Here is the letter in plain text, with some parts I put in bold:

INTERNATIONALE GEWERKSCHAFT IM EUROPÄISCHEN PATENTAMT
STAFF UNION OF THE EUROPEAN PATENT OFFICE (SUEPO)
UNION SYNDICALE DE L'OFFICE EUROPEEN DES BREVETS (USOEB)

Zentraler Vorstand - Central Executive Committee - Bureau central

10 May 2010
su10050cl - 3.2/0.4.2

For the attention of the Members of the European Parliament involved in intellectual property issues

EU Patent legislation
Accession of the European Union to the European Patent Convention

Dear Madam, dear Sir,

The European Parliament is currently preparing its position with regard to the EU Patent system and EU patent legislation. SUEPO, the Union of European Patent Office employees [1], is concerned about the shape of the future institutional cooperation between the EU and the EPO and wish to draw your attention to this subject.

Commission and Council consider the European Patent Office, an intergovernmental body established outside the EU institutions, as the right entity to take on the important public authority task of processing and granting EU patent applications. SUEPO welcomes the trust granted to the EPO. SUEPO shares the Commission's and the Council's opinion that Europe's existing, complex patent system urgently needs upgrading in order to meet the needs of the EU's "Lisbon Agenda": the European patent system currently lacks a single patent title and single patent jurisdiction [2]. Due to the split legislation there is also a lack of efficient coordination between EU patent policy and other relevant EU policies in the field of intellectual property policy (plant varieties, trade marks, etc…), competition, internal market issues, regional and SME policies.

However, the public percieves legislation under the existing intergovernmental European patent system to be intransparent. Further, the strong presence of chief executive officers of national patent offices in the governing body of the EPO, the EPO Administrative Council, results in an unhealthy competition between the European Patent Office and the national patent offices. It also hinders the harmonization of quality and renders more difficult an efficient distribution of tasks between the EPO and the national patent offices which is in the interest of the users of the system [3].

SUEPO is concerned about the future institutional link between the EU institutions and the EPO. In our view, gearing the EPO to the EU legislator can only be achieved effectively through the accession of the EU to the EPO: i.e. when the EU becomes a signatory of the EPC. The institutional concept allowing an efficient and legally sound gearing of the two organisations is available [4]. This concept would permit the EU to rely on the EPO to grant EU patents that are examined under legislation truly legitimated by EU legislative processes. In contrast, any contractual relationship between the EU and the EPO, should such an option be considered, would raise a number of serious legal undertainties.

1. It is particularly worrying that currently the EPO bodies, including legislative [5] and judicial [6] bodies, feel that they are not formally bound by EU legislation.

2. If a simple contractual relationship between EU and EPO is opted for, the procedures that allow the European Parliament to be involved in the legislative process (Ar. 218 EU Treaty) can be circumvented. Procedures allowing the European Parliament to hold the Commission accountable have no effect on a legislator - like the EPO - that is institutionally located outside the EU Institutions. The draft EU Patent Regulation [7], which is based on Art.118 of the EU Treaty, incorporates the EPC which may change in substance according to the wishes of the 37 EPO member states. Under a contractual relationship, an external legislator would be allowed to substitute into legislation under Art.118 EU Treaty. This would entail a loss of procedural rights of the European Parliament and introdude a structural inconsistency in the EU legislative process.

3. EU patent applications and third parties alike could challenge the validity of the EPO decisions based on international constitutional law, inspired by the appeal filed by a German businessman before the German Constitutional Court [8] (unconstitutionality of the European arrest warrant). Indeed, it is doubtful whether the European Patent Convention (EPC) provides for sufficient legal basis for the EPO to conclude far reaching agreements between the EU Member States and the EU (neither Art.40 EPC, nor Art.149 EPC).

4. Following the "Lisbon" judgement of the German Constitutional Court [9], the validity of the envisaged EU Patent Regulation itself could be challenged based on the failure to meet constitutionality standards equivalent to German standards, since an important element for the creation of the EU Patent, the EPC, would stay outside of constitutionally safe legislation.

5. Litigation brought before the ECJ (Court of Justice of the European Union) by patent applicants of third parties [10] may entaila a challenge of the validity of the EU Regulation itself, for instance because of a lack on involvement of the EU Parliament.

6. The danger described for the EU Patent Regulation may also apply to the decisions of the European and Community Patent Court, since the agreement on this Court (Art. 14) foresees the applicability of the EPC also for the validity assessment of EU Patents.

It would be highly problematic that individual patent applicants, patent owners or third parties be put in a position of challenging the validity of the whole European legislative construction. The risk taken in opting for a contractual relation between the EPO and the EU would be entirely disproportionate.

In the light of the considerations above we urge you to give the considered accession of the EU to the EPO under Art.218 EU Treaty the highest attention. Should you have doubts on the relevance of the questions raised by SUEPO, we suggest that an opinion be requested from the European Parliament's Legal Service.

