European Parliament Rejects Software Directive

by Ulrika Lomas, Tax-News.com, Brussels

08 July 2005

Against expectations, the 648 MEPs out of a total of 729 voted on Wednesday to reject the EU's controversial directive on the patentability of computer implemented inventions.

This may be the end for the Directive, since Charlie McCreevy, commissioner for the Internal Market, told the plenary session of the Parliament on Tuesday that the European Commission would not stand in the European Parliament's way if it decides to reject the draft directive on software-related patents.

"You can of course reject or substantially amend the proposal," said McCreevy. "If the Parliament decides to reject it, then the Commission will respect your wishes. I will not propose a new directive."

The Directive has had a convoluted history. The European Parliament made extensive amendments to the Directive last year in the first stage of the 'co-decision' procedure, but most of these were ignored by the Commission when it prepared the Directive for approval by the Council. Several countries, notably Poland, held up approval of the Directive for a while but finally switched sides. The Parliament objected strenuously to the Council's behaviour, and pondered making a procedural objection, but finally in April its judicial affairs committee (JURI) announced that the Council did not break procedural rules by approving the software patent directive despite a restart request from the EP.

JURI gave a second reading to the directive two weeks ago, leaving the Council's text largely unchanged, rejecting most of the amendments tabled to limit the possibility of patenting computerised inventions.

Debate in JURI and in the EP's plenary session mirrored the differing views within the industry. Advocates of "open source" software, such as smaller companies, want the patents to be limited to the inventions themselves, leaving the underlying software unprotected and available to other users. Moreover, these firms claim copyright already protects their inventions and are afraid that patenting would raise legal costs.

By contrast, large information technology firms are in favour of a patent regime that would protect not only individual inventions that use computer programs but also the programs themselves. They argue that patents would encourage research spending and defend European inventions from US competition.

The version of the Directive which has now been rejected by the Parliament leant more in the direction of the large business lobby, and this probably caused its destruction.

The Foundation for a Free Information Infrastructure (FFII) described the decision as a "great victory for those who have campaigned to ensure that European innovation and competitiveness is protected from monopolisation of software functionalities and business methods."

"This result clearly shows that thorough analysis, genuinely concerned citizens and factual information have more impact than free ice-cream, boatloads of hired lobbyists and outsourcing threats," said Jonas Maebe, a spokesman for the FFII, referring to the intensive lobbying of MEPs by the larger companies.

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