Unitary Patent A Threat To Small Business

A short article in today's Independent on Sunday looks uncritically at the single European patent and thinks the new patent rules coming in Europe will help small business. The article seems to start from the idea that patents are good, thus more patents are better. But consider this statement from the article:

"If a company believed its patent was being infringed in Germany and France, it could defend its rights in the court in London, receiving a judgment that would apply to Germany and France."

That cuts both ways. A small British company could find itself subject to court cases it can't understand in countries it can't afford to defend itself. Any patent holder in any one of the 27 EU countries can go to a local court and get a judgment in any one of the 23 official languages. Once Cable signs this agreement, the UK government agrees a judgment like this is enforceable against any UK business.

Such judgments could well become a huge business opportunity - but not for genuine innovators. It's likely we'll see companies whose only business is to own patents springing up in unlikely European jurisdictions, "trolling" innovative small businesses who can't afford to defend themselves across Europe. Faced with the threat of costly international litigation, most small businesses will just fold, settling out of court regardless of the merits of the case.

Far from "helping UK business" this ill-considered new regulation, promoted by big businesses as part of their euro-politics, will be a weapon to chill competition and favour corporations able to defend themselves on a European scale. The size of the fees is not the issue; the cost of defending patents against infringement, and defending oneself against accusations of infringement, is the real issue. We understand that well in the field of software; we've seen endless "patent assertion entities" at work around the world using easily-obtained software patents to threaten litigation. As Colleen Chien has observed, the perpetrators of this legal shake-down are increasingly targeting start-ups.

The IoS may have uncritically picked up the messaging the UK's "Intellectual Property Office" has been spreading, but the likely outcome of the unitary patent is likely to be much less savoury. Rather than helping small business, this new regulation introduces yet another threat against small business owners, especially those basing their business on open source software who have no corporate sugar-daddy to protect them.

Mr Cable, don't sign that document. Even President Obama thinks patent trolls are a problem.

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Copyright © 2013 IDG Communications, Inc.

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