Software Patents in the EU
A Perspective on the European Computer Implemented Inventions Directive

by Edward Griffith-Jones, Tom Chance

Bill Gates wrote, in his Challenges and Strategy memo of May 16, 1991, that "If people had understood how patents would be granted when most of today's ideas were invented and had taken out patents, the industry would be at a complete standstill today. The solution to this is patent exchanges with large companies and patenting as much as we can." Microsoft has since filed thousands of patents both in the European Union and in the U.S.

Whereas software patents are unfortunately legal in the U.S., they still have very questionable validity in Europe. Though they're not legally enforceable, over 30,000 patents on software have been granted. The Computer Implemented Inventions Directive (CIID), which seeks to clarify the issue, is still being fought over in the EU and may or may not result in legalizing them. For small and medium enterprises (SMEs) and in particular, free software projects, there is much to lose.

What Are Software Patents?

We want to first outline what we mean by software patents. The argument over the directive revolves around the question of whether or not we should be able to patent physical inventions that use software--such as a traffic light system--and whether or not we should be able to patent software itself. Most anti-patent groups accept that the former should be patentable, while the latter shouldn't. If it were, then inventions such as the progress bar would be patentable.

Patents were originally introduced to protect concrete and physical inventions. Any type of state protectionism is a contract between the creator and society, under which society abridges certain freedoms in return for increased productivity through financial compensation. Specifically, patent law gives inventors an exclusive right to new technology for 20 years in return for publication of the technology's specifications and for use of the technology in the monopolist's products. So, if allowing patents wouldn't lead to increased productivity, and they wouldn't benefit the whole of society; they would be a bad idea.

While traditional patents were for concrete and physical inventions, software patents cover inventive ideas. An example that the Foundation for a Free Information Infrastructure gives is that, instead of patenting a specific mousetrap, you patent a "means of trapping mammals" or a "means of trapping data in an emulated environment."

This is not appropriate for software development, where innovation occurs rapidly, can be made without a substantial capital investment, and tends to involve creative combinations of previously known techniques. For SMEs (who make up the majority of the industry) and free software projects, patents on pure software would be a disaster. But for some big businesses, they are a lucrative prize. With our economy increasingly dependent on knowledge, there has been a large movement towards increasing protection on information with copyright, patents, trademarks, and other legal means, misleadingly grouped together under the term "intellectual property." Patents are another way for some big businesses to "protect" software in their interests.

Arguments Against Software Patents

One of the main arguments against software patents in Europe is that they will stifle innovation, especially for free software developers and SMEs. Though there hasn't yet been a concerted attack against free software using patents, there have been many attacks on SMEs. If any big business needs to remove competition and is failing to do this by beating them on price, quality, or free licensing, then they can simply attack them with their patent portfolio. Even more worrying are the so-called "patent trolls" like Acacia Technologies, which "develops, acquires, and licenses" patented technologies, using them to extract licensing fees out of software developers, but who do not actually produce any software. The company is opening an office in Europe in the spring with the intention of demanding royalties on patents.

Since software, especially free software, is usually based upon a huge number of sub-programmes and ideas taken from other programmes, it would be extremely difficult to avoid patent infringement. However, under the U.S. system, SMEs have been restricted due to large companies building up patent portfolios that they use to reap billions in licensing revenues from other businesses. The idea of selling products over the Internet has already been patented in the U.S., and Amazon used its "one-click buying" patent to famously sue Barnes & Noble in the late 1990s.

Examples of currently granted European Patents are EP803105 and EP738446. These patent the idea of selling objects over a network using a server, client, and payment processor, or using a client and a server. In other words, these are patents on selling products over the Internet; clearly a lot of software would infringe on these overzealous patents.

The time and money spent on patent filing, prosecution, maintenance, litigation, and licensing (which SMEs cannot afford, and which have caused many to fold or be bought out) could be better spent on product development and research leading to more innovation. Surely, software companies would prefer to live with the pressure of having to improve and innovate constantly instead of having to deal with software patents? This is how it works under copyright, which already prevents competitors from merely copying software. This is also how it has worked up till now, and we have managed to develop the Internet, operating systems, and other software without patents.

For the free software community, which eschews patents both on pragmatic and ethical grounds, they represent an even more worrying threat. Gestures from companies like IBM won't ever fully protect us from attacks. Free software can only guarantee its safety in an environment without patents, in which the only other threat is copyright infringement, which is easy to avoid--just don't copy proprietary code.

European Union

In September 2003, European Parliament voted though a raft of amendments to the CIID, which ensured that patents on pure software and business methods would not be allowed. However, under the co-decision rules for European lawmaking, the European Parliament, Commission, and the Council all have to agree on the text of the directive before it can come into force. The full process is best explained here.

The current Council document, which was officially adopted yesterday (March 7), leaves loopholes that could be (and already have been) exploited to allow patents on pure software. Specifically, the Council document took amendments out of the Parliament directive, or weakened them, on issues such as interoperability and technical contributions in software.

For example, article 4a of the Council document states that "A computer program as such cannot constitute a patentable invention. Accordingly, inventions involving computer programmes, whether expressed as source code, as object code or in any other form, which implement business, mathematical or other methods and do not produce any technical effects beyond the normal physical interactions between a program and the computer, network, or other programmable apparatus in which it is run shall not be patentable."

However, article 2a of their document defines the term "computer-implemented invention," which the document uses later to describe inventions that are patentable. It states that "'computer-implemented invention' means any invention the performance of which involves the use of a computer, computer network or other programmable apparatus, the invention having one or more features which are realised wholly or partly by means of a computer program or computer programs."

Confused? You should be. Some recitals in the proposal are phrased in such a way that they seem to indicate restrictions in patentability, while many of the legally binding provisions in the articles confirm the 30,000 software patents already approved by the European Patent Office and leave the door wide open for further patenting of software. The Parliament text of 2003 made the distinction close to watertight.

Clarity Needed

Related Reading

Understanding Open Source and Free Software Licensing
By Andrew M. St. Laurent

The CIID was initiated because there was legal uncertainty with software patents in Europe. There will continue to be legal uncertainty until a clear and concise directive is put into force. A clear directive stating that software cannot be patented would also send a strong message to other nations and trade areas that already allow them, or that are considering it. Politicians in America are said to be watching the European process attentively.

The European Parliament recently voted to restart the entire software patent directive because the Council ignored most of the Parliament's amendments. However, even though the Parliament is the only directly elected body in the legislative process, the Council ignored this request and adopted their position against their own rules of procedure.

The directive will now return to Parliament for a second reading. Though MEPs can retable their amendments, each amendment and the final document must receive a majority vote, which can be difficult when many MEPs don't turn up to vote at all. Our only hope is to lobby MEPs with a renewed vigour to ensure that they can pass a good version of the directive. If more programmers and SMEs approach their MEPs and go beyond the single letter, we may yet win.

Although no directive is better than a bad directive, it would also leave companies free to patent as much as possible, either for protection purposes or with the intent of making future profits from the patents. What is needed is a software patent directive that makes it clear what is and what isn't patentable. Parliament will only listen if more software developers get involved with groups like the FFII and the Free Software Foundation Europe and make their voices heard.

Edward Griffith-Jones has a background in political hacking, from environmental issues and the Trade Justice Movement to digital issues such as software patents and Creative Commons.

Tom Chance is a philosophy student, free software advocate and writer. He has worked in various guises with the KDE Project, the Association For Free Software, the Foundation for a Free Information Infrastructure and a new Creative Commons project, Remix Reading.

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