Yours sincerely,

Edward Daintith Chairman SUEPO Central Executive Committee

Desmond Radford Chairman SUEPO The Hague

Dorothée Heller Chairwoman SUEPO Munich

Carmen Schuhmann Chairwoman SUEPO Vienna

Peter Kempen Chairman SUEPO Berlin

Copy: Mr J. Buzek, President of the European Parliament Mr M.Barnier, Commissioner, DG MARKT

[1] SUEPO is an affiliate of Union Syndicale Fédérale (USF), European Public Services Unions (EPSU), European Trade Unions Confederation (ETUC)
[2] Harhoff, Economic Cost-Benefit Analysis of a Unified and Integrated European Patent Litigation System, Final Report, Study commissioned by DG MARKT of the European Commission, Tender No. MARKT/2008/06/D, 31 December 2008, as revised on 9 February 2009, p. 40; see also Van Pottelsberghe in http://www.bruegel.org/uploads/tx_btbbreugel/pb_201002_300310-2.pdf
[3] Van Pottelsberghe, Danguy, Economic Cost-Benefits Analysis of the Community Patent, Study commissioned by DG MARKT of the European Commission, 7th April 2009, http://ec.europa.eu/internal_market/indprop/docs/patent/studies/litigation_system_en.pdf
[4] Council document 14551/03, 13th November 2003
[5] EPO Official Journal 8-9/1999, p.573, paragraphs 2-3: "2. Directive 98/44/EC of the European Parliament and of the Council of 6th July 1998 (hereafter the Directive) on the legal protection of biotechnological inventions entered into force on the 30 July 1998. EU member states are required to implement it in national law by 30 July 2000. 3. The European Patent Organisation itself is not subject to this formal requirement."
[6] See decision of the Enlarged Board of Appeal of the EPO G 1/06, point 6: "The Boards of Appeal apply the provision [the Directive] because it is law under a specific Rule of the Implementing Regulations to the EPC, and not because the Directive is a source of law to be applied directly."
[7] Council document 8588/09, 7th April 2009
[8] Bundesverfassungsgericht, judgment of the18th July 2005, "2 BvR 2236/04"
[9] Bundesverfassungsgericht, "Lisbon Treaty judgement", “2 BvE 2/08, 2 BvE 5/08, 2 BvR 1010/08, 2 BvR 1022/08, 2 BvR 1259/08, 2 BvR 182/09”
[10] Art.48 of the Draft European and Community Patent Court agreement, Council document 7928/09, 23rd March 2009

Here is the full letter in images, also a copy in PDF:

There is a pending report on "Community innovation policy in a changing world" led by Hermann Winkler (PPE) in the European Parliament (that will come to plenary for a vote in June), and some amendments at the committee stage were already quite critical of the future role that will be played by the European Parliament patent law:

FFII comments on the Winkler report: "European Parliament not a legislator of second class"
April 27 2010

Dear Member of the ITRE Committee,

I am writing to you regarding the pending Winkler report on reviewing
Community innovation policy in a changing world (2009/2227(INI)) [1]. For me
it seems an important initiative to address the institutional deficits that
stifled the ambitious Lisbon innovation goals.

I am very delighted about amendment 103 and ask you to lend your support to
this:

"22b. Warns against the proposal to set up an International Patent Court
within the United Patent Litigation System draft Treaty, and points to the
fact that such a Court would not be counterbalanced by any legislative
assembly, let alone the European Parliament;"

In 2003 the FFII coined the slogan "Power to the Parliament". It is known
that the European Parliament rejected the controversial software patent
directive in 2005 [2]. Less then 6 months after the rejection of the bill,
the patent lobby asked to get a specialised court in place.

The Parliament had also passed a resolution in 2006 [3] asking for
assessments of "patent quality, governance of the patent system, judicial
independence and litigation costs".

The pending UPLS international treaty will create a patent court outside
of the EU system, outside of the European Parliament, and outside of the
European Court of Justice [4].

Please have your say on the attempts to make the European Parliament
defunct as a legislator in patent matters, and endorse amendment 103.

Best regards,

—
HENRION Benjamin <bhenrion at ffii.org>
President of FFII.org
Tel: +32-484-566109

[1] http://www.europarl.europa.eu/activities/committees/amendmentsCom/comparlDossier.do;jsessionid=93DC543C37F0A871B357A03D0B62E57A.node2?dossier=ITRE/7/01773&body=ITRE&language=EN
[2] http://epla.ffii.org/quotes
[3] http://kwiki.ffii.org/EplaReso061012En
[4] http://press.ffii.org/Press%20releases/EU%20patent%20system%20taken%20away%20from%20European%20Court%20of%20Justice

Parliamentary questions
22 January 2010
E-0147/10
WRITTEN QUESTION by Alexander Alvaro (ALDE) to the Commission

Subject: Anti-Counterfeiting Trade Agreement (ACTA)

1. It was reported that 38 different nations have participated in discussions about the text of the proposed Anti-Counterfeiting Trade Agreement (ACTA). Why should that text be withheld from the public?

2. If there is consensus to make the proposed ACTA public, how promptly can it be made public? And had the Chairperson and Coordinators of the responsible INTA committee full access to the documents?

3. Can an approximate timeline for the negotiation of the proposed ACTA be given?

4. Will the proposed ACTA address issues other than counterfeiting? If so, why?

5. Will the proposed ACTA make changes to substantive intellectual property law, or will it be limited to harmonising enforcement measures? If the former, why?

6. If the proposed ACTA make changes to substantive intellectual property law, why is this initiative being discussed in secret, instead of at the World Intellectual Property Organisation (WIPO)?

7. Will the proposed ACTA impose obligations with respect to the Internet, and if so, why?

8. Some commentators have claimed that the proposed agreement requires a so-called ‘Three Strikes’ approach, whereby Internet services or Internet access providers must terminate the access of Internet users accused of having violated copyright law. Can it be stated authoritatively that the agreement will not require or recommend a ‘Three Strikes’ requirement being implemented by Internet services and/or Internet access providers?

9. Certain US officials have claimed that the agreement will impose no new obligations upon the United States Government. Is it the case that the US Government would undertake no responsibilities as a result of this instrument, and if so, what benefit would accrue to the Commission by entering into such an agreement with the United States of America?

