Opinion of the Economic and Social Committee on the "Proposal for a Directive of the European Parliament and of the Council on the patentability of computer-implemented inventions" (COM(2002) 92 final — 2002/0047 (COD))
Date: 2002-09-19
Institutions: European Economic and Social Committee
Subjects: computer assisted design, information technology, intellectual property, patent, software

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Opinion of the Economic and Social Committee on the ‘Proposal for a Directive of the European
Parliament and of the Council on the patentability of computer-implemented inventions’

(COM(2002) 92 final — 2002/0047 (COD))

(2003/C 61/25)

On 4 March 2002 the Council decided to consult the Economic and Social Committee, under Article 95
of the Treaty establishing the European Community, on the above-mentioned proposal.

The Section for the Single Market, Production and Consumption, which was responsible for preparing
the Committee’s work on the subject, adopted its opinion on 11 September 2002. The rapporteur was
Mr Retureau).

On 19 September 2002, at its 393rd Plenary Session, the Economic and Social Committee adopted the
following opinion by 43 votes to 18, with 9 abstentions.

1.

Introduction to intellectual property regimes

Industrial patents create temporary operating mon-
1.1.
opolies for their inventions, subject to specific conditions, and
for the benefit of and within the limits of the claims made by
patentees. The conditions for patentability generally accepted
in Europe apply to an invention of a technical nature, which is
not obvious to a person skilled in the art, and thus makes a
‘new contribution to the state of the art’. An invention must
also have ‘industrial applicability’. It may be a technical object
or a (manufacturing) process in the material world, as opposed
to the immaterial world of theories and ideas.

1.2.
Obtaining a patent implies proof of progress with
respect to the state of the art. The major patent offices keep
databases on patents issued, which must include descriptions
and explanations to make it possible to reproduce the protect-
ed invention. An essential feature of the patent concept is that
the temporary monopoly awarded to the patentee (contrary to
ideas of free competition and free markets) is compensated by
making public the technical know-how and new knowledge
brought to bear by the invention, which thus directly con-
tributes to technology transfer and the dissemination of
knowledge.

some and costly procedures, which were only partially simpli-
fied by the 1973 Munich Convention on the European Patent
(EPC) for its member countries in Europe and at international
level by the PCT (Patent Cooperation Treaty) which can extend
protection to member countries of the relevant conventions
and treaties of the World Intellectual Property Organisation
(WIPO). The EPO deals with registrations made under the
Patent Cooperation Treaty.

The Committee would like to take this opportunity
1.2.2.
to repeat how crucial
it is to have effective protection of
intellectual and industrial property to step up investment,
competitiveness, innovation and therefore growth for busi-
nesses and the creation of skilled jobs in the Community. The
Committee has already insisted, and reiterates its request to
the Council,
that the registration costs and periodic dues
remain moderate, so that patents are accessible in particular to
SMEs-SMIs. As these costs increase with the number of
is therefore
countries of registration and translations,
important for the Community patent to be truly accessible.

it

1.2.1.
The quality of a patent depends, apart from the
significance of the innovation, on the quality of the manifold
skills and expertise implemented, firstly by the inventor and
then by the patent experts and advisors and the patent office
examiners (in-depth knowledge of the state of the art and the
search for precedence, backed up by top quality databases
which are constantly kept up to date). Given the territoriality
of substantive law, registration must take place in the various
countries for which protection is requested. These are cumber-

It is clear and universally accepted that intellectual
1.3.
creations, fundamental discoveries and scientific theories about
the properties of matter, mathematics (equations, algorithms,
set theory, the calculation of probabilities, matrix operations,
fuzzy logic, etc.), which are applied directly in data processing
or software programming are not patentable. The theories of
relativity or quantum mechanics, the discovery of radioactivity
or nuclear fission cannot be protected by law, as they are
abstract ideas, fundamental scientific discoveries, although
radioactivity or nuclear fission, for example, may provide the
theoretical basis for industrial applications with considerable
social and economic value (energy, medicine).

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1.4.
Some intellectual creations, such as the works of
literary authors, painters, photographers, sculptors, film-mak-
ers, musicians, lyricists, etc. which can be marketed in various
material forms (publication in different media) or publicly
performed, are protected by the copyright regime. For a
good thirty years, computer software has been covered at
international (WIPO, then WTO) and European (national rights
or exclusion from the EPC) level by copyright. Some countries,
however, (United States, Japan, etc.) have changed their laws
and have recently allowed patents on software and even on
intellectual methods. In these countries ‘novelty’ and ‘utility’
are sufficient criteria, which means that many patents, are
issued for ‘inventions’, which, in Europe would come under
the utility model (confirmation of internet purchases with a
mouse click, but also — and by the EPO — a patent on a
computerised programme for choosing music to play in
supermarkets).

