In our latest issue, Editorial Board member Darren Smyth passionately discusses recent troubling events at the EPO, calling for prompt and incisive actions to address these issues, rethinking the structure and governance of the EPO. You can read the editorial below - Darren concludes his piece by noting that "[t]he EPO represents a unique problem and demands a unique solution, which must now be found". Which solution(s) would readers suggest?
Something is rotten in the state of the EPO
Darren Smyth
Email: dsmyth@eip.com
When the drafters of the European Patent Convention conceived of a system whereby the heads of the national patent offices would form an Administrative Council (AC) as a kind of legislature that would exercise oversight over the executive powers of the President, they must have believed they invented a good system. Who could be more disinterested and impartial than the national offices, which were actually competitors of the European Patent Office itself? What the drafters could not have realized, but has now become apparent, it is that the national offices might come to rely financially on the EPO, either in the form of income from renewal fees for patents where the national office has done no examination, or more directly in the form of cooperation and assistance funds.
Recently, the EPO has been beset by problems. A programme of reform has been pushed through which has led to widespread industrial unrest amongst the workforce, and distrust between the examiners and senior management. The problems have been exacerbated by the fact that the only legal recourse for aggrieved EPO employees is the International Labour Organisation, which has an immense backlog (partly caused by the number of EPO grievances) leading to a delay of many years before cases are decided. While there was little dispute that some reform was needed, the pace and character of the reforms, as well as their style of introduction, created a toxic atmosphere, the scale and causes of which were denied by the management, and relatively unrecognized outside of the EPO itself. The relatively generous salaries of EPO examiners led to a lack of sympathy in some quarters. The wider world only noticed the increasingly troubled situation at the EPO when a member of the Boards of Appeal of the EPO was suspended by the President without the prior sanction of the AC, an action that appeared to compromise the judicial independence of the Boards of Appeal. This occurred shortly after a seminal decision of the Enlarged Board of Appeal (EBA), which upheld an objection of suspicion of partiality against its Chairman, on the sole basis of his dual administrative role within the management of the Office. The response of the President, transferring some administrative powers from the EBA Chairman to himself, seemed to make the problem worse rather than better.
The judicial independence of the Boards of Appeal is crucial to the finality of their decisions. If the Boards are not accepted as a judicial instance, a national court could decline to give effect to their judgments on the basis of lack of compliance with European legal norms such as those embodied in Article 6 ECHR (right to fair trial). Before recent events, although national courts had always accepted the judicial character of the Boards, Board members took the view, supported by some commentators, that more autonomy was desirable. However, a proposal to increase the autonomy of the Boards had been shelved by the current administration.
It was clear that action needed to be taken, but new proposals from the President to modify the administrative structure of the Boards seemed to conflate independence with efficiency, and also addressed other matters, such as the management of possible conflicts of interest of Board members, which had never in reality seemed to be a problem. There was more concern with the appearance of independence, such as the physical location of the Boards, than independence itself.
These developments caused the wider IP community in Europe to take an interest in the situation. The EPI, national patent attorney associations, and industry bodies, as well as the Boards themselves, made representations to the President and, when these seemed to fall on deaf ears, to the AC directly. Now, finally, it seems that consideration will be given to an autonomous structure for the Boards. But consideration also needs to be given to the wider governance of the Organisation. The EPO is a transnational body with immunity from jurisdiction and execution (which led to the moniker “Eponia” - a quasi-State). It is free from both direct political control and judicial review. Therefore, the oversight afforded by the AC is the only check of the executive. Can it now be considered that the AC structure is capable of providing resilient governance, when in many cases this may involve biting the hand that feeds them? Something more robust is surely required.
Where does the answer lie? The closest comparable institution is OHIM, which does not provide a model since it is an EU body, and its decisions are subject to two instances of judicial appeal. The EPO represents a unique problem and demands a unique solution, which must now be found.
© The Author(s) (2016). Published by Oxford University Press. All rights reserved.
It is encouraging to see a critique of the current situation at the EPO, but it focusses on the situation of the Boards of Appeal, without going into enough detail about the staff conflict, which has major repercussions for the mission of the EPO. The editorial seems to accept that there was a need for "reform" without saying what reform and why. Once on accepts the use of this term, much wielded by the President, it is a very short step to considering it a "good thing", and that the only difficulty lies in its implementation. This is very far from the truth. The President's aims since his appointment seem to be to replace the high- standard examination at the EPO, which has contributed so much to the its reputation, and to the rewarding of innovation by small and medium industries, with a registration system, such as prevails in France, which favours mega corporations with deep pockets for litigation. To this end he has instructed staff to provide preferential treatment to such mega corporations, made impossible productivity demands on examiners, and appears to be intent on destroying the Boards of Appeal. The editorial is correct in identifying the weakness of the governance of the EPO by those who benefit financially from it. The President has had no hesitation in exploiting that fact, linking grants to agreement with his agenda, promising that the EPO will pay for "emergency" dental treatment for delegates at AC meetings, etc. In fact he realized from the outset that the only real opposition he was likely to encounter was from the staff, and specifically, the staff union, SUEPO. The resistance of the staff is not linked to salaries and benefits, but rather to the idea that with privilege comes responsibility, and with pride in fulfilling that responsibility by providing a high standard of examination to the benefit of industry. Hence the President has specifically targetted the union, and the staff with a series of repressive measures that would be impossible in any member state, secure in the knowledge that, as the editorial correctly states, staff have little or no recourse to timely justice. He has dismissed or demoted Union officials on trumped-up charges, forbidden strikes, rigged the internal system of appeals, and done away with almost all of the feeble safeguards available to staff. Indeed the ATILO itself has expressed extreme disquiet at the overwhelming workload generated, to the extent that it is threatening to expel the EPO.
ReplyDeleteThe editorial is right to say that something must be done. A reputation is built over many years, but can be destroyed quickly and is slow to be recovered. Already experienced staff are leaving in droves, and recruitment criteria are being greatly lowered. The Member States must decide very quickly if they wish to throw away more than 40 years of success, and replace it with a system that no longer rewards innovation, but instead becomes simply a tool for large corporations to dominate by means of their financial muscle.
In the Administrative Council every member-state has the same level of voting power. One possible solution might be that there will be a different weight added to the vote of a member-state.
ReplyDeleteThe AC has a clear conflict of interest, which under a different situation would be considered intolerable. But who cares about the EPO? It is a bit like putting the CEOs of Samsung, LG, Nokia etc. in the governing board of Apple. It is clear that this would not work to improve Apples success, and it is the same at the EPO.
ReplyDeleteThe ILO does not respect the right to be heard, because she does not hold hearings even when they are requested, but this is apparently legally acceptable. Who cares?
I believe the drafters of the EPC were honest and upright men who could not envision that a generation would come after them who had a different moral standard.
The ILO is the only independent review employees of the EPO have when in dispute (the first two instances are internal and cannot be considered independent).
But hey, if you get paid a lot you should just accept being robbed of your rights.... so stop complaining, you are still not doing so bad. "We consulted you (according to the management of the EPO), even though the representatives did not agree to the changes requested, "so we can change your work contract, rules an regulations. WE only need to consult you, it is nowhere written that you have to agree for us to introduce changes which are detrimental to you". In a national setting this would be unacceptable, and an employer would be taken to court. But not so with the EPO because the EPO has immunity.
But no immunity is absolute, and should never be, because absolute immunity corrupts.