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Zentraler Vorstand . Central Executive Committee .

Bureau Central
28.04.2015
su15180cp – 0.2.1/2.2/0.3.2/5.3

A Brave New EPO ?
Summary
Mr Battistelli frequently refers to a need to remain “competitive” in order to
safeguard the future of the EPO. In this context he variably mentions the USPTO
or Asian offices as being much less expensive than the EPO. From that we are
supposed to understand that Mr Battistelli wants to render the EPO less
expensive for its users. But is this really the case? If so: would that be a desirable
aim? Are we really competing with the USPTO and the Asian offices? And if so:
on what basis? This short paper cannot answer all the questions but it hopes to
contribute to the discussion.
With whom are we competing …
For European patents – our core task – the EPO clearly does not compete with any of the non-European
Offices because these cannot grant European patents. The only true competitors for that “market” are the
European national patent offices. If the EPO becomes too expensive, if its quality drops or if changes in
its regulations render the future of the patents granted by the EPO uncertain, then applicants may decide
to go back to the national route. The unitary patent and the planned reform of the Boards of Appeal
(DG3) may also be a risk in this respect. Concerning its fees: the EPO has always been more expensive
than USPTO. Part of the explanation lies in the due legal procedures: right to written opinions by Search
Divisions, right to oral proceedings, opposition and appeal procedures having to be financed, threemember boards and divisions. Another part of the explanation is that the EPO is the only patent office in
the world that co-finances 38 national patent offices to the tune of about 450 million euro/year 1. This cuts
both ways: it increases the procedural costs for the EPO and enables the national patent office to
subsidise their own services. The DPMA (German patent office), the INPI (French patent office) and the
UK Intellectual Property Office are offering patent searches for 300 Euro, 500 Euro and £290, resp. It is
clear that the EPO can never compete on these terms.
… and for what?
Relative high fees and relatively slow processing have never stood in the way of the EPO’s success.
The EPO’s selling point has always been its high quality. This is understandable: high quality patents,
meaning patents with a high presumption of validity, attract less litigation and if litigated have a higher
chance of survival. Litigation is expensive. Honest applicants therefore prefer to pay more upfront in order
to reduce litigation. The rational alternate to systematic high quality search and examination of all
applications (once practised by the French patent office) is to just register patent applications and only
examine them when litigation occurs. But a low quality examination system is in fact just an expensive
registration system, and in the long run not viable.

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In 2015 the national offices expect to receive some 425 million Euro in renewal fees on patents granted by
the EPO. They also benefit of cooperation projects worth an estimated 25 million Euro. These sums do not
take account of renewal fees that are not duly reimbursed to the EPO and of travel costs, daily allowance
and free dental and urgent medical treatment for delegates.

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The automatic office
Examiners and formalities officers in the EPO have long been under pressure to become “more
efficient”, i.e. to grant more patents faster. Staff and its representation have resisted – thus far. They
cannot do so much longer. With the new system any career progression depends on reaching the
production targets the Office sets. Like in the USPTO, this target increases with seniority. For senior
examiners the new targets may be up to 50% (!) higher than last year. Examiners who take on duties in
addition to their examination target and other “high performing” employees will further be rewarded with
discretional bonuses. But worse than the carrots are the sticks: “low performers” are threatened with
down-grading or dismissal, senior examiners are pushed into early retirement. In order to assist the
examiners to reach their new targets the Office has introduced an automatic search tool (“Ansera”) and a
semi-automatic communication drafting tool (“SACD”). Search and examination at the click of a button?

Cui bono?
The present developments raise a lot of questions that Mr Battistelli does not answer. Mr Battistelli talks
about “safeguarding the future of the EPO” but he has never explained either to staff or to the public
what that future will look like. Another question is: who will actually benefit from the increased “efficiency”
of the EPO? The EPO accounts for 2013 showed an overall budget surplus of € 317m euro. The results
for 2014 are even higher € 364 m euro. 2015 should be again better: for this year a “more than
incremental increase” in efficiency is expected from the examining staff. Mr Battistelli seems to imply that
with increased efficiency, patent fees could be lowered, but he has failed to do so thus far. Another key
question is: “How many patents does the European economy need?” Or maybe more precisely: how
many patents can it tolerate? 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.
So the question remains: “Mr Battistelli, what is the plan?”
SUEPO Central

“I am convinced that the way the EPO is managed today (by the Administrative Council) is such
that it will mean either the death of the EPO or its transformation into a cash machine.”
EPO: Interviews for the Future (February 2006)
Thierry Sueur and Jacques Combeau
Intellectual Property Department, Air Liquide

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