Here is the full text of the question, Mr Josefsson is publishing it in a proprietary Microsoft Word format (which is used by EU bureaucrats) on his website, but not in a plain text or html, so here it is:

EUROPEAN PARLIAMENT
FORM FOR TABLING PARLIAMENTARY QUESTIONS
To the: COUNCIL , COMMISSION

ORAL QUESTIONS

Oral Question with debate (Rule 115)

Question Time (Rule 116)

WRITTEN QUESTIONS

Written Question (Rule 117)

Priority Written Question (Rule 117 (4))

AUTHOR(S): Carl SCHLYTER, Eva LICHTENBERGER, Christian ENGSTRÖM, Niccolò RINALDI, Daniel CASPARY, Syed KAMALL, David MARTIN, Helmut SCHOLZ, Bernd LANGE, Robert STURDY

SUBJECT: Anti-Counterfeiting Trade Agreement (ACTA)

TEXT:

The plurilateral negotiations on an Anti-Counterfeiting Trade Agreement (ACTA) are being conducted under a premise of confidentiality agreed upon by participants on a request by the US Government.

At a hearing on 12 January 2010, Commissioner-designate Karel De Gucht said that he will respect the confidentiality agreement among ACTA participants.

In preliminary discussions with Parliament on a new Inter-Institutional Framework Agreement, the Commission agreed on 27 January that it is committed to a reinforced association with Parliament through immediate and full information of the Parliament at every stage of negotiations on international agreements (including the definition of the negotiation directives), in particular on trade matters and other negotiations involving the consent procedure, to give full effect to Article 218 TFEU of Parliament, while respecting each institution's role and safe compliance with new procedures and rules for the respect of the necessary confidentiality.

- How will the Commission honour its commitment to a reinforced association with Parliament with regard to the ACTA negotiations?

- When will the Commission grant Parliament access to all documents relating to ACTA, in particular the ACTA negotiation mandate by the Council, the minutes of ACTA negotiation meetings, the draft chapters of ACTA, and the comments of ACTA participants on the draft chapters?

- Given that the Spanish EU Presidency aspires to an ACTA agreement within the first half of 2010, and given that many Parliamentarians see ACTA as an early example of EP's new role under the Lisbon TFEU, would Commission think that full access to ACTA documents should be given to Parliament prior to the coming into effect of the new Framework Agreement?

Signature(s): Date: 03.02.2010

EN

Let's see if the European Parliament have to go to the ECJ to get the documents, and test the Lisbon Treaty, but there is a high chance that the Commission and the Council will say that the Lisbon Treaty does not apply here, or they won't give full transcripts of the meetings, neither access to the documents.

Bilski v. Kappos, currently pending before the U.S. Supreme Court, is considered the single most important decision worldwide on the issue of patents on business methods, software and algorithms since the rejection of the Software Patents Directive by the European Parliament.

"In Europe there still exists a myth of 'anything goes' as far as patentability in the US is concerned, although the Supreme Court has laid down rather strict rules on what is eligible subject matter - and what is not." says Laura Creighton, a Swedish entrepreneur.

"Software literally consists of abstract ideas", explains Dr. Peter Gerwinski from the FFII Bilski Working Group. "We have asked the Supreme Court to consider some practical realities and to formulate a test that preserves the traditional exclusion of abstract ideas from the field of patentable material."

FFII Secretary André Rebentisch highlights the transatlantic significance: "It is a delicate challenge of the U.S. Supreme Court: to find an applicable tests for patent examination of business methods. We lack a definite yardstick, a 'quadrature of the patent'. We cannot wait to see the Supreme Court's approach because it will shape the international harmonization debate."

Links

• Brief of Amici Curiae (Foundation for a Free Information Infrastructure, IP Justice, and four global software professionals and business leaders in support of respondent)

• Wikipedia: Machine or Transformation Test

Contact

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

About

The Foundation for a Free Information Infrastructure (FFII) e. V. is a charitable association registered in Munich, Germany which is dedicated to the spread of data processing literacy. It funds the development of public information works based on copyright, free competition and open standards. The FFII attained broad international recognition for its phrontistery role in the European debate on a software patent directive (2002-2005) and software-related patent reform.

IP Justice is an international California-based civil liberties organization for the furthering of a balanced intellectual property law.

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?

See also the IAM article:

IBM welcomes today's en banc Federal Circuit decision in the In re Bilski case, as it excludes from patent eligibility business method inventions that are not tied to a machine or transformative of an article. The Federal Circuit's "machine-or-transformation" test was a primary component of the test that IBM advocated in our amicus brief.

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!

2. For the purposes of this section 'goods infringing an intellectual property right' means goods infringing any of the intellectual property rights covered by TRIPS (note 3)

Note that Canada and Singapore wants to restrict the scope to copyright and trademark infringements only, which might be a good thing to avoid harsh sanctions for patent infringement:

[Comment (SG, CAN): Scope of IPR should be confined to copyrights (and related rights) and trademarks.]

[…]

[Comment (SG): Provision is acceptable if IPR in Section 1 covers only copyrights (and related rights) and trademarks, otherwise, footnote 1 is unacceptable. Also, delete phrase "which may be presumed to be the amount of damages referred to in clause (i)" in (ii)]

The EU and US are also fighting over damages, which is a heated topic in the pseudo patent reform right now in discussion in the US Senate:

[Option US (note 1): In the case of patent infringement, damages adequate to compensate for the infringement shall not be less than a reasonable royalty.]

[Comment (EU, CAN): Delete Option US footnote]

The European Commission is also organising a stakeholder meeting in Brussels (Closing date for registration: 15 April 2009) on the 21 April (3.00pm to 5.30pm)

Behind closed doors, the  European Union, United States, Japan and other governments are negotiating the Anti-Counterfeiting Trade Agreement. No mandates or drafts are published. The ACTA will contain new rules for the enforcement of copyrights, trade mark rights, patents and other so called “intellectual property” rights. Public interest organisations are concerned ACTA may limit access to medicines, limit access to the internet, give patent trolls free reign and harm the most innovative sectors of the economy.

