1. What are the main strengths and weaknesses of present Community innovation policy, compared with the efforts of our global competitors?

2. What should be the key elements of a successful future EU innovation policy, in particular of the forthcoming European Innovation Plan, to address our global challenges and to strengthen the EU's competitiveness and growth?

3. What should be done to increase the innovation capacity of SMEs [Small medium Enterprises]?

The Foundation for a Free Information Infrastructure e.V. encourages you to submit your own answers to

consultation at ffii.org

We would appreciate to publish your answers online.

Please also keep us informed how you would celebrate World Day against Software Patents (#ssp09).

September 24 is remembered as the day when our European Parliament expressed its dissatisfaction with software patentability in Europe (2) and endorsed legal clarifications to protect European digital markets from undesirable software patenting (3).

Background

A while ago Hartmut Pilch summarized the current status of software patents in Europe as follows:

In July 2005, after several failed attempts to legalise software patents in Europe, the patent establishment changed its strategy. Instead of explicitly seeking to sanction the patentability of software, they are now seeking to create a central European patent court, which would establish and enforce patentability rules in their favor, without any possibility of correction by competing courts or democratically elected legislators.

National patent specialists of the Council are working to set up a European Patent Court with loyal judges ("Unified Patent Litigation System (UPLS)") to avoid broad democratic deliberations on substantive patent law, and hand over EU powers to the European Patent Organisation (EPOrg).

Equally implicit are the objectives of the Swedish Presidency for an European Innovation Plan: "In a context of economic crisis, it is time to step up a gear and propose an ambitious European Innovation Plan, which puts society at its heart and is oriented alongside the main societal challenges." …"progress has not been so satisfactory in providing an adequate legal framework for the protection of Intellectual Property Rights, venture capital markets remain fragmented across the EU and the standardisation process needs to brought more in line with research and industry needs."(1)

More patenting, more enforcement tools for non-praticing entities ("trolls"), less competition/market access, standards as patent cartells for dominant market players from oversees rather than more "open standards" for a participatory digital society? What underlies the competetiveness jargon? For sure, European Digital Independence or protection of European software manufacturers from software patents and other legal risks/friction are not on the Swedish agenda for an "European Innovation Plan".

The three questions above are for the discussions of a Commission document (4) which claims "The European patent system is costly and fragmented, discouraging innovation compared to the US and Japan. The difference in patenting costs in comparison to these countries is significant and is not being reduced. It is high time to change this situation." The Patent specialists prepare a solution, a central European Patent Court.

[1] http://register.consilium.europa.eu/pdf/en/09/st13/st13079.en09.pdf
[2] http://press.ffii.org/Press%20releases/September%2024%20Is%20World%20Day%20Against%20Software%20Patents
[3] http://eupat.ffii.org/papri/europarl0309/amends05/juri0504/mgp/
[4] http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2009:0442:FIN:EN:PDF

Links

• Endorse the European Petition against Software Patenting: http://www.stopsoftwarepatents.eu
• Worldwide Stopsoftwarepatents.org website: http://www.stopsoftwarepatents.org
• Sign up to the Facebook cause: http://apps.facebook.com/causes/115578
• Follow the FFII on Twitter: http://www.twitter.com/ffii
• Upgrade supporter status to membership or terminate membership http://members.ffii.org
• Donations to the FFII e.V. http://www.ffii.org/Donations
• Software Patents discussions list: https://lists.ffii.org/mailman/listinfo/softwarepatents

Contact

Benjamin Henrion
FFII Brussels
+32-2-414 84 03
+32-484-566109
bhenrion at ffii.org
(French/English)

About the FFII

The FFII is a not-for-profit association active in over fifty countries, dedicated to the development of information goods for the public benefit, based on copyright, free competition, and open standards. More than 1000 members, 3,500 companies and 100,000 supporters have entrusted the FFII to act as their voice in public policy questions concerning exclusion rights (intellectual property) in data processing.

patent protection has promoted the free sharing of source code […] which has fueled the explosive growth of open source software development.

IBM also argue that the machine-or-tranformation test allow software to be patented, and that:

software patent protection provides significant economic, technological, and societal benefits.

IBM also "finds alarming decisions in the wake of Bilski concluding that software is excluded from patentable subject matter" making references to the BPAI decisions on Ex Parte Altman. IBM also says that they are "committed to ensuring that such technology [software] is and remains patentable"."

Here are some answers to the questions of the journalist, note that I did not touch on the subject of "Where is the European Parliament?" in the legislator section.

Q1: What particular element of the United Patent Litigation System (UPLS) proposal has initiated concern regarding software patents?

1. Centralisation

The United Patent Litigation System (UPLS) is heavily inspired from the European Patent Litigation Agreement (EPLA). They have a lot of similarities, inside the FFII we call the UPLS the EU-EPLA, which is the EPLA rebranded with a EU flag on top to make it look like an EU project.

The UPLS and EPLA have in common that they are both international treaties, and not EU regulation (directive, council framework decision, etc…) per se. It means that other countries that are non-EU (such as Turkey, Iceland or even the United States) could potentially join the treaty. The fact that it is not an EU piece of law means that the legislator won't be the European Parliament. As we saw with other international treaties such as ACTA, those treaties are typically negotiated behind closed doors, and the Parliaments (the European one or the nationals ones) typically do not have a say over their content. The UPLS is mainly a piece of legislation written by bureaucrats of the Commission and Government officials, with no input whatsoever from members of those parliaments.

The pro-software patent lobby, mainly represented by EICTA members (mainly Philips, Siemens, Alcatel, Nokia, Ericsson) or BSA (heavily driven by Microsoft) called members of the EPP party some days before the vote of failed software patent directive, asking them to vote for rejection, and push for a central patent court instead.

