On one side of the borderline between patentable "inventions", on the one hand, and non-patentable "novelties", on the other hand, we find a broad spectrum of enterprises desiring to protect their investment into R&D by utilising the patent system. Nearby to the other side of the borderline we see the camp of those groups and individuals who would like to prefer to limit the scope of the patent system as far as possible in order to establish, maintain and - if possible - expand the Intellectual Commons.
In view of this situation, politics might feel encouraged to set, by majority decision, a fence equipped with a barbed wire clearly separating both areas. Patenting shall extend up to the barbed wire but no further. Located behind the fence, out of reach of the patent system, critics of the patent system see the realm of what is called "software", subject only to Copyright.
Let us at first have a look at the basic principles and open questions of the Commission's Draft.
The Commission had well recognised that the standard criterion of a technical character taken alone is not suitable for defining a proper borderline between "is-patentable" and "is-not-patentable". All programs, when run on a computer, are by definition technical - because a computer is a machine-, and so are able to pass this basic hurdle of being an "invention".
The borderline drawn by the Commission's original wording of the Draft directive said:
»Although computer-implemented inventions are considered to belong to a field of technology, in order to involve an inventive step, in common with inventions in general, they should make a technical contribution to the state of the art.
Accordingly, where an invention does not make a technical contribution to the state of the art, as would be the case, for example, where its specific contribution lacks a technical character, the invention will lack an inventive step and thus will not be patentable.«
In the Commission's view, if an algorithm is defined without reference to a physical environment it is inherently non-technical and cannot therefore constitute a patentable invention. And, in addition, this reference to a physical environment must not be anticipated by relevant prior art. The EU Council has even aggravated this criterion by requiring that this reference must be non-ovious.
Commissioner Bolkestein, under whose authority the draft directive was drawn up kept assuring that the Draft directive is not about extending the scope of material criteria of patentability - it only is about providing clarification and stability, but it is also about reaffirming the existing bodies of case law.
So far, the Commission seems to have already drawn a clear borderline by requiring a technical contribution to the state of the art which limits the circle of patentrable inventions far more than just requiring a »technical character«.
Where is the remaining problem?
In September 2004, at the occasion of the 12th European Patent Judges' Symposium held in Brussels, Mr. Rocard had said in view of Commissioner Bolkestein's assertion that the scope of patentable subject matter was not to be extended by the Draft directive:
»On hearing this, we were all very impressed by him and the work done, and we applauded the recitals. However, on reading the body of the document, it seemed to us - our opinion clearly being partial and open to question, but nonetheless being our view with its own merits - that the provisions of this draft directive did not actually include the restrictive definition that the commissioner claimed to be providing.«
Later, again by Mr. Rocard:
»Our argument, presented in the plenary session was to tell the Commissioner: "we listened and agreed with all of your arguments - both written and oral - but think that you have failed to implement them in a sufficiently precise and coherent legal system, so we have made some improvements that reflect your intentions"«
It was in this context that the reference to software requiring the use of energy or material for implementation and development was reintroduced into the text during a European Parliament debate.
Mr. Rocard expressis verbis had admitted that making only this form of software-related inven tions patentable is clearly problematic for companies that file a lot of patents.
Finally Mr. Rocard had concluded:
»We freely admit that the criterion rejected by Mr Bolkestein regarding the use of energy or material may be flawed and difficult to ascertain but it is our only option so far. We will pursue our efforts and try to be ever more precise, and provide sound reasoning with a legal and scientific basis.«
In my view, Mr. Rocard's speech seems to provide some insights into the basic principles of the present debate well beyond his or his parliamentary group's positions.
The intrinsic complexities of patent law make it very difficult to assess the real impact of any particular language introduced into the law books.
It appears to me as if there is a wide gap between the perception of the actual effects of the Commission's language (which is largely preserved in the version as adopted by the EU Council) concerning the borderline, on the one hand, and of the restrictive clauses proposed by some MEPs, on the other hand. Patent critics might believe that the Commission's language would "open the floodgates" for an unlimited patentability by removing the fences on the borderline and the restrictive clauses proposed by MEPs just re-erect such fences in order to make sure that the political goals of the Directive process are met. On the other hand, executives as well as patent experts from the users of the patent system are utmost worried because of they have a reversed perception: The Commission's proposal is adequate, and the restrictive clauses offered by some MEPs effectively close the patent system even for a number of such inventions for which the patent system has worked well in the past without any substantial problems being reported.
I am convinced that vigorous attempts of certain MEPs to "close the loopholes" for patenting software-related inventions would cause drastic side effects which would render vast fields of inventions unpatentable for which patents in the past never have caused real problems.