"The document has confirmed my fears. They want to basically stop everything that can be spread on the Internet, all forms of trademark infringement, and even medicine. It is much more far reaching than I thought. I wonder, finally, what is not covered by ACTA?" said Jens Holm to DN.se.

In the EU, preparatory legal texts have to be published. Informed about the content of the mandate, MEP Jens Holm said he regards the ACTA as legislation.

The ACTA is used to create legislation without democratic control. The European Council said it may adopt the ACTA during parliamentary vacation.

The concerns stated by public interest groups are now confirmed by the secret mandate. The ACTA may limit the freedoms and rights of all Europeans and millions or billions outside the union.

Apparently, the control undemocratic forces have over Europe is so far reaching that DN.se did not dare to publish the mandate itself.

Now, if we are all very quiet, we can hear Robert Schuman turn over in his grave.

See also:

FFII analysis

Open letter by more than 100 public interest organizations

News on the ACTA

Details emerge of secret ACTA negotiation

The Office of U.S. Trade Representative Releases Summary of Anti-Counterfeiting Trade Agreement (ACTA) Negotiations

04/06/2009

WASHINGTON, D.C. - The Office of the U.S. Trade Representative (USTR) today released a detailed summary of the current state of the Anti-Counterfeiting Trade Agreement (ACTA) negotiations. The summary, which all of the ACTA negotiating partners drafted, sets out the specific topics under discussion in the negotiations, and reflects the Obama Administration's commitment to transparency. The summary is being shared with stakeholders for review and comment.

"I am grateful to our partners in the ACTA negotiations for working with us in a joint effort to prepare this summary," said U.S. Trade Representative Ron Kirk. "We look forward to taking more steps to engage with the public in our efforts to make trade work for American families."

The objective of the ACTA negotiations is to negotiate a new, state-of-the art agreement to combat counterfeiting and piracy. The United States has been working with several trading partners, including Australia, Canada, the European Union and its 27 member states, Japan, Mexico, Morocco, New Zealand, Singapore, South Korea, and Switzerland, to negotiate the agreement. When it is finalized, the ACTA is intended to assist in the efforts of governments around the world to more effectively combat the proliferation of counterfeit and pirated goods, which undermines legitimate trade and the sustainable development of the world economy, and in some cases contributes to organized crime and exposes American families to dangerous fake products.

Background

Negotiations on the ACTA began in June 2008. In preparation for those negotiations and since then USTR has reached out to the public for its views and to exchange information on several occasions. The release today of a summary of the ACTA is the most comprehensive joint effort to date of all of the participants in the negotiation to provide information on the ACTA to the public. The summary can be found on the USTR website at www.ustr.gov. Members of the public with questions about the summary or the status of the negotiations should contact Kira Alvarez, Chief Negotiator and Deputy Assistant U.S. Trade Representative for Intellectual Property Enforcement at (202) 395-4510.

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.

Everyone understands why Microsoft seeks patents and invests richly to keep the system going. Everyone understands the motives of patent lawyers, of patent trolls. Everyone understands that people who's business depends on patents would be bitterly opposed to abolition.

In 2003 I wrote that the software industry was splitting into those who understood the future, and those stuck in the past. The rift between these two sides seems huge today.

Yet why are firms like IBM, Sun, Google, and Red Hat investing in software and business method patents, when the ethical and economic arguments clearly show that such patents can help the owner only at a cost to all society.

More to the point, why are these firms, which depend on the goodwill of the FOSS community, silent on the subject. Silent on the patents they own. Silent on the real threats to Linux and FOSS applications¹

For me, the greatest threat to the Abolitionist movement is not the "bad guys" who wear black hats and do stupid things like suing RIM, or TomTom. It is the "good guys", who silently collect patents, allow the Community to be scared into accepting that these "defensive" patents are necessary, and who keep a blanket of silence over the public discussion of software patent abolition.

And those who allow this, from the best motives, are part of the conspiracy. Those who invest in projects like Peer-to-Patent are part of the conspiracy. Those who write how OIN is a great achievement, how various "promises not to sue" are sufficient to waive all concern… it is these good willed people who are the problem.

The work - and greatest success - of the FFII has been to bring the issue of software patents into the public mind but it is an uphill struggle. Everywhere, people prefer not to confront this. They see Abolition as an overtly political issue. An extremist, uncomfortable issue that is bad for business at best, and suicidally stupid at worst.

In 2009, despite wide-spread understanding of the problems software patents cause, Abolition is still not on the political agenda. The large FOSS firms continue to invest in software patents and ignore opportunities for political reform. When opportunities do present themselves, these firms try to stop "business method patents" but not software patents.

Why is this? I think it is because these firms are deeply tied into the software patent system: they profit from it, and they enjoy the silence that allows them to build large "defensive" patent portfolios. There is also an element of elitism. The large firms, with their portfolios, can dominate the market and define the rules. They can absorb the pain of trolls. Mosquitoes. They can develop the patents into profitable licensing models. We are seeing the emergence of a new kind of open source, properly patented for its own protection. It may be Open, but it is not Free.

It is time to end the conspiracy of silence and force the discussion on the ethics of patenting software and business methods. No matter if this hurts firms who have invested in FOSS. No matter if this creates division and no matter if it is "bad for business".

Moves to change the EPC failed, so the patent industry and large software firms together with the European Commission pushed to create a law at the European Parliament (EP) which would have explictly allowed software patents in the largest economic block in the world, independently of any provisions in the EPC.