The divergence of opinions of several courts in Europe (mainly Germany and UK) was the argument the Commission used in 2002 to issue a directive proposal on the subject:

http://web.archive.org/web/20000818230031/www.freepatents.org/agree/images/pat1.png

With the elimination of different courts and creation of a central patent court for validity cases, the disparity of interpretations by different courts has been abolished.

This disparity is important, because it shows to the legislator where there is conflict of interpretation, and where the legislator should intervene to clarify.

2. Legislator

The problem with creating a international patent court between several countries is to balance it with a legislator, who would be competent to correct the behaviour of such court.

In the present state, the legislator would be the government officials signatory of the European Patent Convention, among which you find often that they belong to National Patent Offices.

This conflict of interests has been denounced during the strike of EPO examiners a while ago.

The influence of National Patent Office was also very important during the software patent directive in the Council, where the decision to support software patents was motly made by officials from National Patent Offices.

3. Trusted patent judges

Specialized patent judges have a tendency to favour the patentee, and in the case of the UPLS, they will be handpicked.

The main reason to avoid the creation of patent tribunals inside the ECJ legal system is to be able for the patent establishment to be able to handpick their judges.

Among the top patent judges in Europe, it is pretty easy to see which judges favour software patentability and which do not. The pro software patents will be a criteria for selecting judges. You can expect for example that the delegation of Germany will propose candidates that will favour a narrow and hair-stretched interpretation of the EPC, like the EPO technical board of appeal is doing with "software … as such", software is technical, further technical effect, and so on.

4. No judicial review by the ECJ

One of the main battle right now is the competence by the ECJ to review the behaviour of such court.

The UPLS is a seperate legal system from the EU legal system, and is not connected to it in any meaningfull way.

The US experience with specialized patent courts shows that those courts have interpreted the law broadly, they have notably lowered the threshold of obviousness, allowed software and business method patents, or granted automatic injunctions.

Rencently, the US Supreme Court is taking more and more case for review, in order to correct the abuse behaviour of such specialized patent courts. Such mecanism would not be available in the present draft of the UPLS. It is not surprising to hear that the patent establishment is heavily lobbying against it.

Q2: If software patents are enabled by the UPLS, what might be the effects on how computer programmers work? Please give examples

1. Higher total costs of litigation

The fact that a regional court can issue EU-wide injunctions to stop a potentially infringing product is quite a powerful instrument.

You can expect damages to be calculated in function of the size of the market, in this case the whole EU, plus other countries which will be part of the UPLS agreement.

This is basically what is happening in the United States, where district courts issue US-wide injunctions with US-wide damages.

The patent industry, when trying to justify the need for the UPLS, mostly never mention this.

EU-wide injunctions and damages will be an incentive for patent trolls to enforce their patents.

The other problem with the UPLS is the cost of the procedure. Right now, 90% of cases are not cross-border cases (in one country only), and the Commission and other UPLS proponents try to solve a problem encountered in 10% of cases.

The UPLS, with its system of specialized patent courts, and its international dimension, carries a high probability to raise the lawyer's fees for the majority of non-cross border disputes (90% of cases). Since the system will be fully specialized, patent lawyers will definitely raise their prices. This might be sensitive for Eastern countries, where the cost of litigation is pretty low, compared to western standards.

2. EU-wide injunctions to stop a software product

The main risk with such system is to have a very favourable regional court issuing quasi-automatic EU-wide injunctions in order to stop the diffusion of a suspected infringing product.

There has been recently a hearing in the European Parliament about the IPRED1 directive, where a french expert said french judges were now forced to issue injunctions in the case of "suspicion" of infringement, instead of "quasi-certainty" of infringement.

Right now, it is very complicated for a patentee to obtain an EU-wide injunction, because he has to go to every jurisdiction, and this has never happened up to now. The "lis pendens" mecanism has also provided that a court in one member state has to wait for the outcome of a case in another country if the same patent and the same facts are involved in a pending procedure.

A typical example is the RIM case in the US, where the Blackberry was very close to be wiped out of the US market with a US-wide injunction.

3. Out of court settlements for most of European players

There will be a strong pressure for most software players in Europe to bow to out-of court settlements. It can be expected that in most cases, the cost en entry to go to court will still be too high, especially for very small companies (1 to 10 employees), which represent the majority in the software sector.

The result of this will be the near obligation to sign unfavourable out-of-court settlements.

While large software companies has the means and the ability to defend themselves and go until the end of the court procedure, most of the european software players don't have the financial ressources nor the time to afford litigation in court. This is what we explained in the FFII's submission in July 2006 at the public hearing organised by the Commission on the consultation:

http://press.ffii.org/Press_releases/FFII_statement_given_at_EU_patent_policy_hearing

"[…] if you are an SME and accused of patent infringement, it becomes harder to defend yourself because litigation just became more expensive. And if you cannot defend yourself, you will be forced to license, even if the patent is weak or invalid."

4. Loss of legal certainty

It is merely impossible for software producers and users to know if the software they are producing/using/reusing is not infringing a patent. The whole software patent system makes the software development impossible, by creating a situation where producers and users are under a constant threat of being sued. It is not surprising to see that 85% of companies who were questionned in the issue in a survey in Germany fear that software patents might impede their work.

The copyright system provides a legal system where there are very few lawsuits, and when there might be infringement, those are most of time clear and sharp, and thus quickly resolved. This is the total opposite with software patents, since most of them are very broad and thus, which maximise the probability of infringement for the patentee.

Q3: Aside from the software patents element, what is your perspective on the UPLS as a whole?

I don't think it will fly. The main reasons are:

1. Location of the courts: member states don't agree for more then 30 years about where to locate the courts. The UPLS do not provide any indication where the courts will be located, and this is left out of the agreement because it is a too hot potato.