Take, for example, the telecommunications industries.
One of the more important problems when developing new technologies for cellphones is dealing with a so-called 'handover'. A handover is that what occurs when a cell phone used in a car or in a train moves out of the range of one cell and needs to connect to the next available cell. The preceding cell then hands over the connection to the stronger cell without interrupting the ongoing call.
Researching and developing communication protocols for wireless cell phones including provisions for proper and reliable handovers of ongoing calls is a tedious task. The engineers have to deal with radio field strength measurements, frequency allocations and much more concepts borrowed from applied physics.
However, the resulting mobile phone device being able to perform a reliable handover is essentially nothing else than a general purpose computer equipped with a certain very particular sort of periphery.
Should a somewhat tricky and advantageous way of performing a handover from one cell to another be patentable?
Of course, even according the original Draft of the Commission as well as according to the Draft as adopted by the EU Council the technical contribution test can be done only after the relevant prior art has been researched. So there is no general answer available so as to whether such invention would be patentable.
However, if the Parliament endorsed restrictive clauses like
"Member States shall ensure that data processing solutions are not considered to be patentable inventions merely because they improve efficiency in the use of resources within data processing systems."
the question arises whether or not a patent judge would conclude that the entire wireless cellphone system is nothing else than a "data processing system" and having a smooth handover mechanism is merely a means to improve the use of a resource, namely the frequency spectrum, within that data processing system.
Other concerns are rised by clauses like
»"Industry" in the sense of patent law means commercially organised production of material goods«
where patent judges might conclude that a patent directed to an invention which is embodied by an improved method for performing a handover in a mobile communications system should not be deemed to be industrally applicable because of the method as such does not produce material goods.
I am convinced that such proposals as discussed
cause the border fence between patentable and non-patentable inventions be protruded deeply into fields of inventions traditionally deemed to be well patentable (without any perceivable problems reported so far), thereby harming industries protecting their R&D investments by utilising the patent system, while, at the same time, such proposals,
do nevertheless not make sure that each and every tinkering with software is patent-free, thereby also disappointing F/OSS supporters and campaigners in favour of the Intellectual Commons.
Linking to Mr. Rocard's statement as quoted earlier, I would go as far as to say that a number of restrictive causes recently proposed by MEPs not only may be flawed, they are so indeed. They should not be cast into law, and I am happy that JURI as already acknowledged this to some extent.
In Patent Law, an "invention" is an object of legal protection of its own kind. Not the tangible embodiment of the idea of the invention is the object of legal protection but the idea in itself underlying this embodiment. This idea is from the realm of the intangibles. The language of the patent claims used in the granted patent is merely an awkward tool to note down those features which are suitable to identify embodiments of the invention in the real world.
Speaking in strict terms, even a »vehicle tyre« is not patentable despite the fact that you can see numerous granted patents where the generic clause of the patent claims is just »vehicle tyre, characterised in that ...«. The invention is always intangible; nevertheless the embodiments thereof come along in the shape of tangible objects (like e.g. a »vehicle tyre«) in the real world as indicated by the generic clause.
This double-tier construction of patent law makes it inherently difficult or even impossible to precisely control the effects of the patent law on real-world situations by manipulating the material criteria of patentability on the level of the inventions in the realm of the intangibles. This exactly seems to be the trap in which the parliamentary discussion is caught at the moment.
Mr. Rocard had expressed his unease in view of his impression that there seemed to be no viable alternative to draft restrictive clauses again and again. I do not share such general pessimism. There are viable alternatives but they might not be available there where politics has searched for them now.
I think two layers of the practical problem as posed by the directive should be clearly separated:
A first layer is the legal problem of defining a borderline between is-patentable and is-not patentable which is readily understood and practised by the general public, by the Examiners in the Patent Offices, and by the Patent Judges hearing appeals against the Examiner's decisions. This problem has been addressed and, in my view, reasonably solved in an acceptable manner by the original Draft issued by the Commission, and may aspects of this original attempt are still preserved in the version as adopted by the EU Council.
A second layer is the problem of properly setting the limits of the interference of the patent system taken in its entirety with our today's world of business. In my opinion, the ongoing public debate on the relationship between the patent system, on the one hand, and the various software-related businesses including the large field of F/OSS activities, on the other hand, has made clear that there might well be some unresolved problems.
But in my view as a patent practitioner I cannot see that the problems on the second layer can be solved by any measures relating to the first layer.
In fact, the patent system has two borderlines and, if you like, two fences:
A first borderline separates patentable from non-patentable subject-matter within the realm of the intangibles, and
A second borderline separates acts in real life which are open for interference with patents from those which are exempted so far.
