Bonum Certa Men Certa

The EPO Bubble — Part III — Dividing Up the Spoils...

Overview: [Teaser] The EPO's Deflating Patent Bubble and Pursuit of Illegal Software Patents (With Kangaroo Courts, UPC, and Bullied Examiners)

Series parts:

  1. The EPO Bubble — Part I — An “Unprecedented Surge”
  2. The EPO Bubble — Part II — Signs of a Deflating Bubble?
  3. YOU ARE HERE ☞ Dividing Up the Spoils...


Battistelli and the pigs
The higher the volume of granted patents, the larger cash pool available to be divvied up between the EPO and its contracting states.



Summary: The corrupt presidency of António Campinos sees a sharp decline in the number of patent grants; as a result, it bullies honest examiners and seeks to illegally expand patent scope (read: European software patents and other unlawful monopolies) with help from the Administrative Council, motivated by self-serving overzealous greed; there's a lot of money at stake!

In the preceding parts we looked at the EPO’s "grant bubble" which commenced with Benoît Battistelli’s "unprecedented surge" of 2016 and we saw how this "bubble" has started to deflate over the course of the last two years.



To the outside observer this development probably looks like the natural and healthy "correction" of an undesirable and unsustainable state of affairs.

However, the senior management of the EPO and their "friends" on the Organisation’s governing body - the Administrative Council - are likely to see matters differently.

"The essential point to be grasped here is that every granted European patent application generates "national renewal fees" (NRFs) in all of the designated EPO contracting states during the time that it is maintained in force by its proprietor."Those who are inside EPOnia’s "golden circle" have a "vested interest" in propping up the bubble in order to safeguard the lucrative cash flow from the legendary “Dukatenesel”.

The essential point to be grasped here is that every granted European patent application generates "national renewal fees" (NRFs) in all of the designated EPO contracting states during the time that it is maintained in force by its proprietor.

The NRFs generated by these patents are shared between the contracting states and the EPO in accordance with Article 39 EPC (warning: epo.org link). The current split is takes place on 50-50 basis.

Article 39 EPC foresees that the EPO could be awarded as much as 75% of the overall NRF revenue - subject to the Administrative Council agreeing to a change in the distribution ratio.

"In any event, the bottom line here is clear: the higher the volume of granted patents, the larger the cash pool available to be divvied up between the EPO and its contracting states."However, in practice, an increase of the EPO’s NRF dividend is unlikely to be approved by the Administrative Council because the contracting states jealously guard their own share of the loot. If anything, they would prefer to increase this and reduce the EPO’s slice of the cake if only they could find a plausible pretext for doing so.

In any event, the bottom line here is clear: the higher the volume of granted patents, the larger the cash pool available to be divvied up between the EPO and its contracting states.

An increased grant rate at the EPO boosts the revenue of the national patent offices of the contracting states. All of these national offices are financed predominantly by NRFs from granted European Patents.

As an illustrative example, let us briefly consider what this implies in the case of one of the EPO’s most significant contracting states, Germany.

"All of these national offices are financed predominantly by NRFs from granted European Patents."Back in 2014, Germany’s estimated NRF revenue share was € 149 million.

By 2021 this amount had risen to € 211 million, an increase of around 40% compared to 2014.

To put these figures into perspective, in 2021 the total expenditure of the German Patent and Trademark Office (DPMA) was € 248,5 million and it recorded an operating profit of € 214,7 million which was transferred to the federal treasury.

In other words, the revenue accruing to the DPMA from granted European patents in 2021 (€ 211 million) was sufficient to cover about 85% of its expenditure.

This portion of the DPMA’s revenue was also more or less equivalent to its reported operating profit (€ 214,7 million) which was transferred to the federal treasury.

"In other words, the revenue accruing to the DPMA from granted European patents in 2021 (€ 211 million) was sufficient to cover about 85% of its expenditure."No wonder that the German delegation on the EPO Administrative Council was such an enthusiatic supporter and "enabler" of Battistelli’s "reforms" at the EPO!

The EPO for its part receives a 50% share of the total NRF revenue generated in its contracting states.

This means that an increased grant rate also bolsters the EPO’s own internal "slush fund" for keeping delegates from the smaller contracting states "onside" by means of EPO-financed co-operation projects.

