The lobbying battle over the EU software patents directive
CEO backgrounder, 28 June 2005
Parliament resists.. and gives in
Initially, the European Parliament opposed the European Commission's directive proposal. In February 2005, the powerful Legal Affairs Committee made an official request to the Commission that it take the directive back to the drawing board and start from scratch. The Commission refused and caused a deep rift between itself and the parliament. One angry parliamentarian, [Maria Berger, coordinator of the Socialists in the Legal Affairs Committee], accused the Commission of acting "in collusion with Microsoft". She commented that Bill Gates, who visited both the Commission and Parliament in February, "is making himself ever more enemies in the European Parliament'. However, the following months saw a dramatic shift and in a Legal Affairs Committee vote on 20 June 2005, a narrow majority voted to reject amendments which would have substantially altered the Commission proposal. The decisive moment will be the vote in the European Parliament plenary currently scheduled for 6 July 2005.
Meanwhile, the Council of Ministers, has been divided. Much of the pro-patent industry lobbying has focused on the German government. The debate over software patents has been intense in Germany, with an open split between large corporations such as Siemens and Bosch, and the small and medium sized enterprises. In the Netherlands, the Government was in favour of the Commission proposal, but the national parliament forced a change in that position. Poland has been the most consistent proponent of an overhaul of the Commission proposal, with some support from countries like Denmark, Slovakia and France.
The Commission: too close to Microsoft?
Accusations that the European Commission is biased towards large software corporations were enhanced when Trade Commissioner Mandelson had to admit to having attended a party on New Year's Eve 2004 on Paul Allen's boat in the Caribbean. Paul Allen was a co-founder of Microsoft and is still its second biggest shareholder. More seriously, perhaps, are questions about the objectivity the Irish Internal Market Commissioner McCreevy on the software patents issue. Ireland is a tax haven and is highly dependent on investments from US multinationals. Microsoft has its main European operations there. The company was an official sponsor of the Irish EU presidency in 2004, during which McCreevy was Finance Minister, and had its logo on the official EU presidency website.
It is difficult to assess the degree to which the gradual shift by MEPs towards supporting software patents is a result of software industry lobbying. There is no doubt that large software corporations have invested millions of euros in securing the outcome they desire. Exact estimates of how much has been spent and how many lobbyists are working to influence the directive are currently impossible, due to the absence of lobbying disclosure obligations. This is one of the reasons why a growing coalition of civil society organisations is demanding mandatory transparency rules for lobbyists.
The software patents directive has sparked one of the largest EU lobbying battles in recent years. The following overview is by no means a comprehensive overview, but focuses on transparency and ethics (and lack thereof) in lobbying.
Large corporations tend to lobby through industry associations such as UNICE (the European employers Federation), CompTIA (the international IT industry), EICTA (European high tech association) and the North American BSA (Business Software Alliance). In addition to this many corporations have their own lobbyists.
The most visible campaign against software patents is organized by the Foundation for a Free Information Infrastructure (FFII). UEAPME (the European Association of Craft, Small and Medium-sized Enterprises) is also strongly opposed.
Industry lobbyists, frustrated by the resistance to software patents from parliamentarians, have recently launched attacks on the FFII. For example, EICTA lobbyist Mark MacGann accused the FFII of secrecy and deception, accusations that may actually backfire, as they would seem to be far more relevant to parts of the pro-patents lobby. In a two-page interview in the EUReporter magazine MacGann stated that, "it is not fair to MEPs and consumers to have such an opaque organisation lobbying MEPs without saying exactly who they represent."
While opaque lobbying is widespread in Brussels, MacGann's attack seems ill-targeted. FFII provides detailed figures of their income and expenses, of donations and the number of their members on their website.