Patrolling the wrong fence can be detrimental for the understanding of the events on the whole theatre.
Let us have a brief look at the system of continental Copyright Law. Nobody would seriously discuss questions like "Should an opera as such be copyrigtable?" or "Should architect's blueprints as such be subject to Copyright?". All such sorts of artistic work are extensively covered by Copyright law. This fact does not mean that putting all kind of artistic works under the regime of Copyright Law does not cause problems, e.g. for broadcasters, researchers, or collectors of art. But the political solution which was reached up to now is a dedicated and fine-tuned system of exemptions, not of complicated or restrictive material rules of copyrightable subject-matter.
Where is the link to the problems in the field of patents?
Section 11 of the German Patens Act says:
»The effects of a patent shall not extend to [...] the use on board vessels of another State party to the Paris Convention for the Protection of Industrial Property of the patented invention, in the body of the vessel, in the machinery, tackle, gear and other accessories, where such vessels temporarily or accidentally enter the waters to which the territory of this Law extends on condition that such use serves exclusively the needs of the vessel [...].«
How lucky our forefathers have been! In view of the increase of globalised trade at the end of the 19th century they did not enter into a discussion as to whether or not »tackles as such« should be patentable. They simply searched for a pragmatic solution by adjusting the effects of a patent, not by sophisticated debates on the borderline of patentable subject-matter.
I am also convinced that the problem of ensuring interoperability to some necessary and reasonable extent which seems to be important indeed cannot be solved on the basis of the concepts of the first layer. Interoperability mostly depends on the structure of the rules governing effects of patents, not of the rules defining patentable subject-matter. However, ensuring interoperability should not be misunderstood as a tool to deteriorate the patent system; it makes no sense to cancel any effects of the patent system by overbroad exemptions.
"[...]In accordance with Article 3(a) CDR a “design” means the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colours, shape, texture, and/or materials of the product itself and/or ornamentation. A “product” means any industrial or handicraft item, including inter alia parts intended to be assembled into a complex product, packaging, get-up, graphic symbols and typographic typefaces, but excluding computer programs.
The exclusion of computer programs does not mean that screen images, menus, icons and other kinds of graphical elements of a program can not be protected as Community designs. The Office accepts graphical symbols and other kinds of images as Community designs.
Compliance with the definition of a design is subject to examination. The examiner will refuse the application where he/she finds that the subject-matter of the application does not correspond to the definition of a design as set forth in Article 3(a) CDR.[...]"
FFII Ad Hominem Against Mr. Klaus-Heiner Lehne, MEP.
Some of the amendmends to the Draft Directive on the patentability of computer-implemented inventions (CII) as proposed by the Legal Affairs Committee of the European Parliament (JURI) are effectively supporting the patentability of CIIs within certain limits similar to those adopted by the EU Council. A number of those amendments were authored and/or supported by Mr. Klaus-Heiner Lehne MEP.
Now, various anti-patent activists argue that Mr. Lehne is merely a pro-patent lobbyist, and some journalists repeat such opinions. Recently the Austrian "Der Standard" in support of such rants went as far as to say that Mr. Lehne is a "Patentanwalt" (Patent Attorney). This is plain nonsense.
Mr. Lehne is not member of the "Patentanwaltskammer" (German Institute of the Patent Attorneys) and he would in fact not even be entitled to call himself a Patentanwalt.
Indeed, Mr. Lehne is a qualified lawyer and partner of the Law Firm Taylor Wessling in Düsseldorf, Germany.
Mr. Lehne specialises in EU Law and anti-trust Law. He seems not to be specifically involved in Intellectual Property Law matters.
Why all that brouhaha? Because of the anti-patent campaigners fear the influence of every person skilled in the basic principles of Intellectual Property Law who not outrightly dismisses the Directive. They fear such people like the devil fears holy water. Each and every person skilled in this area of Law is denounced as an untrustworthy pro-patent lobbyist.
But more and more MEPs begin to see through such tactics, and the FFII will not prevail on the basis of such tricky methods.
FT.COMreports that today the Legal Affairs Committee of the European Parliament has voted on its recommendations to the plenum:
"[...] In a narrow and keenly awaited decision, the parliament's legal affairs committee threw out proposals for a sweeping overhaul of a controversial European Union proposal known as the software patents directive.
Most importantly, they voted down the overwhelming majority of amendments that would have made it more difficult for companies to win patent protection for software-related inventions.
The vote still has to be confirmed by the entire parliament in early July, although MEPs tend to follow the decision ofthe committee. EU member states would then have to give their approval for the draftlaw, though no-one expects national governments to put up resistance.
