The European Parliaments legal affairs committee, called JURI, has voted nearly unanimously to ask for a restart to the process around the European Unions proposed IT patents legislation.
The decision will continue the turmoil over differing software patent law in two of the worlds major technology markets. As U.S. software companies spend millions defending or attacking intellectual property holdings, European vendors are taking advantage of their easier legal climate for software, especially smaller companies and open-source projects.
The vote will almost certainly derail the current proposal for the “directive on the patentability of computer-implemented inventions,” or CIIs, which has been widely criticized by open-source advocates. It is backed by groups such as the EICTA (European Information and Communications Technology Industry Association), which lobbies on behalf of such IT giants as Microsoft Corp., Apple Inc., IBM, Hewlett-Packard Co., Dell Inc., Intel Corp., Bull, Nokia Corp. and Ericsson AB.
Both sides say they oppose U.S.-style software patents. However, the EICTA supports the more liberal patenting regime defined in the current proposal, while its critics say that text would effectively open the floodgates to patents on pure software.
At a meeting on Wednesday, JURI members approved the request for a restart with 19 in favor, two opposed and one abstention. The motion requests the European Commission, the executive branch of the EUs government, to start the legislative process over from the beginning, by either resubmitting its original proposal on IT patents to the European Parliament (originally submitted in February 2002) or submitting a revised proposal.
Most observers agree that in the face of such opposition by MEPs (Members of European Parliament), it is unlikely that the Commission will attempt to press on with the current text, which the Commission agreed on as its Common Position in May 2004.
“We think this was the right decision,” said James Heald of the FFII (Foundation for a Free Information Infrastructure), which opposes the current text. “This decision from JURI I hope finally puts a stake through the heart of [the May 2004] text.” Dieter Van Uytvanck, president of the FFII Belgium, said the decision was a “victory for democracy.”
The Free Software Foundation Europe said it supported JURIs decision, although it would have preferred for the EU Council to have adopted a Common Position that took the European Parliaments opinion into account. “Then it would have been clear that software patents are forbidden. This still leaves us in a grey area,” said Bernhard Reiter, German coordinator for the FSF Europe.
Arlene McCarthy, the British MEP who originally guided the directive through the European Parliament, and who supported broader IT patentability, also gave the decision a nod. Under the current circumstances, a restart is the best solution, she said.
The EICTA said it was still reviewing the situation, but it has consistently supported the May 2004 text calling for broader patentability and opposed any delay to its adoption.
The EUs patent regime affects companies based elsewhere who want to obtain European versions of patents they already own, according to industry observers. Companies may receive a patent from the U.S. Patent and Trademark Office but may find that different criteria apply for a European patent, especially when it comes to pure software.
The current unenforceability of software patents also gives European software companies a competitive advantage over their U.S. counterparts, all sides agree. U.S. software companies routinely stockpile thousands of patents that are used mainly to defend themselves from patent lawsuits, but European software companies dont need to bother. The lack of software patent warfare also creates a less hostile environment for smaller software developers and open-source projects, which cant afford to accumulate large patent portfolios.
It is now up to the Commission what will happen next. The Commission may comply with the EPs request and either resubmit its February 2001 proposal or submit a revised proposal. It may decide, as McCarthy suggested, to carry out further studies on the legal and economic impact of the proposed patent legislation. It could ignore the EPs vote and push the current text through, although this is unlikely.
Finally, it could withdraw the proposal entirely and pursue its reforms through other means, such as renegotiating the European Patent Convention. The Commission has threatened to withdraw in the past, when parliamentarians voted on tighter restrictions for patents. However, such a move would mean giving up a chance to give the Commission a more active role in European patent policy, and renegotiating the Convention would be a difficult task that could take 10 years.
If the Commission withdraws its proposal, it is barred from submitting a new proposal on the same matter for two years.
Another option may turn out to be more attractive to all sides. Rather than resubmitting a proposal, the Commission could take a shortcut and ask the EU Council to have another look at the proposal—taking into account the EPs concerns as expressed in its first reading of 2003—and arrive at a new Common Position. The EU Council is the third branch of EU government, along with the Commission and the Parliament, and consists of representatives from the various member-state governments.
Asked at the JURI meeting what the Commission would do, Commissioner Charlie McCreevy reportedly said, “All options are open.”
Those in favor of more restrictions on software patents say that in recent months lawmakers have become far more aware of the dangers of software patents and would be unlikely to agree to a Common Position such as the one of May 2004. “It takes time for people to realize why software patents are much more of a threat than a stimulus. I think we found that with MEPs in the Parliaments first reading, and we have seen that with several ministers in the Council,” the FFIIs Heald said. “But once legislators eyes are opened to the dangers, they stay open.”
An EICTA spokesman, on the other hand, said the organization still stands behind the May 2004 text. “We have always said that we think that text works, it blocks software patents, and we dont see what all the fuss is about,” he said.
Last May, it appeared that the European Parliaments concerns around software patents had been cast aside by the EU Council when it arrived at a Common Position on the proposal that cast aside most of the EPs revisions. The Common Position was due to be rubber-stamped last year, and was expected to go on to the EP for a second reading, where MEPs would have had a maximum of four months to make further changes.
A series of chance delays and procedural issues, backed by a rising awareness among legislators of the dangers of software patents, gave JURI its unexpected opportunity to turn the process around. Key turning points were a change in voting rules that gave new entrants to the EU—such as Poland—more power in the legislative process, and a series of delays in the official adoption of the Common Position. If those delays hadnt occurred, JURI wouldnt have been able to vote for a restart; the current text would have been adopted and ratified before Wednesdays meeting.
Those arguing for more restrictions on IT patents say they believe more large enterprises will soon see the light. “I think you will see some billion-dollar corporations speaking out against software patents. The cost of software patent litigation has grown more than the revenues from software sales have,” said Florian Mueller of the NoSoftwarePatents.org campaign.
The Commission is expected to clarify its intentions sometime this month.