While patents and other intellectual property rights are sometimes characterised as incentives, acting as a motivating force for investment and innovation, this Kat has long recognised that there are few, if any, incentives more powerful than money. The prospect of gaining money leads people to commit acts that are illegal, such as robbing banks and peddling counterfeit goods; it encourages them to perform rituals and practices that are often irrational, like gambling with coin-operated machines that have been programmed to return just 70% of what they are fed, or like buying unnecessary products in bulk in order to achieve greater savings. Money also pushes us towards better paid positions and away from less well-paid ones, when the opportunity arises.
The piece that appears below, "Not quite the new Robin Hood", was published in the January/February issue of The Patent Lawyer. It deals in brief with the European Patent Office's controversial decision to share out a large sum of money, effectively its operating surplus, with its employees. So far as this Kat is aware, a dividend of this nature is unprecedented. It has certainly caused disquiet even among recipients, though no reports have yet reached the ears of this blogger to suggest that EPO employees have been refusing the donations or handing them back.
Following this post, this Kat will address a second issue relating to the pay of patent office staff: the unrest which is currently affecting the UK's Intellectual Property Office over the remuneration of patent examiners.
Not quite the new Robin Hood
Robin Hood was a heroic outlaw in English folklore. Skilled with a sword and fabled archer, he might have earned a lasting reputation for that expertise alone. Yet his fame, the best part of a millennium after his reputed life, rests on something quite apart from that: the name Robin Hood is synonymous with the controversial practice of stealing from the rich and giving to the poor.
The suggestion has not yet been made that the European Patent Office (EPO) is following in the footsteps of that celebrated outlaw, yet its decision to channel some 55 million euro of “profit” into the pockets and the pensions of its current and former employees invites comparison. True, not all of the businesses that use the services of Europe’s premier patent-granting office are rich: many are small and medium-sized industries, including micro-businesses, for whom anything that involves a patent —applying to get one or opposing someone else’s — can sorely stretch cash flow and threaten solvency. Nor are all of the recipients of this surprise bounty poor: while EPO staff are not generally regarded as part of the international jet-set, their pay is not ungenerous, their working conditions not uncongenial and their expectation of a constant flow of work not inconsistent with the organisation’s monopoly status as a supplier of various European patent-related services.Does it pay to be a patent examiner? Part II: click here
I find it strange that a public sector body such as the EPO should be allowed to retain and distribute in this manner the excess of income over expenditure. While it is laudable that any public institution should operate in such a manner as to live within its means, it is nonetheless a public institution: it carries out administrative and judicial functions which have been delegated to it by its member states: it is not a private sector trader that is accountable to its shareholders.
Paradigm for disposing of unwanted cash?
Let’s look at it another way. Let’s say that a country’s defence ministry had a good financial year, keeping within its budget and even generating some income through the licensing of the use of its own technology in the manufacture and export of weaponry to friendly nations. Who would not be surprised if it was suddenly announced that the surplus of income over cost was to be distributed among the ministry’s employees?
Decisions such as this could never happen at the national level, particularly in democratic countries in which public sector transparency means that there is the chance to exercise meaningful real-time control over any institution’s decision-making processes, and in which it is feasible to call institutions to account. Sometimes there is too much control; one feels that many a national patent office would thrive and provide better, more user-friendly services if given a greater opportunity to determine how its income was spent. But in the case of the EPO it is almost a case of an organisation which has so many masters —each of which has so many other important issues to distract it — that it is to a great extent de facto autonomous.
Sadly, the money which the EPO is allocating so generously does not consist solely of pennies from heaven or income that has been derived from outside the circle of innovators, developers and technological visionaries: it is all money which might have come in useful when commercialising a new concept, prototyping a new device, carrying out further research or any other potentially beneficial activity. When the Office for Harmonisation in the Internal Market (OHIM) found itself holding a money-mountain following years of levying excessive fees that were not of its own choice, the courses of action that were considered included making refunds to users of the Community trade mark system, financial support for national and regional trade mark offices, improvements in OHIM databases and informational services and other user-oriented objectives: the idea of sharing the money among OHIM’s employees or paying it into their pension funds, in part or whole, was a non-starter.
The EPO pay-out has not met with universal approval even among its intended beneficiaries. For some, the exercise is fundamentally misguided: remuneration should be based upon duties, qualifications and responsibility, not upon the random possibilities of end-of-year bonuses. Others are uncomfortable at the thought that the payment carries with it an implicit message as to what sort of office the EPO’s rulers would like to see. Yet others cavil at its flat-rate egalitarianism. In short, however well-intentioned and whether justifiable or not, the payment has been a shabby exercise and should not be repeated.