Feature

Patent directive could mean less software choice and more red tape for IT directors

Critics say EU move threatens smaller suppliers and in-house work

Plans to introduce European-wide laws on computer software patents have unleashed a storm of controversy as rival political groups argue about the impact they could have on the cost and availability of commercial and open source software.

European member states, members of the European Parliament, commercial software producers and the open source community are fighting over the wording of a proposed directive that could have serious consequences for every company that uses or develops software.

If the critics are right, software patents could create legal hurdles for IT departments wanting to develop their own software. In the worst-case scenario, the patents could force smaller suppliers and open source specialists out of business, restricting competition and the choice of software available to users.

The proposed EU Directive on the Patentability of Computer-Implemented Inventions aims to clarify existing European laws on patenting software.

The current legislation is governed by European Patent Convention, an international treaty which has so far been implemented in slightly different ways across each state. It states that software cannot be patented if it does no more than operate in a computer. To be patented, software has to have a "technical application".

In practice, this means that a company that develops software to control a car can patent it, as controlling a car is a technical application. However, a company that develops software to automate a human resources system would not be granted a patent. This is because HR systems are regarded as a business process rather than a technical application.

The details of the proposed EU Directive have yet to be finalised, leaving its supporters and critics to argue over its merits.

Software suppliers regard the directive as a vital tool to ensure the competitiveness of European companies. IT suppliers' group Intellect is pressing for it to be adopted as a matter of urgency.

"Without it, the UK's individual inventors, small and medium-sized companies and large multi- nationals will be unable to protect their inventions, undermining the incentives to undertake research and development, and creating a climate adverse to technology transfer," said Intellect's director general John Higgins.

Microsoft chairman Bill Gates put the case rather more strongly this month, describing opponents of the legislation as "modern-day sort of communists" who wanted to damage industrial innovation.

Sensible compromise

For its supporters, the directive represents a sensible compromise between no software patenting and the US regime, which allows a wide range of software to be patented. In the US, suppliers have obtained patents covering everything from shopping baskets on internet sites to task completion bars used to show how long software is taking to install.

But some MEPs, smaller software suppliers and the open source community have said that unless such software patenting is specifically excluded from the directive, the law could act as a back-door route to US-style patenting in Europe.

Florian Mueller, who runs protest website nosoftwarepatents.com - backed by a coalition of IT professionals and other opponents of proposals to change patent law - said this could end the work of the open source community, with large suppliers taking out patents on basic IT functions and enforcing them aggressively through the courts.

As small software houses and the open source community lack the financial resources to fight battles over intellectual property in the courts, the directive could leave IT departments with a smaller pool of software suppliers to choose from and restrict the availability of open source alternatives.

Threat to Linux

"Some companies have sent their sales people out telling people not to use Linux because they claim they have a bunch of patents on it. That is one of the reasons why the open source community is concerned about it," said Clare Wardle, deputy head of the legal department at the Post Office.

IT departments could run into difficulties if they develop their own software for in-house use, said Peter Knight, intellectual property specialist at law firm Norton Rose.

"As far as copyright is concerned, it is fairly straightforward for an IT department to make sure they are not infringing someone else's code. But to make sure you are not infringing a patent, you have to do a patent search. I cannot imagine many IT departments wanting to do that," he said.

However, the Government and the Patent Office are adamant that the directive will do little more than clarify existing European law. It is still too early to say how the directive will work in practice. Progress on the legislation ground to a halt in December, following objections from Poland.

In the meantime, Norton Rose suggested that IT directors follow the progress of the directive carefully and to begin preparing the groundwork now. This means seeking indemnities from suppliers that their software does not breach other supplier's patents or copyrights.

For and against the patents directive       

For  

  • Provides European companies with protection for their ideas and encourages innovation 
  • Creates a level playing-field for patents across all European countries 
  • Directive will clarify existing patent laws, rather than introducing major changes. 

Against 

  • Small suppliers will not have enough financial muscle to obtain and enforce patents, reducing choice for IT departments 
  • Could restrict the availability and functions of open source software 
  • IT departments may have to conduct patent searches to make sure they are not infringing rights.

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This was first published in January 2005

 

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