2. Lack of judicial review by the ECJ: I think several member states wants to see a judicial review by the ECJ, notably to avoid the risk of pro-patent courts that would not be "correctable" by a senior court. The US example is very telling about what the EU system would look like with the UPLS, without the fact that you would have a kind of US Supreme court to correct abusive behaviours.

3. Other legal problems, such as:
a. link with national constitutions: in most countries, parties have the right to appeal to a constitutional court, which won't be the case with UPLS cases; this is sensitive in the case where judges might be biaised in favour of one of the parties; you can think to the recent Piratebay case in Sweden where the judges are member of copyright lobby groups.
b. some constitutions of some member states require that the judge is of the nationality of such state: this is the case for France or Bulgaria for example.
c. languages: it is not given that citizens will be able to use their language to defend themselves.
d. impossibility for the EU to join the EPC: the amendments proposed by the Commission do not talk about how the EU (which is not a state as such) would have access to the International Court of Justice (which is only accessible to states member of the UN) in the Hague in case of disputes around the interpretation of the treaty.

Q4: What advantages and disadvantages can you foresee if the UPLS is implemented?

Advantages

1. EU-wide injunctions and damages for patent holders
2. EU-wide revocation of a patent for defendents
3. Possible invalidation of software patents EU-wide (not very likely, but possible)
4. High costs of litigation, good for the patentee to reach a deal out of court
5. Uniform caselaw developed for software and biotech patents
6. No diverging decisions over the same patent by multiple courts

Disadvantages

1. No real legislator to correct decisions of such international patent court
2. No divergence of decisions which might show to the legislator where to intervene
3. Possible validation of software patents EU-wide (very likely)
4. Possible forum-shopping with a pro-patent court located in Turkey, Latvia or somewhere else
5. More incentives for patentees to litigate and enforce their patents
6. Pro-patentee courts
7. Raise of the costs of litigation for most member states and stakeholders, due to the specialisation of the courts
8. Possible EU-wide injunctions to stop a product (think to the Blackberry removed at the scale of the EU)
9. No judicial review to correct the eventual deviance of such specialized courts
10. Potential higher costs of litigation for the patent holder

IBM respectfully submits that the gravamen of that precedent, as informed by the constitutional objective of "promot[ing] the Progress of Science and useful Arts," is that a patentable "process" within the meaning of § 101 is one that involves a technological contribution — namely, a process that either (i) is tied to a particular machine or apparatus, or (ii) causes transformation or reduction of an article to a different state or thing, and in either instance produces technologically beneficial results. This test sets forth a reasonable and balanced standard for subject matter eligibility.

This test is now being interpreted by several US courts and the Board of Patent Appeals and Interferences (BPAI) as allowing software patents (read the article "Bilski at the BPAI - What a Mess (Part 1)" on 271patent blog):

Claim: (Ex Parte Buhan) A method for storing content encrypted by control words in a receiver/decoder unit having a local storage unit and being connected to a security unit, said control words as well as a necessary right for the access to the content being transmitted in entitlement messages that can be decrypted by system keys, the method comprising …

BPAI: We note a receiver/decoder unit having a local storage unit is mentioned in the preamble, which storage unit is embodied in the first step of storing the encrypted content. We also note in the preamble a security unit, which is embodied in the second step of storing the system keys. Both the local storage unit and the security unit constitute tangible, solid, real-world machines, the former exemplified by a magnetic hard disk, and the latter by a smart card (See Fig. 1). We find these elements sufficient for satisfying the “particular machine” prong of the Bilski machine or transformation test, and thus find the Examiner erred in rejecting these method claims.

The Bilski test to validate software patents is an invention of IBM. Now let's guess what the new USPTO president David Kappos will defend at the US Supreme Court against Bilski. Conflict of interests, no one?

Bahr, Robert <vog.otpsu|rhaB.treboR#vog.otpsu|rhaB.treboR>
to gro.iiff|noirnehb#gro.iiff|noirnehb
date Mon, Jun 22, 2009 at 12:31 PM
subject Copy of the Bilski pending patent application

Dear Mr. Henrion,

I understand that you have a question as to why the USPTO's administrative file of the Bilski application is not available to the public. The application at issue in Bilski is not a published or patented application, and thus must be maintained in confidence under 35 USC 122(a). The Bilski application was the subject of an appeal to the US Court of Appeals for the Federal Circuit (Federal Circuit), and the relevant portions of the USPTO's administrative file of the Bilski application was filed with the Federal Circuit during this appeal. These portions of the USPTO's administrative file of the Bilski application are part of the Federal Circuit's records, and any member of the public may inspect the Federal Circuit's records. The USPTO's administrative file for the Bilski application, however, is not open to public inspection. This is explained at MPEP 1216.01.

I hope you find this information useful

Regards,

Robert W. Bahr
Senior Patent Counsel
Office of the Deputy Commissioner
for Patent Examination Policy

For those who wants to submit an Amicus Brief to the US Supreme Court, this is nearly mission impossible without the pending patent application. Some blog mention claim 1, but this is not enough to understand what the patent is about:

1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of: (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate correspoding to a risk postion of said consumer; (b) identifying … (c) initiating a series of transactions between said commodity provider and…

The industry-based driving force behind the EPLA comes from the pro-software patent group as a way to ensuring that their software or potential software patents are fully enforceable across Europe.

Alberto Barrionuevo, CEO of the small spanish software company OpenTIA and ex-president of the FFII, had submitted an amicus brief to the Enlarged Board of Appeal in spanish. The European Patent Office has notified him that they are refusing his letter because it was not written in one of the 3 official languages of the EPO (French, English or German):

From: DG3registry_eba <gro.ope|abe_yrtsiger3gd#gro.ope|abe_yrtsiger3gd>
To: Alberto BARRIONUEVO <se.aitnepo|oirraba#se.aitnepo|oirraba>
Date: Thu, 7 May 2009 15:10:18 +0200
Subject: Re: Amicus Curiae Brief contribution to referral G03/08

Dear Sirs,

Any written statement filed to our proceedings should be in one of the official languages of the EPO = German, Enlish or French.
To ensure that your statement can be given due consideration you are kindly requested to file it in one of the these languages.

