Disciplinary authority over the EPO Boards of Appeal: a former member speaks

A Cat speaks ...
The events that unfolded in the European Patent Office (EPO) in Munich in December 2014 have been extensively covered by Merpel on this blog, and have attracted many comments.  Almost the entirety of the internal members, and many (here and here) of the external members, of the Enlarged Board of Appeal wrote in protest at the so-called "house ban" imposed on a member of the Board of Appeal, referred to by the administration as a "member of staff". The actions of the administration were also criticised by many European judges in a letter from Sir Robin Jacob.  The Kats are delighted to receive this legal analysis of the situation from Catarina Holtz, a former member of the Boards of Appeal of the European Patent Office.  Catarina writes:
"The altercation at the EPO in December 2014 concerned a member of the Boards of Appeal who was ousted without any further ado by the President. This action was subsequently condoned in a suspension decision by the Administrative Council. 
In legal terms this is a borderline case with regard to Article 23 EPC 2000, which gives the power to remove members exclusively to the Enlarged Board of Appeal. The word “removal” suggests permanent severance from the position of member, but an action with no previous preparation should be avoided. 
Article 23 is part of the necessary self-management of a court, in keeping with the European Convention of Human Rights, Article 6 (which deals with the rights to a fair hearing and a fair trial, and primarily to a court of law). Under Article 10(2)(h) EPC 2000, the President has the power to exercise disciplinary authority over employees. However, with regard to senior employees he only has the function  to propose disciplinary actions, which are for the Administrative Council to decide upon. This rather suggests that the President cannot take action without a previous decision by the Council. Where it may be dangerous to delay, there might be a margin for actions by the President -- but this is not in keeping with the organisation of a court, where the chief of the court would have the right and function to discipline colleagues, possibly with the help of a group of colleagues (for example, as in the EPO, the Enlarged Board of Appeal). 
Decision R 19/12 means that the system in place, with the Boards of Appeal as part of the European Patent Office, is deficient in that the Boards of Appeal are not considered a court. The agreement proposed for the forthcoming European Unified Patent Court is a highly commendable model: it provides for the Boards, e.g. to be a separate body, and to have a transparent recruiting organisation, introductory education of new members and self management by the judges themselves as well as re-education during their tenure in the court and a well organised system for removal from office. Germany and Sweden have both operated such a system for several decades, with a separate patent appeal instance. This should now finally be done for the Boards of Appeal of the European Patent Office."
Catarina Holtz, LLD, SSE, Stockholm (Retired appellate judge, Svea Court of Appeal Stockholm, retired member of the Boards of Appeal of the EPO)
The IPKat and Merpel thank Catarina for her comments, adding that it is always a pleasure for the Kats to entertain a Cat ...

Disciplinary authority over the EPO Boards of Appeal: a former member speaks Disciplinary authority over the EPO Boards of Appeal: a former member speaks Reviewed by Merpel on Tuesday, January 27, 2015 Rating: 5


  1. "with the help of a group of colleagues"

    Is this intended to cover a case where a Board member causes a bit of a disturbance one day (too much low cost wine at lunch, perhaps) and may be in need of physical restraint? Must the President and able youngsters stand idly by in such circumstances while the other Board members are summoned from their lunch?

    I can't find anything in the EPC to support such action, but I haven't read the RPBA for a long time. Is it covered there?

  2. Ashley Roughton has previously invited us to "have a shufty at the Lenzing case [1997] R.P.C. 245". So I have.

    An issue in that case was whether an EPO Board of Appeal provided the opportunity for judicial review required by TRIPs, or whether Lenzing could ask a national court to review the Board's decision to revoke their patent.

    Robin Jacob gave an extensive list of the necessary qualities of a court, and concluded that the Boards of Appeal have them. He cited cases and legal texts to distinguish their judicial function from a merely administrative function. In particular, he said that "Article 23 is of especial importance here."

    Lenzing had attacked this view by pointing to the system for appointment, re-appointment and control of BoA members. They said the members are subject to the supervisory authority of the President via Article 10(f). They can be appointed by the Administrative Council only on a proposal from the President and can only be re-appointed after consultation with the President (Article 11(3)). According to Lenzing, this made a BoA member too close to the EPO as an administrative body. A member would want to please the President to get his job in the first place, or to hang on to it.

    Robin Jacob found this argument "absurd". "The fact is that the members are independent in their judicial function and that independence is guaranteed by the EPC itself. They are judges in all but name...". Distinguishing the principal authority cited by Lenzing, Jacob J held that the cited articles of the EPC do not provide an "organisational link".

    This is all strong stuff. However, it all relies on the judicial independence guaranteed by the EPC, for which "Article 23 is of especial importance."

