New patent law on software threatens innovation

By EDRi · January 29, 2003

Current European patent law does not allow for patents on software, much to the dismay of large IT-companies like IBM, Intel and Cisco. In February 2002, The European Commission published a draft patent law directive that will be dealt with in a co-decision procedure with the European Parliament.

The proposed text clearly reflects the strong differences in opinion, but fails to reconcile them. The new law does allow for software patents, but not in all cases. Traditionally, innovations can only be patented if they are technical inventions. Therefore, the definition of ‘technical’ is essential. Under the proposed new law, all ideas are treated as inventions, but will only be awarded a patent if they are not obvious. The invention must contain a ‘technical contribution’ to make it non-obvious. In the USA, patent law also allows for patents on business methods (like the Amazon One-Click case), on health and education methods. In spite of the reassuring press release by the European Commission, many open source advocates fear this will also be the case in Europe, since novelty or industrial applicability are no longer required.

Overall, the initiative seems to legitimise the current practice. Because current patent law does allow for software patents if they form a structural part of a device, the European Patent Office has already granted 30.000 patents on computer-implementable rules of organisation and calculation (programs for computers).

Since 1999, open source advocates, companies and NGO’s have joined forces in the Eurolinux alliance, warning about damage to innovation and competition, and loss of freedom of expression. Furthermore, they argue, software patents can easily be used to bar citizens from developing their own forms of communication.

Most software is a creative recombination of existing abstract rules (algorithms). Granting patents on some of those rules will cause problems for many developers, especially small ones. Large companies can easily afford the legal fees to register patents, and the legal fees to seek compensation from smaller companies using ‘their’ algorithms.

Back in July 2000, the renowned American law professor Lawrence Lessig warned about the lack of any economic proof of the benefits of patent law in what he called Europe’s ‘me-too’ patent law. Quite to the contrary, software patents have actually harmed investment in software research and development, according to a 1999 study by technologist James Besson and Harvard economist Eric Maskin. Lessig recommends this study as a powerful model to show why in this type of industry – where innovation is sequential and complementary – patent protection will slow innovation, not speed it.

The proposal is currently under discussion in the parliamentary committee on Legal Affairs and Internal Market. Lobbyists crowd in front of the door of rapporteur Arlene McCarthy from the UK labour party. Opinions will also be given by Elly Plooij-van Gorsel from the Dutch liberal party on behalf of the committee on Industry, External Trade, Research and Energy and by Michel Rocard from the French socialist party on behalf of the committee on Culture, Youth, Education, Media and Sport. McCarthy is expected to present her report on 18 March.

Draft software patent law

Excellent overview of issues in English, French and German through the german FFII, including a ‘European Software Patent Horror Galery’

Eurolinux Alliance

Petition against software patents (in 11 languages)

Europe’s ‘me-too’ patent law by Lawrence Lessig
Financial Times (11.07.2000, no longer online)