From aoe@sslug.dk  Sat Nov 18 12:16:42 2000
Date: Sat, 18 Nov 2000 13:16:42 +0100
From: Anne stergaard aoe@sslug.dk
Subject: [Patents] English translation of SSLUG.DK's comments on the EPO Basic Proposal

English translation of SSLUG.DK's comments on the EPO Basic Proposal.

General remarks and remarks on Article 33 and Article 52.

Kind regards

Anne
Anne stergaard, [aoe@sslug.dk] http://www.sslug.dk


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Hearing of the Basic Proposal in regard to the
amendment of the European Patent Convention.

SSLUG's official answer to the Patent- og Varemrkestyrelsen
(the Danish Patent and Trademark Office, abbreviated PVS).

To
Patent- og Varemrkestyrelsen
Erhvervsministeriet
Helgeshj All 81
2630 Taastrup
E-mail: pvs@dkpto.dk
Kbenhavn, November 3rd 2000


In regards to the hearing about the Basic Proposal amendment
of the European Patent Convention. SSLUG's comments to the
Basic Proposal was requested by the PVS in a letter dated
October 24th 2000. Please note that the reply deadline
for this request was unacceptably short; the request could
have been made earlier.

Nonetheless, SSLUG's conclusion is as follows:

Our recommendations for the Danish government's position at
the European Patent Office (EPO) Diplomatic Conference in
Mnchen in November is as follows: The modification of Article
33 and 52 in the proposed amendment of the patent convention
should not be put to the vote. If, however, this amendment is
put to the vote, then we recommend a no vote on both modifications.

The question of European software patents has a profound
impact on the development and evolution of the information
society. A narrow economic assessment is not sufficient
to gauge the full impact of software patents. Thorough
and extensive investigations of the effect on many
different areas of society are required before the full
impact can be assessed in a satisfactory manner for
the society as a whole.

Please refer to comments made to the press by the
German Minister of Justice:
[http://www.spiegel.de/druckversion/0,1588,100120,00.html]
(in German)

The fact that the European Commission's Internal Market Directorate
October 19th initiated a hearing with a deadline December 15th
suggests that the decision regarding the present exclusion of
"computer programs" in Article 52 should be postponed, at least
until the official hearing period is concluded. A rash decision
should not be made during the EPO Diplomatic Conference in November.
[http://www.europa.eu.int/comm/internal_market/en/intprop/indprop/soften.p
df]

The 10-9 vote in the EPO Administrative Council in September
2000 shows, that there is no decisive majority among the
EU member states for removing the existing exception of
patents of "computer programs".

At the EPO Diplomatic Conference in November, each EU member
state will have one vote. However, it will be unacceptable
for a majority of the EU citizens if small states outside
the EU pushes the Basic Proposal through, especially if EU
member states such as Germany, France, England, Spain, Portugal
and the Scandinavian countries would prefer to take a more
cautious approach by awaiting the result of the EU-hearing,
and possibly making additional independent inquiries.

Do not forget that the EU should not be a cooperation of
wealthy companies, but should be the European Union of the
European citizens. The citizens of Europe should have their
say in defining the future development and evolution of the
information society. This should not be left to so-called
"independent reports" made by the patent lobby, such as the
Intellectual Property Institute (IPI).

See: Graham Lea from The Register. "Patent lobby
get in early for EU consultation process.
[http://www.theregister.co.uk/content/1/14305.html]

SSLUG made its view regarding the EPO amendment
known to commissioner Frits Bolkestein October 23th
2000. Please see
[http://petition.eurolinux.org/consultation/index_html?LANG=en]
or [http://www.sslug.dk/emailarkiv/itpolitik/2000_10/msg00442.html]

In the following we will elaborate our clear recommendation,
that especially Article 52 and Article 33 should not be modified
as it is proposed in the Basic Proposal amendment.

General remarks:

During the last half year an intensive debate has raged about the
value of patenting computer programs and algorithms. Patenting
computer programs are a relative recent practice. The major
software companies in the USA began acquiring patents as late as
1994.

Before 1994 companies were very successful without having to
obtain and use software patents. Microsoft is an example of a
successful company, that has made its progress primarily
without the usage of patents.