1.5.
Author’s rights have per se a more directly international
impact, as they do not require filing fees or dues to be paid,
although substantive law, like patent law always comes under
the national jurisdiction of each country. They are therefore
easily granted, sometimes on condition of registration in some
countries (Latin America, etc.) or first publication in others
(‘copyright’ in English law) or any other way of proving the
work’s precedence and the author’s identity. Author’s rights
are thus protected almost freely and universally compared to
patents, which in general are quite costly (EUR 50 000 to EUR
150 000 for a European patent).

1.6.
Given the increasing role of fundamental and applied
research in industry, the ever growing contribution of know-
ledge and ‘immaterial’ components in new technologies
(embedded software, programmed electronic components,
‘intelligent’ or ‘virtual’ machines, etc.), it now sometimes seems
more difficult to draw a line between the two main legal
systems for intellectual property without calling into question
their essential premises. With adaptation and greater flexibility
in some areas, the patent should continue to be applied to
procedures and inventions which produce material effects in
the physical world, even if they comprise tailor-made software
to do so (ABS braking, digitally controlled machines, guiding
instruments, etc.), which is implemented by sets of electronic
components and input/output extensions (for which the
assembled whole is similar to a computer). As for copyright, it
should continue to be applied to intellectual creation and
literature, science or
publications in the fields of culture,
software programmes, even if the material media for these
works has profoundly changed in some instances (multimedia,

electronic networks, television), and although their copying
and illegal use have become relatively easy, which affects the
ways and means in which rights are protected — and which
have been enhanced in recent years — overall
the legal
arrangements for property remain, subject
to adaptation,
adequate.

1.6.1.
Nonetheless, the question is to provide better defi-
nitions of the most suitable adaptations to the traditional
forms of protection or to define the protection sui generis in
order to provide the best guarantees for intellectual property
rights that affect the new technologies and the information
and communication society without obstructing the dissemi-
nation of knowledge and technology. Depending on the case,
discussions have focussed either on sui generis regimes (semi-
conductor topography, new plant varieties) or on more or less
extensive overhauls of the traditional legal regimes, to make
them more flexible and better suited to the nature of the
technologies and the general interests of society (for example,
the imposition of ‘national licences’ or cheap, compulsory
licences for patents on medicines, in order to fight epidemics;
limits to the scope of application in the protection of
biotechnologies, etc.). It is a question, and one that is a classic
legal and ethical problem, of striking a balance between
exercising a legitimate right (right to intellectual property,
recognised as a right of the human person) and the legitimate
rights and interests of other people and society, to promote
the general interest.

1.7.
An embryonic body of Community law on intellectual
and industrial property is developing (software directives,
biotechnologies, electronic circuit board designs, EU trade
mark, geographical
indications and designations of origin,
etc.). However, the lack of a Community patent, which the
Community failed to introduce in the 1970s, is regrettable and
has led to the legal vacuum being filled by the strictest of all
regimes,
the 1973 Munich
intergovernmentalism:
Convention on the European patent — EPC — and the
establishment of the European Patent Office (EPO), The arrival
of a Community patent has been delayed yet again by serious
political and legal difficulties in the Council — due in particular
to linguistic issues (pretexts) and objections to the creation of
a specialist European jurisdiction (1) — which the Committee
would like to see overcome in the Council.

that of

1.8. With the development of the NTICs, particularly the
open and universal interoperable network, i.e. the internet, the
permanent creation of programmes to operate the different
hardware which make the network an area of freedom,
expression and communication as much as a medium for the
net economy, together with the creation of applications for
communication, trade, capital flows, education or adminis-
tration, it is appropriate to ask whether the patent system is
suitable for these new technologies. Although copyright has

(1) ESC Opinion 282/98, OJ C 129, 27.4.1998.

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been applied to computer programmes (compilers, languages,
operating systems and applications), the internet has not been
patented, its regulatory bodies are establishing standards and
preserving the universality and interoperability of the world
network, which is undeniably an essential aspect of the
development of the new technologies of the knowledge-based
society and the growth of numerous industrial and service
sectors.

