Having been returned to blogging duty, Merpel has turned her attention to the finances of the European Patent Office. She wrote about this last year, examining the 2013 financial report of the EPO, and concluded that it was not possible to establish with any confidence, or in any degree of detail, what the true financial position actually is.
|It still doesn't add up ...|
However, the Unitary Patent Regulation states in Article 12(1) that the level of renewal fees should be
" ... sufficient, together with the fees to be paid to the European Patent Organisation during the pre-grant stage, to ensure a balanced budget of the European Patent Organisation".It does not state that the level of renewal fees should be sufficient to maintain a specified level of renewal fee income compared with the current situation. Article 42 of the European Patent Convention provides in similar terms that "The budget of the Organisation shall be balanced."
Now, "balanced" is a concept that requires to look at both the income and the outgoings of the EPO. Merpel is given to understand that the EPO generates an operating budget surplus year on year of the order of hundreds of millions of Euros: €281m in 2011, €311m in 2012, €338m in 2013 and €364m in 2014. Now these numbers may not be entirely accurate, and Merpel realises that it depends what accounting rules are used to process and report the numbers. These figures are however hard to reconcile with the published accounts of the EPO.
The big imponderable seems to be the Pensions Reserve Fund. This is the money that the EPO puts aside to fund the retirement pensions of employees, once it can no longer afford to pay them out of current income which, Merpel understands, is currently the case. How much money the EPO needs to squirrel away depends on actuarial assumptions on the future pensions liability, and on the expected returns on the assets that already exist -- which are enormous at over €6 billion. Merpel, who much prefers chasing squirrels to squirrelling anything away, cannot disentangle all of this.
But the point is that she should not have to. If the EPO is supposed to present a balanced budget to justify the renewal fees that it wants, then it should explain openly and clearly to the European Union and to EPO users what its budgetary constraints actually are. No explanation of why the proposed renewal fees levels are needed has emanated from the EPO.
This lack of financial transparency makes it also impossible to judge the obsessive message repeatedly coming from the EPO that there needs to be a huge leap in efficiency and productivity. This increased productivity is being enforced by escalating production targets for examiners, directives to refuse various categories of leave, having non-examining project work done in extra time remunerated by bonuses (reported here), applying more stringent conditions to part-time working, and implementing regressive sick leave provisions (reported here). But nowhere is the EPO explaining why this leap in production is needed. Why not?
|If transparency is good enough for|
cats, it's surely enough for the EPO
If the EPO is arguing financial necessity both for its internal reforms to career structure to increase productivity, and for the level of renewal fees, then only a clear exposition of its financial position will suffice for the users and others affected by the European patent system.
So, what do we want? Transparency about the EPO finances and the effect of Unitary Patent renewal fees on this. And we would like it now, please.