Showdown over European Software Patents

"I'm usually inclined to side with the open source folks"

So does that mean that you're lobbying internally for Businessweek to be free and are prepared to offer your services on a pro bono basis to assist in that cause? Thought not.

A market with Patent law has to be seen as opposed to the free market. When you allow granting software patents you have to provide evidence first that patents really work as an incentive system in the market. This is a question for economists. All studies show that these conditions are not met in the software market.

It is not about Ms vs. Open source. But sure, the patent system does not work for small players.

You say Microsoft would be crazy to sue its own customers. You are right in saying such behaviour is bad PR, but do not forget that its near-monopoly position makes it impervious (or so it thinks) to such criticism. The non-producing patent-parasite companies such as Acacia also don't care what their "customers" think of them, since their "customers" are defined as the companies they sue. In any case, the fact that an action would court bad publicity is not a reason not to legislate to prevent it. As an analogy, perhaps we shouldn't bother with having laws against child abuse, because child abusers tend to become very unpopular within their community anyway.

You say that EPO software patents have to be "technology patents, not process patents". But in practice there is no difference between the two. Any software process, or computer-implemented business method, can be easily disguised as a "technological" process simply by wording it correctly, because the EPO considers anything useful that can be achieved by a computer to be a new "technology". See
http://www.iusmentis.com/patents/software/epc/ (a patent lawyer website). Therefore anything involving computers that's patentable in the US is likely to be patentable at the EPO. Indeed Wolfgang Reichl is implicitly endorsing this view. If software "belongs to a field of technology", then any process run on a computer must be a technological process, even if it is simply running an ordinary process on a computer.

What do I think? Jeez there's a ton of evidence both anecdotal and (some) statistical that software patents slow down software innovation - turn the place into a mine-field. On the other hand, what software innovation was ever hampered by the inability to patent something (as opposed to copyright it?).

There are only a few industries in which users seriously asset that patents are important to funding innovation (as opposed to a nice but - and this is the point - unnecessary extra). Way out front is pharmaceuticals, and chemicals is also a possible candidate. Software is most assuredly not.

Why don't we have patents in food recipies, or fashion design. Quick answer - because we don't need them. We don't need software patents either. We ran that experiment - and software developed just fine before judges decided that software could be patented.

Or lets try Bill Gates on the subject - in 1991. "If people had understood how patents would be granted when most of today's ideas were invented and had taken out patents, the industry would be at a complete standstill today. . .A future start-up with no patents of its own will be forced to pay whatever price the giants choose to impose.

Case closed

I think not. The core of the software patents problem is that it is trivial to patent a business method implemented in software. Since nobody in their right mind would have implemented a web shop without software, this already could provide very efficient means to create gridlocks on entire areas of industry, making it impossible to actually build something new on top of already proven techniques.

Furthermore, as the BSA study reveals, more than half of the EU's IT industry lies in the hands of very small companies with very bright programmers with not quite as much money for the lawyers as they would need to compete in the software patent game. The BSA study shows that less than 10% of small companies even have a software patent, and it appears that these 10% include some of the biggest businesses in EU, that were "accidentally" left in the sample. This only shows that copyright, due to the fact that it is universally affordable and instantly available upon creating one's work, is a much more suitable means of protection for software, especially because the incremental and complementary development models that the entire industry is benefiting from, and of course because copyright does little to prevent a very fast time to market - a crucial point for any successful software project.

The way I see it, this has nothing to do with open source. Granted, open source will have less to worry about as well, if patents on completely abstract ideas and entities are disallowed, but primarily, this is about the flexibility and competitiveness of our economy.

I think you get things wrong here. The open source community doesn't want the patent system to be abolished or something like that, they want to stop pure software patents as the council's wording would allow them! And again, its not open source vs. industry, it's big multinational mega conglomerates against the innovative industry in Europe.

