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Commission to MEP Brian Crowley: Software Patents have helped SMEs in the US

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19 April 2005 -- In an answer to an inquiry from the European Parliament, the European Commission claims that software patents have been helpful for small and medium enterprises in the United States. The Commission bases its claim solely on "economic study" that the Commission had ordered from a group of patent lawyers in 2000. While providing no evidence to support the claim, this study boldly makes it in its executive summary. The dubious methodology of the study had been pointed out by scientists, including one of the authors of the study itself, several years ago. Yet the Commission continues to cite this study in order to justify its pro-software-patent policies.

What the Commission did not tell him

MEP Crowley question

Commission written answer (2005-04-14)

The Commission's analysis and studies, reported in the Explanatory Memorandum to the Commission proposal (COM (2002) 92 final), took into account patents granted by the European Patent Office as well as those granted by national patent offices of the EU Member States.

One of the studies conducted in the context of the Commission's analysis, taking account of the situation in the United States, found that "the patentability of computer program related inventions has helped the growth of computer program related industries in the United States, in particular the growth of SMEs and independent software developers into sizable indeed major companies".

The study also concluded that in Europe there is increasing, even though still relatively low, use by independent software developers of patents in raising finance or in licensing. The authors of the study considered that harmonisation on the basis of the status quo would have no consequence save for the important one that SMEs and independent software developers will be less likely to consider computer program related inventions unpatentable.

The Commission proposal seeks to clarify the legal rules on patentability for software-related inventions. This does not include computer programmes or other software as such. It means inventions which make a technical contribution and which are truly novel.

Such inventions are present in a number of everyday consumer goods such as cars, mobile telephones and domestic appliances. The Commission's intention in making its proposal was to avoid patenting of pure software and clearly differentiate the EU from the US. Nothing that is not patentable now will be made patentable by the directive and its impact on innovation and competition, as well as on European businesses, will anyhow be monitored by the Commission (draft Article 7).

With regard to the second question of the honourable member of the Parliament, as stated earlier, the Commission found that patentability of software related inventions contributed to the growth of SME's and independent developers. Exclusions of fields of technology from patentability are undesirable as a matter of policy.

Comments

"One of the studies conducted in the context of the Commissions analysis, taking account of the situation in the United States, found that the patentability of computer program related inventions has helped the growth of computer program related industries in the United States, in particular the growth of SMEs and independent software developers into sizable indeed major companies

See above or read that paper for the Commission: IPI 2000: The Economic Impact of Patentability of Computer Programs.

In that economic part of the study we find, p. 32

Remember Brian Crowley's question answered by the Commission above?

"Exclusions of fields of technology from patentability are undesirable as a matter of policy."

Application of Patent law in a specific field has to be justified, not "exclusions from patentability". The EU-Commission reverses the burden of proof. Patent law actually is an incentive system, the lawmaker restricts the free market in order to reach certain effects. Provided conditions are met.

"Nothing that is not patentable now will be made patentable by the directive"

"This does not include computer programmes or other software as such."

"Computer-Implemented Inventions" according to the Commission's proposed definitions are nothing but software.

"Such inventions are present in a number of everyday consumer goods such as cars, mobile telephones and domestic appliances."

"Computer-Implemented Inventions" according to the European Commission's definition refer to software running on general purpose computers. "Cars, ... and domestic applicances" are normally not claimed.

Lawmaking is the role of the legislator. Clarification is needed, indeed. But EU lawmaking led to even more obfuscation by use of terminology such as "software as such", "Computer-implemented inventions" and so forth. E.g. BGH-lawyer Mellulis 2002 strongly criticised the original proposal of the Commission.

Clarification does not mean unlimited patentability.

How? On what empirical basis?

SME Study

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