You may file it as a signed pdf.file or by signed fax.

Best regards
W. Roepstorff
Registrar

As of today, the letter is still available in the online register of the EPO, see also a copy of it in PDF or HTML.

Why discriminate citizens in function of their language? Basically Spain should go out of the European Patent Convention if its citizens cannot talk to the authority granting patents for their territory.

The EPO has tried automatic translation for spanish, and a while ago, I submitted a link to a spanish automated translation of the Amazon Gift patent to the es-parl discussion list (Es-parl — Coordinación y debate anti-patentes en España). Here are some of the results:

[es-parl] Automated translation of Amazon 1-click patent from english to spanish
Benjamin Henrion bh en udev.org
Mie Nov 12 14:49:48 CET 2008

Hi,

Automated translation is proposed by the EPO as the magic bullet to
solve the Community Patent problem.

Can you tell me if this looks like comprehensible spanish:

http://epo.worldlingo.com/wl/epo/epo.html?SEED=EP0927945&SEED_FORMAT=E&ACTION=Claims&OPS=ops.espacenet.com&LOCALE=en_V3&TRGLANG=ES&T=1

It is the automated translation of the Amazon 1-click patent:

http://v3.espacenet.com/publicationDetails/claims?CC=EP&NR=0927945&KC=&FT=E

which is currently being appealed at the EPO TBA.

Best,

—
Benjamin Henrion <bhenrion at ffii.org>
FFII Brussels - +32-484-566109 - +32-2-4148403

Here is the answer I got:

Hu Benjamin,

Definitely the text is not compressible in Spanish.

Best regards,

Javier

It is time for EU citizens to put some sand into the EPO machine and challenge its accessibility in front of constitutional courts, or courts of human rights. Such language discrimination cannot exist at the time we want to build a patent system for Europe.

If such basic human rights considerations cannot be satisfied, some people will take care of the future of the EPO:

The European Patent Office is a corrupt malicious organisation which should not exist. (Applauds)

At the next Competitiveness meeting of May 28-29, the Council of Ministers will request a legal opinion to the ECJ about potential conflicts of the UPLS with the EU treaties. The current draft mentions that the ultimate power to interpret patent law will rest with hand-picked patent judges.

Hartmut Pilch, founder of the Foundation for a Free Information Infrastructure (FFII) predicted this already in 2007: "I don't think EU joining European Patent Convention (EPC) would automatically mean that ECJ can intervene on substantive patent law questions. If there is a ECJ above the European Patent Judiciary (EPJ), then probably only for very special questions relating to areas outside patent law, such as EU treaties, and it would not be accessible to the litigating parties but only to the EPJ itself."

Benjamin Henrion, President of the FFII and leader of its litigation working group, says: "A central patent court forbidding any petition right for review to the ECJ means the patent court has the last word over software patents. The Agreement is drafted in a way to avoid the ECJ intervention on substantive patent law."

Brian Kahin, senior fellow of the Computer & Communications Industry Association, says: "Given the U.S. experience with the Court of Appeals for the Federal Circuit and the many areas where the Supreme Court has recently stepped in to provide balance, it is clear that the European Court of Justice needs to be able to oversee the evolution of patent law. Otherwise, there is constant danger that a self-interested patent community will successfully press to expand the scope, volume, and power of the patent system."

The UPLS carries the risk that specialized patent courts will have the last word for important questions such as limits of patentability. This is typically what happens in Germany where the Senates of the Federal Patent Court should refer basic questions to the Supreme Court but do not do this.

Benjamin Henrion concludes: "This specialized patent court will be shielded against external intervention and won't be an EU institution. Those patent judges want to have the last word over European patent law."

Background

The proposed United Patent Litigation System (UPLS) is an international treaty which is heavily inspired by the now defunct European Patent Litigation Agreement (EPLA).

In 2005, large companies asked the European Parliament to drop the software patent directive, and push for a central patent court instead.

The German Federal Ministry of Economics and Technology clarified that the validation of software patents goes via central caselaw: "We must moreover continue to attempt to harmonise the practise of granting patents for computer-implemented inventions at the European level. This is to be attempted by a common European patent court system (EPLA) in which the member states can voluntarily participate. Thereby a unified procedure and legal certainty are achieved."

The current UPLS draft is shielded against ECJ intervention in software patents and substantive patent law. The centralised patent court won't be an EU institution.

The Court of Justice of the European Communities would only "rule on preliminary questions asked by the court structure established in the framework of the Unified Patent Litigation System, […] on the interpretation of EC law and on the validity and interpretation of acts of the institutions of the Community." The UPLS itself would not be a "institution of the Community" (the EPO is not either) and thus not fall under ECJ jurisdiction.

On the other side of the Atlantic, specialized patent courts in the United States (CAFC) have watered down the patentability requirements, allowing software patents, business method patents and lowered the threshold for patent quality. The poster child of the lowering quality is the Dembiczak case, where the specialized patent court allowed a patent over a plastic bag with a pumpkin drawing. The Supreme Court judges overturned the patent, heavily criticising the obviousness threshold of the specialized patent court: "This is gobbledygook. It really is, it's irrational. It's worse than meaningless."

