March 8, 2005

European Union countries gave their full support Monday to a much-delayed bill backed by large high-tech and ecommerce software companies wishing to promote software innovation and development.

EU research and industry ministers approved the draft legislation, but the fate of the proposal remains uncertain after the European Parliament already threw out the bill.

The proposed rules allow software that is part of a mechanical device - such as a mobile phone - to be patented. It is now slated to go back to the EU assembly for a second reading. It is uncertain if the parliament will vote for the bill, or demand further changes.

EU Internal Market Commissioner Charlie McCreevy had threatened to scrap the entire proposal, which is meant to harmonize patent law on software across the 25-nation bloc, if EU governments did not end their delay in approving the bill.

McCreevy said he would now "engage constructively" with EU governments and the parliament to try and reach a compromise.

"I will work to make sure these concerns are taken into account in the interest of a balanced result," McCreevy said.

Debate over the bill has divided those who say patents are needed to reward companies for innovation and opponents who argue that it would stifle innovation by shutting out smaller companies from open-source software.

Parliament leaders unanimously decided to scrap the bill arguing it favored large corporations like Microsoft Corp., which hold many patents.

Supporters of the bill said it struck a compromise harmonizing national patent laws on so-called "computer-implemented inventions," within Europe, while stopping short of the U.S. system that allows patenting of business methods or computer programs such as Amazon.com Inc.'s "one-click" shopping technique.

Monday's decision was welcomed by the Computing Technology Industry Association, a Chicago-based umbrella group for the global IT industry.

"It's a cornerstone of the whole ... process, to enhance further progress of technological innovation in Europe," said Hugo Lueders, CompTIA's European public policy director.

Source: BizReport.com

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