Before a decision is made about software patents it
is of the utmost importance that a thorough and neutral
inquiry is made. This inquiry should assess the effect
of software patents on the development of the information society.
And to what extent software patents will influence the prospects
of the citizens in making free use of and participating in
the future information society.

The Open Source community is against software patents.
Software patents will limit the possibility of creating
free and innovative applications. Applications that can be
used and improved by everybody. Concepts such as email
and the world wide web, and the software, that is used to
transmit email and web pages over the Internet, are
conceived and developed within the Open Source community.
Both email and the world wide web have created many new
opportunities for the democracy, for the individual citizen,
and for commercial interests.

Software patents will furthermore inhibit creation and
impede the growth of small innovative companies. Such
companies can not afford the expenses, associated with the
legal investigations to review their software against
possible violations of large companies patent portfolios.
Only a very small number of people read and understand the
issued patents. They are anything but easy reading--even
for professionals.

The Internet is a hotbed for small innovative companies
and the Internet economy has been estimated to be 10%
of the turnover of the Danish industry in the year 2000.
See "Danmark.com - Kortlgning af de danske internetpionerer"
(Danmark.com - Survey of the Danish Internet pioneers)
by PLS RAMBLL (page 18 - 21)
[http://www.pls-ramboll.com/DanmarkCom/index_forside.html]
(in Danish)

The rationale behind patents is to protect the inventor,
while furthering innovation and development by making
the inventions public after a certain period of time.
The question whether software patents further innovation
has mostly been examined by economists, and the inquiries
shows that software patents, at best, have no positive
effect on development.

EU - IPI-report:

This can be concluded from for instance the IPI-report,
which has been published by the EU-Commission, from
the report that that been commissioned by the French
administration. [http://www.pro-innovation.org] (in French),
and by various articles written by economists.

USA - the Bessen and Maskin report:

On the basis of a model of sequential innovation Dr.
James Bessen (Harvard) and Professor Eric Maskin (MIT)
conclude that software patents inhibits innovation.
See: "Sequential Innovation, Patents and Imitation",
[http://www.researchoninnovation.org/patent.pdf].

The effect of software patents can be measured
quantitatively by the change in the ratio between
expenditure for research and development and
proceeds from sales. The experiences from the
USA is that this measure remains constant for the
companies, who obtain the majority of the software
patents. The conclusion is that the financial support
for research and development, granted when a
software patent is issued, does not cause an
increase in proceeds.

Denmark - the PLS report:

In Denmark only a qualitative investigation has
been made about the attitude of companies towards
software patents - "Danmark.com - Kortlgning af
de danske internetpionerer" af PLS RAMBLL (pages 95+96).
[http://www.pls-ramboll.com/DanmarkCom/index_forside.html].

The conclusion with regards to software patents is unclear.
However, only 15% of the companies are dissatisfied with the
current situation, and only 11% intend to use the possibilities
for acquiring patents to a large or very large extent.

The report also mentions that the effect from any change
in the legislation regarding software patents will have
repercussions for companies that do not expect to acquire
or own patents. Because software patents creates the
possibility of parasitic e-squatter activities. An e-squatter
would get patents on unused, but potentially valuable
future e-business methods and/or e-technologies (in
analogy with the Internet Domain squatters that, for instance,
register a name such as www.windows95.com, and license
it to a company who would like to use that particular
domain name.)

What does the society gain by issuing patents?

The question of whether software patents are useful for
sharing information, is a completely different matter.
Again, it is our judgment, that the answer is no. If a
company owns a software patent, that patent will make
any incremental developments very difficult for all other
companies.

So frequently an exclusionary effect is observed instead,
where patented solutions are avoided - either because of
the strategic importance, or simply because of the increase
in the product price, caused by the licensing expenses
of a patent acquired by another and possibly competing
company.

Almost all software patents are patents of logical and
abstract principles (algorithms). Such an algorithm is in
principle no different from a baking recipe or a knitting
pattern, and can be implemented using software, a micro
chip or by manual labor.

Information regarding technical aspects can be shared in those
circumstances, where an algorithm is implemented in software,
simply by making the source code of that implementation public.
The source code implementing an algorithm correspond to a very
long verbose text explanation of that algorithm, just like a
picture corresponds to a thousand words.

Today certain companies make the source code of their
programs public. Some of these companies are privately owned
(for instance Sun Solaris), others are Open Source (for instance
Linux). The free and unhindered access to source code is of
great importance for users and developers.

