There's going to be a vote in the European Parliament on 1 September (originally today, Monday 30 June 2003) that will have enormous implications on the worldwide software market.
The vote will be on whether to adopt a report by its Legal Affairs and Internal Market Committee that recommends the rules on patenting of software be relaxed in line with existing laws in the US and Japan.
It looks as though, despite widespread and deep criticism, the report will be adopted. And this will probably mean a shift of power from small software companies and the open source community to large multi-national corporations.
With patents allowed, small software companies may suddenly find themselves faced with accusations of patent infringement from IBM, Microsoft, HP, Sun etc etc. They can agree to pay a licence and see their profits slashed or go to court and spent on average £300,000 fighting the case.
The situation for Linux looks even worse. The recent trademark infringement claim by SCO against Linux has already created turmoil. The fear is that with patent law allowed, the floodgates would be opened and Linux distributors swamped and bankrupted by court claims - with Microsoft leading the charge.
Sadly, though, those who are most against the law change have only themselves to blame if it goes through - thanks to their failure to understand on a very human level how the world works and in particular how politicians work.
It is politicians who make the law, and it is politicians who need to be persuaded if the law is to move in the direction that you desire it to. But while they are a peculiar and varied breed, there are three things you can be fairly certain will not hold much sway with them:
- Ideological argument. Politicians are nothing if not pragmatic. Their very survival is based on seeing which way the wind is blowing and adjusting accordingly
- Little-man defence. Politicians will not risk upsetting rich and powerful people and companies unless there is a principle at stake: that principle being that the government ultimately decides. Therefore arguing a point on the basis that it will restrict or impair a powerful body is counterproductive
- Criticism. Politicians do not respond well to criticism. In fact, the more they get, the more stubborn they become. Flattery is the surest route to their heart, and this means making them feel important. Wining and dining, listening, applauding their insight and then putting your point across
Unfortunately, every coherent and persuasive argument (and there are many) made by those opposing this change in patent law fits squarely into one of the three categories above and that is why the patent laws of the EU are set to change on Monday.
The patent issue
Of course it doesn't help that the issue of software patents is so enormously complex. For every argument there is an equally good counter argument. For every assertion, there is anecdotal evidence or a logical argument that undermines it.
The basic issue at hand is whether computer software can or should be entitled to a patent. If it can, whoever has developed the software can prevent anyone else from using it and the idea and/or method behind it - unless they get permission, which usually means paying a fee.
Fair enough, you say. Except patents go beyond that - they can put controls on the process that software allows to happen. A famous example is Amazon.com and its One-Click patent. Amazon thought it would be a good idea to allow its customers to click just one button to buy a book, rather than have to go through various screens confirming their credit card, address, delivery etc.
It was a very good idea but hardly a huge leap in imagination. The tough part was writing software that would do it for you. It did and patented the idea. It then went to court to stop a competitor from offering the same thing - even if the code was written from scratch. Barnes & Noble was prevented from offering a one-click option until the two settled years later out of court. Amazon still holds the patent.
Patents exist for a very good reason however. The prime benefactors of patents are pharmaceutical companies. It costs billions to develop and test new medicines until a commercially feasible one is found. Without a patent on this, competitors would be able to copy the drug and benefit from the other company's research and development. It doesn't take a genius to work out that without this protection, there would be no new drugs.
Is software somehow different?
But is software such a different being that to use the same laws developed long ago to defend extensive research and development is to misunderstand its very nature?
This argument has raged for decades. In fact, it is the Convention on the Grant of European Patents 1973 (revised in 1991) that is to be changed by this current action. The Convention states quite clearly that "European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step" except for "(a) discoveries, scientific theories and mathematical methods; (b) aesthetic creations; (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers".
Since the 1990s, however, the booming computer and software industry has put increasing pressure on extending patents to cover their products.
