Every time a visitor to your U.S. Web site clicks on a link to another site, you could owe British Telecommunications PLC (BT) some money. Or at least that's what the company is trying to prove in court in a U.S. case against Prodigy Communications Corp.
BT contends its Hidden Page patent, U.S. patent number 4,873,662 filed in the U.S. in 1976 and granted in 1989, gives the company the intellectual property rights to the hyperlink technology.
If it wins its case, BT stands to make millions -- and potentially to make the Internet much harder to navigate.
The same situation could cover the use of text and graphics on a Web site, or even just the use of a Web site to conduct business. Patents for both of those acts have been awarded by the U.S. Patent and Trademark Office to Pan IP Corp., and the company has already filed lawsuits against 11 small companies, presumably testing the water before going after bigger prey.
Europe is watching this sort of development nervously, as it struggles to set rules on its own patent laws and decide what is, and is not, patentable.
At present, European companies can apply for patents via their own national patent office, or through the European Patents Office (EPO). The EPO can grant pan-European patents, according to the rules laid down in the European Patents Convention (EPC) in 1973, but each European patent is in fact still a bundle of national patents -- negotiated, agreed and packaged as one.
The rules on what can and can't be patented are now being reviewed. Europe's patent laws are narrower than those in the U.S., as fewer things can be patented, but the rules as they stand are not clear.
According to Article 52(2) of the EPC, software programs are not patentable. But then Article 52(3) qualifies that, saying that the items in Article 52(2) are banned only if the patent relates to that item -- in this case, the software -- "as such." Those last two words are responsible for a great deal of debate.
European patent authorities have tended to interpret Article 52(3) as meaning that, while computer programs can't be patented, that rule can be waived if the development includes a technological innovation or "technical effect." Rather than patenting the program "as such," the owner is seen to be patenting the innovation or effect. However, there's been variation in what each country will allow, and the EPO has been relaxing its rules over time, according to a spokesman for the U.K. Patent Office (UKPO), who asked not to be named.
"We need clarification on this," he said. There are differences between what individual countries will allow, too, he said, "and so we want to clarify what the rule means."
The UKPO doesn't mind how that's done, he said -- whether by the EPO or by the European Union. "It would be ideal to have (the clarification made) by the E.U., because it's preferable to have a democratically elected body make these decisions, but we just want it done as quickly as possible," he said.
The E.U. issued a proposal for a Directive on patents in February and this is being considered by the E.U.'s Council of Ministers and the European Parliament. The proposal suggests that the law remain much as it stands currently: Computer programs should continue to be outside the scope of patents, unless they make a "technical contribution" and contribute to the technical field concerned. Programs "as such" and business methods using technology would not be patentable and would be covered by copyright. The biggest proposed change from the current situation is that "isolated" programs, such as programs stored on CDs rather than on computers, would not be patentable. These patents have been allowed by the EPO and some E.U. member states.
The EPO is not subject to European Community law and bases its decisions on the EPC. However, if the Directive is implemented, the EPO will have to follow suit, as each European patent it grants is subject to the national laws of each country, which would be covered by the Directive.
The EPO has no problem with the proposed changes, said Dai Rees, a director of the EPO. "We're here to do what the politicians want us to do. It would involve slight changes, but it's not that significant."
There has been a certain amount of "drift" in terms of interpretation of the law, he said, and clarification would be welcome. The EPO will continue to follow the rules of the EPC, he said, "and so the Directive doesn't directly apply to us," but in time the EPO's administrative council would no doubt adapt the EPC to bring it into line, he said.
However, not everyone supports what the E.U. and the UKPO are aiming to do, and there are some who suspect their motives.
The Eurolinux Alliance is a group of companies and individuals committed to open-source software development. It has been following the developments and is keen to make patenting software either difficult or impossible. When the E.U. published a consultation document in October 2000 asking for comments, 90 percent came from Eurolinux members, through an open forum set up by the group.
On its Web site at http://www.eurolinux.org/index.en.html the Alliance claims the E.U. and the UKPO are dissembling. The E.U. and the EPO may say they want to clarify the law and have restricted patentability, but in fact they are moving towards unlimited patentability, it said. The E.U.'s press releases, it said, are "written in an esoteric Newspeak from the European Patent Office (EPO), in which normal words often mean quite the opposite of what you would expect."
Spokesman Hartmut Pilch says the E.U. knows "what to say to be popular," but that it is heading toward the American model.
"Don't read their press releases, read the directive itself. Once people read the directive they see how things really are."
The proposed directive is available online at http://www.europa.eu.int/comm/internal_market/en/indprop/comp/com02-92en.pdf"The EU doesn't actively want business model patents," Pilch said, but "that's the inevitable result of the way they're doing things. To understand it you have to think like a patents lawyer -- this is not about boosting the economy or about fostering competition, but simply about making sure the patents business has a future."
All that the Eurolinux alliance and companion organization FFII (Foundation for a Free Information Infrastructure) can do is keep pushing their point, Pilch said, and they are doing so forcefully in every forum it can. "Our hopes are very good. The French and Dutch governments have stated clear positions against the directive and Germany is unclear, but once they start thinking about it people see our point," he said.
Miriam Rainsford is a writer and free software advocate whose latest book, Copy Left: creativity, technology and freedom, is due out later this year. She too believes that the E.U. is heading for unlimited patentability.
Going down the path proposed by the E.U. and the UKPO could lead to a "dark age" where the Internet and all forms of digital expression are controlled by large software companies, she said. Far from fostering competition, software patents create "a series of antitrust situations, and stamp out creativity. The point of patents is to promote innovation but that doesn't work with software -- we'll reach a saturation point where no one can do anything."
The E.U. should take this opportunity and ban software patents altogether, she said, or be forced to follow the U.S. "In Europe we have a little bit of time here to turn things around, and we have to lobby MEPs to that they understand."
Copyright is the best form of protection for software, Rainsford said, and will stand up in court to protect a developer's rights. The difference is that copyright protects a particular slice of code, while a patent prevents other people from doing anything similar, even if they write a new piece of software to do so, she said. "And patents pending are even worse, in some ways. You don't know they're there, so you could spend ages developing something and then find you're in trouble over patents."
Software patents are worst for small players, she said. "The big guys just cross license, work out a deal, but small companies can't fight it."
The UKPO spokesman is dismissive of suggestions that there is a hidden agenda in Europe and insists that the UKPO only wants a clarification of the status quo. Europe's legislation as it stands works well, he said, and just needs to be tightened and clarified to make sure the rules are adhered to.
The situation in the U.S. is not one that Europe wants to recreate, he said. "Some of the patents allowed in the U.S. do limit creativity, because people get too scared of infringing them. Patents are being granted on the simplest, most basic things, like automatically comparing a price with a competitor's Web site and taking 10 percent off. Even the large players don't want to see it happen here because it's becoming a burden in the U.S. They have to grab as many patents as they can, as bargaining chips, so that they can deal with other companies who have a patent on a technology."
A decision on the proposed Directive is due later this year, but if that "stagnates," the UKPO will start to push the EPO to alter the EPC, the spokesman said. "Our overarching concern is to get it clarified ASAP."