But universality and interoperability together with the
1.9.
low cost of internet access, which are essential for democracy
and for the economy, are sometimes threatened by the
registration of patents that affect internet standards and the
software essential for it to operate, and which must remain, as
far as possible, open and, whatever happens, free of charge.
This is a fundamental question and Europe should play a more
active role to protect a tool of universal value as an inalienable
public asset, as much for businesses, universities and research
centres, who play an essential role in its development and
for software innovation, as for administrations or private
individuals.

1.10.
Software programmes are essential both to the devel-
opment of these network technologies and to the improvement
of data processing tools or various automated machines in
industry. They are used in an increasing number of services or
innovative technological objects, some of which are pro-
foundly affecting everyday life, culture and social relationships.

2. The Commission proposal

2.1.
The proposal requests Member States to introduce ‘the
patentability of computer-implemented inventions’ (Article 1,
Scope) into national legislation, either through statute law or
case law, and thus oblige patent offices in all the Member
States to grant patents for such inventions, as the EPO does,
despite the exclusion allowed in the EPC, in order to ‘unify’ the
jurisprudence of the national courts.

2.2.
The definitions set out in Article 2 state what such
inventions and their characteristics are understood to mean in
the draft directive.

The performance of such an invention involves the use
2.3.
of a computer, computer network or other programmable
apparatus (Article 2(a)).

2.4.
The definition of ‘technical contribution’ as ‘a contri-
bution to the state of the art in a technical field which is not
obvious to a person skilled in the art’ (Article 2(b)) is a standard
one, but this ‘prima facie’ novel technical contribution is
‘realised wholly or partly by means of a computer program or
computer programs’.

2.5.
Given that a programme is a series of instructions, the
purpose of which is to process digital or analogue data,
the technical contribution is therefore inseparable from and
largely, if not wholly, dependent on the execution of one or
several programmes in a programmable computer or similar
apparatus.

However, any ‘computer-implemented invention’

2.6.
is
‘defined as belonging to a field of technology’ (Article 3). This
means that items of software, (the invention may be entirely
i.e. comprise software and the
implemented by software,
method or result of data processing, or perhaps include
databases), are automatically related to a technical field and are
thus considered de facto to fulfil some of the fundamental
requirements for patentability (technical
invention, contri-
bution to the state of the art).

2.6.1.
In addition to the requirements outlined above,
Article 4 (conditions for patentability) also demands the
additional, traditional requirement for a patent to be issued,
whereby the invention must have ‘industrial applicability’.

2.7.
Article 5 (Form of claims) provides that inventions
may be claimed as ‘products’, i.e. as programmed computers
or programmed networks or as ‘processes’
through the
execution of software.

2.8.
Article 6 maintains the provisions on the legal protec-
tion of computer programmes by copyright in Europe, as set
out in Directive 91/250/CE, which allow reverse engineering,
decompilation, for the purpose of interoperability or personal
software backup copies. The provisions concerning semicond-
uctor topographies and trade marks also remain unaffected.

3. General comments

3.1.
The Directive makes it possible to patent a pro-
grammed computer or programmed network or a process
implemented through the execution of a programme. Any
innovation made in this way is automatically considered ‘to
belong to a field of technology’, even if the result is derived
entirely from software operations. The door thus seems wide
open to a software patent, as no programmable electronic
hardware can operate without software and as the distinction
between software ‘by itself’ and ‘software producing technical

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results’, the product of legal casuistry, is indefinable in practice
as all software is made to run on a computer or an electronic
component, either as a system or as an application. This
extension of the scope of application of patentability could
thereafter be extended without limit to software programmes
and intellectual methods at successive legal rulings of the
technical chambers of the EPO, irrespective of the exclusion
provided for in Article 52 of the EPC.

3.1.1.
Although for the time being the scope of application
of the Commission’s proposal for a directive concerns com-
puter-implemented inventions,
to which are attached the
classic, cumulative criteria limiting the field of application of
patentability — which will not satisfy those in favour of purely
and simply abolishing all limits on the field of application of
patent law — the text is, nonetheless, a de facto acceptance
and justification of the a posteriori drift of EPO jusriprudence.
While at first glance the directive seems to advocate something
less extreme than the pure and simple abolition of Article 52(2)
of the EPC, which is what the EPO executive and some Council
members want, it does nonetheless open the way to the future
patentability of the entire software field, in particular by the
admission that the ‘technical effect’ can amount to the simple
fact of a program running on a standard computer.

