Thursday, April 30, 2015

Promise of union recognition insufficient to solve conflict at European Patent Office: new protests

By promising (after approximately four decades) formal recognition of EPO staff unions, the Administrative Council of the European Patent Organisation extended an olive branch, presumably due to a combination of political (with some key member states increasingly hesitant to support EPO president Battistelli) and legal (Dutch court decision) dynamics. Last week the kick-off of the "renewed social dialog" took place. According to SUEPO (Staff Union of the European Patent Office, which published a report on the meeting (PDF), "[t]he atmosphere was such that some frank exchanges about the situation in the Office could take place." But staff representatives still appear to be skeptical of whether any meaningful change will result from all of this.

It's clear that formal union recognition won't solve any problem. It can be seen as a gesture of goodwill, and indirectly it could have positive effects if the talks helped build a consensus, but for now there are no signs of the situation actually improving. In the most critical respects it seems to be "business as usual", with certain reforms being implemented at any rate.

It could be that the Administrative Council hoped staff representatives (particularly, but not only, SUEPO) would soften their stance on the actual issues because of the potential benefits to their organizations from formal recognition. Should that have been the plan, it doesn't appear to have worked out: SUEPO organized a march today from one of the EPO's Munich buildings to the Dutch consulate (PDF flyer).

Again, I don't know whether the Administrative Council overestimated the impact of the promise of formal recognition and the invitation to talks, but in any event the representatives of the EPOrg's member states should consider that they are not dealing with "your average trade union" such as in a traditional manufacturing industry, where there may sometimes be a disconnect between union leaders (and their personal interests) and most of the people they speak for. EPO examiners are very educated people who can tell the difference between window dressing and real change.

The day before yesterday SUEPO published another flyer, which explains some key underlying issues (this post continues below the document):

15-04-28 SUEPO Flyer Brave New EPO by Florian Mueller

There are three key things that this flyer explains:

  • The stated reasons for certain reform measures are based on the nonsensical notion that the EPO "competes" with the USPTO, JPO, SIPO and other non-European patent offices. If it competes with anyone, it's with national patent offices, but national patent systems control the EPO through the Administrative Council and milk it (through high renewal fees that have an almost 100% gross margin for national patent systems).

  • Increased productivity pressures on staff require and inevitable result in a lowering of patentability standards, particularly with a view to the inventive step. Ultimately, this is a very problematic development that can have negative economic effects (except for the EPO and, especially, the national patent systems controlling it).

  • While the EPO is highly profitable, with a budget surplus of €364 million in 2014 and a likely higher one in 2015, it still doesn't lower its fees. Instead, the EPO leadership argues that more (not better) patents must be granted. The question of how many patents Europe needs (or, as SUEPO asks now, how many it can tolerate) came up before. SUEPO now also pointso ut that it would be a fallacy to assume that more EPO patents mean more European innovation or growth:

    "Two-thirds of the applications filed at the EPO are not of European origin and thus are more likely to hinder European industry than benefit it. A flood of badly examined patents could affect in particular the small and medium-sized enterprises that cannot afford expensive litigation."

I agree with SUEPO on all of that. There's only one thing that SUEPO has said in connection with today's protest (in a PDF flyer published on SUEPO's website) that I disagree with:

"Last week Mr Battistelli informed us that the Dutch government will join the EPO in its attempt to overturn the judgment in the next instance ('cassation'). If so then the Dutch government makes itself complicit in violating fundamental rights."

(emphasis in original)

In my opinion, the Dutch government is in its right to express its position on the legal question of EPO immunity, and if it agrees with the EPO on this one, then that's legit, even if staff representatives don't like it. I view the Dutch government's role as, practically, an amicus curiae as not objectionable at all, but it should accept the final outcome even if the previous judgment is affirmed, meaning that a final judgment in SUEPO's favor should also be enforced.

Also, the Dutch government should play a more constructive role on the Administrative Council to ensure that EPO staff have certain human rights. In one of the related contexts the IPKat blog pointed out an interesting fact:

"People who work for the World Intellectual Property Organization (WIPO), the Office for Harmonisation in the Internal Market (OHIM) and the Community Plant Variety Office (CPVO), the Benelux Office for Intellectual Property (BOIP) and the good folk whose job it is in the European Commission to make life difficult for us by thinking up new IP policies, must all have the occasional health issue too, and presumably WIPO, OHIM, the CPVO, BOIP and the Commission must have schemes that govern the health and welfare of their own employees -- none of whom, so far as Merpel is aware, have publicly complained about the health provisions that apply to them."

The EPO situation indeed appears to be unique.

I'd also like to point to this IPKat post on a subsequently-withdrawn European Commission statement (a pretty bad propaganda piece) on the proposed fees for the single European patent. I'll talk about this issue on some other occasion. I know there's a lot of unhappiness about this one in industry and in the legal community.

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