Miceli: The Software Patent Fairy Tale

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Attached is the best summary yet of the situation with software
patents in Europe, by someone who says he believes in the term
"Intellectual Property Rights."  :-)

Preface by Seth:

But what matters is that this article is the natural development
of the effective methods applied by the movement in Europe, where
the law stipulates that software is not patentable.  The movement
has been feeding the right messages since shortly before the
First Reading, and now the narrative is being fully presented. 
The lucidity of this article is stunning for anybody who has
watched the arrogant obfuscation that has pervaded the EU
political community and media regarding this issue.  But it's all
here.

I disagree with Miceli on a certain key point, when he says the
"CII Directive" was not killed by the anti-sw-patent folks, but
by a decision of the pro-sw-patent lobby to kill the Directive
when it became evident that they were about to actually achieve
clarity regarding how to handle inventions that contain software,
without making software patentable.

I like to emphasize that it was indeed the movement that
triggered that, that it was the specific decision to draw the
line by focusing on highlighting the contradictions throughout
the campaign, that both forced that moment to a head and made
this article possible.  This is how a principled movement was
created.  Once this occurred:

  - Many groups came together, including the free software
community which had long stood on principle and had focused on
meticulously building the constituency for software freedom on
that basis;
  - FFII transformed almost instantly once the decision was made;
with
    * the site growing intensely clearer; and
    * a critical move taking place away from legislative finesse
and negotiation, to movement-building that created a base of
power to speak from, based on clear line that communicated the
key principles through exposing of contradictions;
  - The nosoftwarepatents.com site sprang into existence, pulling
together the contradictions and myths that had become the focus
of the movement and becoming a powerful and succinct reference
point for the movement;
  - The media began to finally pick up pieces of the messages we
sought to convey due in no small part to the undeniability (and
yes, volatility) of the contradictions being highlighted;
  - The EU Parliament was politicized and made to recognize that
yes, they were indeed in a moment of supreme democratic stakes;
  - Through many developments, the final confrontation in the
Second Reading could not possibly have been clearer -- to the
extent that I felt many more of the remaining EP members who had
not come to comprehend the issue probably came to their clearest
understanding on that day;
  - And now, this article has come into being in a manner much
like the nosoftwarepatents.com site and the gradual transition in
the media coverage, compiling now for the legal community all the
pieces, all the myths and individual deceptions that the movement
has worked so assiduously to separate and expose and thereby use
to educate those they sought to influence.


So, a specific decision to use the traditional movement-building
technique of drawing a line that illustrates the principles by
exposing contradictions and blowing them wide apart, led to the
moment at which those who were trying to codify the bogus
practice of granting software patents at the EPO, were compelled
to withdraw the Directive by which they were trying to do that. 
The pro-software-patent side may have made that individual
decision, but they were put in the position of having to do that
because of how the movement created the moment with a kind of
surgical precision.

Anyway, enough of my pontificating.  This is a REALLY GOOD
article!  :-)


Seth
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> http://www.groklaw.net/article.php?story=3D20060115145429444


Quietly Tying Down Gulliver - The SW Patent Fairy Tale ~ by Cristian Mice=
li

Sunday, January 15 2006 @ 09:28 PM EST


Cristian Miceli is an IT lawyer in the UK. This article is a roundup look=
 at software patent issues in 2005. It addresses the question of whether =
software patents are beneficial or counterproductive. Its intended audien=
ce is other IT lawyers, but the rest of us can enjoy it too.


As an attorney, Miceli says he believes in intellectual property rights, =
and "as part of this, I see the benefits that patents can potentially bri=
ng in certain sectors. However, as one law professor recently commented, =
'good policy does not just consist of "more rights"; it consists of maint=
aining a balance between the realm of property and the realm of the publi=
c domain'=94.

I've formatted it so that you can click on a footnote number and read the=
 footnote, then click on the number and return to the main text. You can =
also download the paper, if you prefer to read it as a PDF, here.

******************************************

Quietly Tying Down Gulliver,

The Software Patent Fairy Tale


~ by Cristian Miceli


The Battle of Trafalgar

One of the funniest things I saw this year was a photo of a rather large =
white cruiser bearing down on a small rowing boat on the lake outside the=
 European Parliament. This was not the Battle of Trafalgar but the battle=
 between the pro-software patent lobby (big white cruiser) and the anti-s=
oftware patent lobby (small rowing boat). On this particular day, no bloo=
d was spilt, but this had been a little skirmish in a long running battle=
=2E

The battle has been played out for many years but in recent years has com=
e to a head since the proposal of the Directive on the patentability of c=
omputer-implemented inventions (2002/0047/COD) (the =91CII Directive=92) =
on 20 February 2002. What followed was a roller-coast ride through the EU=
 legislative process culminating in the rejection of the CII Directive on=
 6 July 2005 where neither side could claim a complete victory.

Since its rejection, as for as the UK has been concerned, there have been=
 four High Court decisions on the scope of patentability, a change in the=
 UK Patent Office=92s (=91UKPO=92) practice following one of these cases,=
 (IN THE MATTER OF Patent Applications GB 0226884.3 and 0419317.3 by CFPH=
 L.L.C. [2005] EWHC 1589 (Pat), (=93CFPH=94) decided by Prescott QC) and =
a number of potentially important UKPO hearing officer decisions.1 It has=
 been a turbulent year. As will be discussed below, with CFPH we finally =
had some clarity in English law on the issue of software patents with a d=
etailed judgment which explored the purpose behind the computer programs =
exclusion and sought to lay down a test for patentability firmly grounded=
 on the European Patent Convention 1973 and public policy. However, it ha=
s been a brief calm in the storm because although this thorough approach =
was confirmed by the UKPO and the case applied by a High Court judge on 4=
th November (see IN THE MATTER OF UK Patent Application no.GB0108683.4 in=
 the name of Cecil Lloyd Crawford (2005)(=93Crawford=94)), the waters hav=
e once again been slightly muddied by a decision of Mr. Justice Pumfrey i=
n the High Court which although heard several months before Crawford was =
only published on the 7 November (see, IN THE MATTER OF Patent Applicatio=
n GB 0017772.5 by Shopalotto.com Limited, [2005] EWHC 2416 (Pat) (=93Shop=
alotto=94)).

The Shopalotto judgment should be treated as a pirate ship, which would b=
e better at the bottom of the ocean, for it is weak judgment compared to =
CFPH and Crawford. The judgment lacks detail, ignores the careful analysi=
s undertaken by Prescott QC (the case is not even referred to in the judg=
ment) or the change in UKPO practice, fails to adopt a purposive approach=
 to the EPC and to recognise the clear policy reasons for not allowing th=
e foreclosure (i.e., monopolisation) of software under a patent system an=
d gives weight to a body of decisions of the European Patent Office (=93E=
PO=94) institutions that lack any legal or democratic foundation and whic=
h, against the purpose of the European Patent Convention 1973 (=93EPC=94)=
, endorse the idea of the =91software invention=92, i.e., that a computer=
 program can have patentable =93technical effects=94 outside of any other=
 claimed physical artefact or industrial process other than a computer.

The need for debate

There are a great many myths which have been propagated about the CII Dir=
ective and the desirability of software patents and there has been little=
 objective debate about the CII Directive and, more particularly, about s=
oftware patents amongst IT lawyers.

Why this article?

Put simply, the clouded and subjective debate over the CII Directive and =
software patents is detrimental both for IT lawyers and the IT industry.

Notwithstanding the recent English developments, there is little doubt th=
at the debate over the patent system is to be had at a European level. Fi=
rstly, UK patent legislation to all intents and purposes transposes the E=
PC. Secondly, from an economic perspective, if we are to effectively comp=
ete against the US and Asia, we need to be able to guarantee innovation a=
t a European level through pan-European laws.

With the Community Patent on the horizon, the issues debated on the CII D=
irective are bound to reappear and the outcome of such debate could have =
a long-term effect on the economic health and diversity of the UK and Eur=
opean IT sector. As IT lawyers, given our wealth is dependent on the heal=
th of such sector, we should be showing more of a passing interest. Furth=
ermore, on the EU Commission=92s own figures from i2010, =93ICT account[s=
] for 40% of Europe=92s productivity growth and for 25% of EU GDP growth=94=
=2E These are big figures by anyone=92s standards -- the IT industry is v=
ital to the European economy: at the heart of a successful Europe there h=
as to be a successful home grown software industry.

Given the above, it would seem absurd that a European directive would put=
 at risk such an important part of our economy, but early this year, this=
 is almost what happened. The fact that many people cannot imagine that t=
hose at the head of Europe may not be acting in our best interests is und=
erstandable when the debate has been shrouded in a campaign of disinforma=
tion. If not as IT lawyers, then as citizens whose economy is inextricabl=
y linked with the rest of Europe we should be concerned that we are not g=
etting the full picture and take the moral responsibility to ensure that =
any debate is objective.

Getting religious

When you wish to conduct an independent survey about whether it is good t=
o be catholic, if you are only going to ask the pope and his cardinals, y=
ou cannot call the results objective.

We have asked the pope and cardinals of the patent system and accepted th=
eir version of events not only on what the CII Directive intended to achi=
eve but, somewhat more subtly, whether software patents are desirable. We=
, as lawyers, should recognise the conflict of interest but let me instea=
d use the words of a more enlightened cardinal:

    =93most patent lawyers -- most lawyers in general - =85. unthinkingly=
 spout pro-patent slogans. That is because most patent and IP and even ot=
her attorneys with an opinion on this issue mindlessly parrot the simplem=
inded economics with which they were propagandized in law school. Virtual=
ly every patent lawyer will reiterate the mantra that "we need patents to=
 stimulate innovation," as if they have given deep and careful thought to=
 this=85..It does not take a genius to figure out why most patent lawyers=
 are in favor of the patent system; and it is not because they have reall=
y studied the matter and dispassionately concluded that society is better=
 off with a patent system -- it is because they don't want to see the sys=
tem that pays the mortgage for them eroded or abolished.=942 =


This article is not meant to be a sermon, what I have tried to do is inde=
pendently review the issues at stake and leave it the reader to make his/=
her own analysis. However, if I am to preach about objectivity, then that=
 must start with me the author. Do I believe in intellectual property rig=
hts (=93IPR=94)? Yes I do and, as part of this, I see the benefits that p=
atents can potentially bring in certain sectors. However, as one law prof=
essor recently commented, =93good policy does not just consist of =91more=
 rights'; it consists of maintaining a balance between the realm of prope=
rty and the realm of the public domain=94.3

I do not work nor have any financial interest in an open source software =
company nor am I getting paid, whether directly or indirectly, for writin=
g this article or for expressing a particular view point. In fact, rather=
 than standing to gain financially by encouraging the reader to adopt the=
 views that I am espousing, I am more likely to have put a damper on any =
prospect of having a lucrative in-house position overlooking the M4 motor=
way (perhaps a good thing). If we are to see through the smog of disinfor=
mation, we first need to explore the key myths that have been put up in o=
ur way to obscure our vision.

