|
|
|
Opponents of software patents believe that they will stifle innovation. |  he purpose of a patent system is to maximise the benefits to society of inventive activity. Without the incentive of a temporary monopoly on the sale of new drugs, for example, pharmaceutical companies would not invest billions of dollars in research programmes whose success is always uncertain. In return for this monopoly, they must publish technical details of their inventions, enabling others to build on the state of the art.
If the patent system is well designed and well administered, everyone wins.
Through the looking-glass
But in the relatively new and rapidly changing field of computer software things are not quite so simple. Competition and innovation depend on the ability of new entrants to protect their intellectual property - whether it is embodied in lines of programming code or in physical products. On the other hand, some believe that software patents stifle innovation by making it too easy for first-movers to establish dominant positions in new fields, thanks to the network effects which characterise this market. (If your customers all use one e-business solution, there is pressure for you to use it too.)
Opponents also argue that stronger protection is unnecessary. They point to the success of 'open source' products like Linux as evidence that innovation is possible without such protection. However, software patents might contribute to the creation of new companies - venture capitalists are certainly more likely to invest in a software company with a strong IPR position. And Europe may be disadvantaged by differences between its patentability rules and those in the United States. European firms may be less inclined to protect their innovations in the US if they cannot do so in their domestic market.
Playing by the rules
The precise definition of what is patentable is a key issue to be resolved by the future Directive. The European Patent Convention explicitly excludes business methods and computer programs 'as such' - unlike US patent law, under which both are patentable. However, EPC rules do allow a product involving a computer program to be patented, provided that it is 'of a technical character' as well as being both new and inventive. Under specific conditions, recent case law even allows patents on programs themselves.
The widespread belief that software is not patentable in Europe is therefore unfounded. Thousands of such patents have been granted by national patent offices and by the European Patent Office. But the practical application of EPC rules varies widely between Member States. The resulting confusion has discouraged use of patent protection by European software developers - especially small and medium-sized enterprises (SMEs).
According to a recent report(1) 175,000 software developers in over 20,000 companies create added value of DM50 billion a year in Germany alone, so the issue is a serious one. Last autumn, the Commission's Directorate-General for the Internal Market conducted a consultation exercise to inform the new Directive, which is intended to remove ambiguity and legal uncertainty(2).
The need to harmonise laws on the patentability of software throughout the Community is clear. But should this harmonisation be based on current EPC rules, should it adopt a more relaxed stance in line with US law, or should it tighten current exclusions? Responses from industry, the software community and others display sharply differing views, and the Commission's own position will be based on a thorough analysis of these submissions. Some aspects of the topic will also be discussed at the Patinnova 2001 conference to be held in Cardiff in October(3).
Fear, uncertainty and doubt
In parallel, the Commission's Enterprise DG has conducted its own study on patent protection of computer programs. It investigated how software companies, and SMEs in particular, currently protect their intellectual property, their reasons for employing these strategies, and their awareness and understanding of their options.
The report confirms that SMEs seldom patent their software, relying instead on secrecy, speed to market, encryption and other technical means, and the much weaker protection afforded by copyright. The main obstacles preventing greater use of the patent system by SMEs are the complexity and cost of obtaining patents, and of subsequently defending them. Many feel that the technology is changing so quickly that the time required to make a patent application is better spent developing their next product. They also doubt whether patents would really give them any competitive advantage over large, established rivals.
The study discovered widespread ignorance and confusion about the current position on the patentability of software. It concludes that public authorities need to redouble efforts to improve awareness of IPR issues among SMEs. The study team itself has produced a new guide, 'Your Software, and How to Protect It', which sets out the issues and the options in simple terms(4).
(1) 'Analysis and Evaluation of the Software Development Industry in Germany', by the Fraunhofer Institute ISI, available in German at http://www.dlr.de/IT/IV/Studien/evasoft_abschlussbericht.pdf
(2) The consultation paper, 'The economic impact of patentability of computer programs', together with many of the responses, is available at http://europa.eu.int/comm/internal_market/en/intprop/indprop/index.htm
(3) Further information about Patinnova will soon be available at /patinnova99/home.html
(4) Copies of the study on SMEs and software protection, and of the accompanying awareness brochure, are available from Manfred Schmiemann at the European Commission (see Contact).
Contacts
- M. Schmiemann, European Commission
Enterprise DG
Innovation Directorate
Innovation policy
Tl. +352 4301 33353
Fx. +352 4301 34129
manfred.schmiemann@ec.europa.eu
- A. Howard, European Commission
Internal Market DG
Services, Electronic Commerce, Intellectual and Industrial
Property and the Media Directorate
Industrial property
Tl. +32 2 299 5481
anthony.howard@ec.europa.eu |
IPR FOR SOFTWARE
