Europarl Hearings 2002-11-07 and 26

The hearing was based on the unaltered McCarthy working papers which we had criticised already in June. These working papers defined the questions to which respondents were to answer. They attempt to portray the patent critics as a "vociferous" minority whose arguments "many" do not agree with and who should bear the burden of proof.

see MEP Arlene McCarthy 2002-06-19: Report on the CEC/BSA Directive Proposal

The hearing date was fixed only a few weeks in advance and only 5-10 minutes of speaking time were planned for each speaker. Moreover, the speakers were exhorted to use their scarce time to respond to legalistic questions which implicitely propagated the patent establishment's viewpoint and tried to preclude any debates on what the directive should achieve and what is desirable in terms of software economics. Moreover, the hearing was scheduled to start with 5 speeches from known software patentability advocates and the majority was to be put in a minority position with short speaking time.

At the hearing, we distributed a very detailed printed documentation in English, German and French. It is based on the PDF version of our Call for Action with appendices, but with much improved typesetting, thanks to Peter Gerwinski. Europe Shareware brought a letter from Opera Software Inc which supports our position in detail. CALIU brought piles of copies of various CALIU and FFII documents. Industrial patent lawyers brought papers which basically applaud the McCarthy paper and say that in particular the "Some Arguments" section, which minoritises the Eurolinux Alliance, is a "very good basis" for EuroParl legislation.

The message of Hartmut's presentation boiled down to something like

This was not to the taste of all JURI politicians. Dr. iur. Joachim Würmeling, a conservative MEP from Bavaria, showed his displeasure by gestures and audible talking, which, according to some observers, started from the moment when Mr. Pilch was called to speak and persisted until the end, and even by walking out of the room during the speech. Mr. Würmeling later publicly stated that we do not have a counter-proposal. Unfortunately for us, Mr. Würmeling is the shadow rapporteur for the European People's Party. Würmeling complained about Pilch's "massive accusations", but refrained from examining the substance of these accusations. Würmeling did however display an above-average level of interest in the subject by posing numerous questions about formal law issues to the patent officials and university scholars.

In spite of the bias, irriation and noise, in the end the problems and solution alternatives which the European Parliament is facing did to some degree emerge. The three invited law scholars Michel Vivant (FR), Reinier Bakels (NL) and Albert Bercovitz Rodrigéz-Cano (ES) took a refreshingly objective approach to the problems, and UK software entrepreneur Dominic Sweetman reinforced our position with a very calm speech about the lack of clarity in the propposed directive. The former french prime minister Michel Rocard, who is chairing the Cultural Commission (CULT), cast doubts on the wisdom of the directive by posing five basic questions of political direction, the gist of which was to demand explanations in a language which an intellectual generalist-politician such as Rocard can understand. This was seen by political experts as a warning that CULT, which is one of the commissions which are scheduled to report about the directive project, will take a particularly critical look at the proposed directive.

The EuroParl is faced with the problem of drawing a limit to what can be patented, in particular with respect to computer programs and business methods.

