Proposal For EPO Staff Bonus Raises QuestionsPublished on 13 November 2012 @ 6:46 pm
By Catherine Saez, Intellectual Property Watch
A proposal of the European Patent Office President Benoît Battistelli to pay a collective reward to EPO staff in 2012 in view of the positive operating result of 2011 has stirred concerns about the kind of incentive this might give to EPO examiners.
According to a confidential document [pdf], Battistelli proposed that €27,656,000 be paid as a collective reward to staff who were in active service in 2011, and that another € 27,656,000 be transferred to the Reserve Funds for Pensions and Social Security (RFPSS). This financial flow comes from a 2011 operating result of €89,231,639.
“As a basis for the calculation, a net amount of EUR 4 000 after the deduction of internal tax will be set aside for each full-time staff member,” says the document. It adds that the positive results are to “a great extent the result of the work and efforts of its staff.”
The EPO 2011 annual report says that “2011 was a record year at the EPO,” with “almost 250,000 patent filings, the highest number ever in our 34-year history, showing that European patents are in high demand across the globe, and that Europe remains attractive for innovative industries.”
In recent years, says the confidential document, “the EPO has regularly obtained IFRS [International Financial Reporting Standards] operational surpluses.” In 2009 and 2010, the surpluses “were transferred to the RFPSS to cover future liabilities, in particular those resulting from the partial compensation on pensions.”
The document dated 5 October is addressed to the Budget and Finance Committee for opinion, the Administrative Council for decision, and the Supervisory Board of the RFPSS for information. The Administrative Council is expected to convene on 11-13 December, according to an EPO source.
A series of concerns have been reported in the German press such as in Wirtschafts Woche and voiced by several sources to Intellectual Property Watch.
One of the main issues raised was that the proposed bonus to staff might provide the wrong incentive and might have a potential effect on patent quality. Paying a bonus to its staff could be contrary to the EPO’s public mission, they said. The operating results could serve to lower fees, not encourage a pro-patent bias, they added.
According to a June newsletterJune newsletter [pdf] of the Munich branch of the Staff Union of the European Patent Office (SUEPO), the staff was informally told about a bonus scheme for staff. The article said the Munich staff representation had some reserves, one of which is that “Linking staff pay to EPO operating results thus puts staff, in particular examiners, in a conflict of interest.”
EPO Says No Link Between Bonus and Mission
An EPO source told Intellectual Property Watch that there is “no link between generating a bonus in the operative section of our budget and our mission.”
The EPO, the source said, has launched a set of measures and programmes to increase the quality of its work. These initiatives were described in Battistelli’s speech at the EPO Patent Information Conference 2012 on 6 November as five strategic roadmaps.
The EPO’s services have been “sanctioned in diverse independent surveys … among in-house and external patent attorneys rating the EPO as the best patent office in the world,” the source said.
“The performance measurement of an examiner evaluates a refusal twice as high as a grant – taking into consideration that a refusal requires a higher investment of examiner time,” the source said. Since 2005, the EPO has improved “its overall performance and productivity due to massive efforts,” in particular “more time spent by examiners on search and examination.”
Catherine Saez may be reached at email@example.com.