3.1.2.
The step towards patenting business methods has
already been envisaged by the EPO executive, using the model
interpretation applied to software programmes
of internal
(Appendix 6 of the internal rules for examiners, entitled
’Business Methods’, is unambiguous in this respect). By analogy,
other methods could progressively be included in the scope of
patentability, such as teaching methods, which can also,
like business methods, be implemented through software
programmes or on electronic networks, particularly the
internet.

3.2.
An increasing number of apparatuses contain elec-
tronic components and software programmes: digital video
cameras and camcorders, aeroplanes, satellites, cars, industrial
analysing instruments, automatic surveillance and warning
systems, industrial robots, programmable machine-tools etc.
The complete list would be long and it is constantly growing.
It therefore seems essential to consider that a ‘technical effect’
can only be a creation or an effect of a material nature, that is
an action in the physical world.

3.3.
Otherwise, as every computer-implemented invention
[and therefore totally or partially implemented by software] is
ipso facto considered by the proposed directive to belong to a
field of technology, this is likely to mean that all software used

will be treated as technical
inventions subject to patents,
which would seriously blur the distinction between the legal
arrangements applicable to software, depending on whether it
is considered ‘by itself’ or ‘totally or partially implementing a
technical invention’.

3.4.
This muddle is made worse by Article 6, which seems
to maintain the legal copyright arrangements for programmes
implementing inventions with a new ‘technical effect’, while at
the same time including them in patent law, But the arrange-
ments authorising decompilation, the development of interop-
erable applications and copying for personal use, provision for
which is made in the software directive and more generally by
the copyright regime, would amount to counterfeiting or
illegal copying under the patent regime.

3.5.
One may well wonder what the real objective of the
Directive is, in particular given the explanatory memorandum,
which begins with considerations about the need to protect
the software industry against piracy, and in the documents
appended to the Directive discusses almost exclusively software
and the ‘software industry’, whose influence on the proposal
seems excessive yet entirely irrelevant, if the scope of appli-
cation was really as limited as the Commission maintains.

Software programmes are the result of modular pro-
3.6.
cesses, which often re-use entire portions of code and are also
incremental, building on existing functionalities. Furthermore,
interoperability requires older computers, components and
applications to have sufficient upward compatibility so that
they do not have to be replaced with each new version of the
operating system or processors.

Software is now so complex because it is the natural
3.7.
outcome of a process whereby knowledge has been accumu-
lated and broadened, the usual process for intellectual and
scientific activities, which build on previously accumulated
them). The scientific and
knowledge (or on criticism of
technical knowledge contained in technical objects is not of
the same nature as the hardware components. Knowledge can
thus be shared, disseminated or given without losing its value.
As far as software is concerned, the cooperative processes
whereby programmes are produced in universities or in
public research laboratories, for example, form part of the
dissemination of knowledge, which is indispensable to the
knowledge-based society. The patents regime could obstruct
this cooperation and the free circulation of free or open source
software.

Given the nature of software, together with the lack of
3.8.
in-depth examination and the lack of a requirement to register
source code in countries which use a software patent, the door
would be open in Europe, as is already the case in other
countries, to hostile legal proceedings for counterfeiting, which
would be unverifiable unless the code was published, and even
in this case, large blocks of code would necessarily be the same
(current instructions in programmes, algorithms to sort or

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compress images or text, file formats, etc.). The risk of a
proliferation of lawsuits requiring costly and time-consuming
technical and legal expertise, as can be seen in the United
States, would not be beneficial to SMEs, who might go under
despite winning a legal action brought by a competitor with
sufficient financial resources or who could be taken over or
forced to give out overlapping licences, sharing the innovation
with a dominant company, which would not have had to lay
out the initial research investment. These processes favour
anti-competitive practices and concentrations.

3.12.
Is it wise in today’s world to widen the scope of
patents, tools of the industrial age, to intellectual works which
are immaterial, such as software, and to the results of running
software on a computer? The reply is quite explicit and
partisan in the presentation of the proposal for a directive and
the impact assessment form. The narrow field of vision that
has been adopted, based on the legal regime for patents as
the sole motivation, without sufficient consideration of the
economic factors, the impact on research or on European
companies, which therefore lacks a view of the whole, is not
consistent with the importance of the implications for society,
for development and indeed for democracy (e-administration,
education, citizens’
information), which in the longterm is
what is at stake.