The FFII, FSF, and the small-to-medium software firms that make up 80% of the IT sector campaigned on a pure abolitionist platform: No Software Patents. The economic analysis of software patents made it clear, early on, that the benefits of software patents accrued only to their holders (patent trolls and large software firms), and those who profit from litigation, at a large cost to society. The US experience had already shown that software patents created litigation, slowed down progress, blocked competition, and were fundamentally incompatible with a fast-moving industry based on innovation and copyright.

At this time Red Hat had filed around 50 software and business method patents at the US Patent and Trademark office (USPTO), at the EPO, and at the WIPO. For example, EP1691276, "System and method for verifying compatiblity of computer equipment with a software product", filed in January 2005, and EP1659493, "Replacing idle process when doing fast messaging" (by Alan Cox). Today Red Hat as about 350 software and business method patents filed, indicating that their patenting activity has been consistent and growing.

The first Red Hat software patent filed at the EPO was EP1312195, "Method and apparatus for handling communication requests at a server without context switching", filed in 2001. Red Hat was thus at the forefront of filing software patents at the EPO.

The problem for clients of the patent system was that these EPO patents were not upheld by the national courts where infringements could be prosecuted. Specifically the UK upheld the original EPC interpretation that patents on software were not enforceable, while Germany generally tolerated software patents.

The European Commission was fully convinced by the arguments of large software firms, and the patent lobby, that without software patents Europe would be unable to innovate. The logic of the day was, "more patents means more innovation", despite the lack of any evidence to support this, and mounting evidence from the US of the contrary.

With such political pressure to open the doors to full patentability of software, the Abolitionists understood that compromise was not possible, and defined a firm, unambiguous position: No Software Patents. As a theoretical basis, they developed a set of "10 core clarifications" (10CC) designed to resist attack by patent attorneys. The 10CC were the basis of the Abolitionists amendments, which were presented in Parliament and gathered so much support that by June of 2005, at the second reading, the originally pro-software patent Directive had threatened to become a total ban on software patents. The pro-swpat lobby realized the risk, voted to reject the entire Directive, and switched to a number of backup plans, which today are still unrolling. According to parliamentary insiders, the Software Patents Directive was the most heavily lobbied directive of all time.

Of all the firms involved in the conflict, those involved both in the free and open source (FOSS) business, and involved in software patenting, were the most crucial. A large part of the argument against software patents was that it they were dangerous to the highly competitive and open FOSS sector and that this sector was key to European technological progress. IBM, Sun, Novell, and Red Hat were the main firms on both sides of the debate. Red Hat, the only one with a pure FOSS business.

While this climactic debate was happening, Red Hat defined their position with respect to the US and the European patent systems' treatment of software. Red Hat argued - as they have consistently before and since then - that the patent system was not working for software:

The licensing of software patents has become an industry unto itself… Today in the U.S. information industry, we are observing the building of an iron curtain of intellectual property.
The problem, in part, lies in the assumption that patent law, as presently applied to software, is infallible. … We have now established a patent system for protecting software that is failing to promote that progress.

However, when it came to proposing solutions, Red Hat rejected the Abolitionist position and endorsed the position of Microsoft's General Counsel, advocating improvements to the patent system to improve so-called patent quality:

Even Brad Smith, General Counsel of Microsoft, has called for a number of these reforms, as well as greater harmonization around the world. This is an area on which Brad and this author agree. Specifically, this author advocates:

• Non-diversion of PTO fees;
• Third-party participation in the patent examination process;
• Post-grant oppositions;
• Challenges to the validity of patents to be based on a "preponderance of the evidence," not "clear and convincing evidence" standard;
• Restoration of the once-strong non-obviousness standard;
• A higher threshold in finding willful infringement;
• A higher threshold before granting injunctive relief;
• Publication of all patent applications after 18 months;
• Harmonization with Europe to narrow the scope of what is patentable in the software and business method arenas as well as assuring the right to interoperability.

The Abolitionists viewed these "reforms" to be ways of reinforcing the patent system, and making software patents more, not less dangerous to the software industry. This echoes a common division of opinion. While the four firms cited invested in improving the patent system (to prevent devaluation of their own portfolios), the Abolitionists fought for the total end of software patents.

To clarify why: a single patent can demolish an small company, and if the patent is "higher quality", it becomes harder, not easier to fight. Eliminating junk patents leaves space for more resistant patents which can do more damage.

Red Hat endorsed the work of the European Commission, which was a forceful proponent of software patents, with little sympathy for small-to-medium sized firms, nor the FOSS economy:

There are, however, solutions available, both immediate and long-term, that are applicable in the U.S. and abroad. An early lead is being taken in Europe as the European Commission and European Parliament work to establish a uniform system for software patents (more properly, computer-implemented inventions) across the European Union.

And in this statement they endorsed the "proper" term "Computer Implemented Invention" (CII). The term is a clever circular definition designed to circumvent the EPC restrictions on software patents. An invention is by definition patentable, the terms "invention" and "patent" are largely interchangeable. The words "computer implemented" mean that the invention is not software (as such), it just happens to run on a computer.

Thus any party that accepted the terminology would accept inevitably that computer programs could be patented. "Software" became relegated to source code, and the EPO was able to argue that inventions that ran on computers (which could be patented) were fundamentally different from software (which as source code was adequately protected by copyright). By splitting off the "invention" from the "software" the EPO was able to bypass its own rules and allow patents on software.¹

One of the great successes of the Abolitionists was to recapture the terminology by getting the term "Software Patents Directive" into common use. In the propaganda war, whether one said "CII" or "software patent" largely defined one's position as for, or against, software patentability.

