At stake is whether the EU will bring in more permissive rules on software patents, bringing it into line with patent practices in the United States and Japan. Currently, patents on pure software and business processes are not enforceable, making it impossible for large companies to bring their patent arsenals into play in the region.
The system is seen as creating competitive advantages for the EUs open-source economy, and for EU-based IT companies, which dont have to worry about the overhead associated with patents on software. Open-source projects are considered especially vulnerable to software patents, and open-source leaders such as Linux Torvalds have spoken out against the current directive.
The proposal, called the "directive on the patentability of computer-implemented inventions," faced strong opposition in its first round in the European Parliament, called a first reading, and parliamentarians modified the text substantially to ensure software patents were locked out. The EU Council later threw out most of the EPs changes, and finally formally endorsed its own version of the text in March, despite controversy over whether its text had sufficient support.
The proposal has now returned to the EP for a second reading, and the amendments tabled by the EPs legal affairs committee show that parliamentarians are willing to continue to fight for limits on software patentability, according to industry observers. The amendments submitted by MEP Michel Rocard, responsible for steering the legislation through parliament, restate most of the original changes passed in first reading. Piia-Noora Kauppi, of Finlands European Peoples Party, also submitted most of the original amendments from the first reading.
If passed, the amendments would impose strict limits on IT-related patents, locking out pure software from patentability, according to the Foundation for a Free Information Infrastructure, the main group coordinating opposition to European software patents. "Michel Rocards report is good in that it tries to draw a line between what should and shouldnt be patentable," said the FFIIs James Heald.
Those in favor of limits on software patentability want the directive to make a distinction between software with a "technical effect" and without one. Such a distinction would allow patents on technical innovations that use software, such as computer-controlled machinery, but block patents on pure software workings such as processing image data or interacting with memory.
The amended directive must "ensure that software cannot be patentable, but rather only computer-controlled hardware inventions," wrote Eva Lichtenberger, an Austrian Green MEP, in defending one proposed amendment.
The European Information and Communications Technology Industry Association, among other IT industry groups, argues such limits would invalidate many existing patents and make it impossible for companies to protect their investments in research and development. "We believe the current agreement is balanced; its a good framework for protecting and encouraging innovation throughout Europe," said EICTA spokesman Leo Baumann.
It will be more difficult for MEPs to get their way in the second reading, which requires a simple majority to pass any amendment; absences and abstentions count as "no" votes. The legal affairs committee will vote on the matter in late June, followed by a vote by the entire parliament in early July, which will have to muster at least 367 votes to pass each amendment.
"At this stage it is hanging in the balance," said Heald. "There is quite an upswell in parliament [supporting the amendments], but there is an awful lot of lobbying going on."
If the EP makes amendments of the kind the FFII wants, the EU Council is likely to throw them out again. However, passing such amendments will give the EP more negotiating power in a later phase of the legislative process called conciliation. On the other hand, if the legal affairs committee is unable to win sufficient support for any amendments, the current version of the directive is likely to become law.
The precarious situation means efforts to discuss the issues with MEPs could make all the difference, Heald said. "People who care strongly about this shouldnt underestimate the effect that a face-to-face with an MEP now could make, particularly if they are representing a company that could be affected," he said.