3.9. Moreover, the Commission gives no explanation as to
how the patent would provide better protection than copyright
against the unauthorised copying of proprietary software. No
effective economic analysis has shown the alleged benefit for
SMEs-SMIs of patents for ‘computer-implemented inventions’.
Feedback from the free/open source software sector, which
includes opinions in favour of a sui generis regime, has been
dismissed on the pretext that only the proprietary model can
create wealth and employment, whereas up until now in
Europe, this sector has developed economically under the
copyright regime, which has not been a hindrance to invest-
ment. For the most part, the opinion that has been credited is
that of a dozen large software houses, most of which are not
European. Furthermore, an opposing opinion from other large
firms has been ignored, as have some counter-proposals which
advocate a sui generis regime or an adapted utility model.

3.13.
It is hardly plausible to have us believe that the
directive would only be a sort of reversible three-year experi-
ment, at the end of which an assessment would be made.
Rights would have been acquired and in any event there would
be uncertainty and perhaps even legal chaos. In fact the process
would be irreversible, with largely unknown effects on our
economies and societies, although certain trends can already
be deduced: brakes on innovation and interoperability, risk of
internet segmentation, increase in access costs, pressures on
the choice for consumers of open source software and its type
of profitability for authors and providers of internet and
network services and applications adapted to use this type of
software

3.10.
Neither does the proposal clearly define the concept
of a network, i.e. this could mean the internet. A patent for an
invention implemented on the internet, a public arena, and
which cannot therefore consist exclusively of software, could
become possible under the draft directive. The freedom of
the internet, the essential medium of the communication,
information and knowledge-based society, is at stake.

3.14.
The Committee considers that given the lack of
independent, in-depth, serious economic and impact studies,
in particular on SMEs-SMIs, employment and long-term social
impact, it would be dangerous to rush legislation through to
extend the arrangements for patents to an indefinite number
of software programmes considered to produce a ‘technical
effect’, but that it would be more appropriate to harmonise
laws and, by a knock-on effect, the jurisprudence of the
member countries by confirming, as is already the case in most
member countries, the possibility of allowing patents for
technical
include specific dedicated code
indispensable for them to operate (but not those solely or
mainly in the software) or which would use standard software
almost exclusively).

inventions that

The Commission proposal

3.11.
thus makes decisions
about a democratic issue and a market in which consumers
still have choices to make. Patents will enhance monopolising
positions. They would threaten the continued existence of the
free/open source model and the disinterested shareware forms
of development, offer innovations and a competitive alterna-
tive, which give invaluable service to society and the economy.

3.15.
In its present form, the proposal clearly runs the risk
of overturning the legal arrangements for software and other
intellectual works, which would be in breach of the conven-
tions administered by the World Intellectual Property Organis-
ation (WIPO) and the WTO agreements on intellectual prop-
erty rights in trade. The patents system, applied extensively in
some countries to new technologies, has helped to eliminate
or marginalise into ‘niches’ numerous creative players,
in
particular SMEs, in markets that are essential to growth and

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the achievement of an information and knowledge-based
society. This has also led the patents system to include other
forms of intellectual property, such as business methods,
teaching methods and algorithms (encryption, compression).

The Economic and Social Committee considers that
3.16.
the proposal also runs the serious risk of exacerbating
divergent practices in national offices and jurisprudence,
if
common legislation became more ambiguous in the internal
market. Now it seems that national jurisprudence is currently
moving towards greater homogeneity. In the future — and, in
particular, once a clear Community framework for intellectual
property has been established — this harmonisation should be
studied and encouraged appropriately, for example, by using
an open method of coordination.

One important way in which software is protected
3.17.
and which has not been discussed, is the market itself. An
innovative creation can conquer a market and stay on top long
enough to make up for expenditure on research and marketing
before competitors come up with competing solutions. This
occurs quite frequently, given the nature of the software
market. Conversely, if the competition is more innovative or
better value for money,
it can in time establish itself in
the market. Competition thus widens consumer choice and
reduces the price of licences.

4. Specific comments

4.1.
A number of difficulties and specific features inherent
to software are an obstacle to patentability using the same
model as technological inventions.

4.1.1.
There are difficulties inherent in knowing what the
‘state of the art’ is. Unlike the existing databases of technologi-
cal
inventions, such as those belonging to the EPO or the
USPO (United States Patent Office), which are accessible over
the Internet or on CD-ROM, there are no databases of software
programmes. The concept of ‘state of the art’ is practically
impossible to define for software programmes.

