How the European patent system works

Software Patents

How the European patent system works


The most surprising point is that the European patent system isn’t actually in any way related to the European Union. Instead, it is run by the European Patent Organisation (EPOrg). This is an entirely different organisation from the EU. It is governed by the European Patent Convention. The EU and the EPOrg are two separate supranational bodies. The EPOrg is not subject to decisions of the European Union or the European Court of Justice.

The EPOrg consists of two bodies: The European Patent Office (EPO) as an executive body, and the Administrative Council as a supervisory body. The Administrative Council exercises very little control, so that the EPO basically runs itself. While the EPO claims that it merely administers existing law, it has over the years, little by little, reinterpreted the limits of the European Patent Convention.

Software patents are a case in point. Article 52 of the European Patent Convention clearly rules out patents on “programs for computers”. Yet the EPO has merrily been granting these for years. It argues that as soon as a computer program has a “technical effect” – making a hard drive spin, lighting up pixels on a screen – it is a physical machine, and therefore patentable.

Why this drift into ever more, ever broader patents? A large part of the answer lies in the way the EPO is financed (pdf). While it is nominally under the control of the EPOrg’s member states (through the Administrative Council), the money to run the EPO comes from the fees that patent holders and applicants pay. Accordingly, the EPO has an incentive to grant as many patents as possible.

You can learn more about the European patent system in these Wikipedia articles , and this presentation.

What will change with the unitary patent?

If the current proposal for the unitary patent passes unchanged, it will make a bad situation worse. Currently, national courts in EU member states are in charge of handling patent disputes. Under the current proposal, these powers would pass to a new European patent court, run and staffed by the EPO.

This is exactly the wrong direction in which to take things.

When deciding whether an idea is patentable, or what exactly a patent covers, courts can take either a broad or a narrow view. If they take a narrow view, they will look only at the patent itself and the technicalities of the patent system’s rules. This often leads the court to decide that the patent in question reaches further than it really does. Other courts then interpret such decisions as precedents. In consequence, not only the reach of each patent grows, but also the range of ideas that can be patented.

The new patent court would be an international organisation outside the institutional and judicial framework of European Union law. The European Court of Justice has already made it clear [.pdf] that the patent court as currently envisioned would be illegal. This means that an important element of the current proposal can’t actually be implemented. What will happen if the proposal is adopted anyway is anybody’s guess.

Out of control, or at your service?

Patents are one tool among many to promote innovation. There are many other things we can do to encourage people to come up with new ideas, and to turn them into products: better education, tax breaks for research and development, subsidies for companies that bring new products to market, and so forth.

Patents also have very different value to different industries. Pharmaceutical companies typically find patents very valuable, while ICT companies and software developers in particular consider them devastatingly harmful to their businesses. As the plethora of patent litigation in the smartphone space shows – with Apple vs Samsung only the latest example – patents on software have degenerated into mere lottery tickets. Companies amass as many of them as they can, in the hope that one of them will win big. But this is a game of kings. The smaller companies and SMEs that make up the backbone of Europe’s economy can’t afford to play.

We can only resolve this tricky situation if we actively take control of innovation. We can’t leave it to the EPO to develop patent policy; the EU has to take charge, led by the democratically elected European Parliament. Patent policy needs to be integrated into a larger innovation policy strategy.


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