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Predators & Principles

You might have thought that in principle Europe might offer a defence against the predatory side of big and invariably American business but in practise, I don’t see a great deal of evidence that European innovation can survive and thrive under the new American Empire.

Take the rules on patenting as an example. In September, the European Parliament will vote on whether it should adopt a recommendation by its Legal Affairs and Internal Market Committee on whether the continent should harmonise its software patent rules in line with American and Japanese legislation.

And why not, you might ask, after all, if everyone sings to the same hymn sheet aren’t we all then competing on an equal basis with a solid framework of international law to protect companies from unlawful borrowing of their code?

In theory, you might be right but the reality may be somewhat different because the results of such legislation would shift the balance of power towards the really big global software companies and make development an expensive risk in the face of potential patent infringement lawsuits.

I recall that seven years ago, I had a registered company trading style, which one of the world’s largest software companies subsequently decided to name a product after. Very quickly, I was told to cease and desist, even though I had legally arrived at the name first. My trademark solicitor sensibly advised me that unless I had significant funds at my disposal, a fight was out of the question and so I bowed to the inevitable.

In the world of software patents, the same thing is likely to happen if the EU goes ahead with this harmonisation exercise because small software companies might suddenly find themselves slammed with a patent infringement charge by one of the larger gorillas. It does not really matter whether such a company might have infringed a software patent or not. It would have to prove its case in court or simply pay-up for a license. If you happen to be the Managing Director of such a company, it’s unlikely that you would be prepared to blow your company’s profits away on legal fees, so rather like the Dane Geld principle, you are more likely to sullenly pay-up than risk a court case.

The other side of the coin is equally distasteful and resembles a very high-stakes game of poker. Let’s say for the sake of example that small British company Widget Soft, comes-up with a really good piece of software that knocks the spots off a new application from one of the big software vendors. The choices for the bigger player might involve buying the smaller company and incorporating its code in a future release or simply throwing a charge of patent infringement in its direction, wait for it to implode under the strain and then pick-up the useful pieces from the administrator.

We are already seeing the first signs of such a problem buried in the SCO vs. IBM patent infringement lawsuit involving Linux and where Open Source development is concerned, companies will be constantly looking over their shoulders in a world where most new software ideas are built upon the old. If you can patent code in the same way that you can patent pencils then innovation, particularly within the Open Source community, will shrivel and die. This will leave us with a world with two proprietary offerings, one based entirely upon a single dominant Operating System and the other based-upon a service model, where the so-called ‘Open’ Operating System glues the result together. I’m not sure I like the prospect of either as a stimulus for the European software industry.


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