Among the speakers, there was a fair amount of consensus on the following points

1. There are too many "trivial software patents", and the directive proposal does not address this problem. Mr. Hart criticised that the directive may create the impression that it is treating "inventive step" somewhat diffently in software than in other fields and demanded that it be clarified that this cannot be the case, since it would violate Art 27 TRIPs
2. "Business method patents" are unpopular. Mr. Hart and Mr. Bakels demanded that they be explicitely excluded. However, Prof. Vivant warned that the EPO's approach to the EPC has shown that literal exclusions may prove useless, if the excluded thing can be patented under a different wording. Instead, Vivant stressed, it is necessary to create an institutional framework for controlling the EPO.
3. Many of the terms used in the debate are abstract and opaque. This was pointed out in particular by Sweetman, Pilch and Rocard, and Ms McCarthy reaffirmed this impression in her summary and suggested that the debate should be oriented toward example patents. Sweetman said that he had tried for 6 months to learn what EPO and UKPO mean by "technical" and, in particular, to give an example of a software idea which, according to their understanding, could not be framed in such a way that it would qualify as "technical". Many players have furthermore demanded that any legislative proposal be "framed by reference to a series of example patents".
4. The TRIPs treaty obliges us to formulate the rules of patentability solely by means of the concepts of "invention", "technology", and "industrial application". Several speakers suggested a definition of technology along the line of the BGH (German Federal Court of Justice) concept of a "problem solution involving the use of controllable forces of nature" (Rote Taube 1969, Dispositionsprogramm 1976) or similar concepts. Mr. Bercovitz explained that the requirement of "industrial application" means that only those problem solutions are patentable inventions which would usually require an industrial organisation (i.e. factory equipment) in order to be put to work successfully. The patent establishment's speakers mostly opted for circular definitions of technology (e.g. technology = technical solution of technical problem) and demanded that the details should be left to the courts to decide. Mr. Nguyen (UNICE, patent head of Thales) also argued along this line and proposed a sociological distinction as the baseline: i.e. the courts should assess whether an idea for which a patent is sought is typically the work of a "technical" department or of a managerial department. Mr. Bakels expressed his view that no clear distinction is possible within the TRIPs terminology framework, and instead of passing a directive the EP should install a permanent "Patent Observatory" which would study the problems and work out new ways of distinguishing the patentable from the non-patentable.

The Eurolinux Alliance

1. opposes the idea of giving the courts unoverseeable freedom to decide what is "technical"
2. supports all initiatives for building independent institutions for permanent supervision of the patent system (such as the Bakels "Patent Observatory" or similar)
3. suggests that detailed specifications, such as may be proposed by a "patent observatory", be based on the traditional concept of problem solution involving use of controllable forces of nature, at least as long as Art 27 TRIPs is in force.

As Prof. Vivant pointed out, the purpose of issuing a directive could be to

1. clarify the limits of patentability
2. strengthen control on the european patent system by subjecting EPO decisions to the jurisdiction of the European Court of Justice (ECJ)

If the courts are to decide what is "technical", what then is the point of passing a directive?

Does the European Parliament really want to hand over its legislative power to the patent courts?

Wouldn't that grossly violate the constitutional principle of division of powers between legislature and judiciary?

Does the European Parliament really want to place an indeterminate legal concept at the heart of a piece of legislation on which basic freedom rights of citizens depend and which has penal consequences?

Wouldn't that grossly violate the constitutional principle that state organs may not restrict an individual's basic rights by reference to indeterminate legal concepts (as found e.g. in the German Basic Law)?

Does the European Union really want to grant European citizens a lower standard of legal security and protection of basic freedom rights than is mandated by national constitutions?

The proposal demands of the patent lobby for handover of sensitive legislative competences should ring a bell with all JURI members.

Some patent officials do see a problem here and have a ready excuse. They say (we heard it also at this hearing) that inventions are by definition unforeseeable and that therefore we must put up with the indeterminacy of the concept of "technical contribution" as used in the directive proposal.

This argument does not hold water.

1. It is in contradiction with general knowledge found in patent law textbooks. Gert Kolle pointed out in his much-quoted article of 1977 that the concept of technical invention derives its validity from general principles which are rooted outside patent law, namely in the field of general philosophy of science. This has been implicitely accepted by most patent law writers, including those arguing against Kolle. Philosophical dichotomies such as "matter" and "mind" are very resistant to the change of time and have not been revolutionised by any recent development in science or technology. We have demonstrated that the concept of "problem solution involving controllable forces of nature" as developped by the BGH and other courts can be unambiguously applied to randomly chosen testbeds of contemporary patent applications and yields both clear and adequate results.

