SMEs don't get their fair share of EU patents

Small businesses in Europe have filed far fewer software patents at the European Patent Office than multinationals, according to the latest study

Small and medium sized businesses hold significantly fewer software patents than big businesses, according to a study published by the Business Software Alliance (BSA) on Wednesday.

The study -- which may contain inaccuracies, according to its author -- found that only 20 percent of patents issued by the European Patent Office (EPO) are held by SMEs, with the remaining patents held by larger companies.

SMEs are responsible for half of Europe's turnover and employ more than 53 percent of Europe's workforce, according to the European Commission's Web site. This shows that small businesses hold disproportionately fewer patents than they should do according to their contribution to the European economy.

Francisco Mingorance, the director of public policy for the BSA, claimed the study showed that patents are equally important to SMEs and big businesses.

"These figures explode the myth that CII [computer-implemented inventions] patents are the exclusive property of big business," said Mingorance. "European SMEs need their patents every bit as much as big companies."

Opponents of the directive on the patentability of computer implemented inventions, commonly known as the software patent directive, have argued that it will disadvantage small businesses in favour of big players.

But, while the BSA claimed that all the SMEs in the report are European, it appears that the list could include SMEs based outside Europe. The author of the study, Daniel Johnson of Colorado College in the US, obtained the statistics on SMEs by manually checking the patent applications for the names of large companies. As he did not check the applications against a list of SMEs outside Europe, he may have included non-European SMEs.

Johnson flagged up that his final list may include some inaccuracies.

"For example, in our source dataset there is one patent document assigned to William Gates III, an individual whom few would consider representative of an SME," said Johnson. "The final data extraction may have patents that are not CII, may not be SMEs and certainly we have likely overlooked some number of SME-CII patents."

The study also found that almost half of patents issued by the EPO are held by the US or Japan, rather than European companies.

The study defined software patents as patents that have been filed at the EPO under a "technology class consistent with software", or where the patent application includes one or more of the following words: software, computer aided, computer read, computer controlled, computer program, computer algorithm, computer assisted.