Icecream for software patents: the 'Campaign for Creativity'
MacGann's critique could be far more appropriately applied to the Campaign for Creativity (C4C). In its efforts to make Members of the European Parliament (MEPs) support software patents, the campaign claims to represent the interests of 'artists, musicians, designers, engineers, software developers and anyone else whose livelihood depends on their creativity'. The entire website www.campaignforcreativity.org is written as if the authors are themselves part of the creative sector, which is most likely not the case. The C4C website invites visitors to "with one click" send a prepared email to 'all targeted MEPs', 'Conservative MEPs only', 'Socialist MEPs only' or 'Liberal MEPs only'. The website explains the need to bombard MEPs with emails: "We want to make sure that they all know that there are a huge number of us in the creative industries that support the Directive".
The C4C campaign, which portrays itself as rooted in Europe's creative communities, is highly misleading. The website states: "Some of us are privileged enough to make our livelihood from our creativity. We don't only create, but we contribute to economic prosperity." Yet, the issues dealt with on the website focus solely on software and biotechnology, not on the concerns of artists and writers.
Nowhere does the website clarify that C4C is orchestrated by Campbell Gentry, a London-based public relations firm. C4C is run by Simon Gentry, who in the past lobbied for biotech patents on behalf of SmithKline Beecham. Like Gentry, another C4C campaigner Hugo Shanahan, is employed by Campbell Gentry. The English website does mention that the campaign "is supported" by a few companies and organisations including software multinationals Microsoft and SAP, and industry association CompTIA. However, the German and French editions of the website, do not contain this information. No where does the C4C website provide information about who funds the campaign. When the German watchdog organisation LobbyControl phoned Mr. Gentry, he refused to provide further information about the campaign's finances. Gentry claimed that C4C has some hundred individual supporters, but these do not contribute financially. The companies would contribute to specific actions of the campaign, not on a fixed scheme. Gentry dismissed the questions about finances as meaningless as running the campaign is also be a matter of other resources (e.g. providing access to rooms or a patent lawyer), not only money. Therefore, the question remains about where resources come from and, who is defining the goals and strategies of the campaign.
Gentry and the biotech patents directive
In the mid-1990's, Gentry helped orchestrate a similar, highly controversial campaign to influence the EU's biotech patents directive. The strategy, paid for by pharmaceuticals giant SmithKline, included bringing patients in wheelchairs to the European Parliament when the patent directive was debated, a tactic close to emotional blackmail. The patients were wearing yellow t-shirts saying 'No Patents No Cure'. The "friendships forged during that difficult campaign", Gentry explains on the C4C website, "formed the core of the Campaign for Creativity". He does not mention, however, how industry lobbyists financially supported and co-opted some patient groups. After the directive had been passed, one of the patient groups regretted their involvement and revoked their support, as they had not fully realised the consequences such as the possibility to patent genes.
In early June 2005, the 'Campaign for Creativity' caused controversy in the European Parliament when emails were sent on its behalf to all MEP's, from MEP Malcolm Harbour's office and email address. The emails invited the MEPs to come outside to the Place du Luxembourg to 'collect your free icecream and support the Computer Implemented Inventions Common Position!'. Harbour, UK conservative and one of the most influential MEPs on "intellectual property" matters, claimed he was not informed and C4C claimed full responsibility for the blunder. The incident highlighted both C4C's views on " creativity" in lobbying and its overly intimate relations with certain MEPs. About the icecream action, Gentry explained that "It was just a bit of fun. We were getting people to come and have a chat about what patents are." Two weeks later, C4C was back again on Place du Luxembourg, this time with a sculpture made of balloons, and yellow t-shirts saying 'No Patents No Innovation' (closely resembling tactics used during the lobby campaign for the biotech patents directive - see box).
Transparency and ethics rules needed to prevent deceptive lobbying
The Campaign for Creativity fits in the growing trend of EU public affairs firms running pseudo-NGOs or 'grassroots' campaigns that in reality have not emerge from citizens initiatives. For example, PA giant Burson-Marsteller, has faced criticism over the last 12 months faced criticism due to its role in establishing and de facto running "the Coalition to Prevent Deep-Vein Thrombosis" (on behalf of Aventis), "European Women for HPV Testing" (on behalf of Digene Corporation) and the "Bromine Science and Environmental Forum" (on behalf of major producers of bromine flame retardants). In all of these cases, Burson-Marsteller covered up its own role and/or that of the client financing the initiatives and only decided to marginally improve transparency once the critique emerged. Campbell Gentry and Burson-Marsteller are by no means the only EU public affairs firms offering their clients these types of lobbying services, which border on deception.