Alan Greenspan, chairman of the Federal Reserve Board and hence one of the most important men in the world economy, had this to say about the issue in April this year: "Over the past half century, the increase in the value of raw materials has accounted for only a fraction of the overall growth of US gross domestic product. The rest of that growth reflects the embodiment of ideas in products and services that consumers value. This shift of emphasis from physical materials to ideas as the core of value creation appears to have accelerated in recent decades."
He continued: "If our objective is to maximize economic growth, are we striking the right balance in our protection of intellectual property rights? Are the protections sufficiently broad to encourage innovation but not so broad as to shut down follow-on innovation? Are such protections so vague that they produce uncertainties that raise risk premiums and the cost of capital? How appropriate is our current system - developed for a world in which physical assets predominated - for an economy in which value increasingly is embodied in ideas rather than tangible capital?" If Alan Greenspan doesn't have any answers, it is hardly surprising no one else can agree.
However, the major reason why the European Parliament is considering changing the law is because of pressure from the United States. In the 1990s, the US' patent laws were flung open to all and sundry. Since then, the number of patents has rocketed and, say critics, caused Patent Office officials to be overrun, with the result that thousands of poor-quality or wrong patents are approved each year. This is creating a future legal nightmare as companies claim infringement on seemingly disparate products.
Peanut butter sandwiches
A famous example is when food company Menusaver was granted a patent for crustless peanut butter-and-jelly sandwiches in December 1999. Before you could say "chew this" it started legal proceedings against Albie's Foods for infringing its rights with its own peanut-butter-and-jelly sandwich ("the center filling is prevented from radiating outwardly into and through the bread portions from the surrounding peanut butter," reads one part of this ridiculous patent).
As it turns out, it was the efforts of one man - Bruce Lehman - that exposed every aspect of the modern world to patents. As US Commissioner of Patents and Trademarks, he forced through huge changes in US law in a very short period of time. Because of the peculiarities of patent law, he achieved this without a Congressional review and without any backing from the law courts.
Critics point to the forced closure of the watchdog Congressional Office of Technology Assessmen in 1995 - ostensibly to cut costs - and the alleged gagging of Patent Office employees, as to how such changes passed through unopposed. The only block on Lehman's activities came when his attempt to move control of the US Copyright Office from the Library of Congress to his department was stopped.
But whatever the rights and wrongs of the US' shift to an open patent regime though, it exists and US business has got used to it and so it wants it applied everywhere else in the world. In 1994, at a World Trade Organisation meeting, the US threatened to walk out unless others considered changing their patent laws.
The resulting Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement states: "Subject to the provisions of paragraphs 2 and 3, patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application." The only thing stopping software outside the US now being fully opened to patent law was the phrase "an inventive step".
Following continued pressure, Japan simply followed the US' lead, bypassing the Diet Supreme Court. Then, in June 1997, the European Commission issued a Green Paper suggesting patents be reconsidered. It took three years for the European Patent Office to come up with a new version of its convention that removed the "computer programs" clause. And three years after that, we have a vote on it.
The pros and cons
So what are the arguments for expanding patent protection? Innovation, investment and harmonisation of laws across the world.
Innovation: If companies are able to protect their original work, it encourages people to strive for that new super app so they can protect it for 20 years and making a lot of money from it. Without this protection, their idea could be stolen and marketed by others. In this sense, patents protect not only large but also small companies (1994 - Stac won $120m from Microsoft after it included its compression program in Windows).
Investment: With the possibility of protecting a new invention, it will encourage companies to spend money developing new ideas. In the UK's case, several major US companies have set up in the country in order to tap into the rich vein of talent available.
Harmonisation: Clearly if you can use your patent across the world, you stand to gain a lot more than if you have to fight in each and every country. Economies of scale.
All three of these arguments are simply and easily explained and politicians instinctively understand them.
The counter-arguments are more complex. They also rely on predictive realities - "what is likely to have if".
By far the strongest argument is that software works by building on top of other software. This is certainly true and lends huge weight to the assertion that patenting software will end up stifling innovation since people will become weighed down with making sure they don't trend on others' toes. Patenting aspects of software breaks down the very process by which new software is created.
