EU Patent Crisis: Pressure Mounting to Scrap IT Changes

By Matthew Broersma  |  Posted 2005-02-24

EU Patent Crisis: Pressure Mounting to Scrap IT Changes

The European Parliament has unanimously passed a fresh motion calling for the European Commission to take action over the European Unions controversial IT-patenting initiative, which critics say would legalize software patents.

The motion increases the pressure on the Commission, following two recent EP decisions along similar lines. The EP wants the Commission to scrap the current version of the proposed patents directive, which dates from May 2004, and start the legislative process over from scratch.

Meanwhile, the EU Council, the third branch of the European Unions government, is in a deadlock with the Commission over which body will make the next move, according to observers.

Whatever decision the Council or the Commission makes, it will be likely to have uncomfortable consequences, analysts say. The EP and a growing number of the European Unions national parliaments are against the May 2004 proposal, while many large companies, including Microsoft Corp., back the proposal.

A significant Danish political party on Thursday voiced its formal opposition to the proposal, following similar statements from Germany, Spain and the Netherlands.

The outcome of the process will decide whether the European Unions software industry remains free of the patent warfare that has become common in the United States in recent years. Companies dealing with the U.S. and EU software markets must currently deal with two different patent regimes.

The European Unions current system benefits its open-source companies, which dont have to wade through the many software patent claims that exist in the United States.

The FFII (Foundation for a Free Information Infrastructure) said the Commission should withdraw the May 2004 proposal and start over. FFII president Hartmut Pilch said the increasing awareness of software patent issues is countering the influence of big business and national patent office officials.

"Under these circumstances, a Council majority for a good directive may become possible," Pilch told eWEEK.

The EPs motion, passed unanimously in a Thursday plenary session, urged the Commission to "review its proposal for the software patents directive in accordance with the decisions in Legal Affairs Committee of the European Parliament on 2 February 2005 and the Conference of Presidents 17 February 2005."

On Feb. 2 the Legal Affairs Committee, known as JURI, decided to ask the Commission to restart the legislative process, and this was ratified by the Conference of Presidents on Feb. 17. Thursdays motion isnt necessary for the EP to ask for a restart—it is purely designed to reinforce the EPs message, observers said.

Read more here about JURIs decision to restart the legislative process surrounding the patent initiative.

The motion is important in another way as well, showing that if the May 2004 text is adopted by the EU Council and returned to the EP for a second reading, the political will exists for the EP to scrap the proposal itself.

"The Commission and the Council can figure out that it will do them no good to ignore the EPs request for a restart since the EP could then in a second reading simply reject the proposal with an absolute majority of its component members," Florian Mueller, head of the campaign, told eWEEK.

Next Page: Commission and Council in a deadlock.

Commission and Council in


The Commission and the Council are currently in a deadlock over who will make the next move. The Commission said this week that it is waiting for the Council to formally adopt the May 2004 text before it makes a move. EU Competitiveness Council spokeswoman Magdalena Martinez-Almeida made it clear this week that the Council believes the ball is in the Commissions court.

The Council is made up of representatives of the European Unions 25 national governments, and is thus susceptible to the pressure being exerted by an increasing number of those national governments to stop the May 2004 proposal in its tracks, analysts say. Formal resolutions to this effect have recently been adopted by the national parliaments of Spain, the Netherlands and Germany.

Denmarks Social Democrat party on Thursday said it has changed its position on the May 2004 text and now opposes it. Denmarks government is a coalition, and relies on the support of the Social Democrats, the largest opposition party.

"We think so many people have pointed out problems in the proposal that we ask the government that no decisions be made in the European Union on a software patent directive right now," said the Social Democrats IT spokesman Thomas Adelskov, according to a report in Danish industry journal

To read David Courseys analysis of the pros and cons of software patents, click here.

As for the Commission—the European Unions executive branch—some critics believe it is under inappropriate influence from Microsoft, Irelands largest taxpayer. Much of Irelands prosperity of the past few years is due to the countrys liberal tax policy toward IT companies.

Mueller argued there is a danger that the Commissioner currently in charge of the patents proposal, Charlie McCreevy—Irelands minister of finance until last year—will put Microsofts interests ahead of those of the European Union as a whole.

The European Commission can now restart the legislative process as requested by the EP, or it can withdraw the legislative initiative entirely. It also has the option of allowing the May 2004 proposal to go through to the EP for a second reading—but only once the EU Council has formally adopted the text as its Common Position.

Industry bodies such as the EICTA (European Information and Communications Technology Industry Association) argue that the May 2004 proposal will not legalize software patents, and should proceed to the EP for a second reading. The proposal is necessary to harmonize the European Unions patent system and give IT companies clarity, the EICTA says.

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