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European Parliament Rejects Law on Software Patents (Update2)
July 6 (Bloomberg) -- The European Parliament rejected a law on patents for software, ending a three-year effort by companies including Nokia Oyj and Siemens AG to counter U.S. domination of Europe's $60 billion market.
The parliament in Strasbourg, France, today voted 648 to 14 to throw out a draft law protecting inventions that combine software and machinery, such as code that reduces battery consumption on mobile phones. The assembly opposed U.S.-style limits on free software and ruled out a compromise with European Union governments, which endorsed the legislation in March.
``We buried a bad law and did so without flowers,'' said Eva Lichtenberger, an Austrian member of the parliament's Green group. ``The legislation would have hindered the development of small companies and helped big businesses because they are the only ones that can afford patent lawyers and litigation costs.''
EU governments were counting on the legislation to encourage investment. A lack of uniform rules in the 25-nation bloc means European companies trail U.S. firms such as International Business Machines Corp. in patenting software.
That puts companies like Ericsson AB, the world's biggest maker of wireless networks, and SAP AG, the No. 1 business- management software maker, at a disadvantage when negotiating technology-license agreements.
Missed Opportunity
The defeat is ``a missed opportunity,'' said Mark MacGann, director general of the European Information, Communications and Consumer Electronics Technology Industry Association, which represents companies including Nokia and Siemens. ``Harmonization would have been an optimal solution.''
Patents, unlike copyright, give holders exclusive rights to a technology for a set number of years. Patent holders can charge a license fee for their invention and restrict who uses it. Companies are increasingly seeking this protection for computer- driven inventions, which account for about a fifth of patent applications in Europe.
``There is important innovation coming out of the software industry,'' Steve Ballmer, chief executive of Microsoft Corp., the world's largest software maker, said in Paris today before the parliament vote. ``We think that innovation needs to be protected.''
National Rules
The European Commission, the EU's executive arm, proposed legislation on the patenting of ``computer-implemented inventions'' in 2002 to chip away at disparate national patent- enforcement rules and reduce the regulatory burden on Europe's technology industry.
The rejection emboldens a group of policymakers in Europe who are spearheading resistance to EU market-opening proposals in industries that range from services and airlines to energy and championing the rights of national regulators, workers and companies.
The threat of an EU parliament veto had hung over the draft software-patents law for months. Led on the issue by Michel Rocard, a Socialist former French prime minister, the parliament proposed to limit software patents in an initial vote in September 2003 and called for a new proposal in February this year after EU governments had signaled support for an industry-friendly version.
``It would have been impossible to amend the draft law in a way to reach a good result,'' said Piia-Noora Kauppi, a Finnish conservative.
Open Source
Advocates of so-called open-source software, such as the Linux operating system, had lobbied the parliament to restrict software patents because of concerns the EU would follow the U.S. approach, which gives patent protection to software and ideas such as Internet pop-up advertising. Patents can leave open-source developers and users vulnerable to infringement claims for inadvertently distributing patented methods.
Industry had pinned hopes on a software-patents law after broader plans for a European patent system stalled because of disputes between nations including Germany and Spain over language. The drive for a harmonized system is part of EU efforts to boost economic growth that has trailed the U.S. in 12 of the past 13 years.
A European system would end the risk of conflicting national court rulings on the same patent and trim intellectual-property protection costs, which are higher than in the U.S. A patent covering eight EU nations for eight years, for example, costs about 30,000 euros ($36,000) compared with about half that in the U.S., according to the Munich-based European Patent Office.
No New Proposal
The Brussels-based commission has no intention of submitting a new software-patents proposal, said spokesman Oliver Drewes.
Lawmakers including Kauppi said the rejection of the legislation should give fresh impetus to the creation of a single European system.
Jonathan Zuck, president of the Washington, DC-based Association for Competitive Technology representing about 3,000 smaller companies including 400 in Europe, urged more cooperation among existing bodies.
``The way forward is to work with the EPO and the national patent offices to ensure the continued patentability of software- implemented inventions,'' said Zuck, who was in Strasbourg for the vote.
The parliament could have sought changes to the text endorsed in March by national industry ministers or accepted that accord as it stood. Amendments would have led to negotiations on a compromise with the ministers.
The outcome wouldn't necessarily have pleased industry because it opposed some amendments the parliamentarians threatened to put on the negotiating table. These included proposals that would have prevented patents on digital technology such as high- definition television and on inventions in all their forms including interaction between hardware and software, according to MacGann of the European industry association.
These kinds of provisions ``could have narrowed the scope of patent legislation in Europe,'' he said.
To contact the reporter on this story:
Jonathan Stearns in Strasbourg, France at jstearns2@bloomberg.net
Last Updated: July 6, 2005 08:15 EDT
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aikfIyenYsZg&refer=home
July 6 (Bloomberg) -- The European Parliament rejected a law on patents for software, ending a three-year effort by companies including Nokia Oyj and Siemens AG to counter U.S. domination of Europe's $60 billion market.
