European Parliament hearing on patentability of computer implemented inventions

On Thursday, 7 November 2002 the Committee on Legal Affairs and the Internal Market of the European Parliament held a hearing on the proposal of the European Commission for a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions1.

The hearing was based on thorough knowledge derived from the European Commission’s consultation2 with the interested circles of 2001. The hearing participants received a brief and clear summary on the present legal situation3 and the remaining open questions4.

The prevailing questions were:

The hearing maintained a tight schedule, giving five minutes of time for a statement to each of the representatives of the EPO, patent courts, and practitioners, namely

and to interest groups (software industry, open source software, SMEs, software and industry bodies), namely

Ten minute statements were scheduled for the academic experts, namely

The first group of experts explained the current state of patent practice in the EPO and under German and British law. These experts strongly favoured the proposed directive in order to clarify and harmonise the patent protection granted to software inventions throughout Europe. The technical character requirement has historically been a prerequisite for patent protection in most European systems and is a useful criterion for distinguishing between patentable and unpatentable subject matter. The lack of a clear definition of the term "technical" is generally acknowledged but seems acceptable in order to enable the patent system to adapt to the dynamically developing world of technology. All experts of this group agreed that the exclusion of patent protection for computer program products should be dropped. This exclusion does not limit the scope of applicability of the patent system but merely the enforceability of software patents. It would exclude the act of distributing patented software on disk or via Internet from direct infringement, leaving only the limited means of prosecuting these acts as contributory patent infringement. The patent experts did not see any conflict between existing copyright law and the draft directive, especially with the amendments proposed by the European Council5.

The second group of speakers representing industrial interest groups were strongly controversial in their opinions. The first speaker of EICTA, which represents more than 10.000 software companies in Europe, with more than 1.500.000 employees and annual revenues of over 190 billion Euros, strongly called for harmonisation of the patent system. The exclusion of programs for computers as such from patent protection in Art. 52 of the EPC and the respective provisions of the national patent laws have led an important number of European companies to the misunderstanding that any kind of software program would be excluded from patent protection. These companies do not profit from patent protection. This is a great handicap regarding competition, especially with U.S. companies. The directive can now provide harmonisation and certainty in applying patent protection to software inventions containing a technical contribution. This speaker strongly called for the acceptance of claims directed to computer program products, as only those claims would provide appropriate patent protection against infringement. He did not fear any negative effects for small and medium enterprises (SME) and open source programmers, pointing out that those enterprises already exist and indeed grew considerably under the current patent environment (of the EPO) which largely corresponds to the draft directive. SMEs could profit from the patent system if the general knowledge of software engineers about patent protection could be enhanced. Mr. N'Guyen from UNICE expressed a very similar view.

Whereas most speakers tried to meet their scheduled speaking time, the open source representative did not hesitate to triple his speaking time. With great enthusiasm and very few objective arguments he continued the fight of his interest group against the patent system, accused the European patent examiners of illegally granting software patents and claimed that he – not EICTA – represents the majority of innovative European software enterprises. He accused the patent system of generating trivial patents or patenting known methods in the field of software. He rejected patent protection for any kind of software program as lethal to the economic activities of his interest group but left open why open source software remained successful and unharmed under the current system applied by the EPO as well as, for example, the German and British patent systems, all of which largely correspond to the proposed directive.

The director of a small British software company expressed concerns that are often found among businessmen in any technological company without patent experience. He criticised patents as being too expensive and argued that it is time consuming and expensive to investigate whether a product infringes any existing patent. He feared that he would be deprived of his major revenue of selling individual software developments to large enterprises which regularly demand that the programmer guarantees that those programs do not infringe any rights.

The majority of the academic experts voted in favour of the draft directive. They acknowledged the need for harmonisation and the obligation to grant patent protection for technical software under Art. 27 TRIPS. The exclusion of patent protection for computer program products was mainly rejected since this would only weaken the effectiveness of granted patents and not influence the scope of patentable subject matter. All speakers acknowledged that legal uncertainty could not be completely overcome by this directive due to the absence of a clear definition of "technical contribution". One expert argued that this legal uncertainty should be tolerated in order to keep the patent system flexible with respect to new technical developments. Another expert6, however, doubted the success of the proposed directive because of the lack of such definition. He further pointed out that the proposal fails to address the problem of patent quality, i.e. the granting of “trivial” software patents.

Summary
It seems that the hearing generally reflected the outcome of the consultation performed by the European Commission. Except for the open source representative and the director of a small software company, the established software industry seems to favour the current practice of the EPO and calls for harmonisation and continuation of this practice. The deviation from the EPO practice in Art. 5 of the proposed directive (exclusion of claims directed to computer program products) was generally rejected. The general benefit of the patent system for technical enterprises was acknowledged. The coexistence with the copyright protection system was also acknowledged, especially taking into consideration the amendments introduced by the European Council. There seems a general understanding that Europe does not want to extend patent protection beyond its traditional field of technology and that patent protection for business methods should be explicitly excluded.

However, this may not be the final decision of the Parliament. The influence of the open source lobby should not be underestimated. Some of the Members of the European Parliament and even some of the national governments (e.g. France) remain very reluctant to accept the directive. Open source has twisted the issue of harmonisation of software patent protection into a question of free speech. In light of the controversial discussions regarding the genetic patent issue (life patents) some politicians might fear to create another area of public concern by supporting software patents. The open source community directs a multitude of messages toward politicians, all of which snowball into a vigorous argument against software patents.

The established software industry should not leave the field to the open source activists. Members of the European Parliament must receive input from those established companies that profit from the patent system.


Cologne, 16 November 2002 . Stephan Freischem




1http://europa.eu.int/comm/internal_market/en/indprop/comp/com02-92en.pdf

2http://europa.eu.int/comm/internal_market/en/indprop/comp/softanalyse.pdf

3http://www.europarl.eu.int/meetdocs/committees/juri/20021107/468231en.pdf

4http://www.europarl.eu.int/meetdocs/committees/juri/20021107/471443en.pdf

5http://swpat.ffii.org/papiere/eubsa-swpat0202/dkpto0209/dkpto020923.pdf

6Reinier Backels, " Study Juri 107, requested by the European Parliament's committee on Legal Affairs and the Internal Market, http://www4.europarl.eu.int/estudies/internet/workingpapers/juri/pdf/107_en.pdf