    Now let us turn to Sir Robin's recent letter to the Chairman of the Administrative Council, on behalf of the Intellectual Property Judges’ Association.

    He writes: "[A]ccording to article 23(1) (read in conjunction with articles 10 and 11) of the EPC it seems clear that it is for the Administrative Council and the Enlarged Board to take action, not the President, and that the Administrative Council should have so declared.... The present events seriously threaten the judicial independence of the Boards of Appeal and by doing that call in question the guarantee of an independent and impartial review of the European Office's decisions by a judicial body."

    Would the recent events have caused him to reach a different conclusion in the Lenzing case? Perhaps Article 23 is fine in theory, but it has now been shown in practice that it doesn't provide the necessary guarantee of judicial independence?

    Wisely Sir Robin does not answer that question. He is clearly aware of the danger. He says the point could well come up in a real case concerning the status of Board of Appeal decisions.

    That seems to me to be a huge hint. National courts could start to disagree with his opinion in Lenzing. They could be asked to overrule a BoA decision to revoke a patent, as Lenzing tried.

    The Administrative Council needs to act. It needs to ensure that Article 23 provides a guarantee in fact, not just in theory. It needs to ensure that the President has no role in disciplining BoA members. It needs to provide some other mechanism in cases where urgent action appears to be necessary.

  3. " ... re-education during their tenure in the court and a well organised system for removal from office."

    I say, hasn't Benoit already put such measures into place?

    The latest removal from the Office seems to have been impeccably well organised.

  4. Anon 2108, Thanks for your excellent analysis. The problem of course is that the president has acted in violation of Art23. That is what Sir Robin says and that does not contradict his previous views. Now with the new career system in place, also the administrative Council has contravened the EPC. So then we come to a question that I have posed many years ago: What happens if the president and/or the council act against the EPC? Back then everybody laughed: that will not happen. Now it has happened. And my answer is: nothing. There are no sanctions in the EPC, no court is competent to judge such cases. The council can do as it likes and also the president provided he has the council under his thumb. That is today's sad reality.

  5. "The Administrative Council needs to act." It has acted. It has decided a new career system according to which the boards are clearly put under the supervision of the executive. To name just a few points: contrary to Art23EPC there is a probationary period for board members and chairmen, and their performance, upon which their remuneration is based, is ultimately to be appraised by the president. At the same time the council declares its full endorsement of and support for the principle of independence of the boards of appeal, referring to Art23EPC and internationally recognized principles of judicial independence. How cynical can one get?
    The new career system can be found here: http://www.epo.org/modules/epoweb/acdocument/epoweb2/159/en/CA-D_10-14_en.pdf

  6. First of all, I do not support the house ban of the member of the Board of Appeal and I think it casts more than doubts concerning the judicial independence of the members of the Boards of Appeal.

    However, English (native) speakers (and sometimes even the Boards of Appeal and national courts) tend to forget that proper construction of the EPC requires an analysis in all three official languages (cf. Article 177(1) EPC).

    In my opinion, the German and French wording support the view that Article 23 EPC literally only concerns the permanent removal from the European Patent Office.

    On the other hand proper construction of provisions of law must not stop at the grammatical interpretation, but historical, systematic, teleological interpretation have to be performed as well.

    In my teleological interpretation and systematic interpretation leads to the provisional conclusion that the president may neither suggest nor order a temporarily removal from the office. As to the historical interpretation, I have not looked into the Travaux Préparatoire yet.

  7. "What happens if the president and/or the council act against the EPC? ... And my answer is: nothing."

    If the contracting states agree that the Office is operating in violation of the Convention, then the Contracting States can ignore the actions of the office, and can refuse to recognise patents granted by the Office, and can refuse to recognise decisions of the Office revoking a patent.

    The contracting states can also change the Administrative Council, who can change the President. Such a recomposed Administrative Council can also declare actions taken in violation of the EPC null and void. Finally, contractings states can withdraw from the EPC.

    National courts, too, can recognise violations of the EPC, and can provide remedies for such violations, in particular to refuse to enforce rights or to refuse to remove rights which are purported to have been granted or removed in violation of law.

    The President or Administrative Council, if deliberately acting beyond their powers for personal gain, can become subject to the jurisdiction of an external Court under Arts 19 and 20 of the Protocol on Privileges and Immunities. The one can even withdraw the immunity of the other.

    Finally, the user community can cease to use the EPO due to a lack of faith in its effective operation.

    In short, there is lots that can happen as a consequence. The worst case is a failure of, loss of legal certainty in, and implosion of the EPC system.