The CII Directive: the fairy tale

Myth 1: the European Competiveness Council, the European Commission and t=
he Council of Ministers, as the white knights of European democracy and w=
ith our (European) best interests at heart, gallantly proposed a directiv=
e which, in its several drafts, sought to do nothing more than to codify =
and unify our existing laws on patents (commendable) in the area of compu=
ter related inventions whilst at the same time not extending the scope of=
 patentability.

It is a wonderful fairy tale. Unfortunately for the knights, they were ro=
bbed by a bunch of European peasants, knocked to the ground once, got to =
their feet as if nothing had happened (and didn=92t change their noble rh=
etoric) and proceeded to get knocked down for the second time, this time =
by more peasants and, if not a little belatedly, one or two noble men.

Those who are not interested in an objective debate about the benefit of =
software patents for the software industry want you to believe that the f=
airy tale is true and that MEPs for the last couple of years have been mi=
sled by a group of hairy open source hippies hell bent on preventing such=
 unification of existing laws.

Upon what basis do they claim so valiantly that the CII Directive was not=
 seeking to change the law (i.e., extend patentability) and that the hair=
y open source hippies, or peasants in my (or their) little fairy tale, go=
t it wrong? Well, to put it bluntly, because these bastions of European d=
emocracy told us that this was the case. In other words, the pronouncemen=
ts of these institutions is rightly to be treated as divine against the h=
eretical statements of the open source community who should be burnt at t=
he stake for having the audacity to question the knights=92 intentions an=
d disrupt the march of software patents across the world. The history of =
the passage of the CII Directive through the EU institutions exposes this=
 myth.

If the actual words of the various drafts were so clear, why did the EU P=
arliament propose substantial amendments at the first reading, why did th=
e Legal Affairs Committee of the European Parliament (JURI) vote overwhel=
mingly to restart the legislative process and, finally, why was a directi=
ve rejected for the first time in European history at its second reading?=
 Was this purely the result of MEPs being misled by a misguided open sour=
ce software community? To continue to make such a claim in the light of t=
he history of the CII Directive is asking us to accept that MEPs are inca=
pable of undertaking a simple analysis of the patent system or making ind=
ependent judgements. It also discredits one of the greatest grass roots m=
ovements in recent European political history.

European laws should be made for the benefit of Europe and its citizens. =
This may sound like common sense but for many arguing for software patent=
s there seems to be an assumption that EU institutions should be working =
in the interests of the large IT corporations (the minority companies in =
the IT industry =96 see below). Laws should only be passed if they serve =
the public interest. For this to happen, or at least have a chance of hap=
pening, there needs to be a democratic and accountable legislature decidi=
ng these laws.

The Commission and Council of Ministers are not democratic; they are not =
elected by the public or directly accountable. The course of the CII Dire=
ctive through the EU institutions is marked with several unsavoury incide=
nts where the Commission and the Council of Ministers failed to give heed=
 to the overwhelmingly clear wishes of the European Parliament, the only =
democratically elected EU institution. These failures, aside from the sub=
stantive debate, have left many question marks on the lack of democracy a=
nd transparency within the Commission and the Council of Ministers. As la=
wyers, why are we failing to comment on these shenanigans? Why was the Co=
mmission and Council of Ministers so keen to push through their draft =96=
- referred to ironically as the 'Common Position=94 but which could never=
 be described as having anything in =93common=94 with the views of the EU=
 Parliament -- at all costs?

Had it not been for the undemocratic insistence of the EU Commission and =
Council of Ministers being so well documented by the anti-software patent=
 lobby, coupled with the now notoriously unethical lobbying tactics of th=
e pro-software patent lobby (reported to the EU anti-fraud commissioner b=
y European lobby watchdogs4 -- I have never seen more dirty noblemen and =
such clean peasants), I and many others would have been none the wiser as=
 to how far short the actual text of the proposed CII Directive fell from=
 the boldly stated aims.

Part of the way Myth 1 has been spun has been dependent on the second myt=
h of the legality of =93software inventions=94 and the =93existing law=94=
 which the Commission was attempting to unify.

=93Existing law=94

Myth 2: Patents for =93software inventions=94 have been granted for many =
years by the EPO so they must be valid and part of the =93existing law=94=
 which the Commission was trying to unify and codify.

When an act that is illegal gets carried out repeatedly without sanction =
it is understandable that many might subconsciously or otherwise consider=
 such act legitimate. For our storytellers, the granting of patents for =91=
software inventions=92 has never been seen as prohibited but instead as =91=
part of the existing law=92. Therefore, they could declare that Myth 1 wa=
s correct because for them, if the CII Directive allowed software patents=
 it would not be an extension of patentability.

It is at this point that the seeds of objection to Myth 1 start to germin=
ate, for the grant of software patents by the EPO is not legal, and there=
fore, is by definition not =93existing law=94.

In CFPH, Prescott QC confirmed what many of us have been saying for some =
time, that current law has plenty of room for inventions which include co=
mputer programs =96- these are not prevented by the EPC. There are those =
that said we needed to desperately clarify the law and make the IT indust=
ry aware that they can patent inventions which involve computer programs =
and the presence of computer programs does not prevent them being patenta=
ble. If this had been the only outcome of the CII Directive, I would have=
 been the first person lobbying for it to be adopted, for it would have d=
one nothing more than confirm the spirit of the EPC. An invention which i=
nvolves a computer program should not be precluded from patentability if =
it satisfies all other patentability criteria provided the computer progr=
am itself is not foreclosed.

However, the CII Directive was in substance going far further than this, =
it sought to legitimise the undemocratic grant of software patents by the=
 EPO and the decisions of the Board of Appeals of the EPO (the =91BA=92) =
favoured by the big name software players (the majority being non-Europea=
n organisations) which would have resulted in the foreclosure of computer=
 programs.

The EPO -- the law of an administrative body

The EPO and the BA are administrative organisations, responsible for impl=
ementing the EPC not for amending it. The source of existing law is not t=
he EPO and the BA but the EPC together with the interpretation of the EPC=
 at a national level, interpreted by an independent judiciary whose livel=
ihood is not dependent on the granting of more patents. As Prescott QC el=
oquently commented:

    =93The EPO is not equipped with a staff of expert economists who are =
competent to decide if the patenting of business methods, or computer pro=
grams, would be good for our country and even if it was it would still be=
 for our Parliament to decide.=94 5 =


Prescott QC=92s comments apply equally to all national patent offices inc=
luding the UKPO. Patent offices are administrative bodies entrusted with =
the task of implementing democratically made laws. They are not legislatu=
res. This is the way it should be. They do not have the democratic mandat=
e, the independence or a team of suitably qualified economists to make la=
w.

The EPO is a structure that lacks the fundamental characteristics of a co=
mpetent legislature. It has no mechanism for conducting public consultati=
ons on crucial issues such as extending patentability to new areas, it is=
 not democratically elected and its staff, as Prescott notes, are not sui=
tably qualified to evaluate economic and public policy issues concerning =
patent laws. No detailed study has ever been conducted by the EPO as to t=
he desirability of software patents and even if such a such a study had b=
een undertaken it lacks the independence to properly evaluate any results=
 -- yet, despite such constitutional issues, it has taken upon itself to =
extend patentability.

Given the lack of independence of both the EPO and national patent office=
s, we should be questioning the significant lobbying activities of patent=
 offices across Europe and the EPO=92s own stance in the CII Directive de=
bate.

Although, the BA may sound a =91legal body=92, it has no authority on sub=
stantive areas of law and is a technical appeals board. Like the EPO, its=
 function is not to make new law but to implement the EPC. For the above =
reasons, as Prescott QC confirmed, the BA=92s case law is not prescriptiv=
e, as it is a technical body not a legislature or judiciary -=96 it canno=
t extend patentability by creating new laws (or not legally anyway).

The opposition to the Common Position did not come from those seeking to =
undermine an attempt to harmonise existing laws. There is a need to clari=
fy the EPC in the area of inventions involving computer programs. However=
, what those campaigning against the Common Position saw was that the tex=
t of the CII Directive would not have resulted in the EPC being clarified=
 (existing law) but instead would have succeeded in putting the case law =
of the BA, an administrative and technical body which had departed from t=
he letter and spirit of the EPC, on a statutory footing and in so doing c=
reate new law and extend patentability; precisely the opposite of what th=
e Commission and others claimed the text would do.

A story of divergence =96 the decisions of the EPO and BA

The EPC contains two important statements about computer programs:

    1) they =93shall not be regarded as inventions=94 (Article 52(2)(c));=
 and

    2) that computer programs shall be excluded from patentability =93onl=
y to the extent to which a European patent application or European patent=
 relates to such subject-matter or activities as such=94 (Article 52(3), =
emphasis added).

There is no ambiguity as to whether computer programs are patentable unde=
r the EPC. They are =93not inventions=94 and therefore cannot be patentab=
le, or should that be cannot be patentable =91as such=92.

That=92s right, in the run up to the CII Directive many MEPs were convinc=
ed by those supporting the CII Directive that the Common Position did not=
 allow a US style system of software patents because computer programs we=
re excluded from patentability =93as such=94. For most people this sounds=
 satisfactory and many MEPs concluded there was not any intention to pate=
nt software and that the CII Directive would not have foreclosed software=
=2E

However, if you actually asked those who were pushing the Common Position=
, =93can any software be patented?=94, you would have got the response, =93=
well, not software =93as such=94, but yes if the software produces a tech=
nical effect because then it is a software invention=94. What is the diff=
erence between =93pure=94 non-technical software and =93technical softwar=
e=94 or a =93software invention=94? The answer is, there isn=92t any diff=
erence. At the end of the day what is being patented is the computer prog=
ram except by the magic word =93technical=94 what was previously not pate=
ntable becomes patentable. As Jim Warrant, board member of Autodesk (a wo=
rld famous CAD software company) said in 1994 in his impassioned plea to =
the US Patent Office at hearings held over software patents, the concept =
of the =93software invention=94 is=85a pure invention:

    =93Thus, I respectfully object to the title for these hearings -- "So=
ftware-Related Inventions" -- since you are not primarily concerned with =
gadgets that are controlled by software. The title illustrates an inappro=
priate and seriously-misleading bias. In fact, in more than a quarter-cen=
tury as a computer professional and observer and writer in this industry,=
 I don't recall ever hearing or reading such a phrase -- except in the co=
ntext of legalistic claims for monopoly, where the claimants were trying =
to twist the tradition of patenting devices in order to monopolize the ex=
ecution of intellectual processes.=94 =


Let=92s go back to the fairy tale. Imagine, that the king prescribed that=
 knights were only allowed to graze sheep on his royal land and that catt=
le were out. Well, imagine if the knights turned round and argued that if=
 the cow could sing and dance, it wasn=92t really a cow but a technical c=
ow which wasn=92t a cow =93as such=94 and could therefore graze with the =
sheep. Do we think the knights could pull the wool over the king=92s eyes=
? After all, it may be a singing and dancing cow, but it is still a cow.