In view of these circumstances it should come as no surprise that the ongoing deflation of Battistelli’s "grant bubble" is a cause for concern in some quarters. We shall look into this in more detail in the next part.

The numbers go down again?

Recent Techrights' Posts

Links 10/05/2025: Germany Considers Smartphone Ban in Schools, Right to Repair Bills
Links for the day
Blizzard/Microsoft Unions Grow Ahead of Mass Layoffs at Microsoft, Apparently Starting Next Week (as Many as 30,000 Workers Laid Off by Year's End)
Microsoft already fired about 5,000-6,000 workers this year by our estimates; that's not counting resignations compelled through pressure (i.e. pushed, did not jump) and contractors
 
You Need Not Be a Big Company to Defeat Microsoft If You Can Successfully Challenge Its Core "Ideas"
Maybe that's just a sign that the ideas of RMS have become too effective and thus "dangerous"
Gemini Links 11/05/2025: Yeeting Oligarch Tech, Offline Browsing
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, May 10, 2025
IRC logs for Saturday, May 10, 2025
One is Simply Doomed to Fail When Working for Violent Men From Microsoft and Attacking Women as Well as People Who Merely Expose Crimes or Report Real Crimes
Imagine saying to people that you "practice law" or "exercise law"
The Tariffs Are Accelerating Microsoft's Decline in China
Judging by the way things are going, there will be considerable adoption of GNU/Linux in years to come, China being one major contributing factor.
Control Your Systems, Control All Your Data
what does it take for us to control our own systems and data?
Misplacing Blame for Security Problems, Sometimes With LLM Slop That Blames "Linux" for Microsoft's Failures
Broken telephones and stochastic parrots beget plenty of Fear, Uncertainty, Doubt (FUD)
Links 10/05/2025: WW2 Revisionism, Further Tit-for-tat in India-Pakistan Conflict
Links for the day
Gemini Links 10/05/2025: Git Server and Great LLM DDoS of 2025
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, May 09, 2025
IRC logs for Friday, May 09, 2025
"Victory Day" - Part II: Abject Defeat to Hypocrites and Objectionable People Who Strangle Women Whilst on Microsoft's Payroll
Someone is going to have to pay for this; it won't be us
Rust Propaganda Now Amplified by Slopfarms Powered by Microsoft LLMs, Encouraging the Outsourcing of GNU/Linux Distros to Microsoft/GitHub/NSA (and a Shift Away From GPL/Copyleft)
Moving to Microsoft GitHub and adopting unfinished, untested code for highly critical bits
Links 09/05/2025: Inflation Rising and Rights to Protest Curtailed Some More
Links for the day
Gemini Links 09/05/2025: Good and Evil, LLMs Made the Web Worse Yet Again
Links for the day
IBM is Rotting With "Zero Internal Jobs" and Many PIPs (Performance Improvement Plans) on the Way, Typically a Fast Track Towards Layoffs Without Severance
At risk of giving air(time) to tribal sentiments, the internal joke at IBM is that to IBM "AI" stands for "All Indian"
European Patent Office (EPO) Faked "Revenue Expansion" by Granting Loads of Invalid, Illegal Patents; Staff Still Wants to Know Where That Money Went
Only about 30% of the EPO's patents are for EU entities/people
The Gerstnerisation of Microsoft: Seventh Wave of Microsoft Layoffs (Over 20,000 to be Cut) Allegedly Going to Start Shortly, Probably Start of Next Week, Microsoft Spreads Chaff and Noise Before the Big Axes Fall
we might be looking at about 50,000 people that Microsoft gets rid of this year
Links 09/05/2025: TeleMessage Blunder, More Distractions From Impending Mass Layoffs at Microsoft
Links for the day
GNU (and the FSF) Still Changing the World
Today, in 2025, GNU powers almost everything
Military-Grade Anti-Linux Microsoft Propaganda Using Microsoft LLMs in Fake 'News' Sites (Slopfarms)
This is part of a pattern
Links 09/05/2025: Analog Computer and First time at FOSDEM
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, May 08, 2025
IRC logs for Thursday, May 08, 2025