On 13th of May two public traded Danish companies (SimCorp and Maconomy) wrote a letter of concern to the Danish parliament committee which monitors and confirms the government policy in the European union.
The original letter in Danish is a public document.
Here is an unofficial translation by Peter Mogensen (peter at digitalforbruger dk) of a letter to the Danish parliament committee from two of denmark's most known software companies.
Page 1:
We hereby deliver a letter for the committee meeting on May 14th regarding the request of our two companies that Denmark not support the passing of the "software patent directive" on the council meeting May 17-18th 2004.
We request that this document is circulated to the members of the committee as soon as possible.
On behalf of the the undersigned 2 companies
Maconomy A/S Simcorp A/S
Kind regards Simcorp A/S
Peter Theill
Page 2:
We are among the largest danish owned software developing companies and we must express our concern about the Irish proposal for a directive on computer implemented innovations which is on the agenda for the upcoming Council meeting May 17th-18th. 2004.
Our core business is development and adjustments of our own software solutions, which we sell in international markets. Our products are very complex and composed from a large number of ideas. Because of this our products can not be protected from imitation by one or a few patents. We further estimate that the cost of acquiring software patents does not compare to what we can expect to earn by acquiring them. Therefore, we have after careful consideration chosen not to spend resources on acquiring patents. Many innovations happen in our companies, but our employees do not have the time to figure out which ones in reality are novelties.
If we should acquire patents, we should hire employees whose job would be monitoring the innovations we produce. They should further assess whether these were legally speaking inventions and find out whether similar inventions had been made elsewhere in the world. These employees should then estimate which possible patents were worth spending resources to acquire. Finally they should acquire the patents and defend them.
It would be very costly to hire such patents experts and some of our patents would very likely become obsolete because of the rapid development in the IT-sector.
We have a much greater need for these resources for improving and updating our core products themselves. After all, that's were we have our strongest international competence, which is essential for us to remain and improve, and it is essential to us that we retain and extend this competence.
It must be noted that it would be very insufficient to subsidise small and medium sized enterprises for the patent application process itself, since this is only a small part of the costs of having a patent department.
Page 3:
Since our products are very complex, we fear a situation where our products infringes on a large number of patents. Software development is to a high degree based on the use and expansion of the ideas of others, but also that the same ideas are conceived and used in many places. Our product development is based on this and we are deeply concerned that we in the future must spend resources on monitoring patents, negotiating license agreements and paying royalties. That can become a significant workload and economical burden which will make our business difficult.
We do not understand why the danish government - and possibly a majority of the parliament - plans to lessen our competitiveness by supporting the Irish proposal for a software patent directive, in the council. We are astonished that the Irish presidency has discarded all of the amendments which were accepted by the European parliament in the fall of 2003.
The Irish presidency has removed the parliament art. 2a, 4.3, 4.3a and 4b which limits software patents to include technology understood as "utilizing natural forces to control physical effects beyond numerical representation of information". The condition for an invention to be patentable is that it has a "technical contribution" or "technical character". But neither the Irish proposal nor the European Patent Office legal foundation has any definition of when a contribution is "technical" or when it's not. If clear limits of patentability are not decided from the political side we can expect the system to evolve to American conditions where companies such as ours must spend considerable resources to monitor that we do not inadvertently infringe on a large number of patents.
The US Federal Trade Commission released in 2003 a report on the American patent system. Chapter 3.V deals with software patents. 1 Chapter 3.V is written based on statements from a panel consisting of large and small American software companies. It is concluded:
"Many panelists and participants expressed the view that software and Internet patent are impeding innovation. They stated that such patents are impairing follow-on incentives, increasing entry barriers, creating uncertainty that harms incentives to invest in innovation, and producing patent thickets. ... Commentators noted that patent thickets make it more difficult to commercialize new products and raise uncertainty and investment risks." [p 3.54, pdf page 163]
One of the panel participants concluded that there could be "potentially dozens or hundreds of patents covering individual components of a product." [p 3.52, pdf page 161]
Page 4:
This describes well what we expect the situation in Europe to become if narrow and clear limits on patentability of software are not set as decided by the European parliament. Such a situation, where there's no clear limits of patentability of software must be generally regarded as bad for innovation in the Danish software industry, including our companies.
In particular we fear patents on interoperability and standards. We need our software to be able to communicate freely with other software without having to take into account unnecessary restrictions imposed on us by other companies, e.g. competitors. If there has to be patents on interoperability and standards, they must be free and without restrictions such as the W3C is demanding it before approving new standards for the Internet (html, xhtml, XML). Therefore, we are also deeply concerned that the Irish presidency has removed the parliaments art. 6.2 [6a, ed.], which prevents patents on interoperability. It can become very problematic for us, if starndards on which we depend are patented, as it is already happening today in both USA, Japan and Europe.
On this background we request and urge the Danish government and Danish parliament to reject the Irish proposal for a software directive in its present form and further to demand that the European parliament art. 2b, 4.3, 4.3a, 4b and 6a are reinstated when it is discussed in the council.
kind regards,
1: To promote innovation: The proper balance of competition and patent law and policy. http://www.ftc.gov/os/2003/10/innovationrpt.pdf
[Ed. Remark: Company info was attached to the letter. This is more or less the same as on:
http://simcorp.com/about simcorp.aspx?lang=en http://www.maconomy.com/article.aspx?id=10117
Also it is mentioned that Maconomy had a 2003 turnover of DKK 161m, 68% from abroad, is traded on the Cph stock exchange and has 188 employees.
Simcorp is stated as DKK 499m turnover, 84% from abroad.
7.45 DKK is about 1 EUR]
| Home Help Changes SiteMap |