Unfortunately, the fields are now full of cows. The fact that the pro-sof=
tware patent lobby could make the dubious distinction between software =93=
as such=94 and =93technical software=94 as an excuse to foreclose softwar=
e and thus fill the field with prohibited cows lies in the divergence of =
the BA and EPO from its administrative function of interpreting the EPC i=
n a purposive way to extending patentability.

Starting with the decision in Viacom and culminating in the decision in H=
itachi, the BA=92s decisions and the practice of the EPO have resulted in=
 software being effectively foreclosed by the bottomless pit and malleabl=
e concepts of, =93technical contribution=94 and more recently =93technica=
l features=94.

These are not phrases that appear in section 52 EPC (which defines what a=
 patentable invention is). 6 The concept of what is =93technical=94, and =
consequently =93technology=94, is not defined in the EPC. What the BA and=
 EPO have in practice done is to interpret the word =93technical=94 so br=
oadly that =93technical features=94 can be found in virtually all softwar=
e. 7 As Prescott QC commented in CFPH:

    =93Now let me outline the practice of the European Patent Office. The=
y look at the applicant=92s claim, and ask themselves: does it have any =93=
technical features=94? If there are no =93technical features=94 at all th=
ey reject the application, for not being an =91invention=92. But they con=
sider it is an invention if there is any =93technical feature=94 at all. =
They take it very far. Even paper, or ink, can count as a technical featu=
re=94.8 =


In doing so, they have failed to recognise that software cannot be consid=
ered as =93technical=94 or =93technology=94 for patent purposes, because,=
 although =93technology=94 is not defined positively in the EPC, it is de=
fined negatively by reference to what is known as =93excluded subject mat=
ter=94 (and computer programs are, as noted above, excluded subject matte=
r). This is expressly recognised by Prescott QC in CFPH when he comments:=


    =93it will often be possible to take a short cut by asking =93Is this=
 a new and non-obvious advance in technology?=94 That is because there ca=
n often be universal agreement about what is =91technology=92=85.But some=
times it will not be possible without running the risk of error...If ther=
e is any doubt it will then be necessary to have recourse to the terms of=
 Article 52 of the Convention.=94 9 =


Unlike the EPO and the BA, Prescott QC uses the short-hand =93technology=94=
 with strict reference to Article 52, which contains the list of exclusio=
ns including computer programs and recognises that =93technical=94 and =93=
technology, although useful short-hand, are ultimately limited by Article=
 52 EPC (in the context of determining patentability). The same cannot be=
 said for Mr. Justice Pumfrey=92s approach in Shopalotto where he unasham=
edly grabs the loose reigns of the wild horse of =93technical effect=94 u=
nleashed by the EPO and BA and proceeds to gallop off with it:

    =93Suppose a program written for a computer that enables an existing =
computer to process data in a new way and so produce a beneficial effect,=
 such as increased speed, or more rapid display of information, or a new =
type of display of information. It is difficult to say that these are not=
 technical effects, and, indeed, that the programmed computer, itself a m=
achine that ex hypothesi has never existed before, is itself a technical =
article and so in principle the subject of patent protection. The real qu=
estion is whether this is a relevant technical effect, or, more crudely, =
whether there is enough technical effect.=9410 =


Mr. Justice Pumfrey, with respect, makes the same mistake as the EPO by e=
ndorsing the old =93technical contribution=94 test (=91enough technical e=
ffect=92) and succumbing to a broad definition of =93technical=94 which f=
ails to recognise that what may be considered as =93technical=94 in commo=
n parlance does not mean it is =93technical=94 for patent purposes (which=
 requires a purposive reference to Article 52 EPC). In the context of a c=
omputer program, an increase in speed or faster display of information or=
 new way of displaying information are not =93technical=94 effects becaus=
e they have no =93physical=94 (technical) manifestation but result from t=
he application of computer engineering, an exact science (rather than exp=
erimentation with changes to natural forces through the application of ap=
plied sciences). As the 17th senate of the German Federal Patent Court sa=
id in 2002:

    =93If computer implementation of non-technical processes were attribu=
ted a technical character merely because they display different specific =
characteristics, such as needing less computing time or storage space, th=
e consequence of this would be that any computer implementation would hav=
e to be deemed to be of technical character. This is because any distinct=
 process will have distinct implementation characteristics, that allow it=
 to either save computing time or save storage space. These properties ar=
e, at least in the present case, not based on a technical achievement but=
 are pre-determined by the chosen non-technical method. If the completion=
 of such a task could be a sufficient reason to attribute technical chara=
cter to a computer implementation, then every implementation of a non-tec=
hnical method would have to be patentable; this however would run against=
 the conclusion of the Federal Court of Justice that the legal exclusion =
of computer programs from patentability does not allow us to adopt an app=
roach which would make any teaching that is framed in computer-oriented i=
nstructions patentable.=94 11 =


The use of =93technical features=94 to justify the granting of patents ca=
nnot and should not be used without clearly referring back to the exclusi=
ons in Art 52 EPC. However, the broad brush approach of the BA and EPO to=
 =93technical features=94, and now followed by Mr. Justice Pumfrey, is a =
long way away from the EPC exclusions and by allowing everything to be co=
nsidered as =93technical=94, the distinction between software =93as such=94=
 and =93technical software=94 or =93software invention=94 mocks the purpo=
se of the exclusion of computer programs in the EPC so as to effectively =
render it void. As the German Federal Court put it:

    =93any attempt to attain the protection of mental achievements by mea=
ns of extending the limits of the technical invention -- and thereby in f=
act giving up this concept -- leads onto a forbidden path. We must theref=
ore insist that a pure rule of organisation and calculation, whose sole r=
elation to the realm of technology consists in its usability for the norm=
al operation of a known computer, does not deserve patent protection.=941=
2 =


A purposive approach

What is the correct meaning of the words =93to the extent=94 and =93as su=
ch=94? Finally, law makers rather than technicians are starting to speak =
up, as Prescott QC states:

    =93Article 52(3) indicates that a subject-matter is excluded =91only =
to the extent=92 that a patent relates to it =91as such=92=85. In the pas=
t it has led some people to think that you should be able to patent any n=
ew, non-obvious idea, so long as what is claimed as the invention does no=
t consist only of excluded subject-matter. According to that reasoning yo=
u could patent an excluded item e.g. a computer program by the formal dev=
ice of claiming some physical artefact (e.g. =93A magnetic disk in which =
my program is stored=94, or =93A computer when operating under the instru=
ctions of my program=94). And indeed if it were just a question of interp=
reting Article 52(3) as if it were an Act of Parliament, they might have =
been right. However, it is not an Act of Parliament, and they were not ri=
ght.=9413 =


This is a refreshing statement although we have had to wait a long time t=
o hear it. The EPO, the BA and all the other sustainers of the =93softwar=
e invention=94 farce are =93not right=94. You cannot and should not be al=
lowed to subvert the purpose of an international convention which contain=
s a clear exclusion on patenting computer programs by bestowing on the co=
mputer program some, physical, and hence non-abstract and tangible, chara=
cter. For to do so would defeat the purpose of the EPC and as Prescott QC=
 comments, the exclusions in Article 52 EPC need to be given a purposive =
interpretation14 and in order to do this, we must understand the policy b=
ehind the exclusions.

Adopting a purposive approach has two key effects. Firstly, it makes it c=
lear that you cannot have =93software inventions=94 because by definition=
 this can only ever be software, the invention can only consist of softwa=
re and perhaps a computer or other physical artefact upon which the softw=
are is being run=85at the end of the day this invention exists totally in=
 the sphere of computers and software. However, it is submitted, that a p=
urposive approach also allows one to satisfactorily deal with hybrid inve=
ntions (these are not =93software inventions, but inventions which have a=
 physical =91artefact=92 or =91process=92 (per Prescott QC) that is being=
 claimed and which involve software).

=93To the extent=94 and =93as such=94 =96- dealing with hybrid inventions=


    =93The reason why computer programs, as such, are not allowed to be p=
atented=85. [a]lthough it is hotly disputed now by some special interest =
groups, the truth is, or ought to be, well known=85is because at the time=
 the EPC was under consideration it was felt in the computer industry tha=
t such patents were not really needed , were too cumbersome (it was felt =
that searching the prior art would be a big problem ), and would do more =
harm than good.=9415 =


With these words, Prescott QC laid bare the argument of the pro-software =
patent lobby. Politicians have short term memories, as do most people who=
 stand to make money out of software patents to the detriment of the soft=
ware industry as a whole. The truth, as Prescott QC comments =93ought to =
be known=94 but it has been conveniently forgotten by the pro-software pa=
tent lobby. Computer programs were excluded from patentability because pa=
tents in this area were seen as harmful to the IT industry and, this was =
not intended as a =91soft=92 exclusion but a =91hard=92 exclusion. As dis=
cussed later, the reasoning of our 1970=92s forefathers holds true today.=
 Given such a clear statement of the public policy reasons behind the exc=
lusion on computer programs it is, with the greatest professional respect=
, difficult to understand given that the =93truth ought to be known=94 ho=
w Mr. Justice Pumfrey could in Shopalotto state that =93 it [was] difficu=
lt to discern any underlying policy=94 for the computer program exclusion=
 in the EPC. This failure to understand the policy reasons behind the exc=
lusion of computer programs, leads him to conduct an analysis of patentab=
ility in a public policy vacuum resulting in a failure to adopt a purposi=
ve approach to the EPC and, inevitably (in such vacuum), to support the f=
lawed view of the EPO and BA as to the words =93to the extent=94 and =93a=
s such=94.

If, as Prescott QC does, we accept that the EPC excluded computer program=
s for strong policy reasons and that they should not be foreclosed, it is=
 not consistent that the phrases =93to the extent=94 and =93as such=94 sh=
ould infer that combining a computer program as part of a thing or proces=
s which is patentable should render the software also part of the patent =
and therefore foreclosed. A much more consistent interpretation of the ef=
fect of these phrases and the purpose of the computer program exclusion, =
is that Article 52(3) was drafted so as to deal with the =91problem=92 of=
 preventing foreclosure of a computer program (against public policy) in =
the case of hybrid inventions which included a computer program. In order=
 to do this, the most logical choice of words to delimit the excluded sub=
ject matter from the patentable subject matter would be to use the words =
=93to the extent=94.

Therefore, in considering whether a thing or process is patentable which =
includes a computer program, the hybrid invention is foreclosed (assuming=
 it meets the other patentability criteria) =93to the extent=94 it does n=
ot involve the computer program as such.

This means that the inventor gets the benefit of the patent for his hybri=
d invention, the presence of the software does not void the application b=
ut the software itself is not, at a formal level, patented (i.e., foreclo=
sed). In this way, the ideas and functions of the software remain free as=
 is necessary for public policy reasons (see discussion below) but the ta=
ngible, concrete and physical thing or process which has benefited from t=
he application of a computer program is protected. Prescott QC implied th=
is when he said:

    =93the mere fact that a claimed artefact includes a computer program,=
 or that a claimed process uses a computer program, does not establish, i=
n and of itself, that the patent would foreclose the use of a computer pr=
ogram=94.16 =


The presence of excluded subject matter should not prima facie prejudice =
a claimed artefact or process which uses the excluded subject matter but =
if the non-excluded subject matter is capable of being patentable, the ex=
cluded subject matter does not suddenly become part of the patent. =93[T]=
o the extent=94 the now patentable invention includes a computer program,=
 this element is excluded from the patent claims and hence is not foreclo=
sed (hence Prescott QC does not talk of the =91claimed computer program=92=
 but instead of the claimed artefact or process because the computer prog=
ram, being excluded subject matter, cannot be part of the claim).

