w00t! Europe does the right thing

Just once in while, a bunch of politicians get together and get something right, like today when the European Parliament decided to throw out the Computer Implemented Inventions Directive.

Translating that into English, it would have meant that software ‘inventions’ could be patented, killing off innovation and allowing the Great Satan Jr and his Legions of Hell (Redmond Chapter) to force competitors out of the market by patenting things like network protocols, file formats and even business processes like Amazon’s ‘one click’ ordering, etc. just as is currently possible in the US.

If you want to know how dumb an idea that is, all you need to know is that after the US extended its patent laws in this way, dear old BT started issuing threat of litigation having claimed that one of its old patents covered the ‘hyperlink’.

In many respects, computers exemplify both the best and the worst of free market economics. The best in the sense thanks to major cock-up by IBM way back when they put together their first PC, the development of PC hardware has been based on a raft of largely open standards and interchangable components which has meant that everyone from major suppliers like Dell to your local independent Pc retailer can get in on the business of making and selling PC’s. This, over time, has resulted in an open and competative market which has driven prices down to the benefit of the consumer – at one time a basic PC would have set you back £2000+, these days you can get a basic PC for £400.

Oh, and in case you’re wondering about IBM’s big cock-up, they were in such a rush to get a personal computer on the market at the time having fallen behind early pioneers like Apple and Commodore, that they cobbled one together from standard components rather than develop their own proprietory system, thereby opening the door for everything that followed.

If the hardware market shows competition at its best, when it comes to software – especially operating systems – that’s where we see it at its worst, thanks to the near monopoly of Microsoft, which comtrols something like 85% of the operating systems market.

You don’t a degree in economics to follow the maths on this – over the 25 years or since the first PC’s hit the market, PC’s have got cheaper, much cheaper – and not just in inflation adjusted ‘real terms’ either.

During the same period, software has become more expensive, not just relative to price of hardware but actually more expensive – back in the early days your £3000 PC would have used the DOS operating system which cost around £40-50. Today, if you had to buy Windows XP Pro for your £400 PC it would set you back around £150.

Ok, software does much more than it used to and is much more complex than it used to be but no of that takes away from the fact that software costs have increased substantially, exponentially even, in proportion to the cost of hardware and that the major difference between the two markets is that there is substantially less competition in the software market which is dominated by a small number of corporate ‘giants’ including Microsoft and Adobe.

Software patents, of the kind these companies have been pushing hard for, would have given them a more or less total ‘lock’ on the markets and driven their competition, especially from the growing ‘open source’ sector, out of business, leaving them with a licence to print money, not that they don’t have one of those to begin with.

Don’t get me wrong here, there is a case for some limited use of patents when it comes to software – this bill was originally supposed to offer greater protection for companies developing genuinely innovative products such as imaging systems for CAT scanners. Unfortunately for them, that agenda then got hijacked by the corporate giants of the industry with the result that the bill ended up being one that no one was happy with courtesy fo their efforts to extend the bill in dirctions which would have destroyed legitimate competition.

So I’m glad the bill failed. The EU have, for once, done the right thing and, for that, they should be applauded.