Directive on Patentability of Computer-Implemented Inventions (CII) Leo Baumann EICTA CII Task Force Vilnius 23 June 2004 EICTA Positioning & Campaign

What are Computer - implemented Inventions? Very broad Anything software-related Any data processing or info handling device (i.e. hardware) Covers all sectors developing products incorporating any software or microprocessor

Why patent CIIs? Increasing % of innovation in SW IT, telecoms, consumer electronics, domestic appliances, cars, transport, medical appliances, etc. etc. 500,000 Europeans employed in SW development Patents available for CIIs in other parts of the world Protects/incentivises R&D investment Return on investment – licensing revenue etc Copyright protection alone not sufficient

Why patent CIIs? European mobile manufacturers file for hundreds of patents every year Small and Medium sized companies file for patents for example on: DRM solutions Improved control engineering technology Optimized image or speech recognition software Mobile heart frequency measurement applications Digital radio technology

Why directive needed? Harmonise treatment among MSs Confirm legal position in Europe Based on existing EPO practice Increase legal certainty Avoid drift towards US practice of allowing business methods and pure software

EICTA Principles & Position Confirm status quo Should not hinder patent enforcement Meet TRIPS obligations Permit OSS to continue to grow

EICTA Position Harmonise based on existing EPO practice Confirm status quo – no broader/no narrower than now No business method patents R&D/innovation needs to be protected & incentivised Better to have no directive than a bad directive

The Opponents Parts of the open source software movement Very vocal and emotional campaign Eliminate patents on CII Examples of proposed amendments: “ Data-processing does not belong to a field of technology ” “ Industry means: the automated production of material goods ” “ Whenever a patented technique is used for a significant purpose, such use is not considered to be a patent infringement ”

Result of EP vote Completely changes character of the directive Extremely damaging to industry Wipes out patent protection for all software-reliant innovation – applies in all sectors Excludes information handling and data processing, sw & hw Renders existing patent portfolios unenforceable Undermines existing licences & cross-licences EU non-level playing field with rest of the world Impacts R&D investment in Europe Unimaginable economic consequences for innovative industries

Council position Balanced political agreement – the Council supports the idea that effective protection of computer- implemented inventions is essential in order to encourage investment recognizes that copyright and patents do not have the same scope of protection defends the purpose of the directive which is to harmonize patents in the interest of the internal market excludes mathematical methods, methods for doing business, and presentations of information from patentability excludes software (and algorithms) as such from patentability ensures that a business method, data processing method or other method is not patentable for the sole reason that they run on a computer. Thereby ensures that the technical step test constitutes a serious hurdle to draw the line from what is patentable and what is not

Next Steps Goes Back to EP Autumn 2004 If no agreement – conciliation procedure with Council