Regarding the details of the Directive, whatever its name, Red Hat did not argue for abolition. Instead, they argued for amendments to eliminate business method patents and promote software patents with a higher standard of obviousness. They also argued for protection for interoperability:

32 While the final result of this legislative process remains uncertain, what is certain are some of the amendments that are likely to be incorporated into the legislation. First is the definition of the term "technical contribution" as it is incorporated into the legislation. A narrow definition of this term, along the lines of its interpretation to date by the courts of Germany, will eliminate the vast majority of business method patents and will restore a substantial non-obviousness test to software patents. The second is the addition of a statutory protection of the right to create interoperable products. Should those amendments be adopted, the European legislation will have gone a long way toward addressing some of the more severe problems inherent in the U.S. patent system.

The Abolitionists regarded this as betrayal from a key firm that should have been firmly in the Abolitionist camp. Red Hat may have been arguing from a pragmatic position in which it seemed the Directive would pass. However, their statements provided ammunition for the pro-swpat camp and demonstrated that significant FOSS firms explicitly supported software patents.

Since amendments are voted on individually, there was no guarantee that the interoperability amendment would be voted, if their first also was.

While promoting amendments to harmonise software patents on the German model, Red Hat did also argue for changes to the patent system as it applied to software. They said:

At the same time, we should not assume that, even as modified and improved, the application of patent law to software is inherently the best or most logical means of protecting the interests of the developing party. Perhaps we should consider a new paradigm that is specifically designed for software and incorporates the best elements of both patents and copyright. Some characteristics of such a paradigm could include:

• a shorter term of protection (5-7 years would maintain the speed of innovation);
• protection only for complete systems or features, not components (avoids the trivial);
• strong protection (reward first movers);
• published source code (allows knowledge to advance); and
• interoperability.

It is a central tenet of the patent industry that there is a single patent system that covers all subjects. Any attempt to create domain-specific patent models is fiercely fought by the pharmaceutical industry, which fears the weakening of the patent system. So the above proposals were highly speculative and irrelevant to the Directive (and were not proposed in any amendments), with the exception of interoperability.

Even so, the Abolitionists regarded these as unacceptable. A 5 or 7-year patent, following several years of examination delay, would mean a 10-year block on competition in emerging areas of software technology. The "strong protection" cited, is code for "faster and more effective litigation". The avoidance of "trivial" components is meaningless since terms like "complete systems" and "features" cannot be firmly defined. And interoperability, while a valid goal in itself, does not protect independent re-invention.

It is worth understanding why the Abolitionists were so absolute, and so successful, in demanding "no software patents" while pragmatic firms like Red Hat aimed for a softer, more "realistic" middle ground. There are two insights which drove and united the Abolitionist movement.

First, the understanding that the patent system was fluid, and adapting to new opportunities in an organic fashion. From the point of view of a small software developer focused on new products and clients, or an economist, the patent system looks fundamentally parasitical. The growth of the patent system into software and business methods happened slowly, but methodically, through the redefinition of language and the infiltration of the political establishment with ideologies such as the perfection of the patent system, and "more is better". Once understood, it is easily predicted: the patent industry can overcome any barriers that are not absolute. There are no lines that can be drawn between the "good" and the "bad" software patents, that a determined patent attorney cannot cross, given time and money and a cooperative patent office.

This is why the Abolitionists unanimously and without compromise rejected all attempts to build such barriers out of terminology like "technical". And it is why they regarded with hostility anyone, especially lawyers, who proposed them.

The second key insight which drove the Abolitionists was the understanding of the economics of the patent industry. In its marketing, the patent industry claims to promote innovation and help small inventors. In reality, the patent industry is overwhelmingly tuned to the needs of its "clients": large firms and patent trolls. For both these classes, patents are sensible and economically worthwhile. Large firms mostly fight smaller competitors. Patent trolls build and defend a patent licensing business. The small-to-medium software developer finds themselves at the sharp end of the stick, with respect to larger patent holding firms. Trolls tend to attack large end users, and firms with too much money. But they can also attack SMEs, in markets where it is profitable.

Given that it is the large firms, and the lobbyists, who exert the most political influence, especially within the closed circles of the EPO, it seems inevitable that the patent system would and will evolve to provide the widest possible patentability, the strongest possible litigation, and the biggest profits for its clients, at society's expense. The US, often ahead by several years, provided a clear scenario of what could happen in Europe.

By 2001 Red Hat along with others like Microsoft and IBM were pushing the envelope on what could be patented in Europe, investing in lawyers to undermine the exclusions of EPC Art 52. Red Hat's statements must be understood in this context. As they took patents at the EPO level, they argued against abolition, and in support of "reforms" that would improve the value of Red Hat's own growing patent portfolio. While they pointed out problems with software patents, they did not turn this into political action. Instead, they endorsed the propaganda term "Computer Implemented Invention" and they lobbied for amendments that would legislate for, not against, software patents across Europe where the letter of the law still forbade them.

The FFII President Benjamin Henrion was in the European Parliament in 2005, collecting signatures for the amendments that would ban patents on software. He recalls, "I was in the EP. They did not helped us collecting signatures, going for interop instead."

The evidence thus shows that Red Hat, along with IBM, Sun and Google, did not campaign for an end to software patents in Europe, neither when that was within reach in 2005, nor today when it remains a reachable goal. Instead, they focused on:

• Trying to define distinctions between "bad" (business method) and "good" software patents, despite the fact that no such distinctions have ever successfully been formalised and upheld;
• Aiming to "harmonize" US and European patent law, which has invariably meant extending, not restricting, patentable areas;
• Aiming to "improve" the quality of issued software patents, despite evidence that "good" software patents do as much damage as "bad" ones;
• Lobbying for "interoperability" exemptions.

While interoperability seems a noble goal, in the context of these US firms, it means "Linux-to-Windows interoperability". Red Hat was thus working, together with Sun, Oracle, Google, and IBM, to establish US-style patenting of software while carving out enough space to protect their own Linux-based businesses.