Mark MacGann, president of Eicta, an association of technology groups that support patents, said: “European industry is satisfied with the outcome of today's vote. We will now urge the entire parliament to follow suit. It is a pretty good result.”
Eicta's members include companies such as EADS, Intel, Microsoft, Motorola, Nokia, Philips, SAP, Siemens, Sony and Sun.
Monday's vote marks a turning point in the protracted battle over the law, which has split the software industry and sparked severe recriminations. [...]"
Let's wait and see what will happen on July 05, 2005, on the Plenum of the European Parliament.
The Danish Board of Technology: "Recommendations for the Patent System of the Future".
A report "Recommendations for the Patent System of the Future" has been published by The Danish Board of Technology. The report was prepared by a working group with the objective of giving the patent system a thorough 'going-over', discussing consequences and implications, and providing ideas and recommendations for the solution of problems identified.
From the Executive Summary:
"Since its inception in the 19th century, the patent system has become a fundamental institution in society. The patent system is widely recognised as pivotal for the development of new knowledge in both private business and public research and of great importance to growth and welfare. Throughout history, it has always been an expression of difficult political compromise between inventors and users of new knowledge or between social short-term interests (low prices to present users) and long-term interests (the development of new technology). The patent system is a political control tool and, as such, merits greater political attention. To meet this objective, there must be a balance between social advantages and disadvantages in the patent system. The expenses incurred by society in granting an exclusive right must be justified by the benefits reaped by society of enhanced technological advances.
Patent rights have continued to be strengthened and developed over the years. More and more products and processes can be patented, more and more people can take out patents, duration has been extended, administrative burdens reduced, and the protection and enforcement of patents strengthened. While advances in technology move forward at a rapid pace, modifications of patent legislation progress much more slowly. This may translate into a possible mismatch between the reward offered by the patent system and the social benefits.
Our knowledge of the effects of the patent system is far from complete. There has been a striking lack of economic analyses, and it is indeed fairly difficult to evaluate if the patent system benefits society. Some analyses show that stronger patent rules may advance economic performance, competition and research, while others have reached the opposite conclusion. For some industries, the patent system is key to ensure advances in technology. For others, it is doubtful if the system contributes anything to those advances; it may even have negative effects on research and growth. Evaluation of the patent system is being complicated by the fact that evaluation is not possible without the inclusion of additional political rules and frameworks, such as competition legislation, technology policies, information and research support. There are no simple solutions.
The general recommendation by this working group is therefore that rigorous analysis is necessary to determine if a more differentiated and flexible patent system can be designed, containing different durations and types of protection depending on development time, costs, market conditions and product life. The working group specifically recommends the support of the development of a fee-based patent system, which does not allow the patent holder to prohibit the exploitation of the patent, to supplement the present exclusive-right based system which allows bans to be imposed. This recommendation will facilitate access to licenses, lead to more efficient exploitation of the knowledge patented, strengthen enforcement and encourage small and medium-sized enterprises in particular to take out patents. Similarly, it is recommended to propagate the utility model system (also known as “petty patents”) which may function as an alternative to the patent system or ensure increased flexibility of examination during the patenting process itself. In genetics it should be considered if the unrestricted product patents may be replaced by use and/or method-of-use patents or by limited product patents where only the core function of the invention is patentable. Software patents should be required not to block the interoperability of other software and it should be ensured that all necessary knowledge to reproduce the invention is specified in the patent. It is important to ensure that licenses for patents, developed by public research institutions, are designed so public interests are protected and access for public researchers ensured. There is a need for a clearer and more stringent definition of research exemption, to avoid future problems.
It is recommended that university patenting activities are explicitly targeted towards ensuring the application of publicly funded research results, so that patents are taken out only if they encourage the diffusion of those results. The consideration for income to the universities should be downplayed.
In the administrative field, the working group recommends that initiatives are taken to enhance the quality of patent management through increased resources, common guidelines for examination, cross-sectoral investigations of patent practices at various administrative offices and authorities, and the development of international databases and/or procedures for mutual recognition of examination results. It is very important in a future harmonisation of the patent system that the present broad Danish right of objection is maintained so everybody can object to new patents, and that the option to object and demand administrative re-examination is facilitated.
It is also proposed to abolish the restrictions of the patent system motivated in ethical or moral considerations. The patent authorities are not suited for undertaking this type of evaluation. The patenting of unethical or immoral inventions will give greater insight into the development of technology, and any ethical and moral aspects should instead be managed by other authorities in connection with decisions to allow experiments, application and marketing. The working group supports a common EC patent in only one or two languages and the efforts towards a global patent system centralising both issuance and enforcement.