Public source code does not only make it possible to share
technical knowledge and information between software developers,
but it also guarantees interoperativity, as secret formats and
functions can't be hidden in public available source code.

Public access to the source code also allows many developers to
find and correct bugs. These are among the reasons, why there
is such a very high level of innovation present within the
Open Source community.

The introduction of software patents creates a whole new situation.
If a company makes their source code public, they become exposed
to risks, as this enables competing companies to suggest alleged
violations or complicity in patent violations.

That alone removes many of the incentives a company might have
for making any source code public, which is detrimental for the
free sharing of knowledge and information. This is an aspect of
software patents, that has so far been ignored by the
EU-Commision's Internal Market Directorate.

We would like to draw attention to two major flaws in
the report, made public by the EU-Commission
(made by the IPI lobby organization):

   1. It fails to define "technical" and
   2. It fails to distinguish between EPO practice
      and national patent practice.

Innovations of a technical character are the central elements
of patent law. Only technical inventions should be patentable.
A broad consensus can probably be reached about this. However,
it requires a definition of "technical". A definition,  that is
currently missing in the IPI report made public by the EU.

One gets the impression, that EPO regards anything as "technical".

Originally "technical" had a very narrow definition, formulated
by Professor Kolle, a recognized legislative author, more than
23 years ago. Professor Kolle wrote, that regarding computer
programs as technical was very dangerous, as this would lead
to a slippery slope, where anything could be considered
technical. This is the essential problem of software patents.

If the current exception of software patents is removed from
Article 52 in the Mnchen Convention, then all software can be
considered "technical" consequently the word "technical" will
lose its meaning. In that case everything can be regarded
as being technical, the result will be a patent system without
limits as in the USA. A technical knitting pattern or a
technical baking recipe becomes possible.

The IPI report mentions different scenarios. It regards the
translation of the existing EPO practice into law as being
status quo. However, this is a mistake, as in many instances
the current EPO practice is in conflict with the national
practice. And national patent practice takes precedence over
EPO practice as this is mere jurisprudence not law as the
national practice.

The translation of the current EPO patent practice into
EU legislation will lead to a major change in the
European patent legislation and the current concept of
patents. This could be very detrimental for the
development of small and medium sized companies, which
is the majority of the innovative Internet companies
in Europe.

A scenario, which the IPI report fails to mention is the real
status quo; demanding that EPO act in accordance with the
existing legislation and national patent practice.

We should define guidelines:

Not only should the current exception of patents on
computer programs remain, but very precise guidelines should
be formulated by politicians and law experts, guidelines
that clarify the situation for the national patent offices and
the EPO. We regard this as the only way where the present
situation of a continued undermining of the Mnchen Convention
can be avoided. However, a problem that has to be solved is
to clearly define the meaning of "software".

The EPO has taken the initiative to amend the European
Patent Convention, because it is the wish of the EPO to
harmonize the legislation of the member countries, such
that the member states legislations mirrors the current
EPO practice.

Almost no rulings has been made by the courts in the USA or the
national courts in the EU member countries evaluating the
validity of software patents. However, it is not acceptable that
the EPO who should manage the existing law are proposing, that
their current patent practice, which is violating the existing
Convention, should be translated into a new convention.

We are against conferring more power to the EPO with its
closed and non-transparent administration. This seems to be
against the Danish beliefs of the inviability of the democracy,
and emphasis on openness and transparency in the public
administration.

It should also be noted that the EuroLinux-Alliance in just
a few months have collected in excess of 57.000 European
signatures (about 2500 of these are from Denmark). Signatures
from individuals and companies, who are all against software
patents. See: [http://petition.eurolinux.org]

Denmark - the IFO report:

A so-called independent inquiry was made by the Institute for
Opinionsanalyse (The Danish Institute for Opinion Analysis,
abbreviated IFO) in preparation of the EPO Diplomatic
Conference on behalf of the Patent- og Varemrkestyrelse
(the Danish Patent and Trademark Office). We would like
to draw attention to the remarks previously submitted
to the forum on the PVS home page.