The =93Little Man=94 Test

Prescott QC, then goes on to talk about what is now been called the =93li=
ttle-man=94 test which was correctly, in my opinion, being interpreted by=
 the hearing officer in the Oracle application.17

    =93There are many artefacts that operate under computer control.. and=
=2E..many industrial processes that operate under computer control...The =
question to ask should be: is it (the artefact or process) new and non-ob=
vious merely because there is a computer program? Or would it still be ne=
w and non-obvious in principle even if the same decisions and commands co=
uld somehow be taken and issued by a little man at a control panel, opera=
ting under the same rules? For if the answer to the latter question is =91=
Yes=92 it becomes apparent that the computer program is merely a tool, an=
d the invention is not about computer programming at all.=9418 =


In the Oracle application, Oracle tried to apply for a patent of a mark-u=
p language translation program by arguing that since what their program w=
as implementing was a better way of applying the translation rules and th=
at these rules could be applied by a little man, their invention was not =
to do with computer programming (and hence =91computer programs=92). Howe=
ver, this application failed and although the hearing officer=92s reasoni=
ng has been criticised, it is submitted that the decision is not only con=
sistent with the EPC but also Prescott QC=92s reasoning.

Prescott QC, it is submitted, did not intend the =93little man test=94 to=
 be a litmus test for whether something is excluded subject matter, i.e. =
if you pass the test you are not within the exclusion of computer program=
s. His words must be taken in the clear context in which they appeared. H=
e was talking about hybrid inventions which may involve a computer progra=
m, i.e. unlike in Oracle, the little man test appears where the program i=
s not the central element (this is the claimed artefact or process), but =
is instead used to assist an examiner in considering the new and obviousn=
ess limb of Prescott QC=92s test. The test seeks to clarify that, in asse=
ssing newness and novelty, the presence of a computer program should not =
prima facie hinder an application if it appears to be the only =93new=94 =
element, where it is clear that the function that the computer program is=
 performing in the claimed artefact or process could be performed by a hu=
man being and that, the process if =93humanised=94, is new and not-obviou=
s having regarding to the state of the art. If the =93little man=94 test =
is passed, it is the claimed artefact or process which is patented, not t=
he computer program involved in the same.

However, the problem is that granting patents to hybrid inventions whilst=
 at the same time preventing the foreclosure of software requires the EPO=
 and BA to be able to:

        * recognise the public policy behind excluding software programs =
in the first place;

        * not conveniently forget history;

        * not play a formalistic word game with =93as such=94; and

        * not put their =93customers=94 (mainly non-European customers wh=
en it comes to software patent applications successfully filed) first by =
taking upon themselves to extend patents to cover effectively software in=
stead of its administrative function of upholding the terms of the conven=
tion as democratically adopted (including its spirit).

Since the CII Directive: (i) did not contain a clear definition of techno=
logy (recognised now not only by the anti-software patent lobby but also =
Prescott QC when he commented that the Common Position =93would have entr=
enched a test involving =91technical contribution=92 and =91technical fea=
tures=92 that..[was]..too vague to be workable at the margin=9419 ); and =
(ii) relied on the =93as such=94 definition, because of the EPO=92s and B=
A=92s track record on software patents, those arguing that the stated aim=
s of the CII Directive had not been met knew that to have adopted the CII=
 Directive in the form proposed by the Commission and others would have l=
ed to the legitimisation of software inventions, the patenting of pure so=
ftware and the foreclosure of software in hybrid inventions resulting in =
an extension of patentability.

With the realisation that the CII Directive would not have achieved its c=
ommendable aims, those seeking to protect the majority of the IT industry=
 had no choice but to try and modify the same to achieve the stated aims.=
 After all, as Prescott QC comments, =93[d]espite the prohibition on gran=
ting patents for computer programs as such=85.the EPO has granted more th=
an 40,000 of them=94.20 If the EPO could grant 40,000 patents when, in la=
w, they shouldn=92t be=85imagine if they felt the BA=92s decisions were b=
eing put on a statutory footing.

A missed opportunity

The anti-software lobby wanted the directive to be a clarification of the=
 EPC, not an extension. They sought to adopt a purposive interpretation b=
ased on an understanding that patents are not the divine right of invento=
rs -=96 public policy should dictate what is and is not patentable.

The pro-software patent lobby stated that their aim was also to clarify =91=
existing law=92 but as has been noted above, although the Common Position=
 would have permitted hybrid inventions involving computer programs, pure=
 software would have been patented and also all software in hybrid invent=
ions would have been foreclosed, hence creating a result never foreseen b=
y the EPC, against the purpose of the EPC, an extension of patentable sub=
ject matter and a move against public policy as it was then and as it is =
now.

What we needed, and I think we still need at a European level (although P=
rescott QC has got very close to doing this at the UK level) was to clari=
fy how the EPC applied to hybrid inventions involving software, but to do=
 this in a way which didn=92t rewrite the exclusion of computer programs =
and result in the foreclosure of software. Unfortunately, once the pro-so=
ftware patent lobby realised that we were on the eve of achieving this, t=
hey did a u-turn and promptly proceeded to kill the directive they had lo=
bbied so hard to achieve -=96 the directive, was in the end not killed by=
 the open source movement although this truth, which ought to be known, h=
as failed to be presented =93as such=94.

Only the hippies

Myth 3: The only interest group protesting about the CII Directive allowi=
ng software patents through the back door were open source software compa=
nies and individual developers.

This is a very important myth for the pro-software patent lobby. Often I =
have seen press releases talking about the =93open source community=94 ha=
mpering the CII Directive without any mention of proprietary software com=
panies also protesting about the CII Directive=92s substantive effects. T=
he intended purpose of this distortion in reporting is clear -- it seeks =
to polarise the debate as one between proprietary software companies (for=
 software patents) and open source software companies (anti-software pate=
nts and =91haters=92 of intellectual property rights). The truth however =
is very different.

As discussed in the next section, software patents do not discriminate be=
tween the proprietary and open source sectors -- the damaging effects on =
innovation are the same -- it=92s just that in the open source sector the=
 effects are compounded by the sheer scale of independent development whi=
ch is inherent in large scale, worldwide, development projects. Software =
patents affect any individual or organisation writing software, regardles=
s of licensing model, because they grant monopoly rights to the building =
blocks of software engineering and hence constitute a barrier to anyone w=
riting software, but in particular to Small and Medium-Sized Enterprises =
(=93SMEs=94).

The big porky

Myth 4: Software patents are good for the IT industry and necessary for i=
nnovation

    =93Most economists have doubts whether economic efficiency, i.e. incr=
eased overall welfare, is achieved by having or making computer program r=
elated inventions patentable. This caution is supported by the continuing=
, indeed growing, concern in the USA on the issues surrounding patents on=
 computer program related inventions. The debate in the States is not fin=
ished.=9421 =


The above statement was not written by an open source software company. T=
he statement was delivered as part of an independent report commissioned =
by the EU Commission prior to introducing the CII Directive. In no uncert=
ain terms, the authors highlighted the conclusion that software patents w=
ere unlikely to produce benefit to our (European) economy and this was a =
report commissioned by the EU whose undertones were particularly conserva=
tive. However, within a couple of years, certain EU Commissioners would h=
ave forgotten all about this careful analysis (confirmed by many subseque=
nt studies) and would be trying to convince us that software patents are =
beneficial to our economy.

IPR protect just about every element of a software product, including the=
 lines of code, the graphics, the sounds, the front-end text, icons and t=
he general look and feel. The missing piece of the jigsaw are the functio=
ns of the software, which would be protected (or monopolised) if software=
 patents were allowed (whether subversively or otherwise). The pro-softwa=
re patent lobby wants us to believe that software patents or =93invention=
s=94 (as they like to call them) are a natural and acceptable progression=
 of the patent system and that there is nothing wrong with foreclosing so=
ftware through the patent system. What we are being told is that all thes=
e forms of IPR protection are not enough; we need stronger IPR in the for=
ms of patents =96- developers should be given a monopoly over functionali=
ty and that this is vital for the continued competiveness of the European=
 IT industry. Who is right?

Why have patents?

The purpose of patents is to stimulate innovation by rewarding those who =
make inventions with monopoly rights. However, patents have for decades b=
een only granted (in accordance with a purposive approach to the law) for=
 technical inventions, i.e. inventions which have a physical effect. This=
 is often expressed in different ways in each member state but it is fair=
 to say that, drawing from the main concepts, there is a convergence towa=
rds the idea that the invention must be =93technical=94, have a =93practi=
cal form=94 and =93physical=94 effects, represented in some form of appar=
atus or device. Therefore, in CFPH Prescott QC litters his judgement with=
 references to claimed =93artefact=94 or claimed =93process=94 and in dis=
cussing attempts by =91special interest groups=92 to subvert the purpose =
of Article 52 EPC he refers to them trying to claim the abstract computer=
 program together with a =93physical artefact=94, thus recognising that t=
he patentable subject matter is that part which is the physical manifesta=
tion of the idea. What has historically been protected by patents is not =
ideas themselves, but =93a new way of putting an idea to work by using co=
ntrollable forces of nature.=94 22

For such technical innovations, society has considered it right that, giv=
en such inventions often involve a significant amount of experimentation =
and provide benefits to us, we need to encourage inventors by giving them=
 the economic incentive of a monopoly right in return for publication of =
the invention and the system used to do this is the patent system. For su=
ch technical inventions which create a change in natural forces, there is=
 really no other suitable intellectual property right which rewards and p=
rotects the inventor=92s time and effort in undertaking such experimentat=
ion, which because we are in the realm of applied sciences rather than ex=
act sciences (like mathematics) can be substantial.

