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The competitiveness of European enterprises in the face of globalisation - How it can be encouraged
Opinion signed by heads of regional governments all over Europe cautions that the patent system is not universally applicable and in particular should not be extended to software.
Study by Dirk W.F. Verkade, professor of IP law, commissioned by Dutch Ministery of Economic Affairs, published as a book with ISBN 90-5409-267-X. The book's main thrust is that extension of patentability to software is very dangerous and the power copyright in the software business should not be underestimated.
Study on the desirability of software patents ordered by the Directorate General Enterprises of the European Commission, performed by UK researchers among SMEs, large enterprises and research institutions.
Ordered by DG Internal Market from a London-based think-tank of patent lawyers who are well known for their advocacy of software patents. Apparently in reaction to the Eurolinux Petition, the initial lawyer study was renamed to become an "economic impact study" and an economist was ordered to write an economics chapter, which however did not reach the conclusions desired by the Commission. The study was therefore locked away for 6 months until it became a basis of a "consultation exercise" (con00):
There is no evidence that the positive effects stemming from owning software patents outweigh the following deep concerns:
After an unexepected decision of the national governments to refrain from plans to change Art 52 of the European Patent Convention (EPC), the Commission announced another "consultation exercise". Previous consultations had involved only the peer group of the Industrial Property Unit, i.e. about 40 corporate patent lawyers, and asked only questions that were geared to this peer group. The new consultation was designed in the same way, but, due to the higher degree of public attention that the process had meanwhile reached, it received almost 1500 responses from unexpected quarters.
What percentage of participants belonging to the following groups was against software patents:
It appears from this that the governmental patent administrators are even more strongly biased in favor of the EPO practise than the large enterprises and patent lawyers. This is no wonder because the EPO practise was introduced by these people, who represent their governments on the EPO's Administrative Council and in the EU Council's Patent Working Party.
The Commission concluded from the statements of some of a few associations such as EICTA and UNICE, whose patent policy is dominated by patent lawyers of large corporations, that an "economic majority" was in favor of software patents. However 2/3 of the employment and taxes in the software sector come from SMEs, very few of whom have any interest in patenting.
Survey among several hundred companies by Fraunhofer Innovation Research Institute and Max-Planck Institute for Intellectual Property, ordered by patent department of German Ministry of Economics, all with heavy pro-patent bias, yet yielding the following results:
Report of the Dutch Ministry of Economic Affairs of 2001
Study by the Dutch Ministry of Economic Affairs.
The German Monopoly Commission (competition watch organ associated with the ministry of economics) raises concerns about the recent practise of the patent offices and courts of allowing software patents, criticises this practise as being illegal and harmful to innovation and competition.
A report of the French State Commission on Economic Planning published on 2002/10/17 gives figures about the software industry in France (270000 employees, 31,6 bn eur turnover in 1999), sees France's software economy handicapped by proprietary standards and patent dangers and recommends that algorithms and business methods should not be patentable, formats and standards should be exempted and patents for technical inventions that use software should be limited in duration to 3-5 years.
Study by Heli Koski et al from Finnish Institute of Engineering ordered by European Commission's DG Enterprise
The ESC is main consultative organ of the EU, the opinion was approved by plenary vote
The US Federal Trade Commission (FTC) conducted hearings among software companies which showed continued general animosity of the US software industry against software patents. In previous hearings in 1994, large companies such as Adobe, Oracle, Autodesk had expressed strong opposition against the patentability of software. This time, Robert Barr, vice president and head of intellectual property at Cisco Inc, a leader in Internet technology whom many view as a model of modern innovation managment, said:
The time and money we spend on patent filings, prosecution, and maintenance, litigation and licensing could be better spent on product development and research leading to more innovation. But we are filing hundreds of patents each year for reasons unrelated to promoting or protecting innovation.
Moreover, stockpiling patents does not really solve the problem of unintentional patent infringement through independent development. If we are accused of infringement by a patent holder who does not make and sell products, or who sells in much smaller volume than we do, our patents do not have sufficient value to the other party to deter a lawsuit or reduce the amount of money demanded by the other company. Thus, rather than rewarding innovation, the patent system penalizes innovative companies who successfully bring new products to the marketplace and it subsidizes or rewards those who fail to do so.
The final report of the FTC, published in October 2003, comes to the conclusion that the patent system stimulates competition and productivity in some fields (pharma is cited as an example), whereas it tends to harm both in others, especially where software and business methods are concerned. The report expresses doubts as to the wisdom of past court decisions to admit patentability in these areas and proposes a series of measures for repairing some of the damage. The positons expressed at the hearings are summarised as follows:
As one of for "urgent measures for strengthening innovation and economic growth in Germany", a report from Deutsche Bank Research recommends:
Since 1998 the European Patent Office (EPO) has been allowing program claims, i.e. claims of the form
Since 1986 the EPO has been allowing process claims to objects where the only "inventive" achievement lies in data processing and for which therefore program claims would have been more straightforward.
In other words: whenever the allegedly novel achievement could be adequately framed in a program claim, it is not an invention in the sense of the law.
The European Commission's proposal uses the EPO definition, whereas the European Parliament has redefined the term to mean the opposite: technical inventions (engineering solutions involving forces of nature) for whose implementation a computer is used. The Council Working Party has yet another definition which includes both technical inventions and software innovations.
The reference to "forces of nature" is omnipresent in the traditional patent law. It has been codified in the Scandinavian Patent Law treaty as well as in several patent laws of Eastern Europe and East Asia. It appears in most of the decisions against software patentability of German, but also US, French and other courts.
It may be modern to make things easy, but is it also modern to patent easy things?