Small businesses oppose software patents

Proposed software-patents legislation would put thousands of jobs at risk, according to an alliance of European small-business groups

Three organisations representing about two million small and medium-sized European businesses have condemned proposed legislation on computer-related patents, saying its adoption would lead to the loss of thousands of jobs and a serious decline in small-business innovation.

The European Small Business Alliance (ESBA), the European Confederation of Small and Medium Enterprises (CEA-PME) and the European Confederation of Independents (CEDI) said in a joint statement this week that the proposed directive of the European Commission and European Parliament would not be in the interests of small and medium-sized businesses because it would add substantially to their legal costs -- even outside of the software industry.

The European Parliament is set to vote on Monday on a proposal to harmonise laws across the EU with regard to the patentability of computer-implemented inventions, a term which is taken to include software. Critics charge that the directive, while presented as a minor change, would vastly expand the range of software, and even business processes such as e-commerce procedures, that can be patented.

The proposal has attracted protests from software developers, computer scientists, economists and others, including a petition signed by tens of thousands of individuals.

"Unlike most complex technologies, the opportunity to develop software is open to small companies, and even to individuals," the alliance said in an open letter to European legislators. "Software patents damage innovation by raising costs and uncertainties in assembling the many components needed for complex computer programs and constraining the speed and effectiveness of innovation."

The legal burden is particularly onerous for smaller companies, and would threaten the existence of Europe's open-source software industry, the federation said.

The legal costs would extend outside the software-development industry to computer retailers and the IT branches of businesses, the alliance argued. More costs would result from the necessity of conducting patent warfare -- acquiring a portfolio of patents to be used to fend off intellectual property attacks from other companies.

"Within the ICT sector, expansion of patent protection has been found to lead to an increase in the strategic use of patents, but not to a demonstrable increase in innovation," the letter said.

The alliance recommended that the proposed directive be altered to eliminate logic patents, and to clarify that data-processing is not patentable.