2004-06-22 DE Deutsche Bank against Software Patents, asks DE Gov't to Alter its Course
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Quotes
Page 1
- Innovation in Germany Windows of Opportunity Germany's innovation system badly needs a boost. Output is still strong, but prospects are dim due to structural problems. Notorious weaknesses include slow structural change towards cutting-edge technologies, weak supply of risk capital, and declining contributions to innovation from SMEs. A long list of remedies is under discussion, and the government is slowly starting to tackle some of them in its current "Year of Technology". However, they all aim at catching up with other nations' higher standards. Catch-up is essential, but not enough. To gain a true competitive edge, Germany needs to take steps others have not taken, in domains where it is on an equal footing with competitors:
- ..
- Set up a balanced IP protection regime to foster the creation and flow
- of ideas. Stronger IP protection is not always better. Chances are that patents on software, common practice in the US and on the brink of being legalised in Europe, in fact stifle innovation. Europe could still alter course.
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- Bearing this in mind, one could be tempted to consider ever stricter IP protection regimes to provide ever more stimuli for innovation. This conclusion is wrong, however. A prime example is patents on software, which might at first sight be seen as a logical expansion of the classic technology patent. But creating software differs markedly from creating machinery and the like: MIT researchers Bessen and Maskin argue that innovation in software is both strongly sequential (one invention building on a previous one) and complementary (thriving on parallel approaches to the same problem), far more so than in other technology fields. In fact, they found empirical evidence that
software patenting substitutes R&D activity, rather than encouraging it, and conclude: "For industries like software or computer, there is actually good reason to believe that imitation becomes a spur to innovation, while strong patents become an impediment". In accordance with other academics, they strongly favour copyright over patent protection for software. Copyrighting provides both adequate leeway for sequential innovation and enough protection for marketable software products. The cited studies analyse the US software market, where patentability has been introduced gradually since the early 1980s, lowering patent granting standards and strengthening enforcement (see figure). 20 years later, the EU is following suit: the Council of the EU has introduced a controversially discussed pro-patent bill to the European Parliament, due to be enacted this summer. Thus, the rapidly closing window of opportunity for Germany and the EU in general is to alter course, keep the legacy copyright system for software, and thereby provide a better-balanced IP protection regime than software?s old bull: the US3. Measures to take. The German government is among the tentative critics of the EU software patent bill. This position should be bolstered, by (1) putting forward academic evidence and (2) making SMEs? concerns heard. SMEs are crucial providers of pathbreaking innovations, but would be most adversely affected by patentability. The majority of them is deterred by the costs of patenting themselves, but would have to navigate around software patent portfolios of large corporations.
