EC Proposes Patent Rules to Avoid Stifling Open Source

by Kristin Palitza

The Commission thinks that the open source system is too liberal, and its law will therefore be stricter than U.S. rules. Open source technology is free for everybody to use, modify, and redistribute; it competes with patented products. However, the Commission also said it will ensure that patents cannot be used to block legitimate independent innovation.

Linux developer Red Hat said it opposes the Commission's directive. Sources at Red Hat told Guild Companies that it does not believe software patents generally serve the interests of innovation because of the relatively short development cycle for software, the relatively low development costs for software, and the relatively short life span of software. "As has been well demonstrated by the largest of the proprietary software vendors, software patents are, in fact, used to stifle innovation by competitors," the Red Hat sources further said, referring to the antitrust trial against Microsoft and other lawsuits.

The proposed directive will be submitted to the European Union's Council of Ministers and the European Parliament for adoption.

A patent claim, such as one for Amazon.com's "one-click" shopping cart ordering model, for example, would probably not get through in the Commission if the new proposal becomes law. "A patent with the breadth of claims which has been granted in the U.S. would be highly unlikely to be considered [...] in the EU under the terms of the proposed directive," said Frits Bolkestein, one of the 20 commissioners in the European Union (in this case, he is the commissioner of Internal Market Taxation and Customs Union). However, the European Patent Office has yet to decide on the Amazon patent application.

The Commission aims to create a unifying patent structure with binding effect on national courts. Until now, each of the 15 member countries of the EU had its own rules for patentability, and another set of rules applies to the European Patent Office, which includes all EU members. Since 1978, more than 30,000 software-related patents have been granted in the EU, many of them for devices and processes in technical areas, but the majority relate to digital data processing, data recognition, representation, and information handling. This has fueled a debate on whether the limits of what is patentable are still sufficiently clear and applied properly, the Commission said.

It further argued that its proposal was necessary after consultations indicated a lack of legal certainty regarding software patents. It had issued a discussion document, which invited comments for a harmonized approach to the patentability of computer-implemented inventions in the EU.

The wide majority of the 1447 responses--about 90 percent--came from an open forum set up by the EuroLinux Alliance, a group supporting open source software development, such as Linux. Those responses supported a more restrictive patent approach than at present, with fewer patents being granted. The Commission, however, decided to give more importance to responses from what it called "the major sectoral bodies" in the IT industry, "as well as many of the member states," who supported its own approach. The Commission further said that some responses even argued that patentability should be extended in line with the practice in the U.S.

The Commission argued its proposal will make developers "profit justly from their work" and "avoid stifling competition, hampering small businesses, or preventing the development of interoperable software" at the same time. "It is an important step towards ensuring that patents for inventions containing software will truly contribute to the aim of fostering innovation. It would help all those involved to keep the scope and quality of patents at a proper level. It represents a reasonable middle ground in a field where dissenting views had been voiced," said Information Society and Enterprise Commissioner Erkki Liikanen.

The proposal's central requirement is that only inventions are eligible for a patent that make a technical contribution--in other words, which contribute to the "state of the art" of a product. Technical contribution implies a contribution that is not "obvious to a person of normal skill in the field concerned," the Commission explained. Computer programs as such would not be eligible for a patent under the proposal, nor would business methods that employ existing technological ideas and apply them to, for example, e-commerce, it further said.

In the U.S., in contrast, a patentable invention must simply be within the technological arts and does not need to make a specific technological contribution. The mere fact that an invention uses a computer or software makes it become part of the technological arts if it also provides a "useful, concrete, and tangible result." "This has meant that in practice in the U.S., restrictions on patenting of business methods are negligible," the Commission claimed.