EPO Enlarged Board tells Chairman: "disobey President when necessary"

The European Patent Office (EPO) Enlarged Board of Appeal (EBA) has issued an interlocutory decision in case R2/14 (PDF file, 2.3 MB), in which it once again addresses the dual roles of the Board's Chairman, who is also a Vice-President of the Office (VP3), among other issues.

The quite explosive highlights of this Decision, which is analysed in more detail below, are the following findings made by the EBA, at a time when the independence of the Boards and the degree to which they must be subordinate to the management of the Office have never been more closely examined:

The Enlarged Board members getting ready
to defend their judicial independence

• As long as the Chairman of the Enlarged Board ("the Chairman" from here on) is also a Vice-President of the EPO, there is a potential conflict which might compromise his judicial independence unless properly handled.

• The proper way to handle this is to balance the Chairman's obligation to obey the President (as VP3) against his invariable obligation to act at all times with complete judicial independence.

• In cases of conflict the judicial role must take precedence, even at the expense of disobeying a direct instruction from the President.

• The President's authority and power to give instructions to the Chairman in his role as VP3 and to exercise supervisory authority over him are limited by virtue of Article 23(3) of the European Patent Convention (EPC), which lays down the principle of independence of the Boards.

• The requirement to disobey an instruction or direction from the President or to fail to provide assistance to the President must also apply where the effects of complying would be indirectly liable to affect the "work or working conditions" of the Board members.

• The only proper, long-term solution is to revise the EPC so as to take the Boards out of the structure of the Office completely, placing them as a separate independent body within the European Patent Organisation.

Mr Battistelli, President of the EPO, was reportedly furious when, in a previous decision, R19/12 (reported here), the EBA decided that the nature of the Chairman's involvement in the management of the Office gave rise to a justified suspicion of partiality, and ordered that he be replaced by an alternative member for that case.

One cannot imagine that the new decision will make Mr Battistelli any happier. As noted above, the EBA specifically alludes to instructions from the President whose effects might affect the work or "working conditions" (a very hot topic across all levels of EPO staff ranks), particularly at a time when speculation abounds that the President is strongly supportive of a proposal to send the Boards of Appeal to Berlin and there is widespread concern within the Boards that this will hamstring their work.

So reading between the lines (perhaps more than was intended), Merpel discerns the EBA telling its Chairman that, if he is asked to assist with or support this move at an organisational level (after all DG3, under his wing, would have to be involved in the move), he must refuse to do so unless he is satisfied that there will be no adverse effect on the Boards, however indirect that might be. Even more clearly, if VP3 is called on or instructed to implement any sort of efficiency goals within the Boards, it appears that the Vice-President must refuse, again unless there is absolutely no possibility of this affecting the work of the Boards, and one cannot see how this would be the case.

And naturally we mustn't overlook the fact that the EBA also speaks directly to the President in this decision, telling him that his power to instruct the Chairman (as long as the latter is subordinate to the President as VP3) is limited by Article 23, and he may not issue instructions that would compromise judicial independence. This is an important shot in a power struggle between the Boards and the President, have no doubt.

While stated to be a non-public decision, it appeared on the EPO Register for public download (this may change) and the issues it covers are of such central importance to the independence of the EPO judges that it requires publication. Merpel has considered the balancing of interests between non-publication, the stated reason for which was to protect the private rights of the three Board members whose participation was objected to, and the strong public interest in reporting the decision which for the first time states that the President's power to direct the Vice-President of DG3 Appeals is limited by the overriding interest in judicial independence (as long as the Vice-President is also the Chairman of the Enlarged Board) and believes the correct course of action is to publish. More pragmatically, it does not read like a decision that is only for the benefit of private parties to an appeal; it reads like one that is expected to have a wide audience including the President, the Administrative Council, and probably everyone else -- not that this affected Merpel's thought processes.

So with that, let's look at the decision.

Background
 
At the time of Decision R19/12, in his role as VP3, the Chairman sat on two high level committees of the EPO, the Management Committee (MAC) and General Advisory Committee (GAC). The petitioner in that case (this being a petition for review of an allegedly wrong decision of a lower Board of Appeal) objected to the Chairman sitting on the Enlarged Board, saying that he was compromised by his dual roles. A reasonable observer would have a justified suspicion that he might be influenced in his review of administrative decisions taken by the Office given that he was involved intimately in the management of the Office. The Enlarged Board agreed and took him off the panel for that hearing.

