Software patents could spell bad news for small firms
By Aleksander Nowacki
Even as a debate is raging in the European Union over the proposed legislation that could change the shape of the software development market, few local firms seem to share the concerns of their Western European counterparts.
Under the proposed law, software would be granted patent protection; a move that some say could stifle innovation by allowing the few giants to gobble up the patents and block the smaller firms' efforts. If passed, it would mean a major overhaul of the existing practice on intellectual rights protection of software in this country.
The directive, currently worked on by the European Parliament, aims to offer patent protection to "computer-implemented inventions," or inventions that involve a hardware technical element, as well as a software component. Some 30,000 such patents have been granted to date by the European Patent Office (EPO) and, according to Miller Canfield attorney Monika Tomczak, the directive aims to bring order to a "hitherto chaotic EPO practice." The new rules could, however, mean a significant change to the current practice of the local patent office.
"I personally find the prospect of including software under patent protection highly controversial," says Paweł Laskowski, president of Warsaw-based software maker Comtica. He goes on to say that a few market leaders could gobble up the patents and use them to keep competition from smaller firms at bay. In principle, Laskowski says, extra protection for software makers' intellectual property rights is a welcome idea.
"Experience tells me, however, that it could further privilege the few market leaders," Laskowski says. "I fear that, after gaining a number of patents, such leaders could dictate terms to other market players."
His concerns are not, however, shared by many other smaller software companies. Several did not return calls and e-mails seeking comment, while others said they were not monitoring the case and did not see how the new regulations could affect their business.
"The local (software intellectual rights protection) practice is much less developed than in the EU," Tomczak comments. She adds however, that the market has got used to the current situation, when software is protected by copyright alone, and some companies could be in for a rude awakening.
A significant change that the proposed legislation would bring about is that the patents would rule out the practice of "reverse engineering," limiting companies' ability to arrive at the same results as their competition through other means. It is this that makes some market players wary of the directive.
"As I see it, the directive goes in the right direction," says Jerzy Skrzypowski, attorney at Baker & McKenzie. "The problem has been solved to the satisfaction of both the largest firms and the 'open-source' aficionados." Tomczak is, however, less optimistic.
"The official line is that the directive in no way will impede innovation," she says. "Fears, however, persist. The smaller companies may find it hard to keep up the pace of patenting their inventions." Judging from the cool reaction of domestic software makers, she may well be right.