This not (just) the open source folks protesting, and it's also not specifically about Microsoft. It's the majority of the European SME world that's protesting. For example, there's UEAPME (http://www.ueapme.org/docs/press_releases/pr_2005/050621_Computer_Patent.pdf), which represents 11,000,000 European SMEs.

Also have a look at the supporting companies of www.economic-majority.com. There certainly are a number of open source companies among them, but the majority is not. The testimonies there (http://www.economic-majority.com/testimony/) give some examples of why these companies oppose software patents, such as the well known Opera Software (by no means an open source company).

It is not open source vs Microsoft, it imposing extra juridical burdens on a sector which doesn't need it to be innovative. As the FTC report on patents from 2003 concluded about the software industry: in that branche, innovation is driven by competition (http://www.ffii.org.uk/swpat/ftc/ftc.html#software).

Patents reduce competition, with the argument that otherwise the innovators would not have invested in their R&D. That simply does not hold in the software sector in general. Exceptions of course do exist, but adding a whole layer of transaction costs on the IT sector (obtaining patents, licensing negotiations, lawsuits, ... all have overhead costs which get funneled out of the tech sector) just to accomodate the business models of most giants and a couple of small companies does not make sense from a macro-economic point of view.

Regarding the lawyer not seeing a difference between the software and other sectors: maybe he should read a couple of economic reports, such as the earlier mentioned FTC study. This is also not about inherent rights automatically following from some work you've done. Patents are a pure economic policy tool which should only be used where they are deemed to have an overall positive effect.

Software is a tool, it's used to facilitate a method of doing business. As such, there's no distinct difference between these two. By using the descriptions you use in the article, the legislation around patents stays the same as it's is now. The companies describe their businessmethods as inventions now, after passing legislation they will desribe their businessmethods as software. By doing so, small companies are still forced to take legal actions for which most of the time they haven't got the funds. So I can't agree with you on this. Software is protected by copyright. Now already the opensource-developers have no easy way (read: cheap way) to check if closed-source writers aren't using their code. Reverse engineering is forbidden so the only steps they can legally take is to sue, which agin costs lots of money. By taking the stance you take in the article, the position of the small businesses will become worse...

Although Microsoft will probably sue every open source developer on the earth (they're not their customers anyway, since they use open source software), it is not the only one who will sue and not the only one who will get software patents to do it. Just take a look at what is happening in the US: there are companies in the IT sector which don't have any computing professional. They're 100% made up of lawyers and they only earn money by getting software patents and sueing as much companies as they can. A famous example is Eolas, who threatened Microsoft with a plugin patent. Even big IT use software patents as a weapon to extort other companies and kill the competition. Read the article "Patently absurd" [http://www.forbes.com/asap/2002/0624/044.html], written by one Sun lawyer, who tells how IBM threatened to sue them if they didn't pay $20 million. If they do that to such a big enterprise like Sun, what will they do to SMEs?

I can't argue if someone wants to patent an invention. However, should the limitless patents become reality you can patent anything, invention or otherwise.

Non-Microsoft operating systems survive on a basic principle: we are not Microsoft Windows, but we can import the documents from Microsoft Windows. Microsoft could, if they wanted to, patent the format of a Word document, of an Excel documents, etc. Not the program, not the spell checker, not the compression algorithm, but the document format itself. Any program capable of reading or writing such a file would instantly become illegal.

Do we really need to give the large doftware companies more tools with which to maintain their positions of monopoly?

Does anyone, for even a second, think that a major software company will say "Let's not do this. It's an unfair business advantage"?

Wake up and smell the money.

You haven't understood the problem of the current text of European directive and of the unlimited and broad software patents and business processes patents that it allows:

1) It is not possible to define a clear line delimiting which software patents are allowed and which not if you don't split between material world (patentable) and inmaterial world (not patentable and protected by copyright). "Technical" is everything. To write in a paper with a pen is "Technical". If you allow patents on inmaterial world, you allow to block the knowledge and the creativity for 20 years and any kind of patents will pass through the patent offices: business methods, problems instead of solutions, algorithms, etc. Exactly the same situation as in USA, no difference.