Links

• Council: European And Community Patents Court Draft Agreement
• European Commission: Recommendation to the Council to authorise the Commission to open negotiations on a Unified Patent Litigation System
• European Commission: Next steps for creation of unified patent litigation system
• FFII EPLA WG: Hartmut Pilch's 2007 vision on EU-EPLA and software patents
• SSLUG: TBA -> EBA EPC 112!
• Forexpros: EU takes key step towards bloc-wide patent system
• FFII: Single EU patent law good for US giants, bad for small EU firms
• NoSoftwarePatents.com: Round 3
• Eupaco2: John Duffy: Optimal Centralization in Patent Institutions
• StopSoftwarePatents: "Council seeks to legalise software patents with the Community Patent" says French expert
• BMWI: Patente auf computerimplementierte Erfindungen
• FFII EPLA WG: The EPLA plan for software patents
• EuropeanVoice: Czechs call for unity on patent legislation
• Permanent link to this press release

Contact

Benjamin Henrion
FFII Brussels
+32-2-414 84 03
+32-484-566109
gro.iiff|noirnehb#gro.iiff|noirnehb
(French/English)

About the FFII

The FFII is a not-for-profit association active in over fifty countries, dedicated to the development of information goods for the public benefit, based on copyright, free competition, and open standards. More than 1000 members, 3,500 companies and 100,000 supporters have entrusted the FFII to act as their voice in public policy questions concerning exclusion rights in data processing.

The European Commission is organising a conference dedicated to "Make IPR work for SMEs" next Monday in Brussels. You can submit your questions by email to me for next Monday on how to "Make software patents work for SMEs". I might be interested to submit them.

Here is the mail sent to participants:

from ue.aporue.ce|FNOC-RPI-TSEB-RTNE#ue.aporue.ce|FNOC-RPI-TSEB-RTNE
date Wed, Apr 22, 2009 at 1:11 PM
subject Welcome to the Conference Making IPR work for SMEs

Dear Conference Registrant,

We look forward to welcoming you on next Monday, 27 April 2009, to the conference "Making IPR work for SMEs".

Attached please find form which you can use to submit questions to the conference speakers. These forms will be collected periodically in the conference room, so please feel free to prepare questions now and during the conference.

«Template for Questions to the Panels 220409.doc»

For any further details, including the up to date programme of the conference, please see the conference website:
http://ec.europa.eu/enterprise/enterprise_policy/industry/ipr_conference.htm

Best regards,

The Conference Team

European Commission
Enterprise Directorate General
Industrial Policy and Economic Reforms Directorate
Development of Industrial Policy Unit
Tel. : + 32 (0)2-29.53611
Fax. : + 32 (0)2-29.98020
mail: ue.aporue.ce|FNOC-RPI-TSEB-RTNE#ue.aporue.ce|FNOC-RPI-TSEB-RTNE

Here is the form:

Conference Making IPR work for SMEs
Brussels, Monday, 27 April 2009
Venue: Charlemagne Building (Salle Alcide de Gasperi), 170 Rue de la Loi (Wetstraat)

First Name:
Last Name:
From (City/Country):
Working for/Interested in/Affiliated to/
E-mail Address:
My Question is:
I want to put my question to (name(s) of speaker(s) or panellist(s)):

The conference might be biaised in favour of patent holders who needs more tools to enforce their software patents:

Intellectual Property Rights (IPR) can be a vital competitive advantage for small and medium sized European businesses. Their competitiveness, creativity and innovative abilities are threatened by counterfeiting, piracy and uncertainty about enforcing their rights.

Small and medium enterprises are particularly vulnerable to these risks. They often lack resources and knowledge to act against fake products or are convinced it is impossible to do so.

This kind of conference remembers me the intervention of a guy in the audience at a patent conference organised by CGPME, where he said that the patent system was a burden for SMEs (too hard to navigate, SMEs don't understand it).

In the context of the Small Business Act, you will find nothing about those problems, because the patent lobby managed to put some bits in there in order to favour the applicant. They fail to mention the burden on all those companies that have to deviate a significant part of their R&D budget in order to comply with the claims of others.

Here is what he said:

So we have here two different areas attacked and threatened by patents.
It's no accident.
The European Patent Office is a corrupt malicious organisation which should not exist. (Applauds)
The European Patent Office is working for the people who wants to crush everyone's life with monopolies.
It is their tool, pure and simple.
By all means try to make it start respecting your freedom.
By all means try to get rid of plant patents, and animal patents and software patents.
But if the European Patent Office stands in your way, get rid of it too.
It's time to stop treating every european institution as if is was sacred and unquestionable.
Every institution, every government deserve only as much respect as it earns.
The idea of the European Union was a beautiful idea. The practical implementation tries to impose a new constitution by pretending it's not a constitution.
They are gonna let me tell you any more.
Happy hacking!

Brussels & Munich, 1st April 2009 — After years of confidential work, the European Patent Office (EPO) and the Foundation for a Free Information Infrastructure (FFII) today announce a radical way to improve software patent quality: Binaries-As-Prior-Art, or BAPA. BAPA combines a database of billions of compiled computer programs ("binaries") with a powerful Cloud search engine that can find any invention in microseconds.

EPO President Alison Brimelow explains how BAPA will raise patent quality: "rather than searching hand-written prior art, examiners can now search fast because we licensed Amazon's One-click technology. You upload the patent application and BAPA shows whether or not an invention is new."

FFII Chief Engineer B.U. Scotty explains how it works: "we use a Just-In-Time Lisp expression parser that maps the binary object code into reverse polish notation. Using a Beowulf cluster of Babelfish we instantly machine translate the Polish into English, German or French, and finally Lojban. We use a fuzzy text mapping algorithm to compare with the patent claim. If the match score is less than 50%, we consider the invention to be original. If the Babelfish turn purple, we consider it to be inventive. When the computer beeps, that is an indication of a technical effect!"

Scotty explains why BAPA is so complex: "every other possible technique was patented. But they forgot to patent, 'and do it in Polish!'".

Brimelow is happy with the FFII-EPO collaboration: "after many years of fighting over whether or not software can be patented, we're happy to say that we can now work with legal certainty. With our superior BAPA system we can accept or deny patent applications directly over the Web. We take all credit cards!"