However, ideas (mental thoughts, abstract or logical processes) have not =
historically been patentable as conceiving an idea in one=92s mind and ev=
en expressing that idea in writing does not involve the experimentation o=
n physical matter or any technical effect and can happen instantly. We (e=
xcept for the EPO with its vested interests) have not thought it fit to e=
xtend the patent system to covering intangible ideas, whether expressed o=
n paper or by way of a computer program. As Hartmut Pilch of the Federati=
on for Free Information Infrastructure (=93FFII=94) writes:

    =93why should it make any difference whether I run [the ideas] in my =
head, with pencil and paper or with the normal tool of today's civilisati=
on, which is the universal computer=85=85because the economic rationale b=
ehind not granting patents on thoughts applies also here: abstract ideas =
are, regardless of their applicability to technical problems, produced wi=
thout experimentation cost, applicable to an infinite range of problems, =
and replicated at zero cost with no overhead to which patent license fees=
 could be added. The division of the extra cost of patents by the margina=
l cost (and long-term ideal price) of information goods is a division by =
zero.=94

The patent system was very much designed in relation to physical inventio=
ns rather than abstract ideas and has worked well in the industrial and p=
harmaceutical sectors. A patent grants the inventor a 20 year monopoly ri=
ght iIn industries which produce technical inventions. This time period h=
as worked well in such industries because often the R&D time needed to ar=
rive at an invention, such as a new drug, can be very significant and als=
o very expensive. In other words, these industries have very long and exp=
ensive development life cycles. The technology in these industries does n=
ot develop rapidly or incrementally. If after 4 years of researching a dr=
ug, one knows that you can have a monopoly right for 20 years to exploit =
the drug this gives drugs companies the incentive to invest in R&D knowin=
g that they can recoup the costs. It is the same for an industrial proces=
s. The companies involved in such sectors are often large companies with =
money to spend on filing patents and defending patent infringement cases =
which can be incredibly expensive. 23

The role of public policy

As patents for traditional industries may work to generate innovation, an=
 invention which produces physical effects, including a hybrid invention =
which involves a computer program, should in theory be patentable (save f=
or not foreclosing the software element as discussed above). However, we =
should not be destroying years of carefully thought out legal, economic a=
nd scientific practice which has focused on granting patents for inventio=
ns which result in a change to natural forces (i.e. have physical effects=
) and not computer programs. This is a recognition that inventions which =
result in a change of natural forces may take many years to develop and m=
ay have a beneficial effect on society, hence the need to give inventors =
an incentive to spend R&D in coming up with such inventions. At the very =
core of patent law there is a balance between protecting the rights of an=
 individual inventor and those of society. As Peter Prescott QC commented=
:

    =93There can be but one justification for having a patent system, and=
 that is that it is good for the people of the country. If the patenting =
of certain things does more harm than good, it matters. Patents that are =
wrongly granted can be very expensive to challenge and may deter small an=
d medium enterprises.=9424 =


Patents grant monopoly rights. Anyone who has studied economics knows tha=
t monopolies are not good for competition:

    =93A patent system is always a burden on trade, commerce and industry=
: if only because of the =93red tape=94 effect. The only question is whet=
her the benefits outweigh the burdens.=9425 =


In fact, much of the history of European integration has been based in cr=
eating a level playing field in industry by breaking down the negative ef=
fects of monopolies so it is quite ironic that the EU Competiveness Counc=
il could introduce a directive which would have led to a damaging economi=
c monopoly. Prescott QC is bold enough to admit that patents are not the =
divine right of inventors but are only granted where they benefit society=
=2E It is the citizens of Europe who have the ultimate say in whether we =
should extend patentability, represented through its democratic instituti=
ons and not the powerful voice of minority special interest groups.

There is no doubt that in some fields, society benefits from the patent s=
ystem because, for fields of technology where the development life cycle =
is very protracted, expensive and involves a new industrial process, with=
out a system such as patents it would be very difficult to encourage comp=
anies to undertake such expensive research and commit the time to develop=
ing such new processes (which benefit society) if they did not have the e=
conomic security of patents (i.e. a monopoly). In a field such as the dru=
gs industry, where drugs may take many years to develop, a 20 year monopo=
ly on a drug sounds reasonable. However, in software terms, a 20 year mon=
opoly is a lifetime. Furthermore, even if the patent system was amended f=
or software patents (e.g. by shortening the period of the monopoly right)=
, it is submitted that the patent system as a system for protecting and e=
ncouraging software innovation is fundamentally flawed.

Do patents work in the software industry?

Traditionally, it has always been understand that the patent system was n=
ot appropriate for software. Prescott QC referred to the reasoning at the=
 time of the EPC was drafted and that it was felt =93such patents were no=
t really needed, were too cumbersome and would do more harm than good=94.=
 26 This =93history=94 is being forgotten but has the position really cha=
nged? In 1994, at the USPTO hearings on software patents a certain softwa=
re company made the following statement:

    =93software per se should not be allowed patent protection=85. [We ha=
ve] built [our] business by creating new markets with new software. We ta=
ke this position because it is the best policy for maintaining a healthy =
software industry, where innovation can prosper.

    [...]

    when we=85.founded a company on the concept of software to revolution=
ize the world of printing, we believed that there was no possibility of p=
atenting our work. That belief did not stop us from creating that softwar=
e, nor did it deter the savvy venture capitalists who helped us with the =
early investment. We have done very well despite our having no patents on=
 our original work.

    On the other hand, the emergence in recent years of patents on softwa=
re has hurt [us] and the industry. A "patent litigation tax" is one imped=
iment to our financial health that our industry can ill-afford. Resources=
 that could have been used to further innovation have been diverted to th=
e patent problem. Engineers and scientists such as myself who could have =
been creating new software instead are working on analyzing patents, appl=
ying for patents and preparing defenses. Revenues are being sunk into leg=
al costs instead of into research and development. It is clear to me that=
 the Constitutional mandate to promote progress in the useful arts is not=
 served by the issuance of patents on software=94.

Who said the above, was it a small time developer or an open source giant=
? No, this comment was made by one of the largest proprietary software co=
mpanies of its time, Adobe. This was 1994: perhaps things have changed in=
 the 21st century? At the US Federal Trade Commission=92s hearings on the=
 anti-competitive effects of patents held in 2002, Bradford L. Friedman, =
Director of Intellectual Property at Cadence Design Systems, Inc commente=
d:

    =93As I'm sure this committee is aware, there is a general animosity =
to pure software patents within and outside of the industry due to, one, =
the perceived allowance of what I'll diplomatically call overbroad patent=
 claims, and two, the historically non-proprietary culture of the softwar=
e engineering industry. In sum, largely because the current patent system=
 is poorly fashioned for the software design tool industry, the industry =
has evolved to minimize the impact that patents have on competition and h=
as relied on other more market-oriented drivers of innovation.=94

A computer program, i.e., the lines of code, mathematical models etc are =
all intangible and a computer program, on its own, does not produce any c=
hange in natural force (i.e. it does not have a physical effect). Softwar=
e is an =93intellectual creation=94. As noted above, Article 52(2) of the=
 EPC expressly excludes =93computer programs=94 from being patentable. Ho=
wever, computer programs are protected by copyright, an automatic intelle=
ctual property right (there is no need to apply for copyright) which prot=
ects the expression (i.e. the code) of a programmer=92s ideas from being =
copied by others. Copyright does not, however, seek to protect the ideas =
(features or functionality) behind a software program. As Prescott QC com=
ments:

    =93As was pointed out by Laddie J in Fujitsu Limited=92s Application =
[1996] RPC 507, 530, the items listed in Article 52 were excluded for rea=
sons of public policy. This is obvious, for instance, in the case of =91a=
esthetic creations=92 =96 a literary work, say. Such things are to be pro=
tected, if at all, under copyright law. Not only does copyright law refus=
e to protect a general idea, it freely allows the publication of similar =
works if there has been no copying. Imagine what would happen if literary=
 works could be protected by patent. Literary creativity would tend to be=
 stifled, and authors would have to conduct patent infringement searches =
before the expiry of their copy-deadlines.=9427 =


You could read =93computer programs=94 where you read =93literary works=94=
, for the effects are exactly the same. Prescott QC can see the negative =
affects of patenting literary works, including how this would affect inno=
vation. However, although computer programs are written works which are g=
enerally processed by a machine but could be read in source code form, ma=
ny people fail to see the blinding similarities between the dangers of tr=
ying to patent a story plot and the lines of code or functionality of a c=
omputer program.28

The result of the copyright system is that another programmer can come al=
ong, study the ideas of a computer program and write a better program bas=
ed on these ideas that does not necessarily infringe copyright. If the so=
ftware was patented, he could not do this without the risk of facing a pa=
tent infringement suit because patents protect the underlying ideas. Copy=
right protects the hard work and investment made by individuals and compa=
nies by protecting the expression of the ideas and has allowed businesses=
 to write extremely profitable software and led to a very strong IT econo=
my in Europe. However, it has also allowed millions of developers to come=
 up with better ways of achieving the same functionality for a specific b=
usiness process (thus benefiting consumers with more choice and better pr=
oducts) without having to fear being sued for patent infringement because=
 someone owns a patent to a technique, functionality or business process =
achieved by software. Therefore, copyright has allowed the software indus=
try to flourish, generate numerous new products quickly (without having t=
o worry about patent searches etc) and ultimately benefited consumers. Th=
e enforcement of copyright is also much cheaper than enforcing patents, w=
hich helps to protect the majority of the software industry, SMEs. The wa=
y copyright works suits the way the software industry and software develo=
pment works. Not every industry is the same and patents are not suited to=
 the software industry; copyright is (or is at least better suited).

The software industry differs markedly from other industries which benefi=
t from patents. The software development life cycle is much shorter than =
other industries and the costs of R&D and development are much smaller. T=
he way software is also developed is important -- software developers hav=
e traditionally developed software in an incremental process and the majo=
rity of today=92s software is built on the ideas of previous developers.2=
9

=93Software clearly differs from other industrial computer products in th=
at it evolves on the basis of pre-existing ideas. This process of open so=
urcing, which has enabled innovation in the sector to thrive, would becom=
e almost impossible under a patenting system.=94

The Commission on Intellectual Property Rights concluded in its final rep=
ort in 2002:

    =93The patent system fits best a model of progress where the patented=
 product, which can be developed for sale to consumers, is the discrete o=
utcome of a linear research process. The safety razor and the ballpoint p=
en are examples, and new drugs also share some of these characteristics. =
By contrast in many industries, and in particular those that are knowledg=
e-based, the process of innovation may be cumulative, and iterative, draw=
ing on a range of prior inventions invented independently, and feeding in=
to further independent research processes by others. ... The development =
of software is very much a case of building incrementally on what exists =
already. Indeed, the Open Source Software Movement depends precisely on t=
his characteristic to involve a network of independent programmers in ite=
rative software development on the basis of returning the improved produc=
t to the common pool.=9430 =


This view was reiterated in a report prepared by Deutsche Bank in 2003:

    =93[O]ne could be tempted to consider ever stricter IP protection reg=
imes to provide ever more stimuli for innovation.

