Directive on the patentability of computer-implemented inventions

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The European Union (EU) Directive on the patentability of computer-implemented inventions (2002/0047/COD) was a proposal for an EU law which aimed to harmonise EU national patent laws and practices, which involved the granting of patents for computer-implemented inventions provided they meet certain criteria.

The proposal became a major focus for conflict between those who regarded the directive as a way to codify the case law of the Boards of Appeal of the European Patent Office in the sphere of computing, and those who asserted that the directive is an extension of the patentability sphere, not just a harmonisation, that ideas are not patentable and that the expression of those ideas is already adequately protected by the law of copyright.

Following several years of debate, the proposal finally fell when the European Parliament rejected it by an overwhelming majority (648 to 14) in a vote on 6 July 2005.

Contents

History

Original draft directive

On February 20, 2002, the European Commission initiated a proposal for a directive to codify and "harmonise" the different EU national patent laws and cement the practice of the European Patent Office of granting patents for computer-implemented inventions provided they meet certain criteria (cf. software patents under the European Patent Convention). The directive also took on the role of excluding "business methods" from patentability (in contrast with the situation under United States law), because business methods as such are not patentable under the different European national patent laws or under the European Patent Convention.

However, opponents of the original directive claimed that it was a thinly disguised attempt to make all software patentable. This was largely through the use of the vaguely defined phrase "technical effect". Without this directive, it was unclear whether the many software patents granted by the EPO would be enforceable; none have yet been successfully enforced.

Transformation by the European Parliament

On September 24, 2003, the European Parliament passed the directive in a heavily amended form [1], which placed significant limits on the patentability of software. The most significant changes included:

  • a definition of the "technicity" requirement for patentability which distinguishes between abstract information-processing processes and specific kinds of physical processes (only the latter are "technical");
  • a blanket rule that patents cannot be used to prevent interoperability between computer systems.

Patent attorney Axel H. Horns, however, voiced concern that Parliament's wording might extend the ban on software patents to inventions potentially implementable in software, such as signal processing equipment [2].

Politically, these amendments were supported almost unanimously by small parties on both the right and left, while the larger groupings (socialists, liberals and conservatives) were all split, with the balance of socialists leaning in favour of amendment and the balance of conservatives leaning against.

Parliament's amendments were a major defeat for the directive's original proponents. Rather than confirming of the practice of granting software patents, the revised directive placed substantial limits on patentability.

Reversion by the Council of Ministers

Under the codecision procedure, both the European Parliament and the Council of Ministers (representing national Governments) must approve a text in identical terms in order for a proposal to become law. On 18 May 2004, the Council agreed in an advisory vote to resubmit to Parliament what was described as a "compromise version" of the proposal. The agreed version permitted patenting of computer-implemented inventions (providing the inventions have a "technical character") and overturned most of Parliament's amendments. Critics of this new proposal argued that the "technical character" requirement was interpreted so loosely as to allow almost unlimited patentability of software. The Council formally approved this resolution on March 7, 2005 [3]. The revised proposal was resubmitted to Parliament.

Developments between first Parliament decision and Council decision

Subsequently, in an unprecedented move, the Dutch national parliament passed a motion requesting that the nation's ministerial representative on the Council, Laurens Jan Brinkhorst, change his vote on the Council's version of the directive, from "in favour" to abstention. Brinkhorst stated that he would not do this. [4] The Council's confirmation (or otherwise) of its President's "compromise" had also been delayed [5].

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The Polish government announced on November 16, 2004, that it could not "support the text that was agreed upon by Council on 18 May 2004" [6]. A joint press release by the FFII, the Internet Society Poland, and NoSoftwarePatents.com, supported the concerns of opponents of the Council directive, stating:

"at a meeting hosted by the Polish government on the 5th of this month, everyone including representatives of the Polish Patent Office, SUN, Novell, Hewlett-Packard and Microsoft, as well as various patent lawyers, confirmed that the present proposal of the EU Council does make all software potentially patentable." [7]

On 7 December 2004, the Belgian Minister of Economic Affairs, Marc Verwilghen, stated that no Council decision would be taken until 2005 "for the reason that the qualified majority does not exist anymore". However, amid rumours of a change in the Polish position, the 13-15 December meeting of the Council's Committee of Permanent Representatives determined that a qualified majority appeared to exist, and that the Council's revised version of the directive would be scheduled for formal adoption by the Council, without further debate, probably at the Agricultures and Fisheries Council meeting on the 21st and 22 December 2004. [8]

Statements expressing reservations were attached to this Common Position by Belgium (which abstained), France (which hoped for further changes to the directive), the Netherlands (where the parliament requested their representative vote against), Poland (which was opposed until recent diplomatic pressure), Hungary and Latvia. Germany was ambivalent, saying that the text of the directive could benefit from improvements.

