BSA: Only 20% of CII are SME-owned, CII equals swpat in the US.

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9 June 2005 - The Business Software Alliance has published a study which concludes that only 20% of the identified European "computer-implemented invention" patents belong to small and medium-sized enterprises (!SMEs/), and that this percentage has remained constant between 1998 and 2004. Additionally, half of those 20% are owned by US and Japanese enterprises. In the end, about 1,200 EU/ !SMEs own such patents according to their data, which roughly corresponds to the total number of Slovenian IT companies in 2002.

Interestingly, the paper starts out by stating "we wished to define *computer-implemented inventions (usually referred to as 'software patents' in United States)"*. This confirms what the FFII has always said: there is no inherent difference between US-style software patents and patents on "computer-implemented inventions" as granted by the EPO. The study also literally includes "computer-aided", "computer-assisted" and "computer-controlled" inventions, which the European Parliament explicitly wants to keep patentable.

Moreover, the author admits that his selection of !SMEs probably includes several companies larger than the generally accepted SME threshold of 250 employees. Thorough interpretation of the presented numbers is also hard because the study does not look at why patents were obtained and whether or not the owners feel they have benefited from their patent investments. Nevertheless, some key figures do stand out.

The most striking fact is that 80% of the identified patents belong to large companies and government organisations, and that this fraction has remained stable throughout the entire observed period. Of the patents identified as belonging to !SMEs, another 50% belongs to US and Japanese companies. Given that the study concludes that about 2,000 to 2,200 !SMEs (both foreign and European) own such patents, this means there are at best about 1,200 involved European !SMEs. This equals more or less the number of Slovenian IT companies in 2002.

Another interesting point is that only about 37% of the identified SME patents belong to traditional pure data processing patent categories. The rest belongs to classes such as "other physics", "electricity", "human necessities" and "performing operations". Most of these patents would probably pass the proposed forces of nature and data processing tests.

Finally, the study again demonstrates the difficulty in identifying software patents. The comparison of his results with a collection supplied by M-CAM, a specialised patent searching and evaluation company, showed that the author only identified 60% as many patents (17,000 vs 30,000). Moreover there was an overlap of only 9,000 patents among both sets.

Jonas Maebe, Board member of the FFII, concludes "In the light of this information, the touted fact that 81% of those patent-owning !SMEs own only one patent seems to be largely irrelevant. The growth of such patent request by small companies is also offset by the same growth in patent applications from large companies, so they mainly remain a big companies' playground."

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