EPO crisis: what actually happened at the December Administrative Council meeting? Part I

Merpel has been rather busy this week, but has finally had the chance to peruse the Minutes of the European Patent Office's Administrative Council meeting from last December, which came her way recently.  Regular readers will recall that this meeting occurred just after the "house ban" controversially imposed on a member of the Boards of Appeal, so was one of the seminal moments in the recent history of the EPO  (see the timeline here if you need to refresh your memory).

In this post, Merpel seeks to report parts of the President's report and the responses thereto.

The President gave an oral report on developments at the Office since the last meeting, updating the information presented in his activities report (CA/88/14) on the basis of the most recent data. 

DG 1 workload and production 

"Hi-ho, hi-ho! We work for EPO ..."

According to the figures available at the end of November 2014, the year to date had seen filings continue to grow, for both international applications under the PCT (+4% on the same period in 2013) and European filings (Euro-direct applications and PCT filings entering the regional phase), up 2.2% on 2013. Overall, the Office expected the total number of filings in 2014 to be up some 3% on the previous year and roughly 1% above budget. At the end of November, the number of requests for both search and examination received since the start of the year was up 1.6% and 2.8% respectively on the same period last year, corresponding to an increase of 2.1% in DG 1's overall workload compared with 2013. Examiner productivity at the end of November was 3% higher than in the same period a year earlier. A number of targeted measures had been taken to address the various issues referred to at the previous meeting that had resulted in fewer patent grants than anticipated (the increased search workload, changes in applicant behaviour and the waning effect of measures that had caused an explosion in patent grants in recent years). The Office was currently predicting a total of 65,000 patent grants for 2014, down 3% on 2013. However, it was important to note that in roughly 33% of cases the patents were published within 36 months of filing. 

Quality 

The updated Quality Roadmap approved by the Council in June testified to the importance of quality in the Office's overall strategy. A major objective had been achieved with the recent ISO 9001 certification of the quality management system governing the Office's patent grant process. As the first of the big five IP offices to receive this certification, the Office would continue to play a leading role in quality at international level. In addition, significant progress had been made on defining individual quality objectives for staff, which could now be implemented as from January 2015. 

Internal audit 

The Office's Internal Audit unit was absolutely vital and regularly underwent independent external assessment to ensure compliance with international professional standards. The most recent assessment, carried out in October by the German institute for internal audit, had been extremely positive, leading to official certification that Internal Audit complied with all international quality standards. 

Human resources 

Sick leaves ...

In addition to the major career system reform on the agenda for the present meeting, a salary-adjustment proposal had been drawn up, applying the method approved by the Council in June. The new social democracy rules had likewise been approved at the June Council meeting. The new General Consultative Committee had met four times since September. Absenteeism due to sick leave had continued to fall (down by 20% since October 2011 ). Disappointingly, the new strike regulations had been applied several times, showing there was still room for improvement in staff-management relations at the Office. 

[...] 

The Netherlands delegation thanked the President for the positive results he had just reported, and reiterated its support for his efforts to modernise the Office. The reforms undertaken were difficult and resistance was inevitable, but it was vital for the President to stay the course, showing the same determination and courage as hitherto. For the reforms to succeed, all parties concerned - EPO management, staff, the Council - had to play their part, assume their respective responsibilities, and trust each other. That said, the Netherlands delegation was concerned about the recent proliferation of incidents, especially in DG 3. Without wishing to pre-empt the closed-session discussion due to take place later on that matter, it wanted to put on record its concerns about the matter, how it had been handled. It was not sure that the EPC had been respected, given DG 3's special institutional position. 

The UK delegation congratulated the President on the significant progress he had just described, particularly on quality- including the recent ISO 9001 certification -and international co-operation. 

The Croatian delegation echoed the congratulations of the UK and Netherlands delegations, though it shared the latter's concerns about the social climate. It hoped that eventually a way out of these difficulties would be found. It also thanked the Office for its support during the unitary patent system workshop in Croatia. 

The Swedish delegation said it could only endorse the compliments the UK delegation had paid to the President for the progress made and success achieved. At the same time, it shared the concerns expressed by the Netherlands delegation about the social climate. The situation was undeniably very bad, and not just since recent events in DG 3. 

