The difference between software patents and other patents
The issue is about the difference between
- patents on ideas which are applicable to programming computers and computerized machines in general, and
- patents on ideas which are only applicable to some very specific kinds of machines.
The idea behind the patents system is that when you have a good new idea for a new or improved kind of machine, you can get a patent on your idea and then explain the idea to investors. If you can convince the investors they can give you the capital which is necessary for starting to actually produce and sell the machines. The theory is that without the patent system it would be more likely for good ideas to never find an investor, because it is expensive to develop a new idea into a marketable product, but without the patent system, competitors might be able to quickly and relatively inexpensively imitate the product, and the resulting competition would drive prices down so quickly that the investors who invest into product development would not be able to recover their investment and derive a profit from it.
I don’t know to what extent this theory which justifies the patents system is true for inventions related to the kind of machines which have traditionally been subjected to patents (the category “2.” above), but this line of thinking is definitely totally wrong with respect to programs for general-purpose computers. In all competitive markets for computer software, all vendors are frantically working to develop new and improved products and innovate as quickly as possible. Hence investment into the development of new and improved products, the desired benefit of patents, is there quite independently of any software patents system.
However in the field of software, patents have a harmful effect on true innovation: Since the patent offices have only started granting software patents relatively recently, it is still possible to get most programming tasks done using only non-innovative, old, and hence non-patented ideas. Using new computer science ideas is dangerous and will be avoided whenever possible (unless a patent has been secured first), because otherwise the use of any relatively innovative ideas creates the risk of infringing some patent.
Hence software patents (the category of patents which I labeled “1.” above) are harmful rather than helpful for the economy.
In addition, if the EU recognizes software patents, that gives a lot of power to companies like IBM and Microsoft which file lots of such patents. If software patents are recognized, it can easily happen that one day it becomes impossible to write a program for performing any significant business purpose without first buying a patent license from IBM or Microsoft. These companies would then be able to charge arbitrary monopolistic prices for these patent licenses, and the entire European economy would be held hostage to these monopolistic practices. The risks are significant. For example, University of Zurich professor of applied economics Margit Osterloh stated at a Berlin conference on “Open Innovation” that when software patents come, “open source” would die.
The current unclear legal situation
Right now, software patents exist in the sense that the two most influential patent offices of the world (the U.S. Patent and Trademark Office and the European Patent Office) are granting software patents, but the legality of these software patents has not been assured. In the U.S., software patents have been “legalized” by a court decision which has not yet been reviewed by the U.S. Supreme Court. The European Patent Office is granting software patents even though paragraph 2 of article 52 of the “European Patent Convention”, through which the European Patent Office has been legally established, explicitly excludes “schemes, rules and methods for” programs for computers from patentability. If you read that legal text it its context, I think it is clear that it is intended to exclude software patents (in the sense of “1.” above), while allowing ideas for machines (which are tied to some specific purpose of the machine, and not applicable to general-purpose computers) to be patented even when a computer program is the essential part of the machine to which the patent refers. Unfortunately, the European Patent Office interprets the words “as such” in following paragraph 3
(3) The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.
in an absurd way which essentially results in rendering the exclusion of computer programs in paragraph 2 meaningless. (You can read the interpretation of the European Patent Office here. The fact that under this interpretation, the exclusion of computer programs from patentability has become meaningless is totally evident from the last paragraph of that page.)
Hence, even though software patents exist in the world today, their harmful effects are mitigated by the fact that if the holders of software patents “monetize” them too ruthlessly, the result of that could easily be lawsuits through which it is decided that software patents have no legal basis. However as soon as the EU has put software patents onto a clear legal basis, the holders of such software patents can be expected to go ahead and “monetize” their patents aggressively. That could easily kill all but the largest software-developing companies. (There are two reasons why software patents harm big software-developing companies less than they can harm smaller companies: First of all, big companies have sufficient capital that they can survive being found guilty of patent infringement from time to time. Secondly, all of the big software-developing companies file large numbers of software patent applications and then they cross-license these patents among themselves. In a 1991 challenges and strategy memo, Microsoft founder Bill Gates explained why this strategy is necessary with the words “If people had understood how patents would be granted when most of today’s ideas were invented, and had taken out patents, the industry would be at a complete standstill today.”)
Freedom of programming
Together with many other people I feel that the debate about software patents is not just a matter of economic policy, but also a matter of personal freedom. I should have the freedom to program my computer in any way I choose (as long as I do not program it in a way that would cause harm to anyone else), and I should have the freedom to collaborate with others in such programming projects. The development of valuable computer software happens not only in profit-oriented software businesses, but also in collaborative Free Software projects, through which popular software like the Firefox web-browser, the Apache web-server and the GNU/Linux computer operating system are being developed. Copyright law is not a problem for the Free Software movement because copyright law does not infringe the freedom right of being able to write computer programs and having the freedom to distribute them under a Free Software license. However, software patents are a huge problem, because patent law forbids to make use of any patented idea unless a license from the patent holder is obtained first.
We don’t have to tolerate programming errors in the EU political system!
Something went fundamentally wrong with how the software patents directive was handled in Brussels. I can live with the result that in the end the directive was buried and the EU Commission promised to not resurrect it again (in spite of this, software patents are again on the political agenda in Brussels), but I think that there is something at stake here which is more important than even the freedom of programming which is threatened by software patents.
In any democracy, there is a complicated system of interconnected organizations (including for example official institutions like parliaments as well as political parties, lobbying groups, the media, etc). The purpose of the whole system is to make political decisions according to the best interests and according to the desires of the citizens. In the case of the European Unions, it’s the interests and the desires of the citizens of the EU which should directly or indirectly determine the decisions which are made in Brussels. If a political system works properly, it functions as an information processing system in which the various interests and desires which citizens are expressing are analyzed, so that those demands which would benefit only a small minority at the expense of everyone else are rejected, and those proposals which are beneficial for society as a whole are accepted.
Of course, like any other information processing system, political decision-making systems do not always function according to the intended purpose. Sometimes this can be blamed on human error, but we are all human and we all make mistakes. Political decision-making systems need to be designed so that such errors will be detected and corrected before they cause significant harm. If this doesn’t happen, there’s something wrong with the political system, similar to how in computer software, “bugs” are programming errors which cause the program to function differently from how it should.
After pondering this matter for quite some time I have come to the conclusion that I don’t want to blame these malfunctions of political systems on the people who work in the various institutions and organizations which push in directions that I perceive as bad policy or even injustice. Rather, I want to take a constructive attitude and contribute towards getting these shortcomings of our political systems fixed.
Clearly the first step must be to identify those problems which should be given the highest priority. I want to focus initially on problems of the “banana republic” type, i.e. issues which do not only cause inefficiencies in political decision-making processes, but which allow foreign corporations to subvert the political decision-making system so that (unless the citizens engage in significant activism) political decisions will be made which are against the interests of the citizens but beneficial to one or more greedy foreign corporations. Of course the possibility of engaging in activism is an important part of the political system, but I view activism as an emergence measure to prevent bugs in the political system from having disastrous consequences. If in any area of public policy it becomes necessary to engage in activism, that in itself is a strong indication that the regular political decision-making systems have serious shortcomings which need to be addressed. The history of the “software patents directive” shows clearly that there are “banana republic” type problems with the political processes in Brussels.
Among this kind of problems, I want to focus initially on those which can be fixed relatively easily, without need for complicated renegotiation of EU treaties. For this reason, I believe that the EV50 issue is a good starting point. The “EV50″ awards are not well-known among the general public, but they are influential among the EU institutions in Brussels.