    This conclusion is wrong, however. A prime example is patents on soft=
ware, which might at first sight be seen as a logical expansion of the cl=
assic technology patent. But creating software differs markedly from crea=
ting machinery and the like: MIT researchers Bessen and Maskin argue that=
 innovation in software is both strongly sequential (one invention buildi=
ng on a previous one) and complementary (thriving on parallel approaches =
to the same problem), far more so than in other technology fields. In fac=
t, they found empirical evidence that software patenting substitutes R&D =
activity, rather than encouraging it, and conclude: For industries like s=
oftware or computer, there is actually good reason to believe that imitat=
ion becomes a spur to innovation, while strong patents become an impedime=
nt. In accordance with other academics, they strongly favour copyright ov=
er patent protection for software. Copyrighting provides both adequate le=
eway for sequential innovation and enough protection for marketable softw=
are products.=9431 =


Follow the yellow brick road -- only if you pay a toll

Software is written to solve a =93problem=94. You could argue that the =93=
problem=94 is the functionality, feature or method achieved by the softwa=
re. The difference with software is that there are many ways in which the=
 same =93problem=94 can be solved by writing the software in a different =
way. Now in a patent system, the =93problem=94 itself can be patentable. =
This means that once one person has patented the =93problem=94 with a pie=
ce of software, no other person can write a piece of software (even thoug=
h the software may be completely different and not have one line of code =
the same) without obtaining a patent licence. However, the whole industry=
 revolves around the rapid evolution of software. Being able to write dif=
ferent software to solve the same problem leads to better software; if th=
is is prevented or restricted, the result in less innovation, poorer prod=
ucts, less choice for the consumer and less competition (which normally m=
eans higher prices for consumers and businesses). There are many paths to=
 the same destination. Some are more hazardous than others. With software=
 patents you gain a monopoly over the destination turning a free motorway=
 into a toll road. What is worse is that not only do you have to pay to g=
et to the destination but you are prevented from reaching the destination=
 by exploring different paths to the toll road even though they may be qu=
icker, more efficient and less costly.

Defeating the purpose of patents

Monopolies are in most economic circles considered as =91bad=92. A huge e=
ffort has been undertaken within the EU to remove barriers to trade creat=
ed by monopolies. If a monopoly is to be granted for the implementation o=
f an idea, it should only be done when there is a clear economic benefit =
to society in doing so. If the granting of patents in a certain field doe=
s not encourage innovation then the purpose of patents (as far as society=
 is concerned) is defeated. On software patents, the balance of opinion i=
s that in the software industry software patents have the reverse effect.=


The Liberal Democrats in the UK firmly recognise the negative effect of s=
oftware patents:

    "we=85..recognize that there are circumstances in which protection sy=
stems can have the contrary effect of stifling creativity against the pub=
lic interest. We are especially concerned about the use of patents in the=
 area of computer software in this respect.

    There are usually many ways to achieve the same objective using compu=
ter code. The public benefits from the fact that different teams of progr=
ammers will work on solving problems and release their separate solutions=
 as competitors in the market. The specific code each team has written is=
 protected by copyright. Allowing a wide definition of inventiveness for =
patents in the field of software could lead to a reduction in this creati=
ve activity. This might be justifiable if there were evidence that the so=
ftware industry as a whole were suffering because of an inability to secu=
re revenue for research and development but there is no evidence that thi=
s is the case as the sector remains vibrant and growing."32 =


However, what better source of evidence then the US whose software indust=
ry has had to live with software patents for over 10 years? The internati=
onally respected Federal Trade Commission carried out in October 2003 a d=
etailed industry study into patents. Its conclusions, in relation to soft=
ware, make fascinating reading:

    =93The software and Internet industries generally are characterized b=
y five factors: (1) innovation occurs on a cumulative basis; (2) capital =
costs are low, particularly relative to the pharmaceutical, biotechnology=
 and hardware industries; (3) the rate of technological change is rapid, =
and product life cycles are short; (4) alternative means of fostering inn=
ovation exist, including copyright protection and open source software; a=
nd (5) the industries have experienced a regime change in terms of the av=
ailability of patent protection. Panelists consistently stated that compe=
tition drives innovation in these industries. Innovation is also fostered=
 by some industry participants' use of copyright protection or open sourc=
e software. Several panelists discounted the value of patent disclosures,=
 because the disclosure of a software product's underlying source code is=
 not required.

    Many panelists and participants expressed the view that software and =
Internet patents are impeding innovation. They stated that such patents a=
re impairing follow-on incentives, increasing entry barriers, creating un=
certainty that harms incentives to invest in innovation, and producing pa=
tent thickets. Panelists discussed how defensive patenting increases the =
complexity of patent thickets and forces companies to divert resources fr=
om R&D into obtaining patents. Commentators noted that patent thickets ma=
ke it more difficult to commercialize new products and raise uncertainty =
and investment risks. Some panelists also noted that hold-up has become a=
 problem that can result in higher prices being passed along to consumers=
=2E=94 33 =


The Government in its conclusions regarding the Patent Office=92s Consult=
ation Document of 01 November 2000 (=93Should Patents be Granted for Comp=
uter Software or Ways of Doing Business?=94) concluded in relation to the=
 relationship between patents and innovation in the software industry:

    =93The Government is sympathetic to many of the points made by those =
concerned about the impact of patents. There is a vast amount of innovati=
ve software development taking place without patent protection at present=
 (though, like all software, it is protected by copyright against direct =
copying). Much of it is being carried out by individuals and SMEs. To ext=
end patentability so that these developers have to divert time and effort=
 into making sure they are not infringing patents, and seeking and enforc=
ing them, would impose a major burden. The necessary case for believing t=
hat a significant extension of patentability would increase innovation in=
 this field simply has not been made. In fact, as many respondents sugges=
ted, it could have the opposite effect.=9434 =


The rise of the software industry in a patent free world

For 30 years, Europe lived without software patents. What happened in thi=
s period? We saw the rise of a great software industry, the birth of the =
internet and e-commerce, thousands of software products (and the rise of =
Free and Open Source Software (=93FOSS=94)). The Internet has enriched al=
l our lives but had there been software patents in place at the time of i=
ts inception, it is very unlikely that we would have achieved so much. Ma=
ny forget that the Internet has been built on open standards:

    =93Of course the main internet interfaces are open, based around free=
ly available published standards that are not under the control of any on=
e company or industry body.=9435 =


We should all take note that the father of the world wide web, Tim Berner=
s-Lee, is a vocal opponent of software patents. Do we really think that t=
he idea of an electronic shopping cart should be monopolised to the tune =
of US$40,000,000? This is what Amazon has had to pay to secure the contin=
ued use of its e-commerce platform in the US this year.36 It would not ne=
ed to pay this in Europe. Imagine every other e-commerce vendor in Europe=
 who uses an electronic shopping cart. Would they have the funds of Amazo=
n to be able to negotiate a patent settlement with the company that sued =
Amazon? Perhaps this is not an example close to lawyers' hearts. What abo=
ut a rather fruity story turned sour with a disputed settlement of US$450=
,000,000? This is the cost (although the saga is still running) that the =
makers of the Blackberry handheld e-mail device, Research in Motion (=93R=
IM=94), offered to NTP, an American software company, to make NTP stop it=
s patent infringement claims based on very wide software patent claims su=
ccessfully obtained by NTP in the US. The latest in this long-running bat=
tle, is that RIM could end up being forced to shut down its US operations=
37 -=96 that's right, NO BLACKBERRY. Do not fear though; thanks to the de=
sire of some within Europe to preserve innovation rather than profiteerin=
g from the monopolisation of intellectual processes, you can still contin=
ue to get your daily dose of thumb arthritis and access to your office e-=
mails. This wonderful business tool is alive and well in Europe because, =
you guessed it, we have resisted a move towards a US-style system of soft=
ware patents. Even if the little berry wins, though, the sheer cost of fi=
ghting such a battle will have hurt RIM's balance sheet, its investors an=
d, if it is forced to pay an even higher settlement, the battle may ultim=
ately hurt the wallet of business users. These are just a couple of examp=
les from the software patent horror show illustrating how software patent=
s affect companies=92 bottom line, hurt innovation and ultimately affect =
us, the consumers.

Did the absence of patents prevent innovation? Absolutely not. Software c=
ompanies knew that they could, as developers had been taught, study the i=
deas and industry programming techniques and, provided they did not steal=
 someone else=92s expression of those ideas, write a program without the =
fear of being sued for patent infringement. Developers knew that as long =
as they created an =93independent=94 work, they would potentially stand t=
o profit from it. There was no need to do exhaustive searches of patent a=
pplications, nor a danger of being liable for patent infringement for usi=
ng a technique which you had independently created. It is in this environ=
ment that FOSS has flourished.

FOSS: a benefit for all

FOSS often relies on thousands of developers from all over the world cont=
ributing to a software project. FOSS projects, as a result, have very fas=
t development times. Not only this, the products are normally very stable=
 because they have such a huge testing base. FOSS, which is often free to=
 purchase or where the costs of purchase are very much reduced, is being =
used in schools,38 hospitals,39 local authorities, small businesses and l=
arge corporations. It is giving technology to the masses and is vital for=
 the development of the third world. For many small businesses, it allows=
 them to keep their costs down and focus on delivering products to their =
customers at reduced prices because FOSS lowers the cost entry barriers. =
Ultimately, FOSS is helping not-for-profit bodies, government bodies and =
most importantly, everyday citizens to harness the full benefits of techn=
ology and software at little or no cost.

Damaging FOSS would be to damage a market model which lowers costs whilst=
 increasing productivity. The =93open source=94 business methodology has =
huge potential not just in software but in other business fields,40 allow=
ing for innovation to take centre stage through collaborative research pr=
ojects and harnessing the input of the many in an open rather than closed=
 environment. A hammer blow for FOSS could terminate this embryonic alter=
native business model.

If we allow in Europe, through careless drafting or otherwise, software p=
atents, this may destroy the FOSS movement and with it much software inno=
vation. This is not an exaggeration. If each and every developer from aro=
und the world contributing to a FOSS project is not free to use the ideas=
 behind software programs, or a technique or feature because it is patent=
ed, the fundamental building blocks of software development will have bee=
n taken away from them. Furthermore, the fear of patent infringement may =
mean that many developers will not be able to contribute to FOSS projects=
 because of the huge expense of defending a possible patent infringement =
claim. Even if they tried (which would take time and therefore take away =
from development time) to carry out a search of patent applications they =
would not necessarily understand if they were infringing a patent because=
 patent claims are written =93in a foreign language=94, full of legalese =
and it can be unclear as to what is covered or not by the patent. These s=
mall developers, who have made a massive contribution to FOSS software, h=
ave not got the time or money to pay expensive lawyers to determine wheth=
er they fall within or outside of a particular patent.

A thorn in the side of innovation

What is known by millions of businesses in Europe is that software patent=
s are bad for the software industry as a whole. Even the UK Patent Office=
, which carried out a consultation on software patents and business metho=
d patents received an overwhelming response, which its conclusions noted,=
 that software patents did not necessarily result in more innovation but =
could have the reverse effect. If software patents are allowed, US and Ja=
panese companies will immediately proceed to register patents in Europe t=
o match their US patents (many of which have a dubious legal basis) and w=
hich represent the obvious building blocks and techniques of software dev=
elopers which in a patent free world have been capable of being used by e=
veryone free of charge for the greater good of the software community and=
 ultimately consumers. Once registered, no doubt a string of lawsuits or =
requests for royalties will be made against IT SMEs, which form the backb=
one of the software development industry in Europe, resulting in many bei=
ng made bankrupt or having their profit margins slashed with the conseque=
nce of lower investment and development for the future (hence less innova=
tion).

