The European Parliament voted on Wednesday to reject the directive on the patentability of computer implemented inventions.
A spokesman for the European Parliament said that 648 MEPs out of a total of 729 voted to reject the directive, which critics feared would widen the extent to which software could be patented.
The Foundation for a Free Information Infrastructure (FFII) described this decision as a "great victory for those who have campaigned to ensure that European innovation and competitiveness is protected from monopolisation of software functionalities and business methods."
While many SMEs, free software advocates and software developers have spoken out against the directive from the start, various large companies have lobbied for the directive, often via campaign groups such as the Business Software Alliance, EICTA, CompTIA and the Campaign for Creativity.
These groups and the companies behind them have put significant funds and effort into arguing their cause. This included alleged threats to pull jobs out of Europe and trying to tempt European politicians to its cause with free ice-creams.
"This result clearly shows that thorough analysis, genuinely concerned citizens and factual information have more impact than free ice-cream, boatloads of hired lobbyists and outsourcing threats," said Jonas Maebe, a spokesman for the FFII.
"I hope this turn of events can give some people faith again in the European decision-making process," Maebe added.
The future of the directive is currently unclear. It is possible that a revised version could be debated in the future, but back in March Charlie McCreevy, commissioner for the Internal Market, said the Commission would not resubmit a new directive if the Parliament chose to reject the current version.