2) Microsoft doesn't need to sue its customers to ilegalize Linux. It is enough to sue or black mail with patent lawsuits to free software developers taht cannnot defend themselves. In this way you can reduce the features of Linux and rest of free software and it won't be commercialy attractive against Microsoft and closed code products. This is the perpetuation of the MS monopoly. These kind of patent blackmails are facts currently, and will be much much more if the software patentability extends to the East side of the Atlantic. Do you imaging the SCO trial backed with software patents instead of copyright?: Bye, bye Linux...

3) The biggest victims of this broad patentability of software and "technical" ideas, since everything can be technical just using a computer, are the European SMEs. They will be a easy and indefense target for company with patents. No matter if a big software multinational or a patent troll like Acacia Research (its business model is to attack indefense SMEs). BSA studies say this clearly: SMEs hold 20% of the software patents. Software patents = Patents of Computer Implemented Inventions. So this means that, with their numbers (surely manipulated) the 75% of the market that is composed by SMEs only holds a 20% of the patents. Good business for European SMEs for sure!

Please, study better the issue: www.ffii.org, www.nosoftwarepatents.com

Microsoft has no problem intimidating entire countries (such as when Bill Gates recently threatened to move his offices out of Denmark if he didn't get his Directive), I don't see why they would be afraid to intimidate their own customers.

Software shouldn't be patentable for the simple reason that it is doing just fine with copyright, and patentability undermines copyright because the copyright holder can no-longer be sure that they own what they have written (something they can always be sure of under copyright law unless they explicitly copied someone else's stuff).

"Rule #1 of good business practices: Don't sue your customers".

Tell that to one of the growing number of "IP companies" - which have no customers. Tell it to SBC for example, who have extorted God knows how much money from their victims over the years. What would be so crazy about Microsoft or SAP informing prospective clients, such as the City of Munich, that the alternative software Munich eventually decided did best meet their needs, was not in fact an option - because it infringed multiple patents? What would be the easiest and cheapest way to deal with the appearance of a strong competitor to your cash-cow of a market dominant word processor? Try to compete with it on free market terms? Or use your vast portfolio of Government granted monopolies to simply eradicate it?

"They belong to the field of technology...I don't see any reason to deny patent protection to this kind of technology".

One can describe almost any useful invention, idea or discovery as belonging to a field of technology (including much of applied mathematics) and it is in fact easier and more natural to do so for many techniques and methods used by artists, musicians and cooks than it is for most software inventions. Herr Reichl makes the same astonishingly stupid mistake that even the disinterested often do when considering the boundaries of the scope of patentable subject matter: The principal justification for the curtailment of natural rights and profound distortion of the free market that is the patent system, is that it should promote progress in the sciences and useful arts, and consequently enhance economic and social welfare.

There are two wrong assumptions in this article:

1.) MS will not sue its customers, but its
(smaller) competitors.

2.) This isn't about open source, it's about big
vs. small. Software patents will be used as
offensive weapons against smaller market members
or as road block against newcomers.

The biggest confusion or disorientation lies in the fact that technological patents (or the old-fashioned ones) are tangible, and must be working. So indeed it needs quite some research.

Softwarepatents on the other hand are about ideas, you don't need to prove that it works or that's working already. You can be granted a software-patent for something that doesn't work, and if my competitor gets this "invention" working by their own creativity, i would be able to suit and seize their invention.

Since they are idea's and 20 years is a long lifespan for software, software development would be halted.

Now if i would be writing an new application, I would stumble over 100's of patents, almost every single line of code could be patented, can you imagine the research involved, especially because of the wording

The biggest issue is about the fee and the possible defence claims, so one must have already 1 million dollar in cash for frivolous lawsuits...small companies (and they make up for 50% of the turnover in Europe and 53% of the people employed, and there are about 11 million SME's) are therefore basically excluded from a patent portfolio...according to BSA only 2000 SME have a patent, put that against the aforementioned 11 million....