4.1.3.
Software programmes consist of sets of instructions
(source code), increasingly independent of the technical plat-
form or system (cross compatibility), which facilitates port-
ability and interoperability, particularly over the Internet.
There are great similarities in the programmes written indepen-
dently in the same programming language as a result of the
constraints specific to each programming language, to their
algorithmic nature — a number of languages derive from
previous languages or combinations of languages —, to the
programmes produced using development kits, some of which
require practically no code to be written. This is also the case
for database or website management.

4.1.4.
The concept of ‘innovation’ is not therefore easy to
define. It often boils down to a greater or lesser number of
features included in different programmes applied to similar
aims or to the way in which they are called up. User interfaces
are often similar, either because they use the same software
development programs for one or several platforms, or because
they aim at interoperability. Otherwise users would have to
learn a new interface for each application.

Code must be constantly maintained to correct bugs
4.1.5.
and security failures or to make improvements in response to
users’ needs. Maintenance has become an essential responsi-
bility for software publishers and IT service companies against
what has become the strategic backdrop of network security.
In the defence world, in military production and — increas-
ingly — to develop e-administration and guarantee the security
and durability of software, the confidentiality of information
or payments, governments ask for open software, so that they
know the source code and can therefore guarantee it is
maintained, stable and secure, even if the publisher goes out
of business. A patent-based regime for software would be ill-
suited to these legitimate priorities, unless extensive provision
was made for waivers, whereas the copyright regime seems
more flexible and adaptable (software directive).

For the most part SME-SMIs do not have the
4.1.2.
technical, legal and financial resources to register patents, nor,
above all, to fight hostile legal actions for counterfeiting, which
are particularly easy to bring to court where software is
concerned. A European fund or national funds should be set
up for this purpose, but without them, introducing software
patentability would leave these enterprises in a very vulnerable
— indeed critical — situation when faced with hostile lawsuits.

Code is not a traditional ‘technical object’, which
4.1.6.
to an existing legal standard for material
can be subject
technologies. In countries which accept software patents there
are no clear concepts of ‘technical effect’, ‘inventive activity’ or
‘change to the state of the art’, which in fact is impossible to
define. In the United States the idea of creating a software
is
database has been abandoned. As the state of
indefinable, conclusions need to be drawn for patentability in
Europe.

the art

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4.1.7.
It has also to be recognised that the current con-
ditions for registering ‘computer-implemented inventions’, in
particular those which consist entirely of software, do not
meet the normal examination and registration requirements in
line with European patentability requirements, as the software
source code, or at least its user interface or file formats are not
subject
In
addition, the question of whether licences for inventions that
affect the way the internet operates should be free of charge is
not raised.

to publication for the sake of interoperability.

Software, like multimedia products, suffers from illegal
4.2.
copies, which are relatively easy to make, despite the various
technical and software protection devices sometimes used. The
problems of protecting copyright against the making and
distribution of copies, from the technical and legal point of
view are quite similar, with respect to the solutions to be
implemented,
to other intellectual and artistic multimedia
productions, as well as with respect to illegal copying and
distribution which are particularly well-developed, especially
over the internet. There are, however, much greater differences
in the methods to combat the counterfeiting of technical
objects or hardware products (1).

It is perfectly acceptable that a complex technical
4.3.
object, in which non-standard embedded software plays an
essential role in real time (braking, ABS, robotics) and is, in
fact, inseparable from the object, justifies the registration of a
patent for the entire invention. But nothing would prevent
these components being separated legally, as each is subject to
a distinct legal regime. In fact, in practice this is most often the
case. A technical
invention, such as an electronic pocket
computer diary (Personal Digital Assistant, PDA) can be
subject to several distinct intellectual property laws: name and
trademark, design, copyright
for the embedded software
system, optical character recognition software and other
applications, distinct patents for various components such as
touch screens, battery type, electronic components (some of
which are pre-programmed or programmable), etc. There are
standard embedded software programmes that can be used in
several fields, from the pocket computer to the space shuttle
or vehicle guidance systems (such as QNX, an industry
standard, open source programme based on Eclipse, which is
a software engine created and put in open source by IBM;
there is also,
for example, an embedded Windows XP, a
Windows-CE, an embedded BSD, an embedded Linux, some
of which are proprietary, others open).

