procedure for his replacement was launched, paving the way for João Negrão. The EU's Council of Ministers was notified, but no one asked for its opinion, even though it was the competent authority. In the complaint drafted by Christian Archambeau's lawyers, consulted by Mediapart, they claim that the Board of Directors "exceeded its powers".

The secretariat of the Council of the EU, unable to ignore the uproar caused by this "coup", ended up asking, in In March, he was asked to submit the evaluation of the former director so that a formal decision could be taken by the Board. Finally, in May 2023, the ministers ratified the non-extension of Christian Archambeau's term of office, ready to take the matter to court.

Travel by the bucketload

Meanwhile, João Negrão's campaign had already taken off. Literally. In 2022, the number of missions abroad by the "Boards of Appeal" department, of which João Negrão was chairman, exploded in an unprecedented way. With 198 missions, his department became by far the largest in terms of trips abroad, most often to national offices. By way of comparison, this same department only travelled 75 times in 2019 and 79 times in 2018.

For the complainant to Olaf, these missions were merely a "pretext" for the campaign to elect the director.

At the European Parliament on 27 June, Danish Renew MEP Karen Melchior asked João Negrão whether he had managed to keep his job and his campaign separate. The aspiring director claimed to be taking days off and paying for his campaign out of his own pocket.

Yet it seems tricky to keep a campaign and visits to members of the Administrative Council, who are also voters to be persuaded, separate. On 13 October 2022, during a meeting in Munich, where the offices of the European Patent Office are located, Irene Mylona- Chrysostomou, Director of the Cypriot Office, posted a photo of a convivial meal. It shows António Campinos, President of the EPO, João Negrão and several heads of national patent offices - from Cyprus, Poland, Ireland, Slovakia, Bulgaria, Austria and Slovenia - all countries that subsequently voted in favour of the Portuguese.

The fact that this meal was being held in Munich, where the EPO has its headquarters, is no coincidence. In insider circles, there were rumours of interference in the election of António Campinos, an old friend of João Negrão. The French government seemed to express doubts. In a letter to António Campinos dated 27 March 2023, the French Minister for the Economy, Bruno Le Maire, referred to an "event" organised by the EPO in Lisbon, in May 2023. In view of this event, which "brings together all the directors of industrial property offices, a week before they are due to vote on candidates for the post of Executive Director [...] of WIPO, the date chosen does not appear to be appropriate".

According to Ouepi, there have been no irregularities in any of João Negrão's electoral victories. "None has ever been annulled by the Court of Justice". When questioned by Mediapart, the European Commission was not very forthcoming. A spokeswoman told us that, following the reports from the Court of Auditors, an evaluation of Ouepi will be launched. For the rest, the guardian of the Treaties says "no comment".

Cédric Vallet

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Will the complicit EU officials do anything or instead choose to cover up their role? Will something actually happen or be done towards tackling the illegal and unconstitutional UPC? What about the EPO? It routinely violates the EPC, which has turned 50.

It seems clear that EPO corruption has crossed over to the EU, both via the UPC and the EUIPO. The crimes of Benoît Battistelli and António Campinos serve to discredit the EU - a project that we generally do support. If the EU collapses due to mass departure (The Netherlands might be next after Britain), we should at least consider the possibility that EPO corruption played a role. Some role.

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