Superficially it may have looked as if the EBA was rapping the Chairman over the knuckles for having given cause for someone to object, but the reality was very different. This was a Board protecting its Chairman and sending a message to the President: if you think that you can keep control of the Boards by appointing the Enlarged Board Chairman to a managerial role where he is bound (under Article 10) to obey your instructions and assist you unconditionally, think again. Doing so has compromised his role and the independence of the Boards -- hence the reported fury of Mr Battistelli at this decision.

The Chairman subsequently stepped down from both of the managerial committees, other than retaining an observer role for appeal-related matters.

The latest decision, R2/14, deals with a similar objection by a petitioner against the composition of the Enlarged Board panel assigned to its case (concerning an appeal decision with which the petitioner was dissatisfied). The petitioner objected to all three of the members, again including the Chairman, and the two other members.

The objection to the other two members

Before turning to the much more interesting case of the Chairman, let's look at the two other members. The petitioner asked for replacement of these Members, on the grounds that they came from the same Technical Board of Appeal, giving (said the petitioner) that one Board undue influence over the EBA in this case; also, that Board was in a similar area of technology as the Board whose decision they were being asked to review, which was likely to lead to partiality and undue sympathy for the decision under review; and finally, it was argued that EBA members in a petition for review procedure should not be members of the lower Boards of Appeal also.

None of these objections gained much traction and were dismissed pretty quickly. In particular it was held that the design of the legal framework envisaged that Enlarged Board members would also serve on Technical and Legal Boards, and no change in this scheme, or in the appointment of particular members to an Enlarged Board panel, was intended when the EPC was revised to permit petitions for review under Article 112a.

The objection to the Chairman

As regards the Chairman, the initial objection simply referred to the finding in R19/12, and initially the petitioner appeared to believe that the nature of the objection was self-evident from that decision (the EBA agreed as it happened, i.e. the nature of the objection was clear). When the Chairman was asked to comment on the objection he submitted a statement saying that he had relinquished the duties that had given rise to a problem in R19/12, quoting from the relevant order of the President removing him from the committees; he further stated that he was not aware of any pressures on him to compromise his judicial role in pursuit of e.g. efficiency goals.

The petitioner tried to expand its case three times. In a first reply it enumerated several reasons why it believed the role of the Chairman was institutionally compromised due to his alternate role as VP3, even if he had stepped down from the relevant committees. Then, before oral proceedings, it sought production of numerous internal and confidential documents that (it said) might reveal the extent of the Chairman's involvement in management activities and/or the President's interference in the Boards of Appeal, and also requested that evidence be taken from various parties to explore the extent of the Chairman's management activities. Thirdly, following oral proceedings and while waiting for the decision to issue, it wrote to the EBA again saying that the "house ban" affair, covered in this weblog at length, exposed an incident of partiality: nearly all of the internal members of the EBA had written a letter of protest at the President's actions (in suspending a Board member and kicking that member off the Office premises). However, the petitioner noted that the Chairman had not signed this letter, which the petitioner said demonstrated that "other [Board] members could not expect the Chairman to defend their rights vis-à-vis the President."

Did the Chairman's failure to openly criticise the President suggest partiality?

The Board did not look at the "house ban" point, i.e. the inference that should be drawn from the failure of the Chairman to sign a letter critical of the President (a letter signed, incidentally by each of the members who wrote this interlocutory decision along with nearly every other internal member of the EBA). It was made late, and was different from the initial objection. The initial objection had been based on an alleged structural or institutional partiality (of the in abstracto kind) inherent in the dual roles, whereas the observations on the Chairman's failure to sign the letter of protest against the President was based on actual conduct and were aimed at establishing in concreto partiality.

The EBA explicitly said it was not considering the house ban point for procedural reasons alone and that it had not looked at the merits, suggesting to Merpel that there may be scope for a new objection on this explicit point -- and the petitioner appears not to have any qualms about rocking the boat, so perhaps we can expect another new objection and a second interlocutory decision.

Could the petitioner obtain internal documents and evidence from the Office?

The EBA also refused the requests for production of internal documents or the taking of evidence from the Chairman and others. The EPC did not have discovery procedures that would allow a party to uncover documents that might support its case, nor could a party expect the Board to make its case for it -- an appellant or petitioner had to produce its own case for the Board. In the absence of such documents and evidence the petitioner had merely made vague assertions and suggestions that had no evidential basis.

