The EPO – Dysfunctional or Just a Misunderstanding?

In recent times, strange and disturbing things appear to have been afoot within the European Patent Organization.  While the goings-on within the EPO have been reported by other IP blogs, by some specialist IP media outlets and (to a much lesser degree) in the general media, I have so far chosen quite deliberately not to comment.

The primary reason for my silence on the issue has been the very great difficulty in getting at anything even vaguely resembling the ‘truth’ about what is actually causing the ructions at the EPO.  One thing that people have often said to me about this blog (and of which I am quite proud) is how well-researched the articles often are, and how much time it must take me to write them.  I can safely say that the ongoing disputes at the EPO would constitute the most heavily researched article I have never written!  This article does not even try to account for all of the material I have read in trying (and failing) to get a handle on what is going on at the EPO.

Which is not to say that I do not care.  I care very much.  And the reason I care very much is simple – if the EPO becomes dysfunctional and ineffective, it is the applicants for European patents who ultimately suffer.  Those applicants include some of my clients, the clients of dozens of other Australian patent attorneys and, perhaps, numerous other Australian applicants who are more directly represented before the EPO.  And, of course, applicants from all around the world.

So what is going on at the EPO?  Is it dysfunctional?  Is there, as some are alleging, ‘corruption’ at the top?  Or, as I am coming to suspect, is all of the recent negative publicity largely the result of a messy and increasingly vitriolic labour dispute?  (Which is, of course, not to say that all of the above are mutually exclusive.)

Trouble at the EPO

The EPO employs over 7,000 people, and has an annual budget of around €2 billion.  All of that money is derived from fees paid by users of the European patent system.  Those users have a right to expect that the money will be properly managed to ensure the continuing quality of work produced by the EPO.

Over recent months, however, the quality of governance at the EPO has publicly been called into question.  Underlying the negative publicity is an ongoing dispute between the EPO staff union, SUEPO, and the organisation’s President, Benoît Battistelli, over structural changes that will significantly affect employment and working conditions of EPO staff.  This, along with other alleged governance issues, has led to a recent series of ‘incremental strikes’ by some EPO staff.

For his part, Battistelli spoke exclusively to IAM last week, explaining that he is ‘focusing on improving staff productivity and finding operational efficiencies’, including implementation of a new pay regime which ‘will see salaries and promotion based on seniority and the number of years an individual has worked at the office replaced by a new performance-related system, in which staff will be assessed on their productivity and the quality of their work.’  Battistelli also contends that there no evidence of widespread discontent, and that only a minority of staff have taken strike action.

Protesting EPO staff, on the other hand, assert that performance-based pay and advancement will reward quantity of work output, and impact adversely on quality.

This is a debate that is as old and tired – and perennially unresolved – as employee performance appraisal itself.  The EPO is not going to reach any better resolution than the many thousands of other organisations that have grappled with exactly the same issue, and ultimately found a way to strike an appropriate balance.

Taking the Battle to the Next Level…

More recently, however, things have become far nastier.  Early last month I received an email from an anonymous group within the EPO drawing my attention to allegations that had been raised against Mr Željko Topić, who was appointed to the position of Vice-President of Directorate-General 4 of the EPO back in March 2012.  The allegations related to Topić’s previous role as Director General of the State Intellectual Property Office of the Republic of Croatia.

Clearly, I was not the only blogger to receive ‘encouragement’ to cover this story.  I declined to do so, for the reasons already indicated above – the information was plainly partisan, and I was unable to identify any independent source to corroborate or refute the allegations.  However, some other blogs, including the venerable IPKat, did provide coverage.

…and the Level Above That!

Now the latest ‘scandal’ to hit the EPO relates to a member of the Boards of Appeal of the EPO, who was reportedly marched from the building and banned from returning, on orders of Battistelli, before being officially suspended by the Administrative Council, on full pay, pending an investigation into allegations of ‘serious misconduct’.

Once again, there is no shortage of partisan information circulating about these events.  And, again, there are blogs willing to devote considerable numbers of words to the story, despite being fed with information by only one side.

