Europe's harmonized patent rules take a step forward

A European Parliamentary council has voted to approve the software patents directive in a move seen as a win for big tech firms.

The European Parliament's legal affairs committee has voted in favor of proposed legislation to harmonize the rules for awarding patents across the 25-member European bloc, a result seen by some as favorable to big IT vendors.

The committee voted late Monday by 16 votes to 10 in favor of a proposed directive on computer-implemented inventions (CII), and in the process rejected most of the amendments requested by Members of the European Parliament (MEPs) that would have reduced the range of products that can be patented.

The committee did, however, retain a controversial reference to "forces of nature" in defining inventions. The high tech industry has warned such language is outdated and could exclude many state-of-the-art inventions from patent protection.

The draft legislation must now be voted on at a plenary session of all 732 MEPs, expected July 6. Typically, the full Parliament follows the recommendation of the specialist committee. But the CII directive -- dubbed the software-patents directive its opponents -- has been so contentious that the outcome of the plenary vote is not assured. In any case, MEPs will have a chance to present again many of the proposed amendments to the legislation that were rejected in Monday night's committee vote.

"European industry is satisfied with the outcome of today's vote. We will now urge the entire parliament to follow suit. It's a pretty good result," Mark MacGann, director general of pro-industry group the European Information and Communications Technology Association (EICTA), said in a statement

EICTA, whose members include Nokia Corp., Siemens AG, Microsoft Corp. and IBM Corp., has argued in favor of a wide-ranging patent regime that would ensure protection for a range of devices that use computer chips such as mobile phones, digital TVs and electromagnetic scanners.

Members of the open-source community have countered that the proposed legislation would open the door to the widespread patentability of software, which they say would discriminate against open source developers and against smaller businesses, which may struggle with the cost of filing patents.

Still, some opponents to the legislation found something to cheer about. Erik Josefsson, Brussels representative of the Foundation for a Free Information Infrastructure (FFII), applauded the committee for giving courts at the national level the ability to limit the scope of what can be patented by including the language about "natural forces."

"The basis for EICTA's position has been ripped away" by the vote, he argued.

MEPs have argued since the start of the debate that to qualify for patent protection, inventions must make a "technical contribution to a field of technology," and not simply a process that happens to involve computer technology. This would mean, for example, that business methods implemented by computer, such as Inc.'s one-click ordering system, which is patented in the U.S., would not be eligible for a patent in the EU. Pure software, algorithms and code are specifically excluded from being patentable.

The committee voted Monday to define a field of technology as an "industrial field of application requiring the use of controllable forces of nature," such as electricity. This aims to make a distinction between the world of software and the physical world of processes that are implemented using computers or computer chips, such as those in washing machines and anti-skid braking systems.

This definition, based on the "forces of nature," has been strongly criticized by business groups, who claim it harks back to an old-fashioned way of thinking that is no longer relevant to modern, digital-based inventions.

Some of the changes agreed to by the Parliament could "drag Europe's patent regime back to the 19th century by linking computer-implemented inventions to the obsolete notion of natural forces," argued Francisco Mingorance, director of public policy for industry group the Business Software Alliance.

The "forces of nature" concept dates back to a time when inventions were primarily mechanical in nature, and references to it in the legislation risk excluding many cutting-edge technologies from being patentable, he said.

The committee's vote sends "mixed signals" about innovation in Europe, he said, adding that he regrets that MEPs approved 20 to 30 changes to the position originally agreed by the Council of Ministers in May 2004. The Council of Ministers is made up of representatives of national governments.

Still, some of the changes are positive because they seek to ensure that small and medium sized businesses will benefit from the patent regime, he argued. According to research by the BSA, small software companies in Europe will file more than 1,000 patent applications this year, and harmonized rules across the E.U. will make it easier and more affordable for them to protect their innovations, he argued.

Once the Parliament has finalized its position at next month's plenary session, the Council of Ministers will examine the Parliament's recommendations. If the Parliament's final stance is close to the views of the Council (i.e. supporting a wide ranging definition of patentability), the proposed legislation will probably be adopted by the Council with only minor changes.

However, if the Parliament's line is far from the Council's and seeks to restrict the scope of patentability, the two sides will have to enter into a special procedure called a "conciliation" to try and reach agreement. Technology firms have said they fear that this process would produce an unsatisfactory outcome because the legislation depends on precise legal definitions which they say the handful of MEPs and Council experts would not be qualified to decide.

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