Merpel smiled at the additional suggestion of the EBA, apparently made without irony, that the petitioner could have asked for these documents from the competent bodies. This suggestion betrays an admirably naive faith in the power of a nicely-worded letter addressed to the management of an organisation which appears to be deeply paranoid and averse to any examination of its internal procedures, and which is at war with its own stakeholders over the very issues that the documents would reveal. But perhaps Merpel is wrong. Prizes will be awarded by this blog to any patent attorney who successfully convinces Mr Battistelli to send them the internal investigation guidelines used when investigating Board members, which is one of the documents sought by the petitioner.

The structural/institutional conflict in acting as Chairman & VP3

All of the foregoing meant that the decision was confined to the R19/12 point itself: had the circumstances changed sufficiently since that decision so that the Chairman was no longer to be regarded as under a suspicion of partiality?

The Board accepted the Chairman's account of his reduced activities and disengagement from the relevant committees without question. Nevertheless it noted that the Chairman had dual roles, one managerial in which he was subordinate to and answerable to the President (Arts. 10(2)(f) and (3) EPC), and the other in which he was "in no sense hierarchically subordinate to the President and is not answerable to him" (see Art. 23(3)). These managerial and judicial roles could in principle come into conflict with one another.

The EBA labelled this potential conflict as a "normative conflict" between two equal-ranking rules of the EPC (Art. 10(3) vs Art. 23). All other relevant rules, such as Art. 10(2)(f), or the Staff Regulation that might apply to the Chairman as an employee under Arts. 10 & 11, were subordinate to Articles 10(3) and 23.

Resolving the "normative conflict" using (you guessed it) praktische Konkordanz

The EBA once again noted [presumably in the hope that someone from the AC is listening to the highest patent court in Europe] that the only permanent and clear solution to the question of judicial independence would be to separate the Boards of Appeal entirely from the Office, making the Boards a separate, fully independent body within the European Patent Organisation. While this would require amending the EPC, they helpfully reminded the petitioner [Hmm, says Merpel, for a non-public decision it seems the authors expected a wider audience than a lone disgruntled patentee], and noted also that there was a draft amendment to the EPC ready to go, but that a diplomatic conference would be required to make the necessary changes. The proposal to give the Boards organisational autonomy had widespread support, backing this up in a deadpan footnote quoting from none other than a "B. Battistelli", writing in the GRUR Newsletter in 2010.

So with no diplomatic conference in prospect, how was the conflict between the Chairman's role to be resolved. Borrowing a legal concept called "practical concordance" (praktische Konkordanz) from German constitutional law, they said that the conflicting rules had to be interpreted in a balanced manner:

39.7  In applying the concept of "normative concordance" to the present case, the Board concludes that the President's power to give instructions to the Chairman in his function as VP3 pursuant to Article 10(2)(f) and (3) is limited by Article 23.

The Chairman is therefore relieved of any obligation

(a) to obey any presidential instructions or
(b) to observe any other administrative/executive directions or
(c) to assist the President pursuant to Article 10(3) EPC

if and to the extent that any such instruction, direction or assistance might affect him and/or any other member of the boards of appeal, including the Enlarged Board of Appeal, in performing their judicial duties [...]

39.8 An indirect effect in this context could even be caused by any measure of the aforementioned kinds which, prima facie, is not immediately and intentionally directed to the exercise of judicial duties in the narrow or obvious sense.

Similarly, measures directed to less central aspects of the work and working conditions of the Chairman and other members of the boards of appeal and of the Enlarged Board of Appeal could also have longer-lasting effects. These might be perceived by the members concerned and/or by a reasonable observer, for example a party to proceedings before a board of appeal or the Enlarged Board of Appeal, as influencing the independence of the members of the boards of appeal or the Enlarged Board of Appeal.

The Board continued that, even if he scrupulously tries to balance his two roles, the Chairman/VP3 could be faced with an unresolvable conflict where he either obeys the President (and fails to uphold the principle of judicial independence as a result) or he disobeys the President and thus fails in his role as VP3:

In that event, one may legitimately expect that his judicial duties under Articles 23 (3) and 24 and under Article 6(1) ECHR must prevail.

So there it is. As long as the Chairman remains subordinate within the hierarchy of the Office to the President, nothing in the EPC, his contract or the service regulations, permits him to compromise the independence of the Boards, and nor may the President legitimately instruct him to do anything that affects the working of the Boards.