In view of the many unanswered questions to the effects of the patent system, one key recommendation is to develop a more robust basis for decisions before the adoption of any modifications, including analyses to elucidate the effect on both the competitive situation and broader social interests. There is a marked need for more knowledge and more studies of the implications of the patent system. There is also a need for enhanced methods to involve other actors in the decision processes in order to examine and discuss the patent system from the perspective of a wider group of stakeholders. At the same time, a kind of precautionary principle in the patent system should be established, so future modifications will take place only if they can be ascertained to be of benefit to advances in technology.
Those are just some of the recommendations contained in the report – recommendations that are targeted not only at the patent system but also at the rules and regulations that complement and balance it.
It is important that considerations on the patent system of the future should be implemented internationally, particularly within a European framework, as patent legislation in recent decades has been harmonised through a long line of agreements and treaties. Hence, the aim and recommendations of the report are meant to cover not only Denmark but, even more so, European and global levels as well. Here Denmark’s efforts and influence are vital.
The conclusion by the working group is that it is no longer tenable just to keep filling up the old system without producing a more solid foundation for decisions. In particular, developments in biotechnology and information technology have put the system under pressure; however, those developments have also resulted in the discussion of issues of a more fundamental nature for the entire patent system. Our recommendation is to slow down in an attempt to control this evolution, to ensure the appropriate development and exchange of knowledge needed to support future growth and welfare."
15 June 2005, 2pm – 5pm Copenhagen Business School Solbjerg Plads 3, 2000 Frederiksberg, Denmark.
At the seminar, the working group will present its recommendations for the future development of the patent system. The following experts will present their comments on the recommendations:
Dietmar Harhoff, Ludwig-Maximilians-Universität München (Institut für Innovationsforschung, Technologiemanagement und Entrepreneurship)
The 276 pages document comprises a wealth of contributions on a broad range of patent-related topics, including the patentability of computer-implemented inventions, a judicial system foreseen for the Community patent and the Draft Agreement on European Patent Litigation, and recent developments in European and national jurisprudence.
Starting on page 16, you can see a personal statement of Mr. Michel Rocard MEP on the EU Draft directive on the patentability of computer-implemented inventions:
Chairman, ladies and gentlemen,
I am particularly honoured to be your guest because the circumstances of my being here are rather strange. We politicians get to serve in many different areas, but never in all. I have worked in defence, agriculture, the economy – a job for which I had to brush up on my mathematics – and finance. But law has never been my thing; I find it intimidating. You are attending this symposium in your capacity as experts. I, on the other hand, ended up here by accident, having been parachuted into the patent world. Yet it is for this very reason that you – or at least the symposium organisers – invited me to speak to you today, an opportunity for which I am most grateful.
We first became involved in this business just under two years ago. At that time I had the privilege of being the Chairman of the Committee on Culture, Youth, Education, Media and Sport of the European Parliament. This had nothing to do with law, and I was confident of my ability to exercise this role. Then a draft directive on the patentability of software was put to the European Parliament. As you are all well aware, the older we get, the more difficult it becomes to assimilate new information. I do not belong to the computer generation, something my sons often give me a hard time about, and simply had no experience at all of computers and at that stage did not even know what software was. As for the notion that software could be patentable, this was, of course, completely foreign to me.
When this draft directive adopted by the Council on a proposal from the Commission came before the Parliament, the Bureau of the European Parliament, in its wisdom, decided to refer the matter to the Committee on Legal Affairs. Nothing strange in that, you might say. But don’t ask me what body – because the way these things work is a mystery – sought an opinion on the proposal from the Committee on Culture. We were simply at a loss to know what to do. No one on the committee was a legal expert although some members knew a lot more about law than I did. Nevertheless, the thought of having to get to grips with a highly specialised area of intellectual property law, not to mention the whole world of IT, struck fear into the heart of every member and led to me being told that when no suitable rapporteur is found, the task traditionally falls to the chairman.
So you see, ladies and gentlemen, I stand before you today to report on our findings as a complete layman and would not be here were it not for the way our political institutions function. This, needless to say, meant toiling away for six months. We may have been completely ignorant, but at least we were conscious of this fact. So we set about doing lots of reading, some of which was in foreign languages; it is much more difficult to get to grips with technical language when it is not in your mother tongue. When it comes to the language of business and industrial property, my English is not so good, even though people think I can get by at conversational level. We also held many hearings. Once we actually became aware of what the problem was, we became genuinely concerned.