Due to the expressed reservations and especially to opposition from Poland, whose Minister of Science and Information Technology made a special journey to Brussels to demand that the directive be dropped from the agenda. The Council's vote was postponed "indefinitely".

Meanwhile, a group of 61 MEPs from 13 countries tabled a "motion for a resolution" to restart the entire legislative process. On 2 February 2005, JURI, the Legal Affairs Committee of the European Parliament, voted 19-1 in favour of asking the Commission to withdraw the directive and restart the process.

The next day, Nicolas Schmit, deputy foreign minister of Luxembourg (which at that time chaired the Council), said that he would instead ask the Council to formally adopt the draft directive at a meeting on 17 February. Although Poland stated it would only oppose this if other countries raised an objection, reports of opposition from Denmark, the Netherlands and Spain ensured that the common position was not on the agenda for that meeting of the Commission.

On 17 February, Parliament's Conference of Presidents (the President of the Parliament and the leaders of the political groups) approved JURI's request to restart the process, and agreed to pass the request to the European Commission. On 24 February, a plenary session of the European Parliament reinforced this message, inviting the Commission to reconsider, but on 28 February the Commission refused the parliament's request.

The "common position" reappeared on the agenda of the Council's 7 March meeting as an "A-item" for adoption without discussion. At the Competitiveness meeting of the Council, Denmark requested that this be removed. The President of the Council, seemingly in breach of the Council's procedures, opposed this, "for administrative reasons" and because it would defeat the logic of the directive. The Danish representative accepted this at face value, declined to object formally, and entered Denmark's objections into the record. The common position was thus adopted without debate, and referred to the European Parliament for a second reading, with dissenting statements and caveats from a number of countries. In the event, only Spain had actually voted against: Austria, Belgium and Italy abstained (which has the same effect as voting against, given the way Qualified Majority Voting works).

Second reading in Parliament

In June 2005, the legal affairs committee of the European Parliament discussed the directive and rejected plans for a complete overhaul of the directive [9]. The vote by the committee took place on 21 June 2005, and narrowly decided not to substantially amend the Council version of the directive. According to the Financial Times, this "vote marks a turning point in the protracted battle over the law, which has split the software industry and sparked severe recriminations." [10]

On 5 July 2005, the committee's report passed to a plenary session of Parliament for debate by all MEPs. On 6 July 2005, Parliament rejected the proposal by a very large majority (648 in favour of rejection, 14 against and 18 registered abstentions out of 729 total MEPS) without considering any of the other 175 proposed amendments. Under the codecision procedure, the legislative process ended with this rejection and the proposed directive did not become law in any form. This was the first and as of 2005 the only time a directive was ever rejected by Parliament at second reading. [11]

The vote was the result of a compromise between the different parties: those in favour of software patents feared a text that would heavily limit its scope, while those against rejected the whole principle. Heavy defeat was the "least worst option" to both sides. In addition, some saw the defeat as an expression of Parliament's indignation about the handling of the proposal by the Council of the European Union and the European Commission as well as its concerns about the content of the proposal itself.

Consequences of the rejection

Parliament's decision to strike down the final draft has the effect that national laws will not be harmonised. National legislatures may continue to enact laws allowing patents on computer-implemented inventions, should they wish to do so, and national courts may enforce such laws. The European Patent Office, which is not legally bound by any EU directive but generally adapts its regulations to new EU law, has no reason or incentive to adapt its practice of granting patents on computer-implemented inventions under certain conditions, according to its interpretation of the European Patent Convention and its Implementing Regulations.

Reactions

Supporters of the proposal

Supporters of the proposed directive included Microsoft, IBM, Hewlett-Packard and the European Patent Office.

The European Information and Communication Technology Association (EICTA) warned that "thousands of jobs and inventions were at risk because of opposition from the European parliament to a draft EU directive giving patent protection to scores of new products" [12]. EICTA's position was in turn been characterised by opponents of software patents as "dominated by patent lawyers from the patent arms of large corporate members" [13], "most of which qualifying as non European companies" [14] and "with a patent policy (...) tailored to the special interests of a few large corporations (...)" [15].

