Industry Readies For Round Two Of EU Patent Directive 19/01/2006 by William New, Intellectual Property Watch 5 Comments Share this:Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Facebook (Opens in new window)Click to email this to a friend (Opens in new window)Click to print (Opens in new window)Prague — Patent-dependent industries that spent heavily for lobbying on a failed directive on the patentability of computer-related inventions are learning from their mistakes as they prepare for the possible resurrection of the issue. Lobbyists attending a Progress and Freedom Foundation (PFF) in Prague on 17 January signalled they will move early on the patent directive issue following the European Commission’s release this week of a questionnaire asking for views on the patent system. Comments received by the 31 March deadline could lead to the formulation of a new proposed directive. “It’s starting again,” said Guenther Schmalz, director of IP for Europe for software maker SAP. “And I hope this time we will be better prepared.” Schmalz, who lobbied on the directive last year, said industry “started very late” last time and will not let it happen again. He told Intellectual Property Watch that industry representatives developed informal networks last summer which are being revived. The networks are specific to each industry but also cut across industries that use patents. Schmalz added that the difficulty in getting cross-industry consensus on specific positions led to favouring informal networks rather than formal coalitions. For instance, companies that make software can have different purposes for patented products. His company is the third largest independent software maker in the world after Microsoft and Oracle, but other companies develop more software than SAP. Siemens has twice the number of software developers that SAP has, but Siemens develops the software embedded in its machines rather than for retail. Schmalz said opponents of the directive had a three-year start on industry. He described the opponents’ arguments and tactics, such as protests and an effective door-to-door campaign to convince parliament members of the problems with the directive. Schmalz called for a “bridge” between positions on the directive, and posed questions to be answered about the need for special rules for the protection of computer-implemented inventions. He identified some areas of disagreement with opponents that will need to be resolved, such as interoperability and whether a requirement that a software patent solve a technical problem would limit frivolous patents. Jonathan Zuck, whose Association for Competitive Technology includes 4,000 large and small companies, said patent quality is “key” to getting support for a directive. Zuck, along with Stephen McGibbon, Microsoft’s representative for Central Europe, and others at the meeting acknowledged a problem with frivolous patents. Zuck said they can never be entirely eliminated, but fears can be lessened by taking the quality problem “head on” and showing it can be addressed. He also said more emphasis should be placed on letting small businesses speak for themselves on the issue. Schmalz also mentioned an effort to develop a European community-wide patent, but said the requirement to put every filing in all 25 EU languages makes it more expensive than obtaining a patent. Zuck said industry “desperately wants” community patents. Despite SAP’s call for a bridge, some meeting participants fed distrust of the directive’s opponents. PFF’s James DeLong asked how the opposition got its funding, and whether it came from foundations. Schmalz replied that it came from open-source software companies. Speaking to the like-minded business audience, Schmalz also said that some industry representatives reported being personally threatened during the debates last summer. Meir Pugatch of the University of Haifa (Israel) and the pro free market Stockholm Network, warned industry representatives that this is not time for a “vacation” in the aftermath of last summer’s defeat. If there is a need to be filled, he said, it will be filled by one side or the other, so industry would be advised to act quickly. Microsoft’s McGibbon said EU Internal Market Commissioner Charlie McCreevy sees the patent directive as “fundamental” to Europe’s productivity and competitiveness. Later, PFF President Ray Gifford said fear of lost competitiveness is an effective argument with policy makers. Schmalz also raised the spectre of Asian software developers taking jobs from Europeans if measures are not taken to improve the European patent system. Highlighting the need for improvements in the patent system, DeLong said that in the United States, each patent application gets about 20 hours of review, but that because of the backlog it takes two years for the decision to come out. Czechs Lean Toward Support for Directive Dana Berova, minister of informatics for the Czech Republic, predicted the discussions over EU software patents “will continue for years.” She made clear that her country backs the patent directive, which she said should not change Czech law. In response to questions, she said the Czech government is not under pressure to oppose