New Union software patent rules set to boost eEurope

Date: 25/05/2000

By Peter Chapman

SINGLE Market Commissioner Frits Bolkestein will give the EU's efforts to capitalise on the information society a further boost next month when he unveils proposals to provide Union-wide patent protection for the EU's multi-million-euro computer software market.

The move follows concern that a lack of harmonised rules is leading to a patchwork of approaches to the issue among member states and the Munich-based European Patent Office (EPO) - deterring huge segments of the Union software industry, and in particular small and medium-sized enterprises, from seeking protection for their work.

"The same invention is protected in some member states and not in others, a situation that is damaging to the proper operation of the single market," warned the Commission in a 1999 paper on the issue.

Sources say that in a bid to reduce the confusion and set a level playing field, the Commission will call on member states to abide by just one approach - expected to be the EPO's rulings in the software sector. Bolkestein is also likely to propose removing a legal glitch in the current EU patents systems, which does not actually allow patents for computer programs themselves but only the 'technical inventions' which the software uses.

Commission sources say Bolkestein may propose allowing computer software per se, like other sectors, to be eligible for patents if it includes a "technical contribution to the state of the art". This would make it far easier for computer firms to register their inventions and allow them to sue pirates who distribute counterfeit programmes instead of just the person who uses the pirated software.

However, sources hint that the Union proposals will fall short of the US patent regime, which offers massive protection to computer software. Under the American regime, patents are readily available for programmes which merely "add to the commercial state of the art" by solving a business problem in a novel way. This allows patent protection for myriad 'business model' programmes such as the complex accounting and finance packages used by currency traders. US courts have ruled in favour of granting patent protection to ideas such as Internet bookstore Amazon.com's 'one-click shopping' system.

But Commission experts fear that a US-style regime could erode the quality of EU-based patents and lead to an increase in court cases in narrow Amazon.com-style patent disputes. Officials are also concerned that encouraging business model patents could stifle competition and "have a chilling effect on e-commerce".

European business lobby group UNICE has welcomed the Commission's plan to tackle the issue before more Union companies are shut out of the IT market and lose further ground to US and Japanese rivals.

Single Market Commissioner Frits Bolkestein will give the EU's efforts to capitalise on the information society a further boost when he unveils proposals to provide Union-wide patent protection for the EU's multi-million-euro computer software market.