A David vs. Goliath Fight over Proposed Software Patent Rules | Business| Economy and finance news from a German perspective | DW | 23.09.2003
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A David vs. Goliath Fight over Proposed Software Patent Rules

A controversial software patent directive up for a vote in the European Parliament has stirred up intense debate. Critics claim the ruling would stifle innovation and put smaller software companies out of business.


Linux creator Linus Torvalds says new EU patent rules endanger open-source software.

A vote on the proposed guidelines, called the Directive on the Patentability of computer-implemented Inventions, has already been delayed twice due to impassioned protests by backers of open-source software. They say passage of the regulation would have dire consequences for newcomers in the market and developers of free software products. The draft Directive, which has been through 120 amendments, is being debated on Tuesday in the parliament and is expected to come to a vote on Wednesday.

In most EU countries, software is treated in the same way as the written word and receives copyright protection. The new guidelines seek to introduce patenting and its proponents say it will harmonize laws that currently differ across EU states.

But critics have lashed out at the proposal, saying it only benefits larger companies and is a job killer. Smaller companies, which are often the most innovative, will suffer the most, according to Jeremy Newton of the law firm Nabarro Nathanson.

“To go out and seek patent protection is costly and very demanding. Small companies will say, ‘we can’t afford this protection.’ That is a fact of life,” he told vnunet.com, a technology news website.

Two of the world’s most renowned figures in the open-source community, Linus Torvalds and Alan Cox, have written an open letter to the European Parliament urging it to reject the proposal. “Unlike traditional patents, software patents do not encourage innovation and R&D. Quite the contrary,” they wrote.

Torvalds invented the Linux basic core and Cox is one of the most influential Linux developers. Linux is a operating system similar to Microsoft Windows, whose source code is available to everyone free of charge. It has become a formidable force in the software industry, but software patents could threaten its open-source development model.

A clearer framework

The British MEP who introduced the Directive last year, Arlene McCarthy, defended the proposed guidelines on Tuesday in Strasbourg, seat of the European Parliament, saying it would help protect scientists and companies against competition from American software firms and make the legal framework around computer-related patents more consistent and understandable.

The German Federation of Information, Telecommunication and New Media (BITKOM) has come out in support of the proposed rules, arguing smaller firms will benefit by protecting their inventions with patents.

“Innovation costs time and effort. A patent will enable companies to regain some of that investment,” Susanne Schopf, head of BITKOM’s legal protection department, told German television.

According to the Directive’s backers, more than 20,000 computer-related patents have already been issued on software developments in the EU. They say the 120 amendments that have made to the draft guidelines since its introduction ensure that only inventions that represent significant technical developments are eligible for patents.

“U.S.-style mess”

Critics such as Torvalds and Cox, however, say the directive is worded in such a way that virtually any software or electronic business process could be patented, which is already the case in the U.S.

“In principle we are in favor of harmonisation, but not so that it goes into a U.S.-style mess,” John Holden, senior research analyst at Butler Group, told vnunet.com.

But he added that patent legislation has not stopped innovation in the U.S.

Computer scientists, software developers and representatives of small and medium-sized companies across the EU have expressed concern over the proposed change in the law. Last month, a group of 12 leading economists also urged the European Parliament to reject the Directive, warning that it could produce “extensive portfolios of software patents” that favor large corporations.

“While some small and medium-sized firms will be able to prosper in this environment, many will not,” the letter said.

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