Benjamin Henrion, President of the FFII, comments: "I think BAPA is a milestone. This puts the EPO way ahead of any technology the Americans can develop. They have Google, but we have Poland. Thank you, Poland!"

Not everyone is pleased. The European Commission was told that project BAPA was about machine translation of community patents. The Free Patent Association (FPA), which advocates Corel/GNU/Linux and the new GPLv4, still maintains that software patents are a "like land mines to programmers" according to its chairman, Richard Stallman. And Pieter Hintjens, former President of the FFII, complains: "all these people are claiming they invented BAPA! It was my idea, years ago, and but Red Hat patented the idea and sold it to the EPO."

Industry likes the idea. IBM's John B. Wise, Community and Patents Sourcerer for EMEA says, "IBM has always thought it was bad to blame overworked patent examiners for poor patents. Now we can blame the machines and lousy software!" IBM recently filed its millionth software patent, on "A system and method for representing discrete numerical values using two opposing bits".

BAPA has already collected the full contents of the Pirate Bay for its prior art database. The public can submit binaries as prior art on the following website: http://binariesaspriorart.org. Commodore-64 video games are particularly welcome.

Background Information

Software is available in three main forms: as "notes-on-the-back-of-a- manilla-envelope" (NOTBOME) made by non-technical engineers who would not know a black-red binary tree from a banana tree, and as "coffee", which when drunk by programmers, solidifies into a concrete usable third form called "binary code". It is well known that binary code holds the essential, computer-verified contents of entire history of software technology. Furthermore, unlike "source code", which is an encrypted and unreadable form of binary code, binary code is not often protected by copyright, and thus a perfect match for the patent system.

Advanced software factories can turn NOTBOME and coffee directly into binary code, with no intervening source code. This proves that the only valid form of prior art is the pure, computer-validated binary.

Earlier versions of BAPA were called "CAPA" and "NOTBOMEPA", neither of which produced great results.

Links

• Binaries as Prior Art: http://binariesaspriorart.org
• Binaries (or Object File): http://en.wikipedia.org/wiki/Object_file
• Permanent link to this press release http://press.ffii.org/Press_releases/FFII_and_EPO_announce_%22Binaries-As-Prior-Art%22

Contact

Benjamin Henrion
FFII Brussels
+32-2-414 84 03
+32-484-566109
gro.iiff|noirnehb#gro.iiff|noirnehb
(French/English)

About the FFII

The FFII is a not-for-profit association active in over fifty countries, dedicated to the development of information goods for the public benefit, based on copyright, free competition, and open standards. More than 850 members, 3,500 companies and 100,000 supporters have entrusted the FFII to act as their voice in public policy questions concerning exclusion rights (intellectual property) in data processing.

The IPR system also needs to be improved by the creation of a Community patent for innovative ICT companies to protect their inventions in the single market.

It is pretty clear that the patent lobby seeks to validate software patents via a central patent court. Large companies were rejecting the software patent directive, aiming to validate software patents via the Community Patent and skip the debate about patentable subject matter:

NSP: Does the Community Patent restart the debate over patents for computer-implemented inventions (software patents)? Why or why not?

Pilch: It restarts the push for software patents, without a debate.[…] The Community Patent plan doesn't even mention the subject of software, although, make no mistake about it, software patentability is one of the main drivers of these plans.

Of the 20 patent lawsuits filed against Google since late 2007, all but two have been filed by plaintiffs who don’t make or sell any real product or service — in other words, by non-practicing entities or “patent trolls.”

Google goes on by clarifying that in lots of cases, the patents are "invented" by the patent lawyers themselves:

We've also noticed a more disturbing trend: in many of these cases, the patents being asserted against us are owned by — and in a surprising number of cases, are even “invented” by — patent lawyers themselves.

The American Congress is proposing a legislation in the US that would reduce the amount of damages, but the reader will note that it won't prevent Google being sued by patent trolls, so chances to get rid of software patent litigation is not ready to happen:

All too often, Google and other companies face mounting legal costs to defend against questionable patent claims from speculators gaming the system to reap windfall profits. And those lawsuits make it more difficult and costly to introduce the next revolutionary product.

It is to be expected that the companies operating in the US will still continue to be sued in the next years if a more serious reform about substantive patent law is not made. It seems that Congress does not want to touch the Bilski case, probably because the large companies defining the law in Washington wants the advantages of software patents without the disadvantages. This is unfortunately impossible.

Comme dans toute organisation polycéphale, l'incohérence est de mise. Par exemple, le Parlement avait voté contre la brevetabilité logicielle en 2005, avec le soutien d'une partie de la Commission (la direction de la Société de l'Information), et contre une autre partie de la Commission (la direction générale du Marché Intérieur dirigée par le commissaire Mac Creevy, très critiqué pour ses positions extrêmement favorables aux grands groupes privés) ainsi que le Conseil (dans lequel règnent les "experts" missionnés par les offices de brevets nationaux). En 2009, rien n'a changé. Le Conseil et une partie de la Commission cherchent à légaliser les brevets logiciels illégalement accordés par l'Office Européen des Brevets (une institution extra-communautaire hors de tout contrôle) au travers de la mise en œuvre du "brevet communautaire" et des règles de brevetabilité qui l'accompagneraient.

Translation in english:

Like in any polycephalic organisation, incoherence happens. For example, the Parliament has voted against the software patent directive in 2005, with the support of a part of the Commission (Directorate General Information Society), and against another part of the Commission (Directorate General Internal Market lead by Commissioner Mc Creevy, heavily criticised for his positions extremely favourable to large private groups) and the Council (in which rules the "experts" of National Patent Offices). In 2009, nothing has changed. The Council and a part of the Commission seeks to legalise software patents illegaly granted by the European Patent Office (an extra-community institution outside of any control) trough the implementation of the "Community Patent" and the substantive patent rules that goes with it.

