IPRED2: Call on the 25 Governments to remove criminal sanctions in case of patent infringement
(Brussels, 16 feb 2005) According to the title of a non-public document appearing on the Council website, the European Commission is asking the written oppinion of the 25 Member States which rights they want to see removed from the list of the IPRED2 directive proposal (2005-0127 COD).
The FFII and other associations are calling on the Member States to remove patent infringements from the list of IP rights concerned. The broad and abstract nature of software patents makes infringement unavoidable, and most software systems unavoidably infringe on multiple patents. The resulting litigation is already a problem in many sectors. However, criminalisation of patent infringment would be catastrophic change that would severely damage the innovation process, and thus the European economies.
- Dear Ministers, The Commission is asking your written opinion before Monday 20th February on the directive on criminal measures aimed at ensuring the enforcement of intellectual property rights in the European Union (or IPRED2 (2005/0127 COD). Into the list of IP rights taken in account by the directive proposal, it is mentioned that patent infringements should be treated as criminal acts. As a pan-European association representing more than 3500 IT companies and nearly 100,000 individuals who have entrusted us to act as their voice in public policy questions concerning exclusion rights (intellectual property) in data processing, we have serious concerns about the impact of the inclusion of patent infringements treated as criminal acts. It is in practice impossible to write and sell software products without certainty that your product does not violate one of the 65,000 software or business method patents granted by the European Patent Office. Those patents has been granted against the spirit of the European Patent Convention, which clearly excludes software from the field of patentability. Last year, the directive on patentability of "Computer Implemented Inventions", which aimed to legalise the practice of the European Patent Office, was rejected by a strong majority in the European Parliament. Nonetheless, the European Patent Office continues to grant soft patents against the spirit of the law, and continues to lower the standards for the inventive step and subject matter. Patent infringement has always been a matter for civil litigation. The current proposal will force Member States to make patent infringement a crime, and to criminalise incitement to infringement. The initial consequences of criminalisation of patent infringement will be a reluctance of firms to invest in new software products, in Europe. A firm requiring new software systems will prefer to import the software from outside Europe. This will damage the EU software industry and cause loss of jobs, even though this industry is well able to compete on the global market. Secondly, the directive will give patent litigants great powers to harrass software producers, seize documents and freeze assets. We would see criminal law being used to enforce monopolies that are already highly controversial. The cost of these monopolies is higher prices, less innovation, and serious damage to EU economies as they lose the ability to compete on the world market. Thirdly, new business formation and economic growth will be damaged. All technology entrepreneurs already take risks with respect to software patents and the vibrant EU software industry exists despite, not thanks to, software patents. Software patents tend to be have broad claims on trivial methods so that infringement is unavoidable. In the classic patent economy, a firm can bulk license patents by paying royalties. When patent infringement is a criminal offense, no civil settlement is possible. Lastly, the use of criminal law, instead of civil law, makes patent speculation and extortion much cheaper. Today, a patent speculator needs significant funds in order to sustain the cost of litigation until a market accepts to license a particular patent. However, in a criminal matter, the state bears the full costs of litigation. We will see the use of "criminal liability" as a tool for blackmail: while a CEO may be willing to fight unfair patent claims in court, it is a different matter when the police and state prosecutors are involved. In conclusion, the criminalisation of patent infringement will punish innovators, damage confidence in the IT sector, worsen the software patent problem, and promote the use of patents as a tool for extortion, rather than investment. The consequences would be severely damaging for the EU economy, in terms of jobs, investment, and ability to compete. We thus ask you to exclude patent infringements from the list of IP rights taken into account in this directive proposal, in order to keep patent litigation in the field of civil law, not criminal law. In general, the directive should be limited to rights of which it is proven that civil protection is not enough.