Enterprise Papers No 8, 2002
Technology policy in the telecommunication sector
Market responses and economic impacts
The Study was written by a scientist from ETLA (Research Institute of the Finnish Economy) and London School of Economics and is available for download at CEC/ETLA 2002: Technology policy in the telecommunication sector -- Market responses and economic impacts: Introduction.
On pages 28/29 the study discusses patents and copyrights. It finds that patents are generally granted for technical inventions and criticises the extension of patentability to areas where previously only copyright was available.
Thus the study almost incidentally hits a central point of the debate which we can summarise as follows
- Many patent claims cover very general ideas
- Many unsuspicious debatants such as ZVEI und Softwarepatente have found that the concept of invention has been softened and have expressed concern about the CEC/BSA directive proposal's tendency to codify and reinforce this development.
- The debate is suffering from the fact that terms such as "technical contribution" are understood in very different ways by the debatants.
The study ends on page 33/34 with the following Conclusions
Highly tentative conclusions that can be made based on the literature suggest that stronger patent rights may create substantial problems in the telecommunication sector. First, strong patent rights may cause "patent portfolio race". In other words, companies may use patents primarily not to protect their technological invention itself but as instruments with which to trade in order to be able to negotiate access to external technologies. Given the observed entry deterrence strategies of the incumbents, stronger patent rights might provide with them new powerful weapons to defend monopolistic market positions. Thus, stronger patent rights may hinder the development of effective competition in the telecommunication markets. Patentability of principles or ideas might further result in strategic patenting against compatibility. This could be particularly lethal to the content industry and further to the markets of the future generations of cellular mobile telephones and services. Currently available empirical evidence does not allow us to make definite conclusions. However, it suggests that strengthening of patent rights in the communication sector or extending patent protection to cover intellectual property currently protected by copyright involves great potential risks.
The study also criticses the Community Patent and tendencies for a centralised European patent system as measures which are conducive to the worrisome "stronger patent rights".
The creation of a Community patent and the proposed establishment of a Community intellectual property court suggest that the EU countries are moving towards stronger patent rights.
The risks caused by an excessively broad patenting of software are reinforce by a future Community Patent. One could also count the efforts at building a Universitarian Patent System and Basel II among the strengthening factors.