Glyn Moody - European Unitary Patent Court and software patents


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Patents are not granted in Europe for computer programs "as such". But they are granted for the mysterious "computer-implemented inventions". Put that together with the imminent Unitary Patent Court that will allow companies in 25 EU countries to be sued using just a single patent, plus a shift from national jurisdictions to one overseen by the software patent-friendly European Patent Office, and you have a recipe for disaster. US-style patent trolls, which have cost the US economy hundreds of billions of dollars (details included) are probably coming to Europe soon.

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Glyn Moody - European Unitary Patent Court and software patents

  1. 1.    Danish software patents: to be or not to be? glyn moody
  2. 2.    inventive scarcity  patent law was framed in a world with few inventors, and few inventions  monopoly was offered  to attract foreign master craftsman  to make technical knowledge freely available after monopoly expired  to stimulate local industries  to encourage more inventions
  3. 3.    inventive abundance  today, we live in an abundance of inventors and invention, as the creaking patent system shows  in 2012, 469,000 patent applications filed with USPTO; 258,000 in Europe; 11,000 in Denmark  in March 2013, USPTO *granted* 6,000 patents in a single week  "30% of US patents are for things that have already been invented."
  4. 4.    benefits & costs of patents  Bessen, Neuhäusler, Turner and Williams (2014)  looked at costs and benefits to US companies of patents 1984-2009  total benefits - $385 billion  total costs (e.g. litigation) - $538 billion or $1,490 billion  order of magnitude: $1 trillion  Bessen et al. looked at how things developed over time
  5. 5.    something happened  source: Bessen et al. (2014)
  6. 6.    enter the patent trolls  Non-Practising Entities (NPEs)  typically buy patent portfolios  demand licences/threaten to sue Practising Entities (PE)  have no products, can't be sued  no independent invention defence  mount a defence in court costs $2- 5 million fees; most settle  1984-99: PE - 88%; NPE - 12%;  2000-09: PE - 39%; NPE - 61%
  7. 7.    super patent troll  Intellectual Ventures  founded by Nathan Myhrvold  owns 35,000 patents  raised $5.5 billion from Microsoft, Intel, Sony, Nokia, Apple, Google, Yahoo, American Express, Adobe, SAP, Nvidia, and eBay  computer-related patents cases  1984-99: PE - 17.2%; NPE - 5.4%  2000-09: PE - 12.1%; NPE - 32.6%
  8. 8.    software patents  obvious – Wang's overlapping frames/windows  trivial – Amazon's 1-click  ridiculously broad  E-Data: ”system for reproducing information in material objects at a point of sale location” (1985)  generic e-commerce sites sued  lack of well-defined boundaries  intentionally blurred by lawyers
  9. 9.    the key problem  abstract – patent of maths/idea  often impossible to code around  copyright is more appropriate: protects only the particular expression, not the general idea  uniquely, software is patentable *and* copyrightable - anomaly
  10. 10.    software patent infringement  software depends on thousands of components/"inventions"  more complex it becomes, more "inventions" it depends upon  patents are monopolies to exclude others from using an invention  if you can't code around it, you only need one "infringement" to block entire program/product
  11. 11.    patent litigation  source: Techdirt (2010)
  12. 12.    smartphones: just the start  2012: $20 billion spent on smartphone patent litigation and purchase in previous 2 years  2011: Apple & Google spent more on patents than on R&D  US smartphone patent thicket  2000 - 70,000 relevant patents  2012 - 250,000 relevant patents  smartphone is phone+computer  Internet of Things: thing+computer
  13. 13.    US software patents  “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.”  “some large company will patent some obvious thing” and use the patent to “take as much of our profits as they want.”  Bill Gates (1991)
  14. 14.    EU software patents  EPC (1973), Article 52:  "(1) any inventions, in all fields of technology, provided that they are new, involve an inventive step and are susceptible of industrial application."  the following in particular shall not be regarded as inventions:  "(2c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers"
  15. 15.    "as such"  "Paragraph 2 shall exclude the patentability of the subject- matter or activities referred to therein only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such."  "as such" opened up huge loophole for European software patents
  16. 16.    computer-implemented inventions (CII)  computer-implemented invention  "one which involves the use of a computer, computer network or other programmable apparatus, where one or more features are realised wholly or partly by means of a computer program."  in 2002 30,000 had already been issued in the EU
  17. 17.    *not* software patents  transforming file names (EP0800142)  tabbed software palettes (EP0689133)  generating buying incentives from cooking recipes (EP0756731)  pay per use (EP0538888)  online sales (EP0803105)  etc. etc. etc.
  18. 18.    European Directive on CII  Directive on the patentability of computer-implemented inventions (2002)  Denmark was against, ignored by European Commission  6 July 2005: European Parliament voted against it by 648 to 14  in favour: Microsoft, IBM, Hewlett-Packard and European Patent Office (EPO)
  19. 19.    European Patent Office  membership not coincident with EU  38 member states, not 28  supranational body enjoys extra- territoriality  offices are "inviolable": local authorities can only enter with permission of EPO President  funded through its services  vested interest in widening scope of patents, incl. plants, GMOs - and software patents
  20. 20.    Unitary Patent  EPO handles  European patents and European patents with unitary effect (Unitary Patents)  European patents can also add unitary effect afterwards - open floodgates of CII patents  national patents remain an option  race to the bottom  companies will choose whichever gives widest monopoly
  21. 21.    Unitary Patent Court (UPC)  Court of First Instance in France, Germany, UK  local courts in Denmark, Sweden  Mediation in Portugal, Slovenia  Court of Appeal in Luxembourg  EUCJ for "rulings on Union law"  key: national courts play no part  Spain, Italy, Bulgaria, Poland all have reservations
  22. 22.    Polish concerns  Unitary Patent fees may be higher than national ones  could lead to flood of foreign patents applying in Poland  more licence fees for Polish cos.  more litigation against Polish companies, in other EU courts  could see national patent court fading away; loss of autonomy, loss of national culture
  23. 23.    something rotten?  Unitary Patent will bring more, worse software patents to Denmark  Denmark will lose its autonomy: must accept EPO's patent rulings  Denmark sceptical about Directive on the patentability of CII  wise to be sceptical of UPC  adopt the Polish plan: before ratifying, wait and see if Unitary Patents are better
  24. 24.    that is the question @glynmoody on Twitter +glynmoody on Google+