A knock on consequence will be SMEs having to divert away resources from =
development to having to investigate patents before development work can =
be undertaken and also having to defend patent infringement claims. This =
will mean less development time, greater time to market of products, grea=
ter TOC (Total Cost of Ownership) and ultimately less innovation. This is=
 not a claim without substance for it is exactly what has happened in the=
 US. In 2002, at the FTC hearings on the effects of patents on innovation=
, the CEO of Divx Networks, R. Jordan Greenhall talked about the frustrat=
ions of one of his lead developers trying to work out whether one of thei=
r technologies infringed another patent:

    =93The poor guy spent the better part of five days examining all thes=
e different patents and came back to me saying, "I haven't the slightest =
idea whether or not we infringe on these patents, and frankly, they all s=
eem to infringe on one another." The end result being that I have no idea=
 whether my product infringes on upwards of 120 different patents, all of=
 which are held by large companies who could sue me without thinking abou=
t it. The end result, much like Borland, I have now issued a directive th=
at we reallocate roughly 20 to 35 percent of our developer's resources an=
d sign on two separate law firms to increase our patent portfolio to be a=
ble to engage in the patent spew conflict. I think the concept here would=
 be called saber rattling. I need to be able to say, "Yeah, I've got that=
 patented too, so go away and leave me alone.=94

The software industry has thrived without patents, with numerous products=
 developed quickly because developers do not have to worry about obtainin=
g patent clearance for the numerous techniques they use in writing a prog=
ram. This did not go unnoticed for Prescott QC who commented:

    =93it is worth noting that the software industry in America developed=
 at an astonishing pace when no patent protection was available.=9441 =


Under a software patent system, these techniques will no doubt be patente=
d in Europe because of the EPO approach to allowing software patents and =
will result in the US style system where the very building blocks of norm=
al software development are ring fenced by the big corporations, which ha=
ve the resources enabling them to spend time and money to file hundreds o=
f patent claims and in the process laying stake to the very core of a dev=
eloper=92s usual toolkit and preventing developers (without having to pay=
 hefty licensing fees) from developing innovative and better products. Ev=
en Japan, a historic supporter of software patents, has started to realis=
e that they may not be the right way forward and could deter future innov=
ation.42

A defensive battle -- the patent shield

However, once we accept a patent system for software, it will become very=
 difficult to get out, for companies will have no choice but to try and g=
et patents and built up a patent shield =96- this is referred to as defen=
sive patent filing and is prolific in the US:

    =93There is absolutely no evidence, whatsoever -- not a single iota -=
- that software patents have promoted or will promote progress.

    [...]

    The company for which I am speaking, Autodesk, holds some number of s=
oftware patents and has applied for others -- which, of course, remain se=
cret under current U.S. law. However, all are defensive -- an infuriating=
 waste of our technical talent and financial resources, made necessary on=
ly by the lawyer's invention of software patents.

    Autodesk has faced at least 17 baseless patent claims made against it=
 and has spent over a million dollars defending itself, with millions mor=
e certain to pour down the bottomless patent pit unless we halt this deba=
cle. Fortunately -- unlike smaller software producers -- we have the fina=
ncial and technical resources to rebuff such claims. We rebutted all but =
one of the claims, even before the patent-holders could file frivolous la=
w-suits, and will litigate the remaining claim to conclusion. Note that [=
the USPTO] has issued at least 16 patents that we have successfully rebut=
ted, and we never paid a penny in these attempted extortions that [the US=
PTO] assisted. But it was an enormous waste of resources that could have =
better been invested in useful innovation. These unending baseless claims=
 benefit patent lawyers, but they certainly do not promote progress.=9443=
 =


So after you have built up your own =93patent thicket=94, you have a shie=
ld with which to defend oneself from patent attacks. Therefore, several o=
f the American IT giants that got on their knees to the USPTO in 1994 to =
ask them not to allow software patents have, after over 10 years of build=
ing up their shield (at considerable cost and at the expense of developme=
nt budgets, hence innovation) less of a resistance to them. However, this=
 cannot be said for every single new entrant or for all the existing Euro=
pean SMEs who do not have such a shield (and who represent the majority o=
f the IT industry in Europe).

Will Europe benefit from software patents?

Who will be the main beneficiaries of a EU patent system where software p=
atents are allowed (whether expressly or through bad drafting and/or EPO =
policy)? Will it be the millions of small IT companies in Europe, the Eur=
opean economy or the citizens of Europe? No, the beneficiaries of having =
software patents or an unclear community patent regime will be the US and=
 Japanese economies and the few large IT corporations (most of which are =
not European owned). Having software patents will go against the very int=
ention of the statements made by Viviane Reding, European Commissioner fo=
r Information Society and Media, to increase research and innovation in t=
he European ICT sector and the statements from the policy consultation do=
cument for 2010i strategy:

    =93For content in general, the EU should use a copyright system inste=
ad of a patent system but not one that will restrict user rights.=9444 =


For the big IT companies, software patent thickets are built up and cance=
lled out through cross-licensing arrangements. So what is the actual bene=
fit, as clearly innovation is not the winner? Well, it is the fact that t=
he big companies with large software patent portfolios can keep out of th=
e market new entrants and small companies by threatening or actually suin=
g them for patent infringement. In other words, actually destroying futur=
e innovation and market choice. As you may recall HP, Microsoft and Apple=
 all had very humble origins. A software patent system is potentially thr=
eatening the birth of another giant which could bring innovation and bett=
er products to Europe=92s citizens.

If we are clumsy and let those who do not have Europe=92s best interests =
push through the EU institutions a community patent regime which ushers i=
n software patents in Europe (on a legal footing), we will no doubt be dr=
iving a stake straight through the very heart of information technology i=
nnovation in Europe.

A return to a public policy centric view =96- wishful thinking

There does finally appear to be a long overdue backlash, if not limited, =
to the relentless march of intellectual property rights to the detriment =
of society and the global economy. Apart from the vocal opposition to the=
 CII Directive, in the UK, the historic Royal Society for the encourageme=
nt of Arts, Manufactures & Commerce has recently published the =93Adelphi=
 Charter on Creativity, Innovation and Intellectual Property=94 (the =93C=
harter=94). The Charter calls on governments to, inter alia, adopt a publ=
ic interest test in considering new laws on intellectual property requiri=
ng =93a balance to be struck between the monopoly rights implicit in inte=
llectual property laws and the free competition that is essential for eco=
nomic and creative vitality.=94 45 As noted above, the Japanese governmen=
t is also starting to question the effect of software patents on innovati=
on.

The role of SMEs

Myth 5: SMEs support software patents

The upholding of this myth in the run up to the CII Directive was critica=
l to those either openly, or through the promotion of the Common Position=
, championing software patents. Why? Well, there are two reasons; before =
and during the debate, it has been almost universally documented that sof=
tware patents have a negative effect on SMEs (as noted above). Secondly, =
and this is less known, it is not Microsoft or IBM and the like that are =
the key to the European IT industry; it is the thousands of IT SMEs which=
 make up the majority of the European IT industry. More importantly, and =
central to the whole patent debate, it is the SMEs which are the key driv=
ers of innovation (and hence prosperity and development) in Europe. Howev=
er, this is not just my conclusion; this is the conclusion of those respo=
nsible within the European Union for driving innovation in the high-tech =
sector:

    =93Small and medium-sized enterprises (SMEs) play a crucial role in E=
uropean competitiveness and job creation, not only because they represent=
 the overwhelming majority of enterprises in Europe, but also because the=
y are the source of dynamism and change in new markets, particularly thos=
e at the leading edge of technology=94.46 =


If innovation is truly the reason why the pro-software patent lobby want =
software patents (which I doubt), they have a fundamental hurdle to overc=
ome. The key group within the IT sector, SMEs has been shown time and tim=
e again to suffer most from the introduction of software patents and sinc=
e they are the driver of innovation, a negative impact on SMEs results in=
 the stifling of innovation. Hans-Werner M=FCller, the Secretary General =
of the UEAPME, an organisation which represents 11 million small business=
es, had the following stark view of what the CII Directive in the form pr=
oposed by the Commission et all meant for European SMEs:

    =93This directive will threaten the existence of many small businesse=
s if passed in its present format.=94 =


40,000 and counting=85

Myth 6: Europe has over 40,000 software patents and the IT industry conti=
nues to thrive

This is a classic and particularly misleading argument used by the pro-so=
ftware patent lobby. They argue that the EPO has granted 40,000 plus =93s=
oftware invention=94 patents and point to how the European IT industry ha=
s grown in this time, the upshot of their argument being that patents don=
=92t affect innovation. This is an incredibly misleading argument. The ne=
gative effect that software patents have on the software industry has not=
 yet manifested itself in Europe precisely because of the dubious legalit=
y of the software patents granted by an administrative body, the EPO. For=
 software patents to work their destructive magic, they must be no doubt =
as to their legal status yet in Europe not one software patent has been s=
uccessfully enforced. Therefore, without =93legal bite=94 in Europe (comp=
are this to the US situation of the very real threat of triple damages fo=
r infringement) these software patents have been worthless pieces of pape=
r -- they would have become very valuable had the Common Position been ac=
cepted since the EPO=92s unlawful extension of the patent system would ha=
ve received the formal seal of approval -- which could not be used by IT =
companies to demand licence fees and/or block new entrants to the market.=
 On the other hand, where such pieces of paper have legal value, e.g., th=
e US, the concerns of those against software patents have all materialise=
d and continue to get worse and worse every day the current system is not=
 amended.

Tripping us up

Myth 7: TRIPS and article 27

An argument used frequently to convince us that we have no choice to acce=
pt software patents is that TRIPS requires us to allow patents for all fi=
elds of technology. However, this argument is fundamentally flawed for it=
 requires us to accept that =93technology=94 includes software. As noted =
above, software is not =93technology=94 for patent purposes and is expres=
sly excluded from the scope of patentable inventions in Article 52 EPC. T=
he weakness of this argument was recognised by the Comptroller General of=
 the UKPO as far back as 1997:

    =93Some have argued that the TRIPS agreement requires us to grant pat=
ents for software because it says "patents shall be available for any inv=
entions.....in all field of technology, provided they are.....capable of =
industrial application". However, it depends on how you interpret these w=
ords.

    Is a piece of pure software an invention? European law says it isn=92=
t. Is pure software technology? Many would say no. Is it capable of "indu=
strial" application? Again, for much software many would say no.

    TRIPS is an argument for wider protection for software. But the decis=
ion to do so should be based on sound economic reasons. Would it be in th=
e interests of European industry, and European consumers, to take this st=
ep?=9447 =


=46rom the evidence before us, be it economic or, more importantly the im=
moral nature of monopolising abstract intellectual processes, the verdict=
 is clear. It would not be a benefit to extend =93technology=94 for paten=
t purposes to cover software. It would not benefit European business or i=
ts citizens.

Europe as a leader or as a servant?

If we investigate many of the pro-software patent associations claiming t=
o be acting for the software industry, many are either directly or indire=
ctly funded by a small number of very powerful (and non-European) IT comp=
anies whose track record on open market politics is not impressive. These=
 companies are extremely large organisations, which have struggled to inn=
ovate against much leaner SMEs and, their religious zealotry for software=
 patents is ultimately a recognition that they cannot survive in an open =
market but instead need to close the market down through the monopolisati=
on of the ideas behind software engineering. Allowing software patents in=
 Europe would open the door to the continued land grab of software ideas =
by such non-European corporates and legitimise the 40,000 plus software p=
atents already granted by the EPO for the benefit of the non-European IT =
giants at the expense of the majority of the European IT industry.