Red Hat, instead of working with the Abolitionists to end software patents in Europe, was working to rewrite the law and remove the protection from patents that Europe's small software sector had enjoyed until then. While this seems normal and obvious for a firm that needs to answer to shareholders and investors, it is Red Hat's own statements that baffle us. If Red Hat seeks patents "to discourage patent lawsuits by giving us the ability to retaliate against potential patent aggressors by asserting counter-claims as a defence", why did they not work for abolition in Europe in 2005 and why are they not working for abolition in 2009?

Open letter to Spanish Minister of Industry

His Excellency Mr. Sebastián, Minister of Industry, Tourism and Trade, forgive us the frankness of our question, but with all due respect and consideration, are you really implementing your own vision of what should be the Information Society in Spain? In other words, is all that is happening, regarding Information Technologies and
Communication in Spain, direct result of your own policies?

These questions, Mr. Minister, that seem rhetorical, are actually important questions are bothering citizens with increasing frequency. In fact, we not only have these questions from the moment you, Mr. Sebastián, were appointed Minister of Industry, we have had them before you took office. Because actions of your government regarding Information Society in Spain, seem closer to the Jesuitic saying of “not a bad word or a good action”, than a true and strong policy directive accepted seamlessly throughout your Cabinet.

Let us substantiate the claim, by listing some facts:

First, during the procedure of acceptation of the Law for Promotion of the Information Society (LISI), as initial draft and then, in the Technical Advisory Council of the Society of Information (CATSI), Secretary of State for Telecommunications and Information Society, Mr. Francisco Ros Perán, tried to impose the (in)famous Article 17bis against what was supported by your predecessor, Minister Montilla. This article enabled Internet censorship in despite of the Constitution and with independence of the judiciary power. Finally, the scandal, the social mobilization and the intervention of Mr Montilla, resulted in the exclusion of this legal aberration from the draft of the law. This important event, however, had no political consequences for its main culprit.

Second, during the procedure of acceptation of the LISI, pressures from Mr. Ros Perán prevented the inclusion of “Net Neutrality” principle into the law, which is basic to achieve the confidence and certainty for electronic commerce, for advancements of technological developments, for safeguarding fundamental rights of citizens in the Network and for carrying out a structural reform that Spain needs to address the current crisis. With Net Neutrality Innovative SMEs and professionals can compete in equal conditions with major telecommunications operators, providing their contents and services on line on their own. This overlook hasn't had or is having any political consequence.

Third, at the end of the procedure of acceptation of the LISI law, Mr. Francisco Ros again, vetoed the possibility of providing Internet access by local corporations as a public service, service that today would also be an immense help to overcome crisis, since the Internet is a basic infrastructure for the development of our economy. This veto could be compared with the ban of public roads in favour of exclusively private ones. Can you imagine a city only with private streets and toll booths on each corner? Can you imagine a city where the suburbs do not have paved roads because it is not profitable for the private sector? Such veto again, has had no political consequence.

Fourthly, for implementation of LISI law, it is clear that broadband is, and should be, a universal service. Once again, Mr. Francisco Ros, based on this consideration that this is not reflected into EU's laws as such (sic.), he argues that neither companies, nor governments, have obligation to comply with this law. We must add, that his Ministry, by the decision of his Secretary of State, is using a definition of "broadband" that is slantedly obsolete, more typical of the era of Bush (father) and of the reactionary ideas of the “Soto Commission”, that it is absolutely different from the definition used by the rest of Europe. While in Europe a line with less than 1 Mb/s downstream or upstream is not considered as "Broadband", the Spanish Government still considers as "Broadband" such ridiculous speeds as 256 Kb/s downstream and 128 Kb/s upstream. Surely something more adequate for Sub-Saharan Africa, than for a country, that it is self-defined as the 8th largest world power. If we add to all that we said before, the exorbitant asymmetry of our ADSL lines, to prevent that anyone be able to provide an electronic service through the contracting of a normal line of Internet, we have a situation which virtually prevents that any citizen can contribute to the Network, as well as any of our SMEs, and professionals, that can't provide an electronic service minimally innovative and competitive. This lack of application of Spanish LISI law has had no political consequence.

Fifth, recently, was removed from the broadband's Spanish legal regulation any reference to ADSL lines with speeds above 30 Mb/s. Again, this polemic decision was made by Mr. Francisco Ros. A decision that the government was forced to withdraw by the EU because it was a barrier to competition in the Spanish market. This hasn't had any political consequence either.

In summary, Mr. Minister, considering the aforementioned points, you give us the impression that some lobbyists are speaking through the mouth and facts of your Secretary of State, without considering that those interests are clearly opposed to those of the citizenship and the national economy. The problem is that it seems that these mark the policy regardless of your opinion. It is clear that your Ministry should impose a radical change of direction, and eliminate these pressures and diversions, directing its course to one policy that should be social, modern and progressive.

A new policy, that would encourage emerging business from SMEs and professionals, that would provide a quality access, and allow Spaniards to work and participate within the Network, contributing ideas and contents with the freedom that is taken for granted in a modern and democratic state.

Mr. Minister, you maintained clearly that "we will not apply any restrictions or regulation, that prevents any expansion, or discourage the use of the Internet, nor we will set limits to the tools that allow the free flow of information" because "This freedom is and has been the key of the net, the source of its growth and popularity." But the truth seems different. In spite of such noble words, there are black clouds over the horizon for Spanish civil liberties on the Internet. Are you responsible for those black clouds?

