Software Patents Vs. Competition On the 17th and 18th of this month, the European Council of Ministers, consisting of one representative from each member state, will vote on a directive which will alter the European Patent Convention (EPC). Although the stated purpose of the directive is to "harmonise and unify" patent standards among the EU states, there is much controversy over the implementation. According to the EPC, "programs for computers" (as well as math, games, and music) are excluded from the patent system, but the proposed directive would render that exclusion meaningless. Last September, this directive went before the European Parliament, the 626 member democratic body of the EU legislative process. The Parliament voted for the directive to be adopted, but with amendments which reinforce rather than remove the software exclusion clause. However, on May 6th, the Council of Ministers reached a provisional agreement to discard the parliaments amendments. So what? "Ownership rights", for better or for worse, already exist for software in the form of copyright. Copyright law works well with software because it costs nothing to copyright your work, there's no waiting period, and there's no gate keeper too decide whether you get the copyrights or not. Copyright law places no restrictions on software development, so and everyone is free to develop software - but if software ideas become patentable this will all change. Because patents cover ideas, if you take a laptop into a cave and write a new piece of software, you could find yourself being sued for patent infringement when you come out. Independent invention is still infringement. Others wishing to use a patented idea must ask for a license, and the patent holder can name his price or refuse. It's an imperfect system, but it works pretty well for industrial engineering. In most engineering fields, "parts" can be manufactured and sold, isolated innovations can be useful, but not so in software. A new software "part", such as an innovative grammar checker is of no use unless it's part of a word processor, a new word processor is of no use unless it can perform the functions that people are used to. If someone decided to develop a word processor using only new ideas, the result wouldn't be what people call a word processor. In particular, it must be able to read and write common word processor files. So software evolves incrementally, with innovation being built on top of many older ideas. Figuring out a how to read and write files used by competing products is hard work, so hard that it causes anti-competitive problems in the software industry, but if software techniques become patentable, data compatibility could be made illegal. If the market leader used a file format which required a patented software technique, competors would need the market leaders permission to create a useful competing product, and they'd have to pay the market leader for that permission. Software patents have existed in the USA since 1986. Today there are over 100,000 patented software ideas in the US, so that's 100,000 ideas that European companies would have to pay to use if we introduce software to our patent system. Large American software companies encountered the problem a few years ago that they couldn't develop complex software without infringing each others patents. Their solution was to form cross-licensing agreements, like patent peace treaties, among the big patent holders. Of course, small and medium sized companies don't have large enough patent portfolios to buy into these treaties, and Europe doesn't have many big software companies of our own. A second wave of software patent problems hitting the US at the moment comes from "Intellectual Property" law firms, buying software patents and suing software developers. This form of parasitic business is flourishing in the US, and the courts are powerless to stop it. Meanwhile Europe is thinking of copying their system. Even a damning report about software patents published by the US Federal Trade Commission hasn't stifled our interest in software patents.[0] Very few individuals or small and medium sized businesses have the time or resources to divert to political issues like this one, but they'll know all about it if the right to write software is put up for sale in chunks on the patent market. European organisations such the Foundation for a Free Information Infrastructure (FFII), and Free Software Foundation Europe (FSFE), as well as national groups such as Irish Free Software organisation (IFSO) worked hard to educate the MEPs on this technical subject. IFSO was particularly proud last September that all of the Irish MEPs voted to exclude software from patentability, but we'll have to see what the Council of Ministers do next. [0]