The European Patent Office: Agent Without Principals?

The European Patent Organisation (EPOrg) is an IO that was set up in 1977 on the basis of the European Patent Convention (EPC, signed in Munich, 1973), and is the main player within the European patent system. It has two bodies, the European Patent Office (EPOff) and the Administrative Council (AC). The EPOff is the executive arm of the EPOrg, and deals with the examination of patent applications, and the granting of European patents, based on which patent protection can be sought by the patentee in up to 44 European countries. The EPOff is supervised by the AC, which is composed of representatives of the EPOrg’s (38) member states. The functioning of the European patent system, and of the EPOrg, has been called into question from many different angles. The criticisms range from discontent with low patent quality and with backlogs in patent examination to ethical concerns about ‘patents-on-life’, and from major accountability/legitimacy problems of the (top management of the) EPOff to fundamental doubt about whether patenting fits the current research and innovation models, especially in emerging technologies such as for example biotechnology. The patent system is however a rather closed system, which is not inclined to take on board criticisms and/or considerations that are relevant to society at large. Patent law is hardly ever changed, amended or updated; the notable exception is the 1998 EU Biotech (or: Biopatent) Directive, which put limits on the patentability of some biotech inventions, for ethical reasons. The European patent system primarily serves patent applicants, who –through patent fees- are the EPOff’s main funders. The AC, which, within the EPOrg set-up, is formally the principal of the EPOff, is composed of heads of national patent offices, which also function at the second tier of the multi-level European patent system, and thus also act as co-or sub-agents of the EPOff. From this perspective, the paper argues that the system suffers from multiple agency issues, which have resulted in too much discretion, and an overall lack of political guidance. First, the paper looks into the rationales for delegation to and within IOs in general, resulting in three different models of delegation: (a) delegation for efficiency, (b) delegation for credibility, and (c) inverse delegation. The various roles of the actors involved (politicians – national civil servants – international bureaucrats) are discussed as well as the institutional fabric best suited for each model. Secondly, these models are applied to the EPOrg set-up and functioning, to bring out mismatches and flaws. Thirdly, the paper discusses the future outlook for the European patent system and changes needed. Finally, the paper concludes by reviewing the relevance of the patent system case for other multi-level delegation practices in Europe, such as the (increased) use of regulatory agencies within the EU.