EPO Staff To Get Disputed €28M Bonus, Despite Protest

The European Patent Office Administrative Council in December agreed to award a controversial bonus of tens of millions of euros to EPO staff at the end of 2012, with 24 positive votes and 8 negative votes. Several stakeholders had protested the proposal and encouraged contracting states in the Administrative Council to vote against the measure.

The proposal by EPO President Benoìt Batistelli to pay a bonus to EPO staff in view of the positive operating result at the organisation had stirred concerns from several stakeholders, such as the Berne Declaration, the Corporate Europe Observatory, the Development Fund from Norway, the Center for Intellectual Property Rights from Belgium, and the Third World Network (IPW, Patent Policy, 13 November 2012).

On 11 December, the vote reached the necessary three-quarters majority, according to an EPO spokesperson, with 24 positive votes and 8 negative votes. However, according to those opposing the decision, 6 countries chose abstention. According to the EPO, those votes are considered as neutral.

The bonus springs from the result obtained by the EPO in 2011 and comes into effect at the end of 2012, the spokesperson said.

According to a source from opponents of the measure, Austria, Germany, Ireland, the Netherlands, Norway, Switzerland, the United Kingdom, and Sweden voted against the decision, and Denmark, Finland, Liechtenstein, Poland and Portugal chose abstention. This information has not been confirmed by the EPO.

In a confidential document [pdf], Battistelli proposed that €27,656,000 euros be paid out 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.

Critics of the bonus circulated an open letter in December, to the representatives of the 38 EPO contracting states in the Administration Council, engaging them to vote against the decision. The open letter is reproduced here [doc].

In the letter, they said the decision would amount to paying each EPO employee a €4,000 bonus, accounting for 31 percent of the 2011 operating result. The bonus, according to them, “contributes to adverse incentive structures and conflicts of interest for the employees of the EPO. In linking the staff’s wallet to the Office’s surplus, it undermines the efforts to raise the bar in patent examination and fosters a mentality to increase fee revenues for the EPO by granting applications of low quality.”

“Temporary surpluses of the EPO should be used for socio-economic impact assessment of the EPO’s granting practices, for third party involvement both pre-grant and in opposition, and for EPO’s engagement with civil society,” the letter said.

A source indicated that there were reasons to believe that the EPO’s surplus in 2012 may be larger than the 2011 one. Some observers have also remarked on the comfortable salaries enjoyed by the EPO staff.