The parliament in Strasbourg, France, today voted 648 to 14 to throw out a draft law protecting inventions that combine software and machinery, such as code that reduces battery consumption on mobile phones. The assembly opposed U.S.-style limits on free software and ruled out a compromise with European Union governments, which endorsed the legislation in March.
``We buried a bad law and did so without flowers,'' said Eva Lichtenberger, an Austrian member of the parliament's Green group. ``The legislation would have hindered the development of small companies and helped big businesses because they are the only ones that can afford patent lawyers and litigation costs.''
EU governments were counting on the legislation to encourage investment. A lack of uniform rules in the 25-nation bloc means European companies trail U.S. firms such as International Business Machines Corp. in patenting software.
That puts companies like Ericsson AB, the world's biggest maker of wireless networks, and SAP AG, the No. 1 business- management software maker, at a disadvantage when negotiating technology-license agreements.
Missed Opportunity
The defeat is ``a missed opportunity,'' said Mark MacGann, director general of the European Information, Communications and Consumer Electronics Technology Industry Association, which represents companies including Nokia and Siemens. ``Harmonization would have been an optimal solution.''
Patents, unlike copyright, give holders exclusive rights to a technology for a set number of years. Patent holders can charge a license fee for their invention and restrict who uses it. Companies are increasingly seeking this protection for computer- driven inventions, which account for about a fifth of patent applications in Europe.
``There is important innovation coming out of the software industry,'' Steve Ballmer, chief executive of Microsoft Corp., the world's largest software maker, said in Paris today before the parliament vote. ``We think that innovation needs to be protected.''
National Rules
The European Commission, the EU's executive arm, proposed legislation on the patenting of ``computer-implemented inventions'' in 2002 to chip away at disparate national patent- enforcement rules and reduce the regulatory burden on Europe's technology industry.
The rejection emboldens a group of policymakers in Europe who are spearheading resistance to EU market-opening proposals in industries that range from services and airlines to energy and championing the rights of national regulators, workers and companies.
The threat of an EU parliament veto had hung over the draft software-patents law for months. Led on the issue by Michel Rocard, a Socialist former French prime minister, the parliament proposed to limit software patents in an initial vote in September 2003 and called for a new proposal in February this year after EU governments had signaled support for an industry-friendly version.
``It would have been impossible to amend the draft law in a way to reach a good result,'' said Piia-Noora Kauppi, a Finnish conservative.
Open Source
Advocates of so-called open-source software, such as the Linux operating system, had lobbied the parliament to restrict software patents because of concerns the EU would follow the U.S. approach, which gives patent protection to software and ideas such as Internet pop-up advertising. Patents can leave open-source developers and users vulnerable to infringement claims for inadvertently distributing patented methods.
Industry had pinned hopes on a software-patents law after broader plans for a European patent system stalled because of disputes between nations including Germany and Spain over language. The drive for a harmonized system is part of EU efforts to boost economic growth that has trailed the U.S. in 12 of the past 13 years.
A European system would end the risk of conflicting national court rulings on the same patent and trim intellectual-property protection costs, which are higher than in the U.S. A patent covering eight EU nations for eight years, for example, costs about 30,000 euros ($36,000) compared with about half that in the U.S., according to the Munich-based European Patent Office.
No New Proposal
The Brussels-based commission has no intention of submitting a new software-patents proposal, said spokesman Oliver Drewes.
Lawmakers including Kauppi said the rejection of the legislation should give fresh impetus to the creation of a single European system.
Jonathan Zuck, president of the Washington, DC-based Association for Competitive Technology representing about 3,000 smaller companies including 400 in Europe, urged more cooperation among existing bodies.
``The way forward is to work with the EPO and the national patent offices to ensure the continued patentability of software- implemented inventions,'' said Zuck, who was in Strasbourg for the vote.
The parliament could have sought changes to the text endorsed in March by national industry ministers or accepted that accord as it stood. Amendments would have led to negotiations on a compromise with the ministers.
The outcome wouldn't necessarily have pleased industry because it opposed some amendments the parliamentarians threatened to put on the negotiating table. These included proposals that would have prevented patents on digital technology such as high- definition television and on inventions in all their forms including interaction between hardware and software, according to MacGann of the European industry association.
These kinds of provisions ``could have narrowed the scope of patent legislation in Europe,'' he said.
To contact the reporter on this story:
Jonathan Stearns in Strasbourg, France at jstearns2@bloomberg.net
Last Updated: July 6, 2005 08:15 EDT
http://quote.bloomberg.com/apps/news?pid=10000006&sid=aikfIyenYsZg&refer=home
As little as the big ones like it, I think it helps them as well as they have to maintain a certain degree of flexibility.
Good or bad? Discuss.
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