The European Patent Convention, which dates back to 1972 and to which we keep referring, contains – as our previous speaker, Mr Messerli, has just confirmed – an Article 52 stating that software is not patentable. It’s as simple as that. The problem stems from the fact that although software is essentially unpatentable, the European Patent Office has already granted and recognised nearly thirty thousand patents relating to software. How had this strange situation come about? To get a broader picture, we, of course, had to see what our neighbours were up to, our main neighbour in these matters being the United States; we did not devote too much time to looking at the Japanese system. The debate in the US is less complex because they have no legal basis comparable to our European Patent Convention to supplement and complement national law systems that are already well established. There is no equivalent US law, and thousands of software patents have been recognised and accepted. These have been processed and recognised by courts of first instance, but we also discovered that there are five or six cases pending before the Supreme Court for violation of the US Constitution in connection with the free dissemination of ideas and on which – it is rumoured, although we have no written proof – the US Supreme Court has not yet taken a decision. Word has it that it is waiting first to see what approach the EU or Europe adopts.
As you are well aware, there are more contracting states to the European Patent Convention than there are Union members. This in itself presents us with an utterly perplexing situation. The European Commission put a draft directive to the Council of Ministers, which had difficulty in reaching agreement, with the primary aim of creating a stable, coherent and enduring legal framework in this field with a view to limiting the number of appeals. The second objective was not to extend the scope of patentability currently recognised by the European Patent Office. This gave rise to a whole collection of provisions, which you as specialists in the field have had to consider. Of course, these provisions were just proposals.
We then came to the worrying realisation that in our view as generalists and as laymen, and yet as people who were taking a close look at this area, the legal boundary between is and is not patentable in terms of software is very vague, and that this uncertainty also applies to the case law of the European Patent Office and of its courts. This at least was our impression, having had to familiarise ourselves with some of this case law. We are all aware that software is only patentable if it has new technical features. But how do you define "technical"? So we started reading around the subject, commentaries and key documents such as decisions, and gradually realised that they are largely tautological, and that technology is defined in and of itself, and – this being the harsh assessment of a parliamentarian – that the definition of technical is simply anything that is complicated. This did not seem adequate, or conducive to future legal harmony, or likely to provide a stable and established context within which the European Patent Office could operate. In the course of our investigations, we interviewed many people and discovered that there are conflicts, major conflicts indeed.
Ladies and gentlemen, the masses have taken to the Internet. Many MEPs will tell you that never since the inception of the Parliament have we come under such heavy and aggressive e-mail fire. I must also confess that once it became known in these circles that we were looking for a restrictive definition of what was patentable as opposed to what was not patentable, we were bombarded with rather disturbing e-mails that went something like: "if you do this, the future of the global economy is doomed because you will halt scientific development". This form of rhetoric is one that we know well because throughout history the second half of the sentence has been the same. Just think back to the nineteenth century when people began sentences with: "if you want to put an end to children under ten working in the mines, ...; if you want to shorten the working day to ten hours, ...". This reaction we initially regarded as colourful and surprising, but by the time we concluded our work we came to think of it as rather disturbing.
So what is at stake here? I will try to give you our analysis, and start by telling you that most of the experts from industry, representatives from the legal divisions of big companies, whom we tried to convince with some of the arguments I will present in the following, were adamant in their refusal to recognise that there was an aspect to this controversy other than a technical one, and that this bordered on the philosophical. And yet, this is what parliaments are for. It is not the job of the parliamentarian to replace you as experts in a legal field. Our role is to increase the breadth of analysis, and to put legal decisions into the context of how concepts and ideas have evolved in our society. Over a 6 000-year period, humanity has not advanced much at a moral level. The means we have of killing people have become much more sophisticated but the underlying instinct that drives this action is the same. So not much progress on that front. I, as a great fan of the caves at Lascaux, have to say that looking at the beauty of the royal tombs of Ancient Egypt, it is clear that humanity has not made all that much headway in 6 000 years when it comes to creating beauty or art. However, humanity has made fabulous strides forward in the technical fields, thanks in part to knowledge disseminated by means of copying. From the dawn of time until the present day, the sharing of knowledge has functioned first and foremost on the basis of copying permitted by free access to knowledge.
