Green light for software patenting, red light for Community patent

May 20, 2004

Brussels, 19 May 2004

On the second day of the EU's Competitiveness Council on 18 May, ministers voted through changes to the software patenting directive that will pave the way for extensive patenting of software in Europe.

The same ministers, however, failed to agree on an EU-wide patent, which is widely seen as a key part of their drive to boost European competitiveness.

In a statement; the European Council said it noted that 'the necessary unanimity could not be found in support of the Presidency compromise proposal for a Council Regulation on the Community Patent.'

It appears that Germany, France, Spain and Portugal voted against the compromise put forward by the Irish Presidency while Italy abstained. Unanimity was required to move forwards. It is now up to the European Commission to decide whether or not to draft a new proposal.

The proposal aimed to reduce the costs involved in the patent process and to unify Europe's disparate patent laws into a single system. However, differences in opinion over the number of languages that patents could be secured in made it impossible to reach a consensus on the proposed directive.

'This is very disappointing given the huge efforts that have been made over many years,' Mary Harney, the Irish Minister for Trade and Enterprise, told the Irish Times.

The Netherlands, which takes over the EU Presidency in July, has already announced that it will not attempt to revive negotiations on the matter.

On the proposed Computer-Implemented Inventions Directive, the agreement reached will allow software that is part of a mechanical device to be patented. This avoids a 'drift' towards the US system that permits patenting of business methods or computer programmes.

The issue has been highly controversial. Opponents of software patents have claimed the proposed regulations would stifle innovation and restrict research among small businesses. Big firms such as Nokia, Ericsson, Alcatel, Philips and Siemens, however, have maintained that their investment in research and development (R&D) would be wasted if they are not guaranteed patent protection.

After software developers, computer scientists and small businesses complained that the proposed measures would allow software patents to be dominated by large corporations, the European Parliament made changes to the proposal. The majority of the changes were aimed at maintaining the status quo and keeping software beyond the reach of patents.

The European Council vote, however, removes many of those changes. 'The text that was approved is very close to the original Commission proposal,' said a spokesperson for the UK's Department of Trade and Industry.

EU Internal Market Commissioner Frits Bolkestein said Parliament's version went 'beyond what was required to set the right balance between rewarding inventors for their efforts and allowing competitors to build on these inventions, and could ultimately harm EU competitiveness.'

The law 'aims to boost innovation by ensuring that those who invest in developing genuinely new products that depend on computer implemented technology can, like those who develop other products, get a fair reward,' said the European Commission in a statement.

The draft legislation will now return to the European Parliament for another vote later this year. During this reading, no new amendments can be added, but previously introduced changes can be reintroduced. Reversing the Council's vote is likely to be difficult.

To access the provisional Council conclusions, please consult the following web address: essData/en/intm/80522.pdf

CORDIS RTD-NEWS / © European Communities

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