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EP 03/05/08EP 030508 15:00EP 030508 13:00EP 030508 09:00

2003/05/08 09:00 BXL EP: Software Patents and Small and Medium Enterprises (SMEs)

The European Commission and MEP Arlene McCarthy are proposing to legalise software patents in Europe and argue that this will help Small and Medium Enterprises (SMEs) to protect their investments, to compete in the USA and to grow into large companies. This claim is based on references to "evidence" from "studies". However neither the producers of the alleged evidence nor the SMEs themselves have been adequately heard by the European Parliament. This hearing, conducted by the fraction of Greens/EFA, tries to provide the opportunity.

Time and Place

Thursday 2003/05/08 09.00-12.30

Please be at the Parliament entrance 08:30 for the admission procedure!

European Parliament

ASP (Spinelli Building)

01G2 (Salle Petra Kelly)

Simultaneous interpreting between all European languages is available for this Hearing.


The Greens/EFA are holding a hearing 09:00-12:00 May 8 in European Parliament (room 1G2) in Brussels. A number of well-known innovative software SMEs, including MySQL, Galeco, Ilog, and Opera, will express their views on software patents. Richard Stallman will speak about the effect of software patents on SME developers, and key researchers who have participated in Commission-funded studies will explain what the research shows.

Software are currently protected by copyright but there a European directive (com 2002-092) has been proposed that would legalize patents on software, as is the case in the U.S. Many Members of Parliament believe that the patent system is not suitable for software, but rapporteur Arlene McCarthy (UK, Labour) favors patents for software. Others believe that SME issues have not yet been properly taken into account and that the costs software patents impose warrant further research and deeper analysis before Europe is locked in.

While individual patents theoretically provide protection for innovators large and small, in practice the easy availability of patents creates a numbers game that favors large established companies with patenting over SMEs. SMEs fear that legalisation of 30,000 software patents issued on a shaky legal basis by the EPO (with many more on the way) would subject them to ever greater risks, especially since large companies in the U.S. have been setting up licensing operations designed to maximize returns to their patent portfolios. Recent hearings held by U.S. competition agencies show that intensive patenting in the ICT sector has made inadvertent infringement commonplace.

Research also shows that developers believe that patents will adversely affect the future of open source software. In fact, one survey by a proponent of software patents shows that fear of inadvertent patent infringement is a substantial deterrent to corporate use of open source software. Developers generally believe that copyright is well-suited to encouraging software development, and many worry that patents will undermine the confidence and certainty that copyright provides.

The presentations and discussion with MEPs will cover the range of costs and benefits SMEs see in software patents. Software professionals and developers with an interest in the question are urged to attend. Related events around the hearing include:

  1. "Software PatentsFrom Legal Wording to Economic Reality" will take place at the Dorint Hotel in Brussels all day on May 7 and the afternoon of May 8. The symposium will address the many legal, technical, and economic aspects of software patents -- beyond their impact on SMEs, the subject of conference in the Parliament. It will be keynoted by Professor Lawrence Lessig, author of "Code and other Laws of Space" and "The Future of Ideas". Commissioner Mozelle Thompson of the U.S. Federal Trade Commission will also speak, and the panels will offer a mix of academic, patent practitioner, industry, and policy perspectives. This conference is co-sponsored by FFII/Eurolinux and the Open Society Institute.
  2. On May 8th, immediately after the hearing at the Parliament, a festive gathering "Free ideas for a free world" will take place in front of Parliament at Place du Luxembourg, complete with street theater and a buffet.
  3. For registration an participation, please contact
    Laurence Vandewalle
    lvandewalle at europarl eu int

Program Proposal

This hearing is conducted by Greens/EFA, and they may (have) set it up differently. The following is merely our construction site, on which we develop a detailed programme proposal for possible use by the Greens/EFA.

09.00Politicians' Questions
  • What is the role of SMEs be in this process
  • What the Legislator needs to learn from SMEs and software innovation leaders
MEP Daniel Cohn-Bendit, MEP Elly Plooj Van-Gorsel
09.30Statements of Software Innovation Leaders
  • Richard Stallman (gnu.org)
  • David Axmark (CTO, MySQL, Sweden)
10.00Have Software Patents "Helped SMEs Grow into Sizeable Software Companies"? -- SME Interests and How the EU is assessing them
How have European Commission, JURI and EU Council taken interests of SMEs into account? On what evidence have they relied in building their economic rationale for software patents? What does evidence from US (e.g. FTC hearings) and EU teach us?
  • Dr. Puay Tang (University of Sussex, Author of an EU-sponsored study on the role of patents in SMEs)
  • Dr. Peter Holmes (University of Sussex, economist, co-author or a much-cited EU-sponsored study on software patents)
  • Reinier Bakels (Univirsity of Amsterdam, author of an EU-sponsored study)
  • Mozelle W. Thompson (Commissioner, Federal Trade Commission, USA)
  • Prof. Brian Kahin (University of Michigan)
11.00Short SME Position Statements and Discussion
12.00Political Conclusions
  • How should policy decisions on software property be taken and by whom?
  • Have SME interests been adequately taken into account by the EU's Legislative Process to Date?
  • What needs to be done? Where do we go from here?
  • Daniel Cohn-Bendit
  • Elly Plooj-Van Gorsel
  • Mercedes Echerer
  • ...

