BakelsMyths0405En

Ten myths regarding the software patent directive as proposed by the Commission

By Reinier Bakels

(editor's note: these criticisms still hold for the Council position from 18 May 2004, as that document does not address any of the points below)

1. "The directive is not about regular software, but only about mobile phones, computer-controlled washing machines etc."

The truth is that the requirement for a "technical contribution" is soft as butter, especially because they explicitly chose to not define what "technical" means here. The memorandum accompanying the proposal contradicts itself as well, by talking about the size and the interests of the European software industry. So it after all is about software in general, and not just about mobile phones!

2. "The directive enhances the competition potential of Europe"

In reality European software patents are, today already, mainly applied for by American companies. Patent law is governed, on grounds of international treaties, by the "assimilation principle", which forces governments to provide the same protection possibilities to foreigners as it does to its own citizens. Besides, based on that same principle, European companies can today already obtain US patents as well. Therefore it isn't surprising that the Americans strongly objected the amendments of the European Parliament.

3. "The directive prevents business methods patents"

No. Even if the Commission proposal did prevent patents on computerised business methods (which it doesn't), the scope of the directive is confined to computers and the like. This would leave ample room to patent abstract business methods, the worst of all.

Patent law does not exist to protect ideas either, unless they have the character of an invention. In practice, it turns out that exactly software patents are abused to protect pure ideas. This way a very broad protection is obtained for a relatively limited effort. This is commercially very attractive, but disastrous for society.

5. "Patents are good for SMEs"

This persistent myth is fed by some rare success stories that actually are exceptions to the rule that patents typically serve the interests of large enterprises. Therefore, logically they are the strongest lobbyists for the directive (in its original form).

6. "The directive codifies the current case law"

In reality, the courts are still searching for a proper criterion to separate the wheat from the chaff. If something is codified, then it will be at best a snapshot (of yesterday's case law).

7. "Consultations argue in favor of software patents"

On the contrary, many consultations in several countries consistently show that there is no consensus. The Commission thinks the opinion of (a few) large companies to be much more important that that of (many) small companies and as such ends up with a predictable, but utmost unjustified conclusion. The EuroLinux movement should be taken very seriously, for many reasons.

8. "The interoperability article does not require amending"

Without amending there is a large chance that patents will be used to frustrate connections between software from different companies. Open standards and open networks are essential in ICT - look at the Internet. Closed standards can, due to so-called networking effects, quickly lead to extensive monopolies. Competition law does not offer a structural solution here: it's like assessing fire safety by looking at the quality of the fire brigade.

9. "Patent policy is innovation policy"

Governments as well as companies like to measure their innovation quality by the number of granted patents. Additionally, patents are cheap for a government, perhaps even profitable.

It's however remarkable that there are especially in the US serious doubts regarding the proper functioning of the patent system. Over there, the patent system is degenerating into a lawyers paradise which barely fulfills its promise to encourage innovation anymore. For this reason the Federal Trade Commission held a large number of hearings there in 2002, and the National Academy of Sciences recently performed an in-depth study.

10. "Imitation must be avoided at all costs"

A well-known paradox for beginning law and economy students. In reality, competition and innovation benefit from a sound level of imitation. Hence, governments should offer a balanced package of legal protection means for creative achievements, and avoid excessive patent protection.

Conclusion

The directive proposal is a juridical mess from the Commission. There is little doubt that the Commission is being "used" by Microsoft and similar large companies. In the short term a restrictive policy -as presented by the European Parliament- is appropriate. In the long term a structural, broad overhaul is recommended, because many of the problems pertaining to software patents also apply to patents in other fields.

R.B. Bakels, computer scientist, lawyer, law scholar, 25 May 2004

Author of the "JURI 107" report on software patents for the European Parliament (together with prof. Hugenholtz)

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