Another very strong argument that has hardly been used is the huge success built on top of common, patent and royalty-free standards. If ever there was a counter-argument to big business' innovation claim it is that the Internet is so successful because there weren't constraints or patents on it. Due to this, it has grown hugely, created new markets and so benefited everyone.
One misconception that both sides have used for their argument is that it is impossible to patent software in the EU - it isn't. If the "inventive step" can be shown, software can be patented - in fact, there are 13,000 EU software patents. Evidence, say the anti-patent crew that the existing system works fine. Evidence, say the pro-patent posse that the law is confusing and needs to be sorted out.
The argument that the US system is falling apart under the weight of daft patents and expensive litigation has been stymied by the argument that Europe will be able to learn from mistakes and introduce a better system. This has been true for numerous other aspects of modern life, particularly when it comes to the legal system, so this argument is effectively neutralised.
Unfortunately, all the other arguments fit into the three categories mentioned at the start:
Ideological argument: Enter Richard Stallman. While he makes a very convincing and entertaining performer, the ideology that he passionately espouses will never change a politician's mind. Twenty-year patents are too long (where was the computer 20 years ago?) How can you patent an idea? Governments aren't listening to what the people think. The system is too complicated. How can we not support open source?
Little-man defence: Small companies can't defend themselves against patent court cases. Big companies can have patent-sharing agreements between themselves but say no to all the little people. Little man can't understand it all. Little man can't afford patents. Big companies will just try to shut down small competitors.
To all these points a politician is likely to think "well it's a tough world out there". The reality is that business is cut-and-thrust and that most of the anti-patent arguments are about attacking the status quo or constraining large "abusive" companies. But then large companies have proven their worth at producing millions of products and making them widely available to other businesses. Idealists and small-time programmers haven't - so why should their arguments carry even a fraction of the weight?
It was this reaction to small software companies and in particular the open-source community that sparked that peculiar Internet response to things people don't like: heavy criticism and abuse.
The chair of the Legal Affairs and Internal Market Committee, Arlene McCarthy - the very person who's opinion is of utmost importance - has been turned into a hate figure by the anti-patent, pro-Linux lobby. Rather than concede her points or make an effort to understand and then persuade her she may be wrong, she has been faced with brick-wall criticism.
You are wrong, we are right, she has been told. "She's just repeating the same arguments, we sent her loads of emails pointing out where she was wrong and she hasn't even got back to us!" a hundred websites have roared. Numerous articles have appeared in the media explaining how the committee was making the wrong decision.
A lobbying conference was put together in Brussels where, surrounded by people who already agreed with them, the anti-patent lobby rushed around patting each other on the back on an argument well won. But Arlene McCarthy and other people who "aren't even listening" weren't invited. Nor were they given a chance to explain their point of view.
And so, faced with this, with two groups at loggerheads but one seeking to explain their viewpoint and the other shouting abuse (the former of which has all the money and influence), how do you think Arlene McCarthy and the Committee decided? 19 votes to 9, with 1 abstention.
The fact remains that several strong arguments against patent extension were either not put forward or forgotten about in the rush for righteous indignation.
If, for example, it was explained to Arlene McCarthy that changing the rules will create more problems than it would solve; that 13,000 existing patents will effectively be wiped out, irritating European businesses; that innovation and business will be stifled by expensive legal fights; that the very existence of the open source movement points to the fact that software is a special case where collaboration is more effective that protection; that European businesses will be worse off as a result because US companies hold the majority of the patents and the patent know-how... well, then we might just have seen a different result. ®
Read this article in German.
Read this article in Albanian! (Translation by Reg Reader Besnik Bleta)
UK Patent Office conference on software patents
Foundation for a Free Information Infrastructure (extensive coverage and links to source material)
Richard Stallman speech on patents
European Parliament Committee on Legal Affairs and the Internal Market (JURI) homepage
Arlene McCarthy report (pdf)