In these cases, considered borderline forms of lobbying, calls on lobbyists to volunteer transparency about their operations are unlikely to have meaningful effect. As awareness grows about the major role of lobbying and its impact on EU decision making, the need for greater transparency and ethics in operations, is too great to be left to voluntary measures. This is why a growing coalition of civil society groups are calling for mandatory lobbying disclosure and ethics rules, which would ensure that all relevant information is permanently available to EU citizens and decision-makers. As a minimum, all lobbyists should be obliged to disclose who they are lobbying for and with what budget. This information must be made available to the public in a fully searchable, sortable and downloadable online database. Ethics rules are needed to prevent the most blatant forms of manipulation. The Alliance for Lobbying Transparency and Ethics Regulation (ALTER-EU) campaigns for such rules to emerge as part of the 'European Transparency Initiative' (ETI), currently under discussion within the European Commission.
Think tanks think big
Another category of software patent supporters are the 'free-market' think tanks. For example, the Centre for the New Europe, has recently published a new paper titled 'Software is patentable by nature'. On 27 June 2005 the European Enterprise Institute (EEI) organised a lunch meeting to advocate pro-software patents. One of the speakers at this event, titled 'The Bigger Picture', is Jonathan Zuck, president of the US Association for Competitive Technology (ACT). ACT, whose membership includes eBay and Microsoft, is a keen supporter of software patents and has recently been actively lobbying in Brussels. The EEI presented the opinion paper 'Why Europe needs Software Patents', written by a patent lawyer.
Update: In a written comment to CEO, the European Enterprise Institute (EEI) emphasizes that the institution "does not have or take institutional opinions on anything, we frequently publish papers and articles with opposing views". With the EEI there are diverging positions on patents and in October 2004, the think tank organised an event where professor J Peter Murmann made the case against patents.
The European Patent Office: wearing two conflicting hats?
Other groups who stand to gain from increased patent granting an are often overlooked are the European Patent Office (EPO), national patent offices, patent law offices, translation companies, etc. For these groups, patents are their business and the more complicated the laws, the more work. The role of the EPO (and national patent offices) is particularly important as its employees decide whether a patent is given or not. Furthermore, if someone objects to a patent that has been granted, it is EPO employees on the boards of appeal that decide on the case. Yet as the EPO makes money granting patents, its objectivity is surely in question. EPO and national patent office officials are closely involved in the European Council's "Working Party on Intellectual Property". The EPO also lobbies the Parliament, and has three registered lobbyists targeting the European Parliament.
- Maria Berger, Bill Gates schafft sich im EU-Parlament immer neue Gegner; Auseinandersetzung um Software-Patente spitzt sich zu, 21 April 2005.
- Member states keep on pushing for software patents, EDRI-gram, Number 3.12, 15 June 2005.
- Corporate Europe Observatory, Ending corporate privileges and secrecy around lobbying in the European Union, June 2005.
- Mac Gann also stated that what he "would like to know is who finances the FFII?". About the FFII's mass letter writing campaigns, he said "Those who forward the letters don't read the legislation, they don't read economic arguments".
- FFII, Donors of the FFII, visited 27 June 2005.
- Industry and the EU Life Patent Directive, Corporate Europe Observer, Issue 1, May 1998.
- Corporate Europe Observatory, House of Mirrors - Burson-Marsteller Brussels lobbying for the bromine industry, January 2005.
- Corporate Europe Observatory, Ending corporate privileges and secrecy around lobbying in the European Union, June 2005.
- What is the Transparency Initiative?, website Commissioner Siim Kallas, visited 27 June 2005.
- Email from Jacob Lund Nielsen, Executive Director, European Enterprise Institute (EEI), 13 July 2005.
De Wittenstraat 25 1052 AK Amsterdam Netherlands
tel/fax: +31-20-612-7023 e-mail: ceo[at]corporateeurope.org