EU seeks limited scope for software patent protection

The open-source software community has found an unlikely ally in European competition officials in the efforts to restrict the level of patent protection for software.

Competition officials at the European Commission met Wednesday with their colleagues in charge of drafting a new European Union-wide law on software patents, to press their case for limiting the scope of any such law.

They fear that an overly-protective patents regime in Europe will hinder competition by assisting large software manufacturers in maintaining their dominant positions.

A person familiar with the discussions said the concerns of the competition officials have been met. "We haven't agreed a final position but I don't anticipate any further difficulties in getting the draft directive approved within the Commission," he said.

The approach being adopted by the Commission would only allow software of a technical nature to be patented, and it would deny patents to business methods.

The U.S. and Japan have a much broader definition of what can be patented. The U.S. only requires that an application must make a useful contribution, and not necessarily a technical one. It and Japan both permit patents for business methods.

Software of a technical nature would include applications that boost the processing speed of a computer. Business methods include online retailer Amazon Inc.'s 'one click' shopping function, which it patented in the U.S. but not in Europe.

Amazon took out a court injunction against rival online bookseller Barnes & Noble for using the one-click shopping function on its Web site. However, Barnes & Noble successfully appealed and the injunction was lifted. "The United States has swung far too far towards granting patent protection," said Thomas Vinje, a lawyer in the Brussels office of Morrison & Foerster. He said the appeal by Barnes & Noble marks a swing back to the more sensible approach being adopted in Europe.

"The Commission appears to be taking a wise approach to the software patent law," he said. "They will have come under considerable pressure to come up with something more in line with the United States and Japan. But I am glad they appear to have resisted."

The E.U. committee of the American Chamber of Commerce in Belgium has in a submission to the Commission advised it to drop its exclusion of business methods from what can be patented under the new law.

"We argued that permitting business methods to be patented in Europe would not necessarily replicate the American experience here, because the technical nature clause already sets a higher threshold for what can be patented here," said Karl Cox, a member of the Amcham committee in Belgium.

The American chambers of commerce represent the interests of U.S. businesses abroad. "We can live with an extension of the existing approach in Europe towards software patents," Cox said. "What would be dangerous is if the Commission were to become more restrictive than at present, which is what the open source community advocates."

Microsoft couldn't be reached for comment.

Those that favor greater scope for patent protection argue that Europe's failure to adopt a more protective regime has had a harmful effect on software innovation in Europe by denying the innovators the protection they need in order to get financial support for their ideas.

"Some would argue that in Europe, where there is a narrower view of what can be patented, economic opportunity from software invention is limited," said Thaddeus Burns, a lawyer with the Brussels office of Akin Gump Strauss Hauer & Feld. Europe's approach to patent law has contributed to the so-called brain drain of European software engineers who have left to find better returns from their work elsewhere, he said.

The Europe-wide software patent law about to be unveiled by the Commission follows a year-long consultation process with the software industry and the open source community. The proposed directive appears to be following the approach of the existing, fragmented regime in place in the 15 countries of the E.U., the person said.

The Munich-based European Patent Office can register patents for every country in the European Union already. However, the system is very expensive because applicants have to pay the national patent office in order to exercise their protection in that country, Burns said.

Few disagree that the E.U. is right to codify at a European level what was rather vague under existing laws and conventions. "Creating a European standard is a good thing; it's necessary," Burns said. "But I hold a different opinion from the Commission on their narrow view on patents and business methods."

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