Software body slams EC taskforce over software patents

Pressure group claims a report into intellectual property by the European Commission is biased towards big business.
Written by Tom Espiner, Contributor

A software development pressure group has slated a report published this week by the European Commission ICT Taskforce into intellectual property rights (IPR), saying it wrongly promotes software patents.

The Foundation for a Free Information Infrastructure (FFII) claimed the report, which recommended the use of software patents by small firms, was written almost entirely by the patent industry and large businesses, including SAP's patent lawyers, U.S. companies including Microsoft and the European Patent Office.

The report, called "IPR for competitiveness and innovation", found that small companies are increasingly reliant on patent protection, and that European small and medium-sized businesses (SMBs), particularly start-ups, use patents as core assets. It also noted that increased software patents in the United States have not hampered innovation in the U.S. ICT sector.

"IP protection, in particular patent protection, is critical to the success of many technology-driven SMBs as it enables them to attract investment capital and to access finance," said the report.

However, the FFII disagreed strongly with these findings. "These claims are forcibly contested by SMB organizations, who point out that software patents punish the IT SMB sector, while giving large companies a key grip on the market," said the FFII on Thursday.

The ICT Taskforce was set up by the Commission as part of its push to create a stronger business market in Europe. The IPR working group was made up of representatives from large IT companies and trade bodies. European Commission officials were present, but only as observers.

Software patents are a contentious issue in Europe, where they may not currently be granted. Last year, an attempt to legalize software patents in Europe failed, after campaigners argued that the proposal would allow patent-owners to monopolize the software market.

Microsoft has claimed that patents are a currency of European business. In an interview with ZDNet UK on Monday, Microsoft International president, Jean Philippe Courtois, argued that patents improve business for SMBs.

"Patents are a currency," said Courtois. "We try as a company to evolve the licensing of patents between large and small companies, providing skills which are being used more and more."

But FFII UK director Rufus Pollock claimed that this statement was self-serving, as Microsoft already holds many patents that it wishes to license to an untapped SMB market.

"Microsoft holds a huge number of software patents. Most people protect innovative investment through copyright," Pollock told ZDNet UK. "Patents just give a more powerful monopoly."

Pollock said that copyright was a "more nimble" way to protect intellectual property, as copyright was automatically conferred on the author or developer, whereas patents needed to be applied for. He said that patents are inappropriate for software development as ideas tend to be generic, and that the real effort comes in developing the code.

"Cheap software patents act as a tax on those who have expended the real effort in developing real, and expensive, running code," said Pollock. "Writing the code is much more time consuming, and copyright covers the code. Software patents actually stifle innovation," Pollock added.

The FFII also argued that the ICT taskforce seemed to have a disproportionate number of representatives from very large and often non-EU-based enterprises, given the importance of SMBs in the European software industry

"This is rather ironic given the focus on SMBs in the report," said Pollock.

The FFII also called the report "particularly insulting" to small IT businesses, saying that the report accuses smaller companies of having "a relatively inadequate understanding and general knowledge of the patent system".

FFII president Pieter Hintjens said: "This report is a mockery and an insult to all those who participated in good faith."

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