Software Engineering Institute

The Directive on the Patentability of Computer-Implemented Inventions recently approved by the European Parliament may have long range implications for the software industry, public policy and patent protection for years to come. Patents can be, at once, a spur and a roadblock to innovation. At the same time, the world is moving toward greater economic integration, driving current debate on the harmonization of intellectual property rights.

In this paper, we begin by summarizing the scope of patent protection in the European Union, the United States, and Japan. In doing so, we examine the patentability of computer software as inventions allowed under E.U. and U.S. patent law. The value of software patents and the U.S. experience with patent liberalization for 20 years is considered. Two instances of software patenting and their effects are discussed. We then provide an overview of the proposed Directive recently approved by the European Parliament. The approval also included several amendments. Finally, we assess the legal, economic, and public policy implications of the Directive for software developers and users.

We do not attempt a comprehensive examination of the utility and rationale for patent protection. This is beyond the scope of our paper. Ours is also not an empirical research study; rather, our investigation is more contemporary and topical, looking at the conditions surrounding software patentability as a key barrier and enabler for innovation and competition.