There is a group of people who believe that intellectual property rights (such as patents) are an absolute property right. Now the EU is proposing a course of action that must be based on that position: criminalizing all intellectual property infringements, including patent violations. The obviousness of this position is clear — we lock people up for theft of and trespass on real property, why not for intellectual property.
Well, the answer is not so clear. First, is “intellectual property” really property — or is it a state-granted monopoly right? If it is a state-granted monopoly right, then civil not criminal penalties are more appropriate.
Second, assessing the validity of a patent right is not so clear cut (for more see the Athena Alliance/CELI session on patent reform). Patents are not the same quality as real property titles — and even real property titles can get messy (which is why we all have title insurance on our houses). Criminalizing patent infringement would put a strong chilling effect on innovation, since an innovation that is later found to infringe (willfully or not) would subject the innovator to the risk of prison.
Here is what some of the most innovative companies have to same, according to the International Herald Tribune/New York Times:
Tim Frain, director of intellectual property at Nokia, called the inclusion of patents within the scope of a European law “ludicrous.” Frain, who is based near London, advises managers at Nokia on the risks of infringing existing patents when they develop new functions for mobile phones.
Frain indicated that patent holders wanted protection but not penalties of imprisonment as they tested the boundaries of other patents. “It’s never black and white,” he said. “Sometimes third-party patents are so weak that I advise managers to go ahead and innovate because, after making a risk analysis, we feel we can safely challenge the existing patent.”
He added, “But with this law, even if I’m certain the existing patent is no good, the manager involved would be criminally liable.”
. . .
“The law could trigger abusive criminal litigation, which would have a chilling effect on innovation,” said Francisco Mingorance, European affairs manager at the Business Software Alliance, a trade body that represents Microsoft and Apple Computer, among others, in Brussels.
Some of the biggest patent owners have themselves been accused of patent infringement. Microsoft owns around 5,000 patents and is currently fighting 32 infringement claims, the company’s spokesman in Brussels, Tom Brookes, said.
So, does the EU propose hauling Bill Gates off to the gaol if Microsoft loses one of those 32 infringement cases? That would certainly foster a spirit of innovation and solve Europe’s competitiveness problem.