   As the BGH pointed out ludicly in its Dispositionsprogramm decision,

   • The involvement of forces of nature remains the only possible criterion for reliably limiting what is a technical invention.
   • The criterion is sufficiently general to allow the inclusion of new technologies, such as biotechnology
   • Giving up this criterion means giving up all limits to patentability and thereby pushing the patent system onto an adventurist course.
2. Even if the concept of "technical invention" could for some reason be considered unstable and unsuitable for codification in law, then such a consideration could not serve as a valid excuse for empowering the patent establishment's courts to set the rules. Instead the Parliament could set them by means of literal exclusions and sets of examples and revised them from time to time. The Parliament could entrust a "Patent Observatory" with some of the related work.

The Dispositionsprogramm Decision also points out a dangerous popular error of the patent world which already existed in 1976 and which was predominant among the patent establishment representatives at this hearing:

The patent lawyers sent by UNICE and EICTA as well as some of the patent office people committed the popular error against which the German patent judges had warned: their speeches suggested that at least all "billion-dollar industries" must be regulated according to the very set of game rules which they learnt in law school. We believe that this is an impermissible and dangerous ideologisation of patent law.

Prof. Vivant correctly stressed in his speech that laws are not emanations of some universal truth but must be tested by their applicability to practise.

Mr. Pilch said at the hearing that the UNICE and EICTA patent lawyers represented an unenlightened, ideologised version of patent law. They have apparently not read much of the legal literature, of which salient quotations are found in appendix F of the FFII documentation which was distributed to the MEP's at the hearing

The patent lawyers from EICTA and UNICE misrepresented their member base and made false statements, partially against their better knowledge, e.g.

Mr. Nguyen failed to mention that ZVEI, a member organisation of UNICE, has sent a letter to UNICE and to the German Ministery of Justice in which it explained that its members, after further discussions, expressed fears that the proposed directive would lead to a proliferation of patents on broad and trivial concepts and that a strict definition of "technical invention" is needed in order to prevent this from happening. Mr. Nguyen not only failed to mention these misgivings of UNICE members, but actually argued in the opposite sense. Moreover Mr Nguyen and Mr Hagedorn both failed to mention that many of their constituents (such as VDMA in Germany) have deliberately abstained from expressing an opinion, because they are too divided. At Hagedorn's own organisation BITKOM in Germany, the pro-softpat decision was taken by 7 patent lawyers of large corporations, among them Mr. Hagedorn, in a closed session where only one SME representative was present (and protested). Mr Hagedorn moreover misrepresented a study of the German Ministery of Economics as showing support of German companies for software patents. In reality, this study shows that software patents are unpopular among software companies in Germany and that patents are not promoting innovation and are likely to lead to further concentration and disappearance of SMEs, if the current trend is not reversed.

Mr Nguyen cited Mandy Haberman, a small entrepreneur who has filed software patents, as an example of successful use of patents by small companies. Sylvain Perchaud pointed out that Haberman is a supporter of Europe Shareware (and thereby also Eurolinux) and shares our positions on software patents. Ms Haberman has meanwhile confirmed this in a letter to the European Parliament. Indeed other Eurolinux members also posess some software patents but still believe that general patent disarmament would serve us better.

Mr. Hagedorn said that "software is a multi-billion dollar industry with expected growth-rates of 10% p.a. during the next years" and that "like in any other industry" such growth can only be sustained if patents are available. This statement is in contradiction with all economic studies and with the experience of SAP, the company in whose patent department Mr. Hagedorn has been working since 1997. SAP grew to become a large company completely without filing a single patent until 1997. Moreover, SAP's board chair Prof. Hasso Plattner has publicly explained at a hearing in Germany that SAP would not need patents to protect its investments and is collecting them only as a defensive weaopon to prepare for litigation in the US.

Also, the claims about miraculous growth-rates in the "software industry", which echo the "explanatory memorandum" of the CEC/BSA directive proposal, are in marked contradiction to more realistic estimates published by Bitkom (Hagedorn's EICTA member organisation) in recent months.

Dai Rees, software patent specialist of the European Patent Office (EPO),said that the EPO has been wrongly accused by some people of breaking the law. In reality, Rees said, the EPO has only been looking at court decisions of member state courts such as those in Germany and Britain and tried to bring its own jurisdiction in line with these courts.

