Software Patents – Some EPO Figures

The software patents issue is coming to a head and with this in mind I thought it was time to back up one of the main arguments with some figures from the European Patent Office (EPO).

The argument being that large international companies have been prospecting for the past few years through the EPO by taking out patents on business methods and algorithms in anticipation of EU Directive COD/2002/0047 coming into law. The purpose of this directive is to “harmonise and unify” the patentability criteria of Europe’s patent offices and give effect to the EPO. Unfortunately this directive, as it stands, contains loopholes which would make all business methods and software ideas legally patentable.

Our argument is that if this directive is passed it will stifle innovation and competition. These large companies will have an enormous advantage over their smaller competitors through their amassed patents. The threat of patent litigation alone will dissuade SMEs from innovating. It should also be known that the big U.S. and Japanese I.T. companies have formed cartel-like patent sharing agreements of which the E.U.’s SMEs cannot afford to join.

I have been asked to back these assertions up with figures by a number of journalists. The EPO publishes annual reports so let’s look at the statistics from 2002 and 2003. There is no one category that says “Software Algorithms” or “Business Methods”. There is, however, category G06 – “Computing; Calculating; Counting” which contains many sub-categories including “Eectrical digital data processing”, “Recognition of data; Presentation of data; Record carriers; Handling record carriers”, etc. The number of patents issued/filed for Ireland, Great Britain, Japan and the US in these years and in this category were:

2003 46 428 1563 3643
2002 33 401 1293 3601

Patents found in this category include many of those listed on including #1 on the list: “a method of ordering services, like booking hotel rooms” [over the Internet] (EP0738446) and a “network-based sales system includes at least one buyer computer for operation by a user desiring to buy a product, at least one merchant computer, and at least one payment computer” (EP0803105).

I think these figures speak for themselves.

One last thing. A common argument made is that if this directive does not pass then U.S. companies will not invest in R&D programs in the E.U. Well let me ask, what the hell have they been doing here for the past twenty years? If the directive does not pass, the status quo is maintained. Microsoft, IBM, Sun, etc will continue their existing and new R&D programs here in Ireland and throughout the E.U. Just as they always have.

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