  8. You're right, anon @13:14: the implosion of the EPC system is the likeliest outcome.
    BB is not different from any of those corporate managers that gave a display of their "managerial skills" at the helm of banks and companies such as, to cite a few ones, Lehman Brothers or Enron.
    "Après moi le déluge" is their motto: they take the helm of a company, run it towards destruction while earning big money for themselves and their accolites and finally leave with a huge bonus, leaving ruins behind them. Why should BB care about the EPO? There will be another highly-paid post for him to move to, after destroying the EPO.

  9. It seems that there has just been an interesting exercise of "judicial independence" in the EU's newest member state.

    According to reports coming in from the Municipal Criminal Court of Zagreb, Judge Marijan Bertalanič has just issued a judgment dismissing a defamation action being pursued by a certain Vice-President of the EPO.

  10. It is indeed fortunate that we have people around with long memories combined with a fine legal analytical mind, and not the least: who have the freedom to express themselves openly. Catarina Holtz has provided us with a concise presentation of the situation that the Board of Appeal of the European Patent Office finds itself in.

    Scandinavian IP professionals have been able to enjoy her in-depth analysis of the BoA situation in a recent issue of the professional journal NIR (Nordic Intellectual Property Law Review), in its last article with the title ‘Vad betyder EPO:s beslut R 19/12 för besvärskamrarna’ (‘What is the impact of the EPO decision R 19/12 on its Boards of Appeal’). The paper is worth learning Swedish for (!), not the least for her section presenting comparative law (‘Some comparisons – what is internationally required to consider an organ making legally binding decisions qualified as a court of justice’ [my translation]). The EPO BoA’s do not fare well in their present organisation!

    This particular issue of NIR (2014 No. 4; TOC at www.nir.nu/journal/nir-2014-4) is otherwise devoted to the new legal order in European patent law. There is nothing specifically ‘Nordic’ in the various approaches; the analyses are of the highest international order. They argue very convincingly concerning the internal contradictions or pitfalls in the rules that are going to apply, and it is quite apparent that official Sweden has put a huge effort in understanding the future situation before passing an act. This is in marked contrast to Denmark where the government was hellbent on joining quickly (even to the extent of promising a Danish branch of the UPC that will most likely never materialise due to too few cases).

    Back to the EPO situation: not having an independent legal body passing judgment on a patent case will hit the startups and smaller businesses much more heavily than well-established big industry. And I still maintain that we need an appealable rejection of an application to be able to go to the highest court. The need for legal certainty is large, and is a prerequisite for some of the support given to startups, from finding capital to obtaining insurance to create a more level playing field. Traditionally, this has been the in the focus of politicians who used to have ideas about the development of society, rather than letting the market decide on its own. I fear that the present, partly secret negotiations about the new US-EU World order will overshadow the fundamental requirements for a just legal system. Perhaps the playing field of patent law will end at the lowest common denominator.

    Somewhat depressed,

    George Brock-Nannestad

  11. @Anon 16:37

    It will be interesting to see if the defamation case in front of the Munich public prosecutor goes the same way. If it is decided to dismiss the defamation case against the suspended BoA member, where does that leave BB and VP4?

  12. "If it is decided to dismiss the defamation case against the suspended BoA member, where does that leave BB and VP4?"

    Up the creek without a paddle ?

    Watch this space:

  13. Thanks for the link, which is the first thing I've seen in relation to story behind the current issue. Unfortunately, it is a typical conspiracy theory article. Hacking by the EPO? Doe PB have a secret IT army?

    It does, however, link to some document which may tell more. The first I clicked on was a letter referring to criminal charges against a Mr Topic (prefer twix myself) and states:

    "One of these cases concerned the
    circumstances surrounding my dismissal from the SIPO"

    Which lead me to the conclusion that there is a personal battle going on. Whoever is right in the argument, if the personal battle got out of hand, I can see this leading to problems for the letter-writer, said problems ultimately being of their own making.

    Why would they write such a letter to the AC stating they had been asked by an anonymous source in Munich about the man? What a coincidence they asked someone with a grudge.

    I shall read more and withhold my own judgment, but it all sounds a bit tabloid.

  14. Thanks, George, for your very interesting analysis. Unfortunately, the article by judge Holtz in NIR seems to be available only to subscribers: do you know whether it was made freely available elsewhere? Thanks.

  15. "Which lead me to the conclusion that there is a personal battle going on. Whoever is right in the argument, if the personal battle got out of hand, I can see this leading to problems for the letter-writer, said problems ultimately being of their own making."

    If you want to deal in facts as opposed to speculation here are some "facts" for you.

    The "personal battle" to which you refer involved inter alia a dispute over the implementation of the Public Lending Right for authors in Croatia. The "letter-writer" was an Assistant Director in charge of the Copyright and Related Rights Department of the Croatian national IPO. The Republic of Croatia had given international commitments to introduce the PLR.

