April 4, 2007

Single EU patent law good for US giants, bad for small EU firms

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Brussels, 4 April 2007 — EU Commissioner McCreevy today announced his plans for an EU-wide patent law. The Foundation for a Free Information Infrastructure, which represents more than 3,000 small-to-medium IT firms and 8,000 IT professionals, says that this proposal is based on flawed assumptions and will make it easier for large US companies to sue small European IT firms.

FFII President Pieter Hintjens explains, “The EU is following the US down the risky path of a central patent jurisdiction, when this experiment has failed miserably in the US.” New studies to be presented at a conference organised by the FFII in Brussels in May, show that in all industries except pharmaceutics, the US patent system has slowed-down, not promoted, innovation.

“The Commission insults the many SMEs who participated in its Patent Consultation by claiming that they are uninformed when they say the patent system does not fit in their business model. Reducing financial burdens on venture capitalists, like in the US, would be much more fruitful than proposing to throw even more money at ‘reeducating’ companies to agree with the Commission’s patent obsession,” he added.

The Commission explains its patent fixation by noting that there is a strong correlation between its innovation indicators and patenting activity. Since these indicators are however partially based on patenting activity, the absence of such correlation would be most peculiar. Moreover, as any first year statistician knows: correlation does not imply causation.

“There are also some positive notes. The Commission insists on independent judges, and recognises that the the patent system as it stands today is largely unsuited for SMEs. But its focus on patent litigation costs is like putting lipstick on a pig. Unless the quality problems in the European Patent Office’s functioning are addressed, cheaper litigation will only make matters worse”, Hintjens said.

He concluded, “Cheaper litigation by itself would merely result in a US-like litigation explosion, which is devastating for small companies. This is a high-risk experiment jeopardising the European software sector, which depends on SMEs. It’s a mistake to launch this, without proper study, just as the EU economy is starting to beat the US economy.”

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Contact information

Benjamin Henrion
FFII Brussels
+32-2-414 84 03
bhenrion at ffii.org
(French/English)

About the FFII

The FFII is a not-for-profit association registered in twenty European countries, dedicated to the development of information goods for the public benefit, based on copyright, free competition, open standards. More than 850 members, 3,500 companies and 100,000 supporters have entrusted the FFII to act as their voice in public policy questions concerning exclusion rights (intellectual property) in data processing.