As the structures of our countries became more complex, a new need – the need to pay creators and writers – emerged. As you know, the great French dramatist de Beaumarchais is the father of the copyright collecting society and the very notion of copyright, which is a legal arrangement to remunerate writers and other creators without restricting access to their work. It is simply authors’ moral right not to have their work misrepresented over their lifetime and for a limited period after that. And that is as far as its protection extends. However, humanity has done more than come up with works of art, plays and music. It has also invented countless objects, for which it has had to use material, energy, or harness natural forces at great cost, making it necessary to provide compensation to a level many times higher than simply paying a creator who needs software, a music stave, a novel, or a pen and paper and a well-developed intellect. The patent was invented to enable this reimbursement, and you as patent judges are more familiar than any with this tradition and legal construct. I am running a certain risk in telling you all this because I know that I am greatly oversimplifying the situation. But these are the simplifications not just of the man in the street at pains to understand your discipline but also those of a parliamentarian whose job it is to create the legal framework in which all this is supposed to happen. Unlike copyright, patents prevent use except where a licence fee is paid to compensate for the energy or tools used to arrive at the invention in question. This much is more or less clear, and I think that the bigger problems with which you are now confronted are relatively recent.
This distinction presented no difficulties before the computer age, which in turn ushered in the software era. Incidentally, I would like to congratulate the Academie francaise for once for coming up with the French term 'logiciel' as part of the bid to fend off the linguistic attack which could give us no alternative but to talk about these matters in English. I find the French 'logiciel' is better defined than the term 'software', a fact that has given rise to translation errors because the English term describes a broader concept than the French one. But let me stick to my subject and my own language. Once the new forms of knowledge, this new knowledge, became bound up with reason, logic or scientific expression – I hope there is some overlap here – its new expression took the form of software. So what exactly is software? It can be a mathematical formula but is more usually a set of mathematical formulae, and they are not patentable because the people who come up with these formulae only need a pen and paper to do so. According to the European Patent Convention and the great Einstein himself, a mathematical formula is not patentable, a point that was also made during the debate. Ergo software should not be patentable.
On the other hand, some forms of software cannot be fully developed or tested without using energy and/or tools. Typical examples would be the ABS braking system and the means of compressing eight hours of music on to a disk that could formerly accommodate three-quarters of an hour’s worth. In these cases, the software would not exist without the use of materials, heavy equipment and more energy than the negligible amount needed to run the computer itself. This could be the dividing line. Problems arise because the US has agreed to grant patents in respect of educational software. Let’s say a teacher uses software as a presentation aid. No energy, natural forces, or materials are expended on the development of this software, and one could argue that it should not be patentable because, being a teaching aid, the under-education of entire continents – beginning with Africa – would demand that it be made available and distributed immediately free of charge like any product of the human mind. Software to assist the surgeon during operations especially for vascular and cardiac surgery has also been patented. The analysis here is the same, ie it is merely a more sophisticated expression of intellectual endeavour. And we told ourselves that this could be the defining criterion. As it turned out, the debate with the Commission regarding the first reading in the European Parliament was rather strange because it revolved around this question. Commissioner Bolkestein, under whose authority the draft directive was drawn up and who was speaking on behalf of the college of Commissioners, kept insisting and even wrote that 'this is not about extending the scope; it is about providing clarification and stability, but it is also about reaffirming the existing bodies of case law'. On hearing this, we were all very impressed by him and the work done, and we applauded the recitals. However, on reading the body of the document, it seemed to us – our opinion clearly being partial and open to question, but nonetheless being our view with its own merits – that the provisions of this draft directive did not actually include the restrictive definition that the commissioner claimed to be providing. Through our work in this area, we had become aware of this tautology and ultimately the fact that it is impossible to find a hard and fast definition for the term "technology". Identifying such nuances of meaning is extremely complex but what it all boils down to is that "technical" just means "complicated", which is inadequate and unacceptable in our view. It was in this context that the reference to software requiring the use of energy or material for implementation and development was reintroduced into the text during a European Parliament debate. Making only this form of software patentable is clearly problematic for companies that file a lot of patents.
There are huge financial interests at stake in this business. One estimate puts the annual value of patent-related fees at between 35 and 40 thousand million dollars. We are talking about vast sums here, and I must also confess that I do not think that the European Parliament has ever in its history had to consider a single document with such vast implications. It therefore comes as no surprise that people are at loggerheads with one another. However, it is a mystery not to be able to find engineers, specialists from the big companies who are prepared to think seriously about what they are proposing, ie changing the status of knowledge in our world. Basically, our big concern, our main argument, is that of the new software developed – the millions, or tens of millions of pieces each year it would seem – just two or three per cent is produced by the economic giants Microsoft, Nokia, Apple and a handful of others. Most software, 96-97%, is the work of young researchers, students about to finish their degrees, who get together, say in a group of three, have a good idea and want to exploit it commercially. It is taken for granted that new software is developed using existing software. This means that the present legal uncertainty – which would be exacerbated if one claimed to be removing the economic uncertainty by extending the scope – allows these big companies (the rare few – ten or so – able to pay very powerful law firms to track down users of their patents) to identify, for example, a fledgling company set up by four students with EUR 50 000 to launch a good piece of software they had developed using a version that pre-dated the previous version of some Microsoft software and say "that will be 10 000 dollars, thank you very much". This could hold back the inventive tide in this area. And it is for this very reason that users of free software put up a strong fight, form groups and the surprising thing is that in some of our countries – I am not familiar with the situation in Belgium, but know with regard to France and Germany – that certain administrations such as the French Ministry of the Interior are changing their IT setups and replacing Microsoft with Linux, which is the main open-source software, ie software developed with the source code accessible to all. For reasons of transparency and so as not to leave themselves open to bullying and piracy while at the same time stifling innovation, they thought it better – the analogy being the US Prohibition in inter-War years – to uphold the principles of free use and copying in this domain.