Annotated Links

->Research on the MacroEconomic Effects of Patents
Since Fritz Machlups report to the US congress of 1958, a considerable number of studies about the economic effects of the patent system has accumulated. Some studies deal with certain types of innovation (sequential, complex systems) or with special areas such as semiconductors, genetics or computing rules (algorithms, mathematics). None seems to claim that the patent system has a positive effect on innovation in these fields. Most find strong indications for negative effects. Some governmental studies (e.g. by intellectual property institutes and the like) combine such negative findings with a recommendation to legalise software patents.
->Quotations on the question of the patentability of rules of organisation and calculation
Salient quotations from law texts, economic analyses, political documents as well as statements by programmers, politicians and other parties interested in the debate about software patents.
->Patentability Legislation Benchmarking Test Suite
In order to test a law proposal, we try it out on a set of sample innovations. Each innovation is described in terms of prior art, a technical contribution (invention) and a small set of claims. Assuming that the descriptions are correct, we then test our proposed legislation on them. The focus is on clarity and adequacy: does the proposed rule lead to a predictable verdict? Which of the claims, if any, will be accepted? Is this result what we want? We try out different law proposals for the same test series and see which scores best. Software professionals believe that you should "first fix the bugs, then release the code". Test suites are a common way of achieving this. Pursuant to Art 27 TRIPS, legislation belongs to a "field of technology" called "social engineering", doesn't it? Technology or not, it is time to approach legislation with the same methodological rigor that is applicable wherever bad design decisions can significantly affect people's lives.
->McCarthy 2003-02-19: Amended Software Patent Directive Proposal
Arlene McCarthy, British Labor MEP appointed by the European Parliament's Committee for Legal Affairs and the Internal Market (JURI) to report on the European Commission's Software Patentability Directive Proposal (CEC/BSA Proposal), suggests that the European Parliament should enact the CEC/BSA version with additional safeguards to align Europe on the US practise and make sure that there can be no limit on patentability. McCarthy reiterates the CEC/BSA software patent advocacy and misrepresents the wide-spread criticism without citing any of it. Even economic and legal expertises ordered by the European Parliament and other critical opinions of EU institutions are not taken into account. McCarthy's economic argumentation consists of tautologies and unfounded assertions, such as that companies like Ericsson and Alcatel need software patents to finance their R&D, that SMEs need european software patents in order to compete in the USA, that patents are needed to keep developping countries at bay. McCarthy uses the term "computer-implemented inventions" as a synonym for "software innovations". These "by their very nature belong to a field of technology". McCarthy insists that "irreconcilable conflicts" with the EPO must be avoided. McCarthy says she wants to "set clear limits as to what is patentable" -- and that she wants to avoid the "sterile discussions" about "technical effects" and "exclusions from patentability". Yet her proposal stays confined to such discussions. McCarthy demands that all useful ideas, including algorithms and business methods, must be patentable as "computer-implemented inventions". McCarthy proposes to recognise the EPO as Europe's supreme patent legislator and to make decisions of a few influential people at the EPO irreversible and binding for all of Europe.
->Swpat Conference Amsterdam 2002-08-30..1 (Columbanus Symposium)
Hartmut Pilch is attending a conference hosted by Prof. Bernt Hugenholz and Reinier Bakels from University of Amsterdam about the typology of innovations in the software and business method area and the implications of various rules for defining what is patentable, including the European Commission's recent proposal for a directive and hopefully also our widely supported counter-proposal.
->Information Economy and Swpat Conference Paris 20020610-1
Institut Français des Relations Internationales (IFRI.org) and Center of Information Policy Research at Mariland University (CIP.umd.org) are organising a transatlantic conference on information economy and in particular on the limits of patentability as well as the problems in neighboring areas such as database exclusion rights and copyright. Hartmut Pilch is participating on behalf of FFII and Eurolinux on two of the panels.

[ 2003/05/08 BXL: Software Patents and Europe's Competitivity | 2003/05/08 BXL 15:00 Dorint: The Economic Impact of Software Patents | 2003/05/08 13:00 BXL Luxemburg Square: Free Ideas for a Free World | 2003/05/08 09:00 BXL EP: Software Patents and Small and Medium Enterprises (SMEs) ]

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