4.4.
Furthermore, some robots and software used for heavy
industrial production are often not even patented and remain
internal production secrets of a company (and as such are
protected in some countries and could be in Europe, too).

4.5.
No comparative study and no argument has shown
that the patent would offer more protection than copyright
for software, whether embedded or not. The BSA (Business
Software Association) estimates that more than 40 % of
professional software used by businesses is pirated. In some
countries, this figure can climb to 90 %, not to mention copies
made for private use by company staff. Multimedia, music,
cinema and electronic games, which are protected by copy-
right, also have similar problems with illegal copying. It is not
clear, nor has it been shown, that the copyright regime, which
makes it possible to gather together considerable amounts of
capital in the cinema and music industries, would not be able
to do the same for software, and that to do so would require
changing the legal arrangements.

The reasons why European SME-SMIs do not make
4.6.
greater use of patent registration are known, but will not be
solved, even partially, by the draft directive on computer-
implemented inventions. In the first place, as the Committee
stressed in previous opinions (2) the problem is the lack of a
that is technically and financially
real Community patent
accessible.

4.7.
The Committee urges the Council to take a decision
quickly, but some existing texts need to be revised or
completed, while respecting international standards in force,
though this should not rule out specific regimes, for example
those which may provide greater protection.

Finally, on the issue of innovation, the Committee has
4.8.
already pointed out that the financial efforts made for basic
research and R&D were notoriously insufficient.

4.9.
These are the Committee’s real priorities. The Com-
mittee therefore considers that more detailed, independent
economic and legal studies, together with the opinions of all
the sectors and actors concerned, must be re-examined in a
truly objective manner, without prejudice, before irreversibly
changing the law on intellectual property, even in a manner
limited to part of the software sector, given the profound
impact the initiative would have on the scope of application
of patentability.

( 1) ESC Opinion 701/2001, OJ C 221, 7.8.2001.

921/2001, OJ C 260, 17.9.2001.

(2) ESC opinion 411/2001, OJ C 155, 29.5.2001 and ESC opinion

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5. Conclusions

The question of which legal regimes should protect all
5.1.
types of software against undue appropriation, illegal copying
or counterfeiting is, as in other sectors, to be posed. However,
should this also mean irreversibly modifying the applicable
legal regime, as was also planned for the removal of software
from the exclusion clause in Article 52 of the EPC, without
first holding more detailed and equitable discussions among
all stakeholders and in the general interest? The Committee
considers that a comprehensive discussion about the European
approach and the principles for harmonisation on intellectual
property issues should take place before any fundamental
changes are made, so that a coherent set of rules for the single
market can be devised.

5.2.
The Committee is of the view that the Commission,
the Council and the Parliament have to consider intellectual
property issues as part of a coherent overview of industrial
and intellectual property in its diverse forms, and in the
context of the EU’s political and economic objectives,
in
particular those set out in Lisbon. The Internal Market Council
in May 2002 again highlighted the priority nature of the
Community patent.

5.3.
It has not been shown in the Commission’s presen-
tation and impact documents, nor by the only study com-
missioned from a national patent office, that the legal protec-
tion conferred by copyright would be less effective, as far as
software programmes are concerned,
than the industrial
patent. Nor has the impact on users (consumers) been
assessed. How would they benefit from a change in the legal
arrangements, which would be very costly for businesses?
Neither has the impact on employment been determined.
The protection of inventors, whether working as salaried
employees or sub-contractors, has not been raised, although
they play an essential role in these immaterial ‘productions’.

5.4.
The Committee would prefer that the draft directive be
seriously revised, and believes that the Commission would do
better to initiate a truly political and legal process of harmonis-
ing issues of intellectual and industrial property at Community
level, keeping abreast of research, innovation and financing. It
could also make the Community patent a priority project, fully
respecting the EU’s international commitments with respect to
the WTO and those of the Member States with respect to the
WIPO and the EPC in its current form. But would it not be
more suitable to make the EPC and the EPO EU bodies? Failing

this, attempts at EU harmonisation will remain backward and
dependent on a non-EU organisation, which is competent in
intellectual property and is naturally
only one area of
attempting to extend its own particular area of competence
and sources of revenue. However, given its specific point of
view, it cannot readily perceive the overarching nature and
complexity of intellectual property issues, nor the need for
greater flexibility or more variety in the legal arrangements for
the new technologies.