    It is alleged that the the then Director of the IPO decided on his own bat that this wasn't important and basically blocked the implementation.

    As the internal dispute escalated, he responded by allegedly abolishing the Copyright and Related Rights department of the IPO and using this as a pretext for dimissing his "turbulent" Assistant Director on the grounds that her job no longer existed.

    So where's the problem you say ?
    Well we are talking public sector here and according to Croatian law, the Director-General of the IPO is not competent to carry out such "restructuring" of his Institute of his own motion.

    So for all you puzzled readers out there, the point is that what he is alleged to have done appears to constitute a serious breach of administrative and possibly also criminal law in Croatia.

    Aside from that there are further allegations including one that the Director-General improperly used funds from the IPO budget to finance the leasing of an Audi 6 Quattro for the Minister in charge of the IPO who curiously endorsed his re-appointment in 2008 despite the fact that he was under investigation for various alleged irregularities. That is probably a minor peccadillo under the ultra liberal "business friendly" regime of the UK, but apparently under Croatian law it could give rise to charges of "corruption" or "bribery" or something similar.

    The above and various other allegations which were made in letters written by the accused person were used as the basis for a "defamation" complaint.
    They have also bee widely reported - apparently without any challenge - by the Croatian press.
    Curiously there doesn't appear to be any indication of a defamation action ever being taken against a Croatian newspaper.

    Anyway, the bottom line is that that the judge dealing with the matter appears to have decided that the allegations were not "defamatory".

    Aside from all that it seems that criminal investigations are currently in progress in relation to a number of the above "allegations".

    Feel free to draw your own conclusions ... and weep for the EPO ... unless of course you are so cynical that you no longer have any tears to spare.

  16. The text of the Judgment acquitting the former Assistant Director of the Croatian State Intellectual Property Office of the defamation charges brought by the former Director-General of that Office (currently an EPO Vice-President) is now available online:

    Text of Ruling/Decision Against Željko Topić

    It appears from the Judgement that in Croatia it is not considered defamatory to allege inter alia that the former Director-General of the Croatian State Intellectual Property Office "bought" his second term of office by providing a Minister with an expensive car leased on the account of the IPO to the tune of an estimated 500 000 HRK which is said to be around EUR 66000.

    Of course in the "business friendly" wads-of-wonga world of UK politics such shenanigans would hardly raise an eyebrow.

    Unfortunately, it appears that the Public Prosecutor in Zagreb is investigating the matter with a view to bringing corruption charges.

    As they say, watch this space ...

  17. When allegations are found to be not defamatory, doesn't it mean the allegations are true?

  18. The article doesn't say the allegations have been found to be not defamatory. It says the defendant has been acquitted. It was a summary judgment, so the court would have just decided the case on the pleadings, without hearing all the evidence.

    I don't know about Croatia, but in the UK a high standard of evidence is required to sustain a criminal charge. Based on the pleadings, the court could just have decided that the evidence wasn't going to meet that standard, even if it heard it. For example, it might just be one person's word against another's.

    Another possibility is that the court realised that this case is a personal vendetta, and decided that it wasn't in the public interest to proceed with criminal charges.

  19. Anon @ 20:28,

    While indeed truth is an absolute defense, other defenses allow then that a non-truth yet still escape the status of being defamatory.

  20. "The article doesn't say the allegations have been found to be not defamatory. It says the defendant has been acquitted. It was a summary judgment, so the court would have just decided the case on the pleadings, without hearing all the evidence."

    On a point of clarification, the term "summary judgment" was used above in a rather sloppy and inaccurate manner to indicate that the "judgment" which was issued on 28 January was just a "summary" announcement of the court's verdict.

    In this particular case, there were in fact several hearings held during 2014 (at least three) with a number of witnesses being heard including representatives of the Croatian Writers' Association, the staff union of the Croatian IPO and at least one civil servant who had worked at the IPO and in the supervising Ministry.

    According to information provided by reliable sources, there will be a full judgment issued (probably some time in February).

    It also seems fairly certain that the Public Prosecutor in Zagreb is continuing to investigate the allegations of bribery and corruption at least some of which were filed prior to the appointment of the person in question as a VP of the EPO.

    For those unfamiliar with Croatian politics, it may be worth noting that it is widely alleged in Croatia that the previous Croatian President Ivo Josipovic (who recently failed to secure re-election) was one of the main "protectors" of the person in question. This claim was also reported in an article published in Croatian by the Deutsche Welle in 2012.

    Josipovic's departure may thus have the side-effect of accelerating developments on the legal front in the various pending criminal lawsuits.

    "It ain't over yet folks ..."


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