EICTA's 'air of disaster'

[ News ]

In the journo-lobbying magazine EU Reporter EICTA put a two page report about its lobbyist Mark MacGann titled 'A false campaign that will beggar the EU'. Self-criticism of that kind is rare in EU lobbying. He also asks for more lobbying transparency.

Astroturfing

• Mark MacGann has a guarded admiration for the directive's opponents despite his case that they have obscured the identities of their backers, managed to the directive a name, that he says, is completely misleading politicians and, if he is right, leading the EU into a potential economic disaster the enormity of which is hard to grasp.

FFII can fully agree with that and will do its best not to make it happen. There is much destructive lobbying that wants to derail the directive project. EICTA's astroturfing campaign tried to obscure their identity. EICTA is a large business association that now presents its case through !SMEs. In early May they even created a employee's perspective. Brunswick Pr(MacGann is a former Brunswick professional) announced EICTA's position as one of the trade unions. Politicians are intentionally mislead.

Yellow danger vs. Territorial principle

• A 'no' vote on the (Council) directive will turn the EU into a shopping mall for products that are patented in other parts of the world
• .. the real threat to Europe is coming from China. ... Europe needs to strengthen its industries.

The directive is about rules for the European single market, not for European players. Patent law adheres to the territorial principle. A European patent for a European inventor will not stop a Chinese manufacturer to sell EU patented technology on the American market. The Chinese manufacturer needs no authorisation of the European rights holder. The inventor has to apply for a US patent to stop this. Interestingly more than 75% of EU software patents are held by non-EU players. EICTA represents many of those non-European players. European software patents are patents for the European single market, not for Europeans.

Know your opponent

• "This is not an issue of interoperability. It is not about the big guy or the little guy. Whether or not Microsoft has a dominant position is not something I care about."

• Of course interoperability is crucial for the software market. EICTA has good expertise on this issue, and Mark MacGann should know that interoperability is at the heart of the debate. Some EICTA supporters such as SUN even voiced their discontent with EICTA's weak interoperability enforcement strategy.

• Big guy - small guy is a misleading pattern that was cast by media reports. It is a conspiracy theory that big companies wanted software patents to destroy small players. What is in fact on a solid empirical basis is that the patent system does not work for !SMEs and individuals.
• Dominant positions are of course a potential problem for a working European single market and our toothless and slow competition law faces the problems. There is little economic indication that Microsoft which calls for software patenting reform in the US will benefit from software patents in the EU. Usually media depicts Microsoft as a player that wants software patents and many lobbyists under different hats fulfill the attributed role. Microsoft disastrous lobbying in the EU contributed much to FFII's campaign. Microsoft has huge corporate relations problems in Europe. Probably media guys hate their favourite word processor. Many MS consumers, competitors and distributors developed a anti-MS bias. It is easy to ride on the anti-MS bias as it is to present a big guy-small guy scheme. Microsoft takes responsibility for its lobbying mistakes.

No intervention in the market

• "it is not for MEPs to intervene in the market..."

Well said. Patent law restricts the free market per definition. This is why liberal economists such as von Hayek and Machlup took a very critical position of the patent system at large. Patent law is alien to software market needs. The European legislator shall not intervene into a working market.

Community patent

• "We are all agreed that the patenting system in Europe is much too expensive. Community patenting would make it simpler and easier for an SME..."

Indeed. The very same day the Council reached a political agreement on its directive the community patent directive failed for dubious language reasons. The same interest groups of patent professionals that push the swpat directive derailed the community patent. In fact no one likes to see patent professionals butchering language with their patent legalese. It is useful to limit European Community patents to the three languages of the European patent system: DE, EN, FR.

No exclusion of computer-assisted inventions

• ..in our zeal to avoid making sure that software should not be patentable we should not exclude the patentability of inventions that use software"

Fully agree. But MacGann's interpretation of the Rocard amendments is based on misconception.

Council vs. Michel Rocard

• ..either accept their co-decision with the Council or turn that
  • on its head by accepting the amendments to Monsieur Rocard.

The Council position turned the Parliament's 1st reading on its head. The Commission is not the European lawmaker and lacks competence for lawmaking. A Commission's withdrawal would be an abuse of power that shows the problem of premature European separation of powers.

anti-Americanism, anti-globalisation, far-left

• a lot of very populist, anti-globalisation, anti-American statements ... coming from within the chamber of Parliament

FFII does not share an anti-American bias. But we have to fix the problems of the US patent system as well. Both camps of the debate have strong transatlantic ties.

• "We have a former French prime minister .. who was very much a centrist .. who now veers ... completely and utterly to the far left of economic policy and economic debate.

Interestingly patent criticism is the domain of neoliberal economics which might not be mistaken for vulgar-capitalism for what the anti-globalisation movement and MacGann mistake neoliberalism. Although our position got strong initial support from left wing groups it has little in common with a particular side of the political spectrum.

FFII never did put much emphasis on the strong American corporation interests in the field documented by the fact that most lobby groups are funded by US players and the fact that about 75% of all current EPO software patents are in the hands of foreign players. You can of course ask why American lobby groups such as DCI or !CompTIA or IIPI or ACT shall have a say in European policy issues. MacGann himself criticises anti-Americanism and puts forward unfounded anti-Chinese sentiment with the well-known yellow danger metaphors from the 19th century. It is entirely wrong to play a national card. Software patenting is a worldwide problem and has to be solved not only in the EU.

Explaining EICTA's SME group makeup

• Once again I am not sure in what stage of the debate it became a bad thing to be a large corporation, but this is perhaps another debate. The companies I represent employ two million technology workers...