The ultimate goal of this move is to create central caselaw on software patents by a specialized patent court in Europe. With the recent caselaw of Symbian using ambiguous terms like "technical", it is highly probable that patent judges in a central validity court won't scrap all the software patents illegaly granted by the EPO:

The Court of Appeal in UK has allowed a software patent, possibly setting an important legal precedent. Last week's decision by the Court of Appeal has upheld a previous decision by the High Court that the Intellectual Property Office or IPO's refusal of a patent application by Symbian was not correct in law. The application was for a patent for an indexing system for library functions in an operating system. Accordingly, in considering the "technical effect" of the invention by smartphone OS vendor Symbian, the patent examiner had displayed an excessively "narrow" point of view. The Court of Appeal, under the leadership of Lord Justice Sir Robin Jacob, has thus wished to minimise somewhat the differences due to the so-called "absurd" discrepancies between the IPO and the EPO – the European Patent Office (EPO). The Court also wants to harmonise patenting practice in England and Wales with that on the Continent.

Experts at the European Commission are already saying that the link between this central patent court and the ECJ is important for groups like FFII to have hope in having the caselaw of this future court reviewed by an independent court. There were also proposals in the register of documents in the Council to make the Court of First Instance of the ECJ also specialized in patent law. Mr Judge Jacob is also a very good candidate to be part of the Central Patent Court, he is foreseen as the driver of the bus where all the other specialized patent judges in Europe will sit.

Mr Hartmut Pilch has already said after the rejection of the software patent directive, which was requested by EICTA and other pro-software patent lobby, that the debate will move to the Community Patent:

Question: Does the Community Patent restart the debate over patents for computer-implemented inventions (software patents)? Why or why not?

Answer: Pilch: It restarts the push for software patents, without a debate.[…] The Community Patent plan doesn't even mention the subject of software, although, make no mistake about it, software patentability is one of the main drivers of these plans.

A press article issued by Out-law just after the rejection of the directive also mentions the Community Patent as the next vehicule to validate software patents:

According to the Parliament, the Community Patent has been mentioned by a number of MEPs as the appropriate legislative instrument to address the issue of software patentability.

The report repeatedly calls for the creation of a centralised European patent judiciary and above all, a Community patent to do away with some of the most obvious shortcomings of the present European patent system, a stance which the EPO wholeheartedly endorses. Moreover, the EPO welcomes the report as it provides further insight into applicant behaviour, bringing support to some of the Office's initiatives intending to safeguard or increase the quality of European patents, such as "Raising the bar", to introduce stricter rules related to the filing of divisional applications.

Despite the fact that the EPO is only an executive institution, it has also lobbying powers when it comes to define the kind of patent law that the society needs.

Maybe someone should invite the EPO to oppose the creation of a central patent court, as it would validate their infamous "technical effect" interpretation of the European Patent Convention?:

The current EPO examination guidelines specify that a computer program is patentable subject matter if, when executed on a computer, it produces a further technical effect which goes beyond the normal physical interactions between the program and the computer. This meaningless phrase has been introduced in 1998 by decision T1173/97 of the Boards of Appeal of the European Patent Office (EPO) with the intention to circumvent the European Patent Convention's restrictions on software patenting, by suggesting a far-fetched interpretation of the phrase "as such". Since then, the EPO has been issuing large numbers of software patents, while unsuccessful attempts have also been made to include the notion of further technical effect in laws such as the software patent directive.

According to Staff Union of the European Patent Office (SUEPO), Examiners of the European Patent Office have recently invaded one of the secret meetings of the Administrative Council with chocolate coins, pointing to the conflict of interests between the National Patent Offices (NPOs) and their appetite of "more patents, more money":

The EPO staff are trying to make their voice heard by a series of actions against the undermining of the European Patent Organisation by its own governing body (see below).
On October 22nd, some 500 staff took part in a demonstration during a meeting of the Administrative Council, symbolically showering delegates with chocolate coins to signify that the member states are solely interested in milking the organisation as a cash cow.

The EPO examiners were also demonstrating in September in Brussels.

Mr Thierry Sueur, a patent agent from Air Liquide and lobbyist for large corporations inside Business Europe (ex-UNICE), is pointing at the cash cow problem in an Interview for the Future (p292):

Within the political sphere, there are several problems to be solved: in the biotech field, in the software field, the Community patent. However, I am convinced that the way the EPO is managed today (by the Administrative Council) is such that it will mean either the death of the EPO or its transformation into a cash machine.

Protect American Intellectual Property at Home: Intellectual property is to the digital age what physical goods were to the industrial age. Barack Obama believes we need to update and reform our copyright and patent systems to promote civic discourse, innovation and investment while ensuring that intellectual property owners are fairly treated.

Reform the Patent System: A system that produces timely, high-quality patents is essential for global competitiveness in the 21st century. By improving predictability and clarity in our patent system, we will help foster an environment that encourages innovation. Giving the Patent and Trademark Office (PTO) the resources to improve patent quality and opening up the patent process to citizen review will reduce the uncertainty and wasteful litigation that is currently a significant drag on innovation. As president, Barack Obama will ensure that our patent laws protect legitimate rights while not stifling innovation and collaboration.

According to a leaked document authored by the European Commission DG Trade, the secret ACTA treaty will reopen the debate on the liabilities of Internet Service Providers (ISPs) over content, as well as trying to achieve criminal sanctions in the EU under the French Presidency Sarkozy. France has already criminal sanctions for file sharers, and a law project on file sharing and "graduated response" has been recently passed the Senate.

