By Nick Wells
This month, the European Parliament rejected one of the most controversial pieces of legislation in its history: a proposed law that would have created a single system for patenting software throughout the European Union. This leaves each nation of the European Union free to maintain independent patent laws. Currently, most laws outside the United States do not permit patenting software or business methods.
The rejected legislation had been the subject of 178 amendments by competing interests, rendering it less than appealing, even to those who favor software patents. Supporters hope that a future proposal will provide clearer legal protections for innovation. Software patents have been available in the United States only since about 1996, and are now issued at about the rate of 30,000 per year, or over 15 percent of all patents. Each typically costs its inventor between $15,000 and $25,000—and 3-4 years—to obtain.
Software patents have been a subject of heated debate in Europe for several years, as competing interests used national and European Union forums to push for patent reforms. Larger businesses, such as Nokia in Finland, consider software patents to be an incentive to conduct new research that can be legally protected. Those opposed to software patents, including vocal advocates of free or open source software products such as the Linux operating system, decry “fuzzy” patent law and have claimed that software patents stifle innovation and impose huge risks that burden small companies as they try to create new products. Despite the creativity many invest in their own software development, many of those opposed to software patent consider software as essentially equivalent to a mathematical formula—something that cannot be patented even in the United States.
While many on both sides of the discussion recognize that some aspects of U.S. patent law are due for reform, businesses remain concerned with the huge cost of securing patents based on dozens of local laws. Though many U.S. inventors are able to use the services of the European Patent Office (the EPO) through the Patent Cooperation Treaty, this important office serves merely as a clearinghouse and initial review stop for patent applications that must still be processed by each nation’s patent office before issuing. With costs for obtaining patent protection easily exceeding $10,000 per country, any effort to simplify the patent application process is seen as a boon to those companies whose assets include significant intellectual property.
The rejection of the recent legislation at the European Parliament, by a vote of 648 to 14, is merely the last in a long line of back-and-forth maneuvers in Europe over software patents. (Business method patents, such as the Amazon.com “one-click” patent, were not part of the rejected legislation and remain unavailable throughout Europe.) The European Parliament was previously opposed to software patents, and the currently defeated legislation was seen by almost all members of Parliament as too fractured and confusing to be of any real assistance in resolving the outstanding issues. In 2004, the European Council of Ministers, for example, voted to accept software patents. But at the last minute, the Parliament of Holland changed the vote of its minister, turning the tide against software patents once more.
The World Intellectual Property Organization (WIPO) has repeatedly expressed the need for harmonization among the world’s intellectual property laws—including patent laws. But as Europe struggles to find an appropriate middle ground in the software patent debate, inventors remain subject to hundreds of different laws as they try to protect their work in an increasingly connected world.
For more information on patent issues, please contact Nick Wells at nwells@kmclaw.com.