Your use of the word "liberalisation" applied to extending the reach of software patent monopoly interference in the free market is a bit obnoxious to my eye.

Patent restrictions destroy free markets, by definition, and are anything but liberal (in the european sense). It is a propaganda technique of the pro-software-patent crowd to claim they are "liberalising" versus "restriction" on software patents. It is important to remember that software patents themselves ARE a gross restriction on the liberty of software (closed or open source!) developers and users everywhere.

Too many politicians confuse pro-big-business and pro-market.

Whatever about his coding ability or otherwise, it is undoubted that Bill Gates is a highly intelligent businessman, and given his statements on software patents a while back (as below), it is seriously stupid that europe would even consider making software patents enforceable, they would never escape from under the USA's shadow (most currently unenforceable european software patents are owned by US companies):

http://swpat.ffii.org/vreji/quotes/index.en.html#bgates91
Bill Gates, 1991: "If people had understood how patents would be granted when most of today's ideas were invented and had taken out patents, the industry would be at a complete standstill today. ... The solution is patenting as much as we can. A future startup with no patents of its own will be forced to pay whatever price the giants choose to impose. That price might be high. Established companies have an interest in excluding future competitors."

That alone SHOULD have been enough to stop any move to software patents in europe! However, parts of the current EU power structure are apparently irredeemably corrupt and unaccountable.

Steve, you are so naive! Of course Microsoft don't want to sue its own customers. Microsoft's number one problem is Linux, which they cannot attack directly because it is backed by IBM and other big corporations that make a lot of profit with it. Microsoft's strategy is to lower the value of Linux by discarding a number of applications that make Linux even more popular. They want to sue the small european open source companies like MySQL which build very popular and cheap software that are directly competing with Microsoft's own products. This is so important for them that Bill Gates himself travels to Europe and meets with the European leaders when there is a vote on the software patent directive.

As far as software patents are concerned, you should ask yourself why patents were invented for in the first place. It was to help science make progress by sharing knowledge about inventions, and to help protect research investment. This year, Microsoft has obtained a patent on the double click (this is true!) and another one of the serialization of objects into XML, a techinque which every modern program uses (you learn this at school in your 1st year). Two inventions so obvious that nobody would publish a paper on them. In addition, patents protect ideas, which cost nothing in software: the cost of a new product is only on programming, debugging, and marketing. Creating a clone of a software costs exactly the same a the original.

And finally Steve, ask yourself this: software is already protected by copyrights, an IP protection form which cannot be used by industries that need patents (say for instance the pharmaceutical industry). Why would the software industry be so special that it would require 2 systems, copyrights AND patents? Copyrights have been working very well for the software industry for decades, and it help it being the most innovative industry. The proof that it works very well and that it is sufficient is open source software, which cannot be copied illegaly even though the source code (the recipe) is public and available to everyone.

It isn't unreasonable to say that patents do more harm than good in the field of software, in fact it's a proven truth.. Software Patents have increased as innovation has decreased.

You also have to bear in mind that the purpose of Patents makes them totally unsuitable for patenting - it's not about "All technology should be patentable" or the crazy notion that "All ideas should be patentable".

Only ground breaking innovation through research and design that would not be economically viable deserves Patent Protection - that being the purpose of Patents : they are to protect investment that would otherwise not be made.. Not to increase profits, protect markets and stifle innovation as software patents currently do.

Even disregarding the many and compelling legal and moral arguments against software patents, the simple fact is that the Industry does not want patents in it's area.

EICTA does not even represent it's own members (Sun, and several european national member organisations have stated this on the record), the BSA is made up almost entirely of the very large non-european companies who already own more than 75% of european software patents, and COMPTIA is a well known front organisation for Microsoft and a handful of its partners. Intellect has gone quiet about this as it never asked it's members to vote and doesn't have the support of the industry it claimed to represent.