To quote Karel Vasak, first Secretary General of the International Institute of Human Rights "No rights have ever been achieved without a struggle, they have always been wrestled away from the established power.” But now we are jeopardizing our basic rights in its modern form, the electronic rights. Rights that were already established and enshrined in our constitutions since the Eighteenth century as freedom of speech, thought and conscience, and that the people won with blood, sweat and tears. In the words of Benjamin Franklin, "Any society that would give up a little liberty to gain a little security will deserve neither and lose both."

The most worrying thin is, Mr. Minister, that your claims, so consistent with a truly modern and progressive politician, are not followed or implemented by members of your Cabinet such as Mr. Ros. As you can see, he appears to have ideas and projects completely opposed to your own… and the vast majority of Spanish citizens. However we have no doubt thatt Mr. Ros is a competent professional. We know what he is and has been. But we also know that he is not the best person for your cabinet because his policies are high risk ones. Risks that have been materialized in the last months. Let us resume the previous list:

Sixth, We have one of the most egregious examples in the consecration of an indiscriminate payment for the compensation of private copying (levy or tax) for copyrighted works. This money is ultimately distributed unequally and without any control, and among very few of the artists, mostly with contracts with large multinational entertainment companies. The method chosen constitutes a real tax, collected and managed by private entities, for what is the "paper" of our information era: the digital information media. If this had happened in Joannes Gutenberg's epoch and a fee ha imposed on each sheet of paper manufactured. What would have been of the Renaissance? Let us remind you that this "tax" for the transmission of knowledge, software and culture, has been established side by side with the Ministry of Culture. Mr. Minister, who has been responsible for this in your ministry? Is this the modern and progressive policy that your ministry wants to follow? If it is not the case, does it not deserves any political consequence?

Currently, there are values at risk that are very important for citizens and businesses. In particular, legal certainty. Especially needed is the certainty that online rulings are and will be clear, stable, and equal for all. Citizens must be assured that nobody is going be shielded by the "management" of the network, intellectual property or crimes and felonies, to criminalize the technology, or to take control of the Network, and eliminate Net Neutrality. P2P technologies suffered this kind of abuse in its day, and a similar thing happened with GPG / PGP cryptography in the U.S.

Let's be realistic Mr. Minister, far from being a security problem, the network has allowed, as with cases of child pornography, the detection and arrest of perpetrators of these offences. But this is not the only case in which the network is helping the justice. These kind of crimes, if perpetrated in the secretiveness of seedy clubs, or in the privacy of a closed group of "initiated", the guilty would be difficult to identify or to convict. "Out of mind, out of sight", as the saying goes. But, Mr. Minister, the problem is not within the technology or within the Web, it is entrenched in the society and in the society, in other words, within the real world, not within the virtual one, is the place in which we must take the corrective and preventive actions. The Network is no better or worse than real life, it is only a reflection of real life. The Network is not the origin and cause of crime, as neither is a knife, that can be used for cooking or for exercising despicable domestic violence. The problem is not the knife, it is the person wielding it and the solution lies in prevention rather than in banning all kitchen knives. If we place barriers on the Network, these criminals simply will look for other means. But you are hindering the main route communication and opportunity for innovation and for the generation of new business routes for Spanish people.

Seventh, and let us hope the last: despite the fact that you, Mr. Minister, insist that no changes are expected on the horizon of the Internet in Spain, it is true that your Secretary of State, Mr. Francisco Ros, hand in hand with the Ministry of Culture, continue pushing forward, along with major Spanish telecommunications companies, grouped as REDTEL association, an agreement with Collective Management Societies of Copyright that will again axe basic rights of the citizens, a curtailment of rights that would favour a minority pressure group that has a dubious legitimacy to reach such an agreement. An agreement that will be the milestone and a pretext for request a legislative change that would make illegal file sharing via P2P networks, something that today is absolutely legal in Spain. An agreement that, unfortunately, also would have large and negative consequences for culture and economy. In the economic sphere the agreemnt would be reflected in the response of the citizens, as has been warned in some papers by experts, asking for contract rescission of broadband services in mass, or at least, continually changing from one operator to another. This will affect infrastructure investment and thus, relegating Internet in Spain to the bottom of the list in Europe. In the cultural area, we would like to remind you, Mr. Minister, that the majority of the culture is public domain or public in nature, therefore it is not subject to any restriction of copyright. Unfortunately, the public culture, which for us is the real culture, is not to the liking of some because it is not easily sold. But with technological restrictions that are promoted by your Secretary of State, ther would be misappropriation of public property. For how long, Mr. Minister? How can you agree these kind of abuses that go on behind your back and promoted by members of your Cabinet? Do they not deserve any political consequences?

The truth is that, knowing that "there is only room for one captain on any ship" we do not understand how your Secretary of State, Mr. Francisco Ros, can be the person who is setting the direction, of the Ministry's (bad) policies in critical matters has been doing so for years. And doing so against the opinion of Ministers who have held your office before you, and against the minister who is leading now the Ministry, agains his own political party, and against the most of the social base that he is representing. We believe, Mr. Minister, that the decisions of your Ministry are very important to the economy of this country and much more in a time when crisis is holding on with steel claws to Spanish society. We remind you that you, Mr. Minister, are the one ultimately responsible to check the policy of your Ministry and thus, to obtain positive results.

Based on the above please, Mr. Minister Sebastián, we request you replace your Secretary of State for Telecommunications and Information Society, Mr. Francisco Ros Perán as soon as possible with another professional who follows the political line that you have traced publicly in your statements in regard with waiving "any restrictions or regulations that prevent expansion, or discourage the use of Internet”, or “establish limits to the use of tools for free flow of information."

A significant part of the Spanish economy, innovation and civil liberties are at stake without replacement. It is essential for our economic, cultural and democratic development, that information infrastructures continue to enjoy full freedom in Spain.

Thank you very much in advance, Mr. Minister.