The European Parliament spent a long time discussing this matter, and it became a cause of dissent among its large political groups. Over the course of an intense debate within the socialist group, we voted three times to keep open-source software, ie for the most technically restrictive definition in relation to software patents, ie the one I have just outlined which applies the use of energy or material criterion. Our rapporteur, Ms MacCarthy, who initially approved the Commission’s draft directive, at the second reading and under pressure from her group came round to the way of thinking I am describing to you. I tell you that after the six dark months of taking in this information, technology and vocabulary on the Committee on Culture, I was ready to step into action, being the rapporteur and having a definite role to play in this business. Our argument, presented in the plenary session was to tell the Commissioner: "we listened and agreed with all of your arguments – both written and oral – but think that you have failed to implement them in a sufficiently precise and coherent legal system, so we have made some improvements that reflect your intentions". He was furious and rejected it out of hand, but as it happened the outcome was amazing: 361 or 362 – I do not recall the exact figure – just over 360 votes to 150. It was an extraordinary majority given that among the 150 were the Greens who did not want any restrictive directives at all – an analysis I believe is wrong – but they did not even want to risk imposing any restraints. Their stance was an absolutist one – much more so than ours – in favour of totally free software. I think it was the wrong position to adopt and that we could not afford not to clarify the legal position. But the fact remains that the 150 votes against the draft accepted by a European Parliament majority cannot all be said to be at the service of the patenting community at large, if I may say so.
This is why agreement was not reached on the draft directive, and why it had to be sent back to the Commission and the Council of Ministers. We rather felt that the Council of Ministers took advantage of the European Parliament’s election recess of two-and-a-half months to get agreement on the main points of the second draft directive, although this is something we do not know for sure and is not public knowledge. Rumour has it that, under its presidency, Ireland, which has a relatively anti-competitive tax regime to promote development, has attracted many powerful IT companies and consequently has a considerable interest in the matter, pushed through a draft directive that antagonised the various factions in the European Parliament even more than at the first reading. I realise how lame it is to make a case based on rumour and not fact, a practice which goes against all legal principles and you should pretend never happened. The only thing is that when the time comes, there will probably be "bad vibes" generated by the feeling that "you could have waited until the new Parliament had convened to work on the new draft directives when there was enough publicity for us to have some say in the matter".
This is the background to the situation. We are waiting now for the second reading, which I know will be a battle. Both camps are preparing for combat, entering into uneasy alliances and making a lot of e-mail noise. I have attempted to present our arguments here today. If we are to disallow patents on all forms of software, which would be complicated, and ultimately prevent Microsoft from controlling all dissemination of new knowledge, we see a need for some criteria. We freely admit that the criterion rejected by Mr Bolkestein regarding the use of energy or material may be flawed and difficult to ascertain but it is our only option so far. We will pursue our efforts and try to be ever more precise, and provide sound reasoning with a legal and scientific basis. This will keep us busy in the coming year and I am looking forward to seeing the outcome of the battles that lie ahead. Incidentally, you may be interested to learn that in the new Parliament I have switched committee and am now a member of the Committee on Legal Affairs, and, ladies and gentlemen, would you believe it, I was appointed rapporteur for the second reading on this subject!
Now, Mr. Rocard acts as Rapporteur General for the JURI Committee of the European Parliament regarding the Directive on the patentability of computer-implemented inventions, thereby advocating amendments which effectively would destruct the patent system in a broad circle around every invention somehow related to software.
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Dipl.-Phys. Axel H Horns is Patentanwalt (German Patent Attorney),
European Patent Attorney as well as European Trade Mark Attorney. In particular, he is Member of:
Mr. Rocard had said in view of Commissioner Bolkestein's assertion that the scope of patentable subject matter was not to be extended by the Draft directive:
Office for the Harmonisation in the Internal Market (OHIM) recently has published 