The Turkish delegation said it too was happy with the excellent results achieved across the board on implementing the strategies outlined in the different road maps. A close eye had to be kept on the extremely positive production figures, to ensure they remained sustainable whilst further improving efficiency and reducing backlogs. It also welcomed the work being done under the new co-operation policy, which could only help consolidate the patent system within the EPN. 

The Italian delegation also congratulated the President on the excellent results presented in his oral report. It was particularly pleased to note that Internal Audit's compliance with all relevant international professional standards had been officially certified. 

The Polish delegation thanked the President for his report and congratulated him, his management team and all EPO staff on the outstanding results achieved so far, and particularly on obtaining ISO 9001 certification for the quality management system. It was also pleased with the progress made on implementing the Co-operation Roadmap. It thanked the Office for its help in organising and hosting the patent information conference in Warsaw. The co-operation between EPO staff and their counterparts at the Polish office had been exemplary, and the conference had been a great success. 

The Serbian delegation likewise congratulated the Office, its President and all EPO staff on the excellent results achieved across the board. That said, it shared the concerns voiced by a number of other delegations about social tensions, especially in the light of recent events. 

The Portuguese delegation said it too was very pleased with the Office's continued success, and expressed gratitude for all the work being done under the co-operation policy, especially the support available for EQE candidates, which was very useful for a country like Portugal. Like the other delegations, however, it was concerned about the social tension at the Office. 

The President thanked the delegations for their congratulations and support. The social climate at the EPO was indeed fraught. Obviously, the problems should not be underplayed, but nor should they be given too much weight. Essentially they stemmed from the difficult reforms under way, and which were probably bound to encounter resistance. The answer was to keep on explaining them. But the very low strike figures showed that resistance was confined to a unionised minority that was closed to any discussion. He intended to keep his door open for dialogue, but there could be no question of allowing a minority to veto the implementation of the social agenda approved by the Council. And the most important thing to bear in mind was that the social unrest had not affected the Office's performance, which had in fact continued to improve in 2014. To his mind, the fact that EPO staff continued to produce excellent work in terms of both quality and quantity clearly showed that the social situation was nothing like as bad as a vocal minority claimed. 

The Council noted the President's oral report and congratulated him, his management team and all EPO staff on the Office's outstanding performance. It reiterated its full support for the President's implementation of reforms aimed at modernising the Office and increasing its efficiency.

Readers from European Patent contracting states may wish to note how their own delegations responded to the EPO at this critical time.  Bearing in mind that the delegations to the Administrative Council are effectively the legislature of the EPO and their primary constitutional function is to act as a check on the executive (namely the President and his management structure).

The next significant part of the meeting has already been published by the EPO, but bears repeating here.  Merpel notes that at the next AC meeting, the Administrative Council will have to decide what to do about this disciplinary case, since the below suspension is only until the end of the month.

Disciplinary case 

The Council discussed the disciplinary arrangements applicable to senior employees appointed by the Council under Article 11(1 ), (2) and (3) EPC and, noting its obligations under Article 11(4) EPC, agreed to set up a Disciplinary Committee. 

The Council took this opportunity to reiterate its full endorsement of and support for the principle of independence of the members of the boards of appeal, as specifically set out in Article 23 EPC and generally embodied in internationally recognised principles of judicial independence. 

Cat o' nine tails ...

On a proposal from the President, the Council addressed and carefully considered a particular issue concerning alleged misconduct by a Council appointee under Article 11 (3) EPC. As a precautionary and conservative measure, without anticipating any further steps which may ensue, the Council unanimously decided to suspend the person concerned from active duty on full salary until 31 March 2015. The Council requested the investigation to be completed as soon as possible, in order to allow it to decide on the next steps. The Council expressed its concern at an incident unique in the history of EPO.

The head of the German delegation referred to Article 23 EPC, and to the necessity to involve the Enlarged Board of Appeal as soon as possible. [Update 15:00 - Merpel regrets that these two lines were inadvertently omitted from the original post and thanks the kind reader who alerted her]

In Part II, Merpel will report the part of the meeting dedicated to the New Career System, the implementation of which is a major cause of the social unrest at the EPO (although it is not just that - the strike regulations, the investigation guidelines, and the sickness and invalidity reforms are also playing a part).

The comment facility for this post has been disabled, since it's only the first part of a two-part feature.  Please post all comments on this matter on the Part II post, which follows.