5.5.
There are certainly new legal solutions that can be
adapted to the ongoing increase of intellectual/scientific input,
i.e. the ’immaterial’ component of technological innovations,
which require in-depth examination and consultation with all
the parties and interest groups concerned, including end users,
keeping in mind international commitments to the WIPO and
the WTO, both to protect innovation and ensure technology
transfers and the dissemination of knowledge, which are the
essential pillars of legal protection for technological innovation
and their only justification for exemption from competition
law. These goals should not be abandoned to create unsuitably
long monopolies or control mechanisms over developing
countries or the newly industrialising countries.

The Committee believes that only the quality of the
5.6.
legal instruments, patents or copyright, the effectiveness of
their protection and above all the quality of the innovations,
can attract the capital that would be seriously interested in
developing them. It is therefore important for the European
legislator to lay down uniform rules on the patentability of
computer-implemented inventions, which can be the basis for
maintaining the high level of European patent rights.

5.7. With respect to the Commission proposal, the Com-
mittee feels that the laws and, by a knock-on effect, the
jurisprudence of courts in the Member States must be harmon-
ised in such a way that it will be possible to allow patents for
technical
inventions that include a specific dedicated code
indispensable for them to operate, insofar as the patentability
requirements of an invention have been met. However, on the
issue of technical
inventions for which innovation arises
principally or indeed wholly from the software or which are
technically innovative but rely exclusively or principally on
standard software, the Committee feels that detailed legal
investigations are necessary, with particular reference to the
questions of definition and delimitation, so that application of
each of the respective legal regimes for the protection of
innovation in Europe may be harmonised. Economic studies
should also be carried out, cost-benefit analyses for instance,
and on the financial impact of protection and its effectiveness,

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particularly for SMIs-SMEs, as well as on the costs to consumers
and their rights and guarantees.

5.8.
The Committee fully endorses the views of the busi-
nesses, industries and services based in Europe and the views
of authors and users, who expect true consistency in economic
and research policy with the necessary legislation to ensure
the various forms of
effective, harmonised protection of
intellectual property.

5.9.
Political and budgetary measures and legal instruments
must guarantee increased encouragement of scientific and
technological innovation, which are now indissociable, and
thus stimulate sustainable growth and competitiveness —
which create skilled jobs through innovation — in order to
promote the knowledge-based economy that Europe aims to
achieve, which the Committee fully supports, and which
should be shared more equitably with the developing
countries.

Brussels, 19 September 2002.

The President

of the Economic and Social Committee

Göke FRERICHS

APPENDIX

to the opinion of the Economic and Social Committee

The amendments below were rejected, but received at least one quarter of the votes cast:

Point 3.12

Delete.

Reason

The scope of patents is not widened by the proposed directive. The EPO has already granted thousands of patents for
computer implemented inventions. The directive is proposed to unify interpretation because divergent national
rulings have been made in some countries, particularly Germany and the UK.

Point 3.13

Delete.

Reason

The text is misleading. As stated above, the EPO has granted thousands of patents for computer implemented
software (according to the Commission representative at the TEN-section meeting approx. 25 000). Rights already
exist and have existed in Europe since the EPO began granting such patents after the Sohei decision published in
T-769/92 (Sohei). The ‘legal chaos’ that the directive is said to threaten us with must therefore already exist, yet it
does not. The purpose of the directive, as stated, is to codify in intellectual property law the existing practice under
which patents for computer implemented inventions, including patents for computer software, are already granted
in large numbers.

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Point 3.14

Delete.

Reason

Here again the directive is said to change the arrangements for patents, but it does not change arrangements. It
codifies the existing practice under which patents for computer implemented inventions have been granted by the
EPO (similar to the USPTO and JPO).

Point 3.15

Delete.

Reason

The text contains misleading generalisations. Business methods are patentable in the US, but not under the EPO nor
through the JPO. An algorithm in the sense of a mathematical formula by itself is not patentable anywhere in the
world. The use of an algorithm in a new invention that solves a technical problem is a patentable invention in most
jurisdictions. Paragraph 3.15 says that the directive is leading to patents for business methods, teaching methods and
(pure) algorithms. No, it is not. It codifies the existing practice under which patents are granted for computer
implemented inventions that are new, inventive, and have a technical effect. The directive does not change the
present practice, and neither does it change the patentability of business methods or algorithms.

Result of the vote

For: 27, against: 27, abstentions: 6.