This is untrue. The EPO began granting software and business method patents against the letter and spirit of the written law with the Vicom and Sohei decisions in 1986. For many years no other European court was willing to follow the EPO on this adventurous course, and German law commentaries such as Benkard did not hide their doubts as to the legality of these EPO decisions. Several high national courts explicitely ruled against the new EPO line. In a Swedish case, the patent applicant later appealed to an EPO board to have his patent granted against the verdict of the Swedish court. In 2000 the German Federal Court finally, under strong pressure from the patent law community which was meanwhile planning a change of law, caught up with the EPO, only to shy back again in a decision of 2001. Rees of course knows that the EPO's jurisdiction on software patents is widely considered "contra legem" by the law world and that this is the main reason why the EPO asked for a change of Art 52 EPC in 2000 and why its allies at the European Commission have been calling for "clarification" and "harmonisation" by means of a directive.

see Moses, the Ten Exclusions from Patentability and %(q:stealing with a further ethical effect)

Moreover, Rees dismissed as "fearmongering" Pilch's assertion (partially cited from a recent thread on the Linux Kernel developpers' mailing list) that the EPO has granted thousands of memory management patents which, if taken seriously, would make programming of the Linux kernel very difficult if not impossible. Perhaps the EuroParl might find it worth studying who is right on this question.

After the hearing, the speakers were invited by the European Internet Foundation to a dinner with a few MEPs and public servants from the European Commission (Howard, Noteboom). The two patent critical speakers, Dominic Sweetman and Hartmut Pilch, were placed at a table together with people from Siemens, Alcatel, SAP and the EPO and had a lively philosophical discussion there. The politicians were surrounded by the Brussels representatives of large companies -- those who can afford to pay the high membership fee and to have a permanent representative in Brussels. A Microsoft representative was placed at the central table with McCarthy. The general secretary of EIF, an American named Peter Linton, made a short introductory speech. He described the mission of EIF as one of promoting understanding of information policy issues among EU politicians. However it seemed that most EIF members are not closely related to any Internet efforts such as those of the Internet Engineering Task Force (IETF), whose European branch ISOC-ECC is a signatory of our Call for Action, or those of the W3C, which has been struggling with software patents for years. Ms McCarthy, who is a "governor of EIF", stressed in her remark that the MEPs in EIF do not always follow the political advice of the corporate members. "The role of MEPs in EIF seems to be limited to receiving honorary titles and enjoying lavish dinners but for the rest of the time not listening to us", one corporate diplomat at our table joked.

Most of the permanent Brussels representatives of companies knew the business strategies of their company and its position on patents fairly well. Some of them are even patent lawyers. In general the positions consist of rather undifferentiated beliefs in the necessity of protecting "intellectual property". They are intrigued by the phenomenon of "opensource" and not necessarily hostile to it, but they tend to naturally ascribe all opposition to software patents to this phenomenon. It seemed that while it would be possible for us to reach a consensus with some of these corporate representatives, that still might not change very much, since they are only diplomats who hand over what they receive from their company's headquarter. And at least at the headquarter of Siemens, the patent people remain dominant, although many Siemens developpers and executives support the Eurolinux positions.

During our time in Brussels we met several more of the MEPs who are involved in the decisionmaking, of which some were very understanding and supportive of our positions while others were more or less prejudiced against us. Wherever we went, we found that UNICE,EICTA etc had already been there several times.

This and the experience at the EIF dinner gave us an impression of what real lobbying work looks like. If we were able to do 1/10 of what our adversaries are doing, we might easily win the battle in the European Parliament.

A more extensive and hearing is being organised by the Green Party Group in the European Parliament. Among the speakers are Brian Kahin, Pierre Haren and Richard Stallman. There will be more time available to go more deeply into the problems faced by the EuroParl and the solutions which we propose. Hopefully it will not be the last hearing but a series of events which lead to an institutionalised framework for bringing the European patent establishment under legislative control.