‘Yes’ vote on EU patents vital to software industry

22 Jun 2005

A successful vote in favour of a single EU patents directive in the European Parliament next month will protect indigenous software firms and safeguard investment in the SME sector across Europe, the chairperson of the Irish Software Association (ISA) told siliconrepublic.com.

Bernie Cullinan, chairperson of the ISA has called on MEPs to vote in favour of the Common Position on the Directive on the Patentability of Computer Implemented Inventions (the CII Directive) that strives to enable inventors to patent their technology in all countries in the EU.

Cullinan warned, however, that global software giant Microsoft’s push to secure the Directive is distracting press attention from the reality that the directive is vital to Europe’s indigenous SME sector’s viable future. “While Microsoft’s position is in line with a lot of different companies’ views, if the vote fails, Microsoft has a lot more muscle and money to protect its patents from imitation, whereas smaller indigenous companies lack such resources.”

In March 2005, the European Council adopted a Common Position on the CII Directive. The Common Position establishes the patentability of CII when they provide a technical contribution to the field of technology, ie inventions whose performance involves the use of computer, a computer network or other programmable apparatus. At its Plenary Session on the 6-9 July 2005, the European Parliament will vote on the Common Position.

The Common Position does not seek to change what is already happening in Europe, but rather it seeks to harmonise the current regime in order to enable inventors to patent CII in all countries in the EU. This means that they only have to file a single patent in any EU country for it to be recognised throughout the entire EU. It will also provide a single means (the European Court of Justice) to appeal against patents awarded at member state level.

Cullinan warns that banning patents in Europe would therefore reduce the investment in research as the investment would no longer be justified by companies, in particular the SME sector. Furthermore, restrictions to the protection of patents would open the door to low-cost economies which, without patent protection, would be free to imitate European products in the hi-tech sectors, which would have a negative impact on European employment and innovation in the SME sector.

At present patents are awarded either on a national basis or through the European Patent Office (EPO) in Munich, which grants so-called European Patents. The EPO offers a single application and granting procedure and so saves the applicant the trouble of having to file with a series of national patent offices. However, each member state may still require that, in order to be legally valid in their territory, the European Patent must be translated into their official languages.

Moreover, in the case of disputes, it is the national courts that are competent so that, in principle, there can be 25 different legal proceedings with the risk of different outcomes. The costs of translation mean that it is currently significantly more expensive to patent an invention in Europe than it is in the US or Japan. When added to the potential inconvenience of working with a variety of different legal systems in case of dispute, the current system is a significant barrier to research, development and innovation. Cullinan illustrated the expense that could arise by pointing out that a single patent for a product in Ireland can cost northwards of €50,000 to secure, a figure that could multiply if technical translation costs and court fees are included.

The aim of the Directive, is therefore to make it less expensive and complex for companies to protect their inventions throughout the whole of the European Union as well as clarifying the legal framework for patents. For those who opt to use this system, just one single patent application will protect an invention in all EU member states.

“This is an important issue for the indigenous software industry in Ireland and elsewhere in Europe. They invest money in research and development and the patentable inventions they create are the life’s blood of many companies. The ability to patent just once and protect that patent at least in Europe is critical to the economic viability of European firms going forward,” says Cullinan.

Cullinan says that Irish MEPs Simon Coveney and Brian Crowley have been briefed on the issue and are supportive of a ‘yes’ vote for the Common Position.

“Smaller companies have to do everything on a shoestring,” Cullinan explained. “This issue is not about Microsoft versus the world as it has been portrayed. It is about small companies too. Securing a ‘yes’ vote is intrinsic to the future of the software industry as a whole across Europe.”

By John Kennedy