R&D spend may be 'wasted' if patent proposals go ahead

Europe's top five technology firms have warned the European Union in a joint letter that €15 billion of their annual R&D spending could be wasted if it implemented proposed changes to its software patent law.

The letter, which was sent last month but surfaced yesterday, was signed by the heads of telecoms and technology giants Nokia, Ericsson, Siemens, Philips and Alcatel.

The companies asked the European Commission to scrap changes introduced to a new software patent draft by the EU parliament on September 24th, saying they deprived their products of patent protection.

"The vote in parliament...has completely turned the commission's original proposal around, removing effective patent protection for much - and in the case of telecommunications and consumer electronics probably most - of our R&D investment," they said in the letter.

"This would have devastating consequences for our companies. It would be open for all-comers."

They sent the letter, dated November 7th, to the European Union's (EU) Internal Market Commissioner, Mr Frits Bolkenstein, and Information Society Commissioner Mr Erkki Liikanen.

An Ericsson spokesman said yesterday that he was not aware of an answer from the Commission yet. A spokesman for Mr Bolkenstein said he was checking if the letter had been received.

Under current EU rules, software cannot be patented but inventions that use the software can. The new patent law drafted by the Commission aims to turn that practice into law. But the parliament changed the draft, introducing amendments to ensure patents are not used to block competing inventions.

As a result, the patent protection on software-based products, like modern telephone exchanges, had been weakened, the five companies argued.

"You could compare it with an old telephone exchange where all the parts were patent-protected. Today the exchange is digital and run by a computer program, which under these rules could not be protected," Ericsson spokesman Mr Peter Olofsson said.