The bottom line for IT lawyers

Software patents will only advantage a small group of the largest (and in=
 the minority) IT companies. As IT lawyers, how many of us can say that w=
e have such clients on our books? The bread and butter for IT lawyers are=
 IT SMEs =96- for such clients, patents are not the solution but the prob=
lem. The legitimisation of software patents across Europe would make pate=
nt agents better off, as well as certain IP lawyers. However, the long-te=
rm picture is very different. Software patents increase the barriers for =
new entrants, your future client base, and potentially the next Microsoft=
 or Apple (neither would have been able to grow so impressively if a pate=
nt rich environment had existed in the early 80s). Furthermore, they put =
at risk the very well-being and profitability of your existing clients. P=
atent litigation is extremely expensive. Dealing with patents takes away =
time from creating innovative applications that generate revenue . With f=
ewer innovative products, the full creative potential of a client may not=
 be realised and if its growth is hindered through lack of innovation or =
if they are ruined through patent litigation, you are likely to miss out =
on the long-term benefit of a consistent and, potentially increasing, rev=
enue stream. What is worse is that the effect of patents is to lead to a =
grouping of ideas with an ever decreasing pool of companies resulting in =
a move towards monopolisation and fewer but bigger IT companies (which me=
ans less clients to go round). Finally, as a consumer of software (which =
all law firms are), IT costs are likely to increase through less choice, =
less innovation and less competition and potentially higher prices. Food =
for thought?

=93Let us stand on each others' shoulders, rather than on each others' to=
es=94 48

Ultimately we have to ask ourselves what kind of software industry we wan=
t in Europe. Do we want an industry dominated by a group of companies, ma=
ybe even a couple of hundred companies, who have the resources or desire =
to carve up the building blocks of software engineering where control and=
 monopolisation through patent revenues becomes more important than innov=
ation, or do we want the software industry we have now in Europe, where d=
evelopers are free (without copying code) to work with these building blo=
cks to create innovative software products for the benefit of Europe as a=
 whole.

With the Community Patent, we have an opportunity to get involved in dete=
rmining which path we choose, the toll road or the freeway. There remains=
 a need to clarify the position on software patents in a way which does n=
ot damage the European IT industry. A good starting point, which has alre=
ady considerable cross party support amongst MEPs, is the 21 amendments p=
roposed to the Common Position by Mr. Rocard (ex-prime minister of France=
), Mr. Buzek (ex-prime minister of Poland) and Andrew Duff (UK Liberal De=
mocrat MEP).49 The Common Position as amended by such amendments would ha=
ve helped rein in the EPO and protected our industry from unnecessary dam=
age.

Copyright or wrong?

The real challenge for IT lawyers and the rest of the industry should be =
looking at ways we can address the problems (yes there are some problems)=
 with the copyright system rather than putting our weight behind a patent=
 system which hinders rather than fosters growth in the industry we work =
in. Although, copyright reform is a subject for a whole article in itself=
, one possible reform would be to create a European registry of software =
to allow copyright owners to deposit their works at a European level. Thi=
s would not be intended to change the substantive laws on how copyright a=
rises but would aid certainty and serve as formal evidence of the existen=
ce of such rights. Such a register would not be compulsory but optional. =
This type of registry exists at a national level in Italy and functions o=
n exactly the basis outlined above.

I leave the final word to someone who is in a better position than I to u=
nderstand the damaging effects of software patents on the software indust=
ry, Ron McQuaker, a recognised figure in the British computer industry an=
d past president of the British Computer Society who, commenting on the n=
egative effects of software patents, concluded:

    =93These considerations lead me to the view that a properly applied c=
opyright regime is much more appropriate to the protection of Intellectua=
l Property in programs than patent. You can only breach copyright by doin=
g something morally wrong, i.e. copying, and copyists know whether they h=
ave done so or not. The case for grants of monopoly by patent looks to so=
me people rather like an example of pulling up the ladder behind them by =
the big battalions.=9450 =


1 The High Court cases where: (1) IN THE MATTER OF Patent Applications GB=
 0226884.3 and 0419317.3 by CFPH L.L.C. [2005] EWHC 1589 (Pat); (2) Halli=
burton Energy Services Inc v Smith International (North Sea) Ltd and othe=
rs [2005] EWHC 1623 Pat; (3) IN THE MATTER OF Patent Application GB 00177=
72.5 by Shopalotto.com Limited, [2005] EWHC 2416 (Pat); and (4) IN THE MA=
TTER OF UK Patent Application no.GB0108683.4 in the name of Cecil Lloyd C=
rawford (2005), 4 November 2005. For the hearing officer=92s decision, se=
e the decision O/255/05, in the application by Oracle Corporation on 14 S=
eptember 2005. The UKPO patent notice can be found at

2 Per Stephen Kinsella, writer, US patent attorney and IP lawyer. For fur=
ther details see

3 Per James Boyle, Professor of Law, Duke University cited in The Economi=
st, =93Free Ideas=94, 13 October 2005.

4LobbyControl and Corporate Europe Observatory wrote to Commissioner Siim=
 Kallas on 28 June 2005. See for further details.

5 Paragraph 56 CFPH, emphasis added

6As Prescott QC comments in paragraph 14 CFPH with reference to the word =
=93technical=94, =93it should be remembered that it was not used by the f=
ramers of the Patents Act 1977 or the European Patent Convention when the=
y wanted to tell us what is or is not an =91invention=92=94.

7For a good list of such software patents see

8 Paragraph 45 CFPH, emphasis added

9 Paragraph 97 CFPH

10 Paragraph 9 Shopalotto.

11 BPatG Error Search 2002/03/26. Emphasis added

12BGH 1976-06-22: Dispositionsprogramm. Emphasis added.

13 Paragraph 25 CFPH, emphasis added.

14 As Prescott QC commented at paragraph 27 CFPH, =93the Convention is ex=
pressed in three languages, all equally authentic. It is therefore not su=
rprising that the methods of interpretation to be applied to such an inte=
rnational instrument are not the same. In particular, there is more room =
for a teleological interpretation.=94

15 Paragraph 35 CFPH, emphasis added.

16 Paragraph 104 CFPH, emphasis added.

17 Ibid. footnote 1

18 Paragraph 104 CFPH.

19 Paragraph 37 CFPH.

20 Although Prescott QC uses =91as such=92, he makes it clear earlier in =
his judgement that he doesn=92t approve of excluded subject matter being =
patentable by claiming some form of =93physical=94 artefact and that =93t=
echnical=94 has to be construed with reference to Article 52 EPC

21 Report to the European Commission by Robert Hart (Independent Consulta=
nt), Peter Holmes (School of European Studies, University of Sussex) and =
John Reid (IP Institute) on behalf of Intellectual Property Institute, Lo=
ndon 24 July 2001. Emphasis added.

22 Per Hartmut Pilch, FFII.

23 Amazon=92s profits were badly hit this year paying US$ 40,000,000 in r=
elation to a patent claim (relating to software!). See

24 Paragraph 11 CFPH, emphasis added.

25 Per Prescott QC at paragraph 35, CFPH.

26 Paragraph 35 CFPH, emphasis added.

27 Paragraph 30 CFPH

28 For a good article comparing the patenting of software to the plot of =
books, see Richard Stallman=92s article on Guardian Online entitled, =93P=
atent Absurdity=94, 20 June 2005,

29 UEAPME 27 April 2005 press release. The UEAPME is an industry body rep=
resenting over 11 million SMEs. Emphasis added.

30 See

31 See

32 See the Liberal Democrats IT policy document at . Emphasis added

33 =93To Promote Innovation: The Proper Balance of Competition and Patent=
 Law and Policy=94, A Report by the Federal Trade Commission October 2003=
, Conclusion (Chapter 3, V.G, pages 164-165). See . Emphasis added.

34 See paragraph 15, =93Should Patents be Granted for Computer Software o=
r Ways of Doing Business? The Government's Conclusions=94, . Emphasis add=
ed

35 Per Bill Thompson, journalist and technology commentator and frequent =
contributor to the BBC technology news

36 Ibid footnote 23

37 For a good article on the latest position see, . What is worse in the =
Blackberry story is that the USPTO may potentially end up ruling that NTP=
's patents are invalid (not because they are software patents but because=
 of prior art) yet because of the court process RIM may end up having to =
settle anyway to avoid an injunction notwithstanding the patents may be r=
evoked in due course. On 5 December 2005, a further NTP patent was revoke=
d. For more details see,

38BECTA, (the British Educational Communications and Technology Agency), =
conducted a study which was published earlier in this year in which confi=
rmed the important role that FOSS could play in schools in Britain. See .=
 Also see, Tom Espiner=92s article, "Italian schools move to Linux". ZDNe=
t UK, September 05, 2005,

39 Novell has just won a contract to supply the NHS with Novell's open so=
urce based SUSE Linux platform. The NHS expects to save approximately =A3=
75,000,000 over three years. See

40 For examples of interesting alternative applications of =93open source=
=94 business methodology see the =93Danish=94 beer example, and the Open =
Source Biotechnology project,

41 Paragraph 35 CFPH.

42 Interim Report of a study group set up by the Japanese Ministry of Eco=
nomy, Trade and Industry delivered in June 2005 as cited on =93Japan Toda=
y =93 =96 see

43 Per Jim Warren, board member of Autodesk at the USPTO 1994 hearings on=
 software patents. Emphasis added.

44 Final Report, Public Consultation on the new Information Society Strat=
egy beyond 2005, 26 November 2004 =96 17 January 2005. Pg. 11 and 12 Emph=
asis added.

45 Per the RSA=92s press release dated 14 October 2005, =93International =
Commission calls for Governments to adopt new public interest benchmarks =
for intellectual property=94.

46 Report entitled =93Support To The Participation Of SMEs In The Sixth F=
ramework Programme=94, 18 Dec 2002, ftp://ftp.cordis.lu/pub/documents_r5/=
natdir0000036/s_1891005_20030127_130002_6L021891en.pdf . Emphasis added

47 Per Paul Hartnack, in his speech as chair of the =93Software Patents i=
n Europe=94 UKPO conference held on 23/03/1998. Mr Hartnack was the Compt=
roller General of the UKPO at the time.

48 Per Jim Warren, board member of Autodesk at the USPTO 1994 hearings on=
 software patents

49 See

50 Ron McQuaker, past president of the British Computer Society in his sp=
eech at the conference cited at footnote 45 above.

----------------------------------------

The law is stated to the best of my knowledge as at 9 November 2005

Cristian Miceli is an IT lawyer in the UK and founder of Lawyers Against =
Software Patents (LASP) =96 www.lasporg.info. The article is written in a=
 personal capacity. He can be contacted at: [email protected]

=A9 Copyright Cristian Miceli 2006. This article is released under the Cr=
eative Commons license, attribution.

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