See: PVS' debatforum
 [http://www.dkpto.dk/debat/default.asp]. *
 [http://www.dkpto.dk/debat/topic.asp?TOPIC_ID=14&FORUM_ID=5&CAT_ID=1] *
 [http://www.dkpto.dk/debat/topic.asp?TOPIC_ID=17&FORUM_ID=5&CAT_ID=1]
(in Danish)


We would especially like to emphasize the need of
more and unbiased inquiries, and call attention to
methodical flaws in the IFO report. These flaws biased
the report in favor of the PVS views and the patent
establishment, whereas the views of the software producers
and users, regarding software patents, were not properly
investigated.

Naturally the decision regarding software patents is
made by the Danish government, and not the PVS.
However, the question remains which information
is made available for the government as the basis for
an informed decision about the important issue of
software patents. Which is the reason why we, in our
hearing answer, emphasize the need of truly unbiased
inquiries.

Article 33

Besides paving the way for software patents, the EPO
amendment to the European Patent Convention includes a
proposal of conferring enhanced powers to the EPO's
Administrative Council. This makes it possible for the
Administrative Council to subsequently modify the treaty
without consultation, such as the conference in November 2000.
It is our impression, that the Administrative Council is
a kind of board of directors, which appoints a president
that is ultimately responsible.

"Article 33.
Competence of the Administrative Council in certain cases.
(1) The Administrative Council shall be competent to
      amend the following provisions of this Convention
      [... text left out ...] to bring them into line with an
      international treaty or European Community
      legislation on patents." (Page 28 of basic proposal).

In the accompanying text the modification is explained as
follows:

      "This new competence would allow any consensus already
      achieved at EU, WIPO or WTO level to be directly echoed
      in the EPC and would thus void having to hold revision
      conferences for the sole purpose of adapting the PC to
      texts already adopted by all or a majority of contracting
      states. (page 28 of Basic Proposal)

If the WTO, for instance, wants to allow software patents,
could the EPO Administrative Council modify the European
Patent Convention by a purely administrative decision?
We fear that member states, that will not introduce
software patents, could be forced to accept them on the
basis of the powers conferred to the EPO by article 33.

Article 52

If a vote is taken, and the existing exception of patents
on "computer programs" is removed from Article 52,
then it signals that software can be patented.
Today several member states has a practice, where
software is not patentable.

The patent practice we have observed in the USA is very
scary. There are numerous examples of incredibly
trivial patents. We refer to the examples listed in our article
in "Information" September 1st 2000. (English, Spanish, and
Sweedish translations of this article is available from
[http://www.sslug.dk/artikler/no_to_software_patents.html])

It would appear that everything can be patented. However,
court rulings on the validity of granted software patents
with regard to the current legislation is sparse.

The fact that prior art in the form of source code is not
examined when a software patent is granted, is in our
opinion a fundamental flaw in the patent examination
process. And it is our opinion, that it is impossible for
the patent office to take prior art in the form of Open
Source into consideration, when issuing a software patent.

Today large amounts of source code for applications
exist, such that it is not humanly possible to decide, if
a particular software construction has previously been
used. Many billions lines of source code exists within
the Open Source community, i.e. prior art, but in a form
that programmers can read and understand, but in a very
different form compared to the legalese found in a patent
application.

Patent offices, on the other hand, describe an idea or invention
in patent legalese, which makes it impossible for even experienced
programmers to recognize an idea from the written description.

Nor is it possible to precisely define the broadness of
applicability of a software patent, as a particular algorithm
can be used in many different applications. This make software
patents very different from traditional patents.

Software is special as the idea behind the software often
carries information. This is particular for software
inventions and this forces us to assess the impact on the
development of society, when a software invention is
patented. The incremental development of society is impeded,
if the patent of less advanced software, effectively prevents
the development and application of better and more effective
software.

We would also like to point out that software is a
combination of technique and representation of information.
It is not possible to distinguish between the intellectual
and technical aspects of a computer program. To allow
patents for a mixture of method and information would
be charting a course into a legal minefield.

On behalf of SSLUG
with kind regards

Peter Toft, President of SSLUG
Mosebakken 23
2670 Greve

SSLUG is an economically and politically independent
Linux user group with about 6000 members, SSLUG's
home page is located at http://www.sslug.dk
------------------------------------------------------------------
Kind regards

Anne
Anne stergaard, [aoe@sslug.dk] http://www.sslug.dk