The actual Software industry itself is almost entirely against software patents, not just open source businesses and developers.

The organisations representing tens of millions european SME's have unanimous membership support for their anti-software patent positions.

The PCG representing Freelance and Contract software developers is against software patents.

Computing and Software Organisations accross europe oppose software patents. Several petitions have collected tens or hundreds of thousands of signatures.

Even governments such as Poland, Netherlands, etc are against software patents and political parties from the Green Party to the Liberal Democrats are against software patents.

Pretty much everybody except a tiny minority of very rich lawyers and american/japanese/scandinavian mega-corporations is against software patents.

I reccomened you actually visit www.ffii.org and read various research by Lawyers, Banks, Businesses, Patent Organisations and Universitys that back these arguments.

Should an author be able to patent the idea of writing a book about trees as opposed to copyrighting a particular book on the subject? How can patenting software encourage development in the industry? The aim of those in favour is profit maximisation at the expense of the free market.

If software patents were to be code specific why have them at all? This is already covered by copyright.

You didn't get it. This is not about
Microsoft vs Opensource.

Patents do not work for software, neither
for opensource nor for proprietary, neither
for large nor small companies. The only
real beneficiaries are lawyers, especially
those in charge of the patent departments
of about 20 large companies who are spending
big money to have 30-40 lobbyists roam the
European Parliament day by day during the
last weeks and months. Software patents were imposed on the US software industry by the patent establishment, against the will of even such big names as Oracle, Adobe and Autodesk. In Europe it's the same.

The Economic Majority is happy with copyright and other existing tools of intellectual property.

Please visit Economic-Majority.com and come to our conference in the European Parliament next wednesday.

Please check out the animation:

http://media.ffii.org/animation/HowSoftwarePatentsWork.mov

Also, there is no safe way in distinguishing between a "technial" destription of a business method, for example "Method and device, upon click, puts a record into a database, describing a transaction of..." and a software patent. US patent attorneys
admit that there is no red line to draw.

I think the Microsoft commercial banner on the right of this article says it all : the means to get more markets won't be only in the technological field but mainly in the legal field.
This will certainly not be good for technological competivity. Software patents are a tax for innovation only big players can afford.

What is software? Software is aimed at improving customers' business. Sofware patents will reduce the technological offer while not reducing costs.
Sofware patents are also a great threat to interoperability : customers will be locked in one vendor solution; they won't be able to take the best from each vendor.

As a developer, all i want is to work on the best technologies, have great jobs opportunities and the challange to create better solutions.
Software patents will ruin most of these wishes.

Opensource folks are not looking for extreme laws against software patents. They just want the rules that define the software legal status since 1973 to remain. The whole IT industry has fairly grow in Europe under this legal status. All the local business are based on copyright.

This is not opensource folks that are extreme but the point of view of organisations such as the BSA and EICTA which represent big business companies.
The law appears to be too liberal for them by now : there is too much competition. Instead of concentrating themself on producing better software, they found it would be a better idea to invest in lobbying and convince politicians to change the rule so they can have a better protection of their monopolies with less investement in the technological competition.

Software technologies is complicated to understand. It's also boring for people who aren't in the field, so it won't make a big wave in Europe.

We can't blame companies such as Microsoft. Their aims is to generate more incomes to their stakeholders.
On the other hand, the European Union aims is to generate more wealth to the European territory. All SME organizations say it loud : software patents won't profit to them at all.
SME are deeply anchored in the European territory and represent the economic majority.

Therefore, the European Union should defend SME positions and oppose to sotware patentability.

I strongly disagree. Pure Software is nothing more than applied mathematics and data processing. Every computer program contains nothing more than algorithms and data structures. It resides in a virtual world inside the computer.