Opponents of the proposal

The proposal catalyzed a campaign by diverse opponents of software patents, who took the opportunity afforded by the introduction of the proposal to argue that software patents are neither economically desirable nor mandated by international law. The FFII and the EuroLinux Alliance played key roles in coordinating this lobbying campaign, which drew support from some free software and open source programmers, some academics, some small business groups, and some commercial software developers. Many of these organisations expressed concern over what they saw as abuses of the software patent system in the USA, and argued that although some software patents might be beneficial, the net effect of the Commission's proposals would be to suppress innovation and dampen legitimate competition. The campaign in its turn was characterised by advocates of software patents as "a small but highly organised and vocal lobby" [16], although the opposition to the Directive expressed by the parliaments of a number of member states suggested that opposition was more widespread.

Figures who have supported the campaign against software patents in Europe include Tim Berners-Lee, developer of the World Wide Web, and Linus Torvalds, developer of Linux. Politicians opposed to the directive included Michel Rocard. Political opposition was founded both on opposition to software patents and on hostility towards what was seen as heavy-handed management by the Commission.

On 16 February 2005, the European Parliament's Directorate General for Economic and Scientific Policy issued a briefing paper (and summary) which concluded that a directive is needed both to harmonise the laws of the member states and to enable Europe to compete, but which also stated that "if we adopt the current proposal, it will create the same broad and ambiguous system that is in place in USA".

Concerns about the balance of power

Apart from the issue itself, the legislative process for this directive generated concerns about the balance of power between the European Commission and the European Parliament. It also raised concern about the balance between the Council (of member state governments) and Parliament (of elected members from member states). When the Commission rejected Parliament's request to restart discussion on the directive, this led to debates over how much power the Commission should have compared to Parliament and member states. Some MEPs saw the affair as part of a power struggle between the two bodies. Others believed that the real debate was more about whether Council should be able to overrule Parliament, or vice versa.

Software patents and international law

Main articles: Software patents under TRIPs Agreement, Software patents under the European Patent Convention.

Whether international law mandates software patents is a controversial question. The World Trade Organisation's TRIPS Agreement includes a requirement that:

"(...) patents shall be available for any inventions, whether products or processes, in all fields of technology, provided they are new, involve an inventive step and are capable of industrial application" (Art. 27(1)).

The only avenue open for completely avoiding a requirement that algorithms be patentable is to define them as not being "inventions" [17]; and/or to define them as being non-technical and thus not in a "field of technology". This distinction is arbitrary but also self-consistent, in that it makes perfect sense to distinguish between "technical" processes and devices (i.e., those tied to the physical world) and informational or mathematical processes which have no necessary connection to physics. Because the "field of technology" requirement in TRIPs had its origins in European patent laws, Europe is, in legal terms, free to take steps to define the concept in either a broad or narrow way.

In fact, some people argue that the principle of software patents breaches those very international treaties which impose them according to others. [18]

See also

Notes

  1. ^  Europarl 2003-09-24: Amended Software Patent Directive, Foundation for a Free Information Infrastructure, accessed July 7, 2005
  2. ^  "The Protection of Software and the Crisis of the Patent System", Axel H. Horns, p8,15.
  3. ^  "EU ministers endorse patent law", BBC News.
  4. ^  "Dutch Parliament causes EU software patents crisis", The Inquirer, accessed July 7, 2005.
  5. ^  "EU software patents directive delayed", iDABC eGovernment News.
  6. ^  "Software patents law up in the air after Poland pull out", EuroActiv.com.
  7. ^  "Poland Does Not Support Current Proposal for EU Software Patent Directive", Joint Press Release Foundation a Free Information Infrastructure, Internet Society Poland, Nosoftwarepatents.com. Released December 4, 2004.
  8. ^  2077th meeting of the PERMANENT REPRESENTATIVES COMMITTEE (Part 1). Meeting minutes: held Monday 13 (11.00) and Wednesday 15 (10.15) December 2004.
  9. ^  Europarl News Report (21-06-2005): Latest on computerised inventions
  10. ^  Tobias Buck, "IT groups win EU ruling on patents", Financial Times.
  11. ^  "EU parliament votes against software patents bill - EU commission", Forbes.com; "European Parliament Rejects Law on Software Patents (Update1)", Bloomberg.com; Jan Sliva, "Europe Parliament nixes software patent law", BusinessWeek Online; "EU assembly throws out bill to harmonise patents", Reuters; "European Parliament rejects software patents", WikiNews.

References

External links

Studies and working papers

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