Charlie McCreevy, Patents and the Irish plot to take over the EU

Do Software Patents promote Innovation?

Software Patents are good for software developers. They promote innovation and enterprise and are needed to protect small busnesses against large ones. The only people who may have some, minor, concerns are the geeks, the open source or free software developers. So goes the standard rationale.

So why do most software developers reject this argument, classifying software patents as an impediment to their business? When I contacted Ian Clarke, an Irish programmer who has founded companies in the US and Edinburgh and raised $4million venture capital money along the way he was unequivocal:
"If software patents are permitted, innovators are under pressure to acquire patents of their own, so that if someone else claims that you have infringed their patent, you have some hope of using your patents to fight back. This process can be extremely costly, and the only real beneficiaries are intellectual property lawyers and very large companies, who can use their patent protfolios to attack competitors."

He dismisses the protection that patents offer stating "A software patent can take years to acquire, by this time most small innovators will have succeeded or failed." This view is backed up by consultany firm Price Waterhouse Coopers who, in a report on the European ICT industry describe patents on software as a 'threat to the European ICT industry...The mild regime of IP protection in the past has led to a very innovative and competitive software industry with low entry barriers. A software patent, which serves to protect inventions of a non-technical nature, could kill the high innovation rate'.

It is this threat to innovation that developers refer to most often. They claim that it is virtually impossible to write any complex piece of software without, unknowingly, breaching patents. The type of patents that are enforceable in the US and have been granted in Europe pending the Patent Directive cover such basic functionality that no new company could launch a spreadsheet for example without opening themselves up to being sued. The Foundation for a Free Information Infrastructure,representing 1,000 companies, list 20 European patents that affect web sites. These are amongst the 30,000 approved by the European Patent Ofice,and cover Credit Card payments, Video distribution over the Internet and even using TV as a metaphor on a web page. Designing a simple web site can open a company to legal claims under software patent rules.

Software developers point to the protection that is available through copyright, where there is no cost or delay in attaining it. Patents on the other hand take 3 to 5 years to acquire and can cost millions of euro to defend. While copyright prevents anybody else from appropriating your code, in the same way as it protects music or text that you create, it is not possible to accidentally infringe someone elses copyright.You can only do this through the act of copying, not through independent development.

But then it is not innovators who pay the lobbyists, it is not garage software companies that sponsor EU presidencies and sit on advisory boards. It doesn't matter what the truth is, as long as the numbers add up. Of course software patents are good for innovation.As for freedom, you're just silly if you bring that up.

Charlie McCreevys New Role to Include Sorting Out Europes Patent Mess

Charlie McCreevy, after a minor delay, looks like he will be appointed Internal Market Commissioner around the 25th November. One of the issues he's going to be responsible for will be the passage of the European Patents directive, which could include software idea patents. From his ratification answers it seems that Mr. McCreevy will adopt the stance of his predecessor in supporting the concept of software patents. This will also be in line with the position taken by the Irish presidency earlier this year. However, in doing so he will be taking sides in one of the most contentious policy debates the EU has seen in a number of years.

There is currently a stand-off between the European Parliament and the Council of Ministers on this directive with both sides becoming increasingly entrenched. The Patent Directive, originally introduced by the commission in 2002 was substantially amended in the European Parliament last September after one of the most concerted grassroots lobbying campaigns the Parliament has seen. This was substantially driven by the very people the Patent Directive was supposedly designed to help, Europe’s software developers. The campaign was characterised as "the most aggressive I have seen in 10 years as an MEP" by Arlene McCarthy, the British Labour MEP who was responsible for steering this through the parliament. The net result of the 120 amendments that the Parliament made was to remove software only patents from the areas covered by the directive and reject the proposition that the European Software industry needed patents to compete with the US.

In May the new directive came before the competitiveness council of the Council of Ministers. There, the Irish presidency introduced a text that ignored 99 out of the 120 amendments, reverting back to the position that the Commission had originally introduced. This caused an outrage among campaign groups in individual countries who claimed that their governments had broken commitments made before the vote, especially in Holland, Poland and Spain. Not only software industry groups, but the European Confederation of Small and Medium Enterprises Associations (CEA-PME) attacked the Councils decision claiming the existence of many European software companies was threatened. The Parliament was no less annoyed, with Arlene McCarthy stating "the Council of Ministers and the Commission cannot ignore our views as democratically elected members of the European Parliament... Our power on this piece of legislation is very strong and we can modify it or block it if we choose to do so."

Ireland, with its high employment in US Software companies which hold substantial patent portfolios managed to achieve 'political' agreement but could not get the new text formally ratified before the end of the presidency and the issue passed onto the Dutch.

But on the 1st of July the Dutch national parliament, in a move never seen before in the EU, mandated its Economic Affairs Minister to abstain from any vote on this directive. September 25th should have seen the Council debate and vote on this issue but this was deferred, supposedly for technical reasons in relation to difficulties with translation. The German Green MEP, Daniel Cohn Bendit rejected this interpretation stating "In reality this file is returning ...to allow the technical discussions between experts from the member states to continue”. He also said the software regulations proposed by the Competitiveness Council would have led to the EU's economy being controlled by a small group of multi-nationals. The next meeting of the Council of Ministers this can come up before is on the 24th / 25th November although there are serious doubts that agreement can be achieved here.

Even if agreement is reached the directive must return to the European Parliament for ratification. According to the office of Proinsias De Rossa , there is still a majority of 60% in the new parliament in favour of the amendments with many of those who voted against the amendments last time taking an even stronger anti software patents stance. If the Council text is not accepted a conciliation process may be attempted , although it is more likely that the ball will fall into Commissioner McCreevy’s court. His predecessor threatened "Now if we fail in our efforts.. we may well be faced with a renegotiation of the European Patent Convention. To be blunt...[this] would not require any contribution from this parliament." after the first Parliament vote. So it is quite likely that early in the new year commissioner McCreevy will be forced to choose between the European software developers and small enterprises and the US multinationals which he has done so much to accommodate as Irish Finance Minister. His actions are likely to be a pointer to the type of Internal Market Commissioner McCreevy will be promoting and how much of Boston he will be bringing to Brussels.