The classical patent is about products and procedures derived from and interacting with the Real World. Nature is much more than mathematics, and such a patent is the reward for solving REAL problems.

So if you want patents for software, you want a fundamental change in the patent system by allowing patents not only for applied physics and engineering science, but also for pure mathematics and data processing.

Are you aware of this problem, or do you think that patents on mathematics are a good idea?

Software is not manufactured, it is something you write and publish. Keep Europe free from software patents, we do not want censorship by patent law on written works.

I think that member States should ensure, that granted patents do not limit or except the rights of authors in accordance to TRIPs article 13, that patents do not conflict with normal exploitation of data and information and do not prejudice legitimate interests of authors, that publication, handling and distribution of information, including loading and execution of computer programs and all effects thereof (a legit.interest of the author = the reason for writing), can never constitute a direct or indirect patent infringement.

I think that the 'devil is in the details' and you should better take into consideration the exact wording of the directive before coming to a conclusion.

In its current form it would make any form of program, code or algorithm - when loaded and executed on a computer or network patentable - because the computer _is_ "the technical step" here. Also any form of making an executed algorithm more efficient, e.g. the famous 'one-click' patent would be patentable by the current directive.

Now consider the fact that most any business method or process can be expressed by an algorithm the fear that any patent lawyer with more than two brain cells can use this as a means to make any form of process or business method patentable is not so far fetched.

Personally I don't fear Microsoft, etc. - at least for the near future. I fear the patent trolls - those vampire companies that do not produce any goods or products but only 'market' and harvest patents, the broader the better... (for them).

Now consider that about 80% of the currently (without legal backing) applied software patents (of about 30000) are in the hands of non-Europe companies, this will most likely mean a heavy finacial drain for the EU IT industry...

Also check other aspects - like small companies not being able to defend themselfs against larger companies when patent infringement claims at put up. The sheer legal costs and time needed to defend themself will most likely cause a lot of them just 'to roll over' and give up, even if the case is not justified.

Also think about small IT companies not being able to get bank credits (-> BASEL2) because of the needs of the banks to get some insurance the SME products do not infringe someone elses patent. (And I can tell you from my own work as software engineer that this case is impossible given the sheer number of already applied-for EU SW patents for any non-trivial program)

So I think you and the EU lawmakers should think twice and hard before opening this box of pandora.

Only a few - larger companies with large patent portfolios, patent laywers and patent trolls - will benefit from its current implementation and at the expense of all the rest of us.

Patents are a necessary protection of innovative ideas. Of course, the open source "community" doesn't like them, because they don't normally innovate anything and instead create duplications of proprietary technology they wish to give away for free. Patent laws may need reform, to reduct over-assignment etc, but to do away with them completely would be foolish and would severly limit the primary motive for innovation - profit.

I don't think you can have software governed by both copyright and patents - they are two very different areas of law, and are not designed to work together. Copyright seems to me much better suited to the way software is developed.

Oh and I think Microsoft will sue distributors of open source software, not users, so it would sue its competitors rather than customers - accepted business practice.

Patents on software are a bit tricky.
On one side it's legit for someone want to protect what they did, but it's stupid to be able to patent every possible combination on lines of code, it's like patenting a piece of poetry.

LONG LIVE OPEN SOURCE, PENGUIN POWER FOREVER.

I think this software patent stuff is terrible, vote no on the patents law.

the european parliement is rejecting broad software patent. it's finish now.

a good décisions. "software" are NOT as physical devices , there are too many risks and every developpers need to use MANY common (patented or not) ideas to create even a _simple_ new software.

we are speaking of SOFTWARE, a thing easy to create (a computer and a book, every children, hobbyist can do it, no need to invest in huge things)
Patent would have damage for every developpers even little enterprises or hobbyist.

too many legal risks exist in usa because of that and it was important for EUROPEAN interest and open source interest to limit these legals risk

a reject is better than a bad law