Software patents: understanding the procedure

The European Commission yesterday rejected the European Parliament’s request for a whole new proposal on software patents. That does not seem very smart from a tactical point of view, as Parliament’s request was unanimous and it is Parliament which eventually decides if the proposal becomes law.

The Commission could however have decided to chance it, as software patent activists have a tendency to cry foul and overstate their case to such an extent that there is a real risk of backfiring. This would be a pity as at least part of the activists’ case (to what extent and under which conditions do patents, in general, promote or inhibit innovation) deserves serious consideration. That discussion, however, is for another time. For now, I will just try to add structure to the debate by providing a short outline of the legislative procedure at EU level in order to make clear what the next steps are.

So here we go: co-decision for dummies ;-):

  1. For a proposal to become law, the consent of both the European Parliament and the governments of the Member States (united in the Council of Ministers) is, eventually, required. This is similar to the legislative procedure in most countries with bicameral parliaments.
  2. As long as the EP and the Council disagree on the text of the proposal, it bounces back and forth between both institutions with each of them proposing amendments to the other.
  3. There is a maximum of two of these readings by each institution. At the end of the second reading, there are three possibilities:
    • They agree. The amended proposal is adopted.
    • An absolute majority of the European Parliament (i.e. a majority of the members, not a majority of the members present at the vote) rejects the proposal. That is the end of it.
    • An absolute majority of the European Parliament still proposes amendments. A conciliation committee then is set up (this again is analogous to many bicameral parliamentary systems). The committee consists of 25 Members of the European Parliament (MEPs), and 25 representatives of the Council (one for each Member State). They have a maximum of six weeks to negotiate a compromise text on which both a majority of the 25 MEPs and a qualified majority of the Council representatives agree.

    (Note that, here, the EP needs absolute majorities in order to change or reject the proposal, so the hurdle is slightly higher than a normal majority)

  4. If, within six weeks of conciliation,
    • a compromise is reached, the text is passed on to the European Parliament’s plenary (number 5 below).
    • a compromise is not reached, the proposal is dead.
  5. If, within another six weeks, an absolute majority of the European Parliament votes for the compromise, the proposal is law. Otherwise, the proposal is, again, dead. Naturally, a qualified majority of the Council must also vote for the compromise within six weeks, but this is a formality at this stage as all Member States were represented in the conciliation committee.

If (as there is still a chance to the contrary) and when the Council adopts its current common position on 7 March (as the Luxembourg Presidency is proposing), the phase reached is only halfway number 2 in the above: each institution has completed one reading.

What follows is a second reading by the EP (in which it will probably reiterate its stance of the first reading), followed by a second reading by the Council. Unless the Council changes its view (which it might), a conciliation will follow (phase 3, 4, and 5 in the above). See also this useful flow chart or read all about it in article 251 of the EC Treaty.

Even then there is still plenty of space for the European Parliament to have the last word, or to get the proposal off the table by:

  • either, not reaching a compromise with the Council within six weeks during the conciliation procedure (though this depends strongly on the will and the political colour of the individual MEPs in the conciliation committee)
  • or, not adopting the end result of the conciliation procedure (note that the absolute majority required is even a slightly higher hurdle than an ordinary one)

Both the Commission and the Council know all this, of course. So they have every interest to cooperate with Parliament and incorporate its views.

[Update 7 March 2005: EU ministers back disputed software patent proposal (requires Financial Times subscription). “European Union ministers on Monday endorsed a disputed proposal for the patenting of computer-related inventions that critics say could stifle software development, a European Commission spokesman said.” This means that the political agreement reached by governments almost a year ago was formally passed as an A point (i.e. without debate) after all, in accordance with usual Council procedures. What this does not necessarily mean is that the Council still supports the proposal in its current form. In fact, several governments that approved the political agreement a year ago have since come under fire from their national parliaments (notably in Denmark and the Netherlands) and have been forced to change tack. Also, the original agreement was reached in an EU still consisting of the 15 old Member States, whereas several of the new ones (notably Poland) are strong critics of the proposal. So the Council’s position is likely to change.
Next step: the second reading in the European Parliament.]

3 Responses to “Software patents: understanding the procedure”

  1. Benjamin Henrion Says:

    The next step of the procedure is that another country will take it out on monday and request a B-item.

  2. eulogist Says:

    Theoretically, yes. But somehow I do not expect that to happen anymore after previous attempts have failed. Luxembourg especially would not have put it back on the agenda if it expected any difficulties.

  3. Elaib Says:

    I recently attended a seminar hosted by Michael Shackleton, head of the conciliation secretariat in the Parliament. We discussed the Patents directive, as it the only really contentious peice of legislation going through the system and there were a bunch of poles in the room.
    He was very sanguine. In the time he has been inthe job (about 6 years) there have only been about 4 peieces of legislation that the process was unable to find a common position. From the flow chart one gets the feeling that there are equal likeihoods of outcome. That just isn’t the case.
    What is interesting is the way the Commission feels that it has the power and the right to reject out of hand the Parliament’s position. There are quite a few bruised egos wandering around the building.

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