American-Style Patents Wont Cross the Pond to EU

Lawyers and open-source advocates weigh in on the European Parliament's decision.

The European Parliament overwhelmingly rejected the European Unions controversial IT patenting proposal on Wednesday, but what will that decision mean for business and open-source?

The European patent efforts had been intended to standardize the EU member states laws on the patentability of IT-related inventions, especially software.

After almost four years of often very vocal arguments between supporters and opponents of the measure, it failed to pass when both groups turned against it.

As originally drafted, the law would have put in a system, which would have brought the EU into harmony with patent practices in the United States and Japan. Critics, however, said that it would legitimize software and business-practice patents.

Currently, patents on pure software and business processes are not enforceable in the EU.

The Foundation for a Free Information Infrastructure, the main coordinator of European opposition to software patents, said the result was a victory for democracy over the "free ice-cream, boatloads of hired lobbyists and outsourcing threats" wielded by large IT businesses.

But what does Europe sticking with its patent status quo really mean?

The open-source community is applauding the laws defeat.

"In theory, a healthy software-patent system might reward innovators and promote the worthy objective of the advancement of knowledge and the useful arts," said Eric Raymond, co-founder of the OSI (Open Source Initiative).

"In practice, American-style software-patent systems have serious flaws, including weak patentability filters and failure to systematically check submissions against important bodies of prior art such as Internet open-source repositories. Their effect is to actually suppress innovation. Real-world evidence of this suppression is in "An Empirical Look at Software Patents," here in PDF form.

In its official announcement, the OSI said, "We are pleased to see that the European citizenry understands that they have an interest in protecting their right to innovate."

Still, "In the near term, it will likely not make much difference at all, because the rules in Europe will remain what they are, which do in fact allow some form of software patenting, and most IT businesses and FOSS (free and open-source software) projects will still have activity in the United States, where software patents are alive and well," said Daniel B. Ravicher, executive director of the Public Patent Foundation.

/zimages/3/28571.gifRead more here about the European Parliaments decision to reject the controversial IT patenting proposal.

"In the long term, however, it will hopefully be one step in the general movement of governments throughout the world recognizing the impact patent policy has on the public," said Ravicher.

Some, though, arent sure how meaningful this decision really is.

"Although software patents are not available in Europe, we have always been able to circumvent this legal roadblock by including software with a machine, computer or technical result. This issue seems to be more political than legal," said John S. Ferrell, founder of Carr & Ferrell LLP, a Silicon Valley intellectual property and corporate law firm.

Going on, Ferrell observed, "Patent protection for software inventions has been loudly debated in Europe for the past 20 years. There is a strong populist distrust by many Europeans that software patents will be used by a few of the largest computer companies to monopolize the industry and squeeze out small and midsize software developers."

"The irony is that because the largest software companies are already able to afford more global patent protection, particularly in the U.S., its the regional European companies that are currently being significantly disadvantaged by having their software innovations commoditized and otherwise exposed with no patent protection," he said.

The Foundation for a Free Information Infrastructure, a major coordinator of European opposition to software patents, however, holds the position that the lack of American-style patent laws will help create competitive advantages for the EUs open-source economy, and for European-based IT companies, which dont have to worry about the costs of software patents.

Not everyone is convinced by these arguments, though.

"The arguments against software patents take no account of the benefits of patent protection which generally encourage innovation (they provide revenue streams for owners and licensees, these are always balanced by market forces so theres no question of the IBMs of this world destroying the growth of smaller IT companies)," said Helen Smith, an associate at the London office of the major international law firm K&LNG (Kirkpatrick & Lockhart Nicholson Graham).

"The way to economic success for IT businesses large and small across Europe is for open-source/free software system to exist alongside a predictable and consistent software patents system throughout Europe," said Smith.

For now, though, the arguments over European patent law are over. Only time will tell if a lack of patents will help or hinder EU IT-based businesses.

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