Commission to MEP Brian Crowley: Software Patents have helped SMEs in the US
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
EU-Commission study IPI 2000: The Economic Impact of Patentability of Computer Programs - the economist who wrote the short section in that study on Economics complained that the executive summary made false conclusions from his part of the paper which was indeed very sceptical. Unlike the name of the paper suggests it was largely written by UK legal researchers. p.8: "As shown in our economic study of the literature (Section III of our report), most economists have doubts whether economic efficiency, i.e. increased overall welfare, is achieved by having or making computer program related inventions patentable. This caution is supported by the continuing, indeed growing, concern in the USA on the issues surrounding patents on computer program related inventions. The debate in the States is not finished."
Public consultation 2000-10-19 to 200-12-15 of the Commision: 1447 answers, 1263 traced back to a member state, of these 1164 (92%) against and 99(8%) in favour of software patenting
A recently published SME study of IFIS for the German Ministry of Work and Economics shows a broad rejectction of the proposed patent rules. The study main focus was on interoperability and strongly critizised the interoperability provisions of the Council directive version as insufficient and argued in favour of interoperability safeguards that exceed even those from the Parliament's version.
- Europe's largest SME associations UEAPME and CEAPME strongly oppose software patents.
A recent Slovenian survey provided the same results as usual: 75-90% against Software Patents.
More than 400 000 persons signed a petition against software patents, among them more than 3000 !CEOs and managing directors of companies.
MEP Crowley question
- ORAL QUESTION H-0200/05 for Question Time at the part-session in April 2005 pursuant to Rule 109 of the Rules of Procedure by Brian Crowley to the Commission Subject: Software patents and the European Patents Office Would the Commission inform the House what analysis and comparison it has have carried out with regard to the granting of patents for software technology, by the European Patents Office? When carrying out that analysis and comparison, did the Commission find any indication that the absence of such patents seriously restricts innovation and technological developments by SMEs in the sector?
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.
Commission study about effects on "the patentability of computer-program related inventions"
"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
- "The economics literature does not show that the balance of positive and negative effects lies with the negative. All it says is that there are grounds for supposing that the negative forces are stronger relative to the positive forces in this area than in some others and that any move to strengthen IP protection in the software industry cannot claim to rest on solid economic evidence."
Remember Brian Crowley's question answered by the Commission above?
- "When carrying out that analysis and comparison, did the Commission find any indication that the absence of such patents seriously restricts innovation and technological developments by SMEs in the sector?"
"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"
- i.e. codifying the legal escape at the EPO that removed all barriers (Computer Program Product IBM, Vicom) and has not proper legal foundation yet.
"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.
"seeks to clarify the legal rules on patentability for software-related inventions"
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.
- Zusammenfassend ist festzustellen, dass auf der Basis des aktuellen
Rechts des EPÜ und deutschen Patentrechts eine Grundlage für einen umfassenden Patentschutz für Software nicht zu erkennen ist. ... Die Richtlinie der Kommission der Europäischen Gemeinschaft, die erst nach Abschluss des vorliegenden Manuskripts zugänglich geworden ist, genügt diesem Anspruch Interessenabwägung nicht; sie ist zudem mit ihrer weitgehenden Bejahung einer Patentierung von Software so nicht in das System des EPÜ einzuordnen.
Clarification does not mean unlimited patentability.
"Commission found that patentability of software related inventions contributed to the growth of SMEs and independent developers."
How? On what empirical basis?
SME study for German Ministry of Work and Economy - only published after Council adoption