Much has been made of the rather round-about way in which the Administrative Council explained its decision (e.g. by the IPKat and FOSS Patents blogs).  In particular, it has been pointed out more than once that the statement ‘[t]he Council expressed its concern at an incident unique in the history of EPO’ is ambiguous as to which incident, exactly, is the cause of concern.  Battistelli has told IAM that this statement refers to the alleged misconduct of the suspended Board member.

The other issue that has resulted in much criticism directed at Battistelli is procedural.  It has been alleged (again, the IP Kat and FOSS Patents have provided coverage) that due process was not followed, and that by issuing a ‘house ban’ Battistelli effectively suspended the Board member, contrary to the provisions of the European Patent Convention, which give that power exclusively to the Administrative Council.  Battistelli’s position (again, in his interview with IAM) is that banning an employee from the premises is not a suspension, that this action was necessary in view of the nature of the alleged misconduct, and that the Council was kept informed and was able to take official action with minimal delay.

Council Supports Battistelli

The Administrative Council appears to be standing behind Battistelli.  This is perhaps not unexpected, since it was also responsible for his appointment.  However, the fact is that the public criticism of Battistelli has been, in no small part, the result of one or more anonymous groups within the EPO, representing the views of an unknown number of staff, conducting a deliberate campaign of leaks and correspondence to push one particular point of view into as many outlets as possible.  This blog will not contribute to that campaign.

Furthermore, Batistelli’s necessarily limited explanation to IAM is entirely plausible.  I think we would all be aware that there are certain allegations of misconduct that can be made by one employee against another to which any employer would be obliged to respond by removing one or both parties from the office environment pending further inquiries.  To say any more than that would be pure speculation, and Battistelli and the Administrative Council have both, quite rightly, declined to fuel such speculation.

Conclusion – Both Sides Need to Get Their Acts Together!

So what am I to make of all this?  Well, whatever the ‘truth’ may be, the situation is clearly far from ideal from the point of view of applicants.  I have cases that have been pending before the EPO without action for years.  The applicants in those cases are paying increasingly high annual renewal fees, when their applications really should have been disposed of, one way or another, long ago. 

On behalf of my clients, I therefore ask (rhetorically, no doubt) why they are paying fees that are going towards the salaries of EPO management and staff who are spending far too much time embroiled in politics and disputes?  Why is there at least one group within the EPO that is actively engaged in undermining its management with ‘leaks’ of information to bloggers and journalists?  In the face of this, why has there been so little official comment from the EPO?  (In this last regard, Battistelli’s interview with IAM is an overdue and welcome development.)

If it turns out that there has been any serious impropriety at the top of the European Patent Organization, that would clearly deal a terrible blow to its authority as one of the world’s leading patent-granting bodies.

If, on the other hand (and as I am increasingly coming to suspect), the public bloodletting is nothing more than the result of a guerrilla campaign being conducted by a group of EPO staff who are opposed to the structural changes that Battistelli is seeking to impose upon the organisation, that would be a very great disappointment.  I have personally experienced this type of campaigning twice in my career – within Telstra as the company sought to restructure as the industry was deregulated in the 1990s, and at Melbourne University during the structural changes that followed on from the so-called ‘Dawkins Revolution’ of the late 1980s and early 90s. 

In all such cases, the dirty tricks and attempts at media manipulation are as tiresome and unproductive as they are predictable.  But they are the result of failure by both sides to communicate and negotiate productively to achieve necessary and inevitable organisational change.  In other words, it is entirely possible that the disgruntled EPO staff have a point when they accuse Battistelli of being confrontational and authoritarian in his management style, and that Battistelli is also right when he claims that the apparent discontent results from the actions of a minority within the EPO.

If so, then it is about time that both sides of this now very public dispute pulled themselves together, and started behaving in a manner more befitting of adults with a very important, €2 billion per year, job to get on with!  Because the EPO is important, and we need it to be functional.

Tags: Europe, News, Patent Office, Politics