intellectual property protections, and that the education of lawyers and others needs to take place to improve the environment for patenting. Berova also said that in the debate over a development agenda at the World Intellectual Property Organisation that smaller economies should not have different levels of intellectual property rights appropriate to their size and conditions. Differing levels of development should be addressed in other ways, she said. Karel Cada, president of the Czech Industrial Property Office, said Czech innovators do not recognise the advantage in obtaining patents for their work, and that the number of patent filings in the country is far below its height in the 1930s. The Czech Republic joined the European Patent Office in 2002 and the European Union in 2004. Cada argued against several concerns that had been raised by opponents of the software patent directive. For instance, he said it would not give patents to pure software, that only technical solutions would be patentable, and that no trivial patents would be granted. 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Benjamin Henrion says 20/01/2006 at 12:31 am I would like to add some corrections and precisions to your article: 1. First of all, many lobby groups that were very active during the debate on EU software patentatility were claiming to “represent” the view of xxxx IT companies. If you take the special case of EICTA or ACT, I have real serious doubts that those organisations have made a questionnaire to their members regarding the position to take on the issue. It is pretty clear that EICTA was not representing 10k companies (otherwise they would had collectect more then the 75 signatures of CEOs to support their position), and I have the same questions regarding ACT. 2. On the financing of the no epatents campaign, numbers of pledges are available here: http://www.economic-majority.com/supporter.en.php?show=all 3. On the argument of “we need EU software patents otherwise Chineese will copy us and kill EU businesses”, I do not see why SAP cannot get patents in EU, make the whole production of software in China and India, and exclude SMEs in their home market in Europe. 4. On the “only technical solutions would be patentable”, nobody at the CEC or EPO or any pro-patent lobby was able to give a definition of what is “technical”. Whitout this definition, displaying a window on a screen is technical, and virtually every software loaded on a computer is “technical”. Reply
Biard says 20/01/2006 at 6:29 pm “Schmalz also raised the spectre of Asian software developers taking jobs from Europeans if measures are not taken to improve the European patent system.” That very much sounds like Fud. Fully dishonnest to say the least. Code produced in Europe can be patent-protected in the countries where software patents exists. Code produced and patented out of Europe can be used here. If there were software patents in Europe, how would that provide any incentive to reverese the current outsourcing-to-low-wages countries trend? Anyway, this adequately depicts the patent promoters: dishonest people, hating fair competition, sitted on piles of cash and intending to sit even higher with little efforts, some lawyers and lobbyists tricks. Reply
Georg Greve says 22/01/2006 at 4:26 pm Since I found that overall there was more to say than fit in this box, I put it here: http://www.fsfe.org/fellows/greve/freedom_bits/software_patents_they_re_back Reply
Foo says 22/01/2006 at 4:38 pm Biard wrote: “If there were software patents in Europe, how would that provide any incentive to reverese the current outsourcing-to-low-wages countries trend?” Because there would be software patents in Europe, there would be less competition and higher prices. Since it probably is competition that is driving the outsourcing trend, les competition might mean less outsourcing. But it could also mean that outsourcing would continue unabated, and the higher prices would mean higher profits. I’m tempted to think that this second alternative is much more likely. Reply
Wayne says 22/01/2006 at 8:36 pm I did a study of Patents granted, which covered “hard goods” only (no software), in an area of which I can claim expertise. Out of the close to 100 patents I checked none of them should have been issued. 1) Close to 60% of the patents would have been obvious to someone with skill in the patent area. 2) The remaing 40% were for tachnology that was impossible – scientifically it could not work. This was very disturbing. I had always been of the opinion that a patent was only granted for real, tangible inovations. I started the study after hearing of some of the software patents that had been issued (I am also a programmer) and wanted to check if the same issues apply to hard goods, and much to my surprise I found that they did, and that the problems on the hard goods patents may actually be worse than the problems with software patents. Admittedly this is a small sample only. However the fact that I could not find one patent that appeared to meet the criteria for which patents are issued (note that I checked the Canadian and US databases only) now has me questioning the value of having a Patent system at all. Reply