Here are the more relevant parts:

ACTA will also create a new international benchmark for legal frameworks on IPR enforcement, whilst fully respecting civil liberties and the rights of consumers, as is the case for the Community acquis. It is critical to have a strong and modern legal framework ­as is the case in the EU- so that law enforcement agencies, the judiciary, and private citizens have the most up-to-date tools necessary to effectively bring counterfeiters to justice. Areas for possible provisions include:

[…]

• Civil enforcement : e.g. the mechanisms available in EU Enforcement Directive of 2004, such as the availability of preliminary measures, preservation of evidence, damages and legal fees and costs;
• Criminal enforcement : It would be key to the effectiveness of ACTA as an enforcement instrument for it to contain clear standards for deterrent and efficient criminal action against counterfeit. There is no EU legislation in this area yet. The Commission has proposed a Directive harmonising the treatment of criminal IP infringements at EU level in 2006, but it has not been adopted so far. This means that The EU Presidency, on behalf of its Member States will coordinate this area of the negotiation and, to a large extent, define what kind of measures the EU is ready to undertake;
• Internet distribution and information technology - e.g. mechanisms available in EU E-commerce Directive of 2000, such as a definition of the responsibility of internet service providers regarding IP infringing content.

The Members of the EU are also very keen on copying provisions of the EU Enforcement Directive of 2004, which allows notably to preventively freeze bank accounts of normal businesses in case of "suspicion" of infringement.

The treaty would apply the same harsh sanctions for all IP infringements, whether they are patents or plant variety rights. ACTA might be a fuel for patent trolls, since it could lower down the threshold level for obtaining injunctions and freezing bank accounts of the suspected infringer. This is exactly what happened in the Italy recently just after the implementation in italian law of the IPRED1 directive with the Philips Vs Princo case. In this case the bank accounts of the Italian trader were frozen in advance, even before a court decision was reached:

‘Piracy’ provisions under the Enforcement Directive and patent infringement
Laura Orlando (Trevisan & Cuonzo Avvocati)

Princo Corporation, Ltd v Koninklijke Philips Electronics, Docket no. 3213/07, Court of Genoa, 18 April 2007

The Court of Genoa has issued its first decision on the application to patent infringement of the remedies introduced by Directive 2004/48 on the Enforcement of Intellectual Property Rights, dismissing the appeal filed by Princo against a precautionary seizure order over its movable and immovable property issued by a judge of the Genoa IP Chamber on the grounds that the patent infringement was committed intentionally and on a commercial scale.

During a hearing in the European Parliament on the revision of the directive, a french expert confessed that the directive was problematic in France and lowered down the threshold to obtain an injunction from "quasi-certainty of infringement" to "suspicion of infringement". He said that current judges tends to keep the old way of issuing injunctions only when they have quasi-certainty, but this could change with new judges.

This lowering of barriers to obtain injunctions for patents has been highlighted in an FFII's analysis in the problems of the IPRED1 directive:

Overheated protection attracts trolls

The broad and abstract nature of software patents makes infringement unavoidable, and most software systems unavoidably infringe on multiple patents. All companies ignore software patents to some extent, simply because every single useful program you write infringes on several patents.

The IPRED (1) Directive gave patent litigants great powers to harass software producers, seize documents and freeze assets. Harsh measures which are justified against commercial piracy enterprises, not against legitimate entrepreneurs. One could say that the Directive enhances legal security for right owners by introducing new legal insecurity for competitors.

Software entrepreneurs may well be careful in using these measures, the competitors could retaliate. But there is no way to retaliate against patent trolls. These companies do not produce anything, acquire patents at low cost for instance by buying bankrupted companies. Their patents tend to have broad claims on trivial methods so that infringement is unavoidable. While the Directive is meant to fight piracy, it gives trolls the means to extortionate entrepreneurs. Patents should never be under the scope of anti-piracy measures.

The provisions mentioned in the ACTA document resemble the IPRED (1) Directive. While "exporting" an adopted Directive may seem uncontroversial, in this case it is not, since IPRED (1) is disproportional. The fact the Community made a mistake before does not make it legitimate to export this Directive – the Community's actions have to be proportional.

It is clear that DG Trade and other delegations of Member States are pushing for provisions against "patent pirates" inside ACTA.

With the export of low injunction levels to the United States, we might have a fireworks of patent lawsuits in the US soon. The US Supreme Court made the threshold higher to issue injunctions in the eBay vs MerckExchange case (a patent troll which had a trivial patent on the "Buy Now!" feature), see the Forbes article "Supreme Court Buries Patent Trolls":

The online auction house had petitioned the Supreme Court to review the practice of automatically issuing a permanent injunction whenever a patent was found valid and infringed, arguing that the rigid standard was not grounded in the law.

At stake for eBay was the viability of the popular, fixed-price "Buy It Now" section of its Web site. MercExchange, a tiny, Virginia-based patent-holding company, won millions of dollars in damages when it successfully sued eBay for violating one of its patents related to the fixed-price auction feature.

ACTA, by exporting the harsh sanctions of the IPRED1 directive, will just do the opposite.

http://bits.blogs.nytimes.com/2008/10/30/**federal-court-kills-patents-on-business-methods**/

October 30, 2008, 6:29 pm
Federal Court Limits Patents on Business Methods
By Brad Stone

UPDATED 10/31 12:30: Change to headline and comment from United States Patent and Trademark Office
[…]
UPDATE: Jennifer Rankin Byrne, director of public affairs for the United States Patent and Trademark Office, wrote to say that the word “kill” in the original headline on this item was too strong. The court rejected calls to exclude all business method patents, but narrowed the definition of what is patentable to innovations that involve transformations of a machine or computer.

“We are pleased that the Court of Appeals for the Federal Circuit has agreed with the USPTO regarding the correct test to be applied in determining patent eligibility for process claims, based upon Supreme Court precedent,” she wrote.

If Mrs Jennifer Rankin Byrne could point out where she sees the term computer in the Bilski decision, that would help to back her statement.