But EICTA does not represent the employees and never consulted the professionals in the field. The Eurolinux petition gained explicit support from more than 400 000 Europeans. It might be impossible to get two million supporters for such a campaign. If 400 000 individuals do not convince, 2 millions would not either.

Several different SME market surveys show a rejection of software patenting in the market.

• Those who forward the letters don't read the legislation...

This is a general problem of democratic legislation and also applies to the companies who support EICTA's superficial case. However, there is a wide and deep debate. MacGann underestimates the people and should know better.

Who finances the FFII?

• Another thing I would like to know is who finances the FFII? I have been told it is a lot of voluntary donations from all sorts of individuals who are worried about this legislation."

We also do not know who finances EICTA and support EICTA's call for open finances. As a tax-exempted non-profit association FFII has to lay open financing and also presented information about that on the web. EICTA mistakes FFII for its own. FFII is a group of committed experts that are supported by a large community for what they do. Financiers have no influence on the position. Compared to EICTA and others FFII only has few financial support simply because funding had low priority. What makes FFII strong is not money but commitment of supporters.

• "but when you look into the records .. you find that one of the largest contributory is ... the Open Society Institute ...

According to our treasurer Holger Blasum this year Open Society Institute only contributed around ten percent. The Open Society Institute has a broad and special non-partisan agenda and supports many important projects under the vision of Sir Popper. FFII could receive more money from channels like these if FFII had time to care about funding.

• "I think that is not fair to MEPs and it is not fair to consumers to have such an opaque organisation lobbying MEPs without saying exactly who they represent"

Again MacGann mistakes FFII e.V. for traditional lobbyists who represent interests of the financiers. FFII is German association (Verein) with around 800 members registered. And 90 000 registered supporters electronically signed a statement that we shall speak in their name in industrial protection rights issues. FFII is a community of supporters and an incubator of the whole debate which provides large information resources. FFII is not astroturfing like EICTA. FFII does not insist on untrue information. FFII people do not have to lie to present their case.

• "I think that MEPs have to force critics of the legislation to stand up and be very clear about who they represent."

FFII strongly asks EICTA and other parties to lay open its financing. FFII is willing to start a joint campaign with MacGann to call for open lobbying.

Rationalisation of pro-software patent autism

• Were you to scratch the surface, as some MEPs like Malcolm Harbour have done, by responding to the emails and asking "can you point which article in the directive will cause a problem for your SME?" - funnily enough there is no response.

FFII did produce large volumes of analysis and will personally explain Malcolm Harbour again what was wrong about the directive if he really wanted to listen. There are large legal resources, there were numerous conferences with experts. No lack of paper and explanation. No lack of comments and dialogue offers. Unlike three years ago many, many supporters are now able to explain what was wrong with the directive. Developers and !SMEs know that they do not need and want software patents. What some persons falsely claim is that codifying the EPO mess will solve their problem with software patents. When you know the answer before you ask, you do not listen, this is the problem of members like Malcolm Harbour. Rationalisation strategies are then applied. It is also easy to intentionally misinterpret the intentions of opponents or depicting them as certain political flavour (MacGann tried here to interpret FFII as a far left anti-globalisation movement, nice try). We did listen all the time and answered many position statements. Most !CEOs of companies EICTA represents cannot explain what amendments they need, too. The problem is the obfuscation by the patent community. It is easier to cast untrue claims than to debunk them. It is perfectly understood when some !MEPs get trapped due to the complexity of the matter. Persons who should know better take the responsibility for that. E.g. MacGann was told again that patent law adheres to the territorial principle and the catchy yellow danger argument is not based on factual grounds. Regardless he will cast it again next time. Ad nauseam arguments hopefully cannot succeed on the long run, they undermine a reputation as a reliable source.

Microsoft and EICTA

MacGann mentions Microsoft several times which indicates that EICTA recently wanted to get or got more support from its member Microsoft. Microsoft's disastrous lobbying efforts through various channels are a huge support for FFII. FFII's impression was that EICTA was initially a proxy of Nokia's patent zealot Timothy Frain. Today EICTA is probably the only pro-software patent lobbying group left which raises concerns for the European software manufacturers.

• "Microsoft is one of the 85 members of my organisation. But I don't care that members should not be involved in overflowing legislation
  • that is designed to harmonise and codify existing patents package
  and which was not designed to hold Microsoft's head under water in order to allow another sector to flourish"

On a superficial level this is criticism of a certain anti-Microsoft bias among individual critics and media of the legislation project. This criticism was fueled by Microsoft lobbying itself, e.g. the alleged blackmail attempt in Denmark. It is reported that Microsoft lobbyists like Francisco Mingorance (BSA), who wrote the initial Commission's proposal, Hugo Lueders, Jonathan Zuck and others face a strong wind of resistance because of the burned soil Microsoft lobbying by themselves and esp. by Bill Gates left in the European Parliament. Years ago a leaked Microsoft 'Halloween' paper presented the option to use patents to crush the competition of competing open source product. Microsoft has acquired a large software patent portfolio that may be used in an anti-competitive manner. It creates a risky environment in the shadow of the giant for European software producers. Economically it was often affirmed by US MS sources that patents are no cash cow for them. Microsoft was also a victim of bad patent law which lead to Microsoft's Brad Smith to call for patent reform. Bill Gates also freely admitted that he would be the first to say that the US patent system needs reform. Microsoft was able to flourish without assistance from patent law and Microsoft developers are aware that patents serve no need in the market and are alien to it. Whenever ordinary Microsoft officials entered the debate they were not able to present their case, to play the role the public attributed to them. FFII would like to see real support from Microsoft as FFII also defends their case. It is better to support FFII by donations than by lobbying clowns who ridiculously defend the interests of patent professionals in the field.