The news is up on Pamela Jones’ excellent techno-legal weblog Groklaw,
where she quotes Bloomberg News:

The European Parliament rejected a law on patents for software, ending a three-year effort by companies including Nokia Oyj and Siemens AG to counter U.S. domination of Europe’s $60 billion market.

The parliament in Strasbourg, France, today voted 648 to 14 to throw out a draft law protecting inventions that combine software and machinery, such as code that reduces battery consumption on mobile phones. The assembly opposed U.S.-style limits on free software and ruled out a compromise with European Union governments, which endorsed the legislation in March.

Read on to find out in English what this means, and why you might care.
Let me see if I can explain this in non-technical terms: Computer software is really just a way to take one set of numbers and tell your computer how to come up with another set of numbers. Since a computer reduces everything to numbers, such sets of instructions — called algorithms — are a computer’s essence. When I’m typing this text, the computer takes the numbers that the keyboard generates and translates them into numbers that are displayed on my screen and sent across the wire to Booman’s server, where another algorithm tells his server how to store them. If I want to listen to an MP3 file, an algorithm takes the numbers in that MP3 file and converts them into the numbers the sound card understands so it can tell my headphones what to do. If I want to sort my address book, an algorithm tells the computer how to do it.

You use algorithms all the time too, for everything from long division to how to store food in your pantry (soup cans on the second shelf, heavy stuff on the floor, and so on). Computers use many of these same algorithms, they just do it much faster than you and I do. Remember, too, that when I say “computer” I am refering to cell phones, your car, the digital-to-analog converter in your cable box, and any other device that uses software in its operation.

Now then. Let’s say that someone could legally own a way of sorting food in a pantry, and could charge you a fee every time you used their process for sorting your pantry. Worse yet, let’s say that someone could claim legal ownership for any method of sorting a pantry, so no matter what method you used, you would have to pay them every time you rearranged the creamed corn. Sound absurd? Of course, but in essence that is what software patents are about. A company that patents a sorting algorithm, for instance, can forbid any other company from using that algorithm in their software without paying a fee to use the patent. In an extreme case the company could forbid competitors from using the patent at all.

(In many ways this has been a gross oversimplification, and for those who understand the law or technology better than I do, I apologize. I’m trying to get past the boring stuff so I can illustrate some of the issues involved.)

Let’s see if I can illustrate this with an example. Suppose I were to develop a new type of long-term storage that increases capacity tenfold for a given cost. In other words, you’d pay roughly the same amount for a 1000 gigabyte Omir drive that you’d pay today for a 100 GB hard drive. Great, huh? Well, not so fast. What happens if I decide to patent the software used to access the drive, and only license it to Windows users? Sorry, Macheads. Too bad, Linux penguinistas. And don’t even think about using it with your iPod or PDA. Why would I do that? The motive doesn’t matter; the potential for abuse does.

Or let’s take a real-world example. If you go to Amazon.com, you can use a feature called One-Click Ordering to pick up that copy of Don’t Think Of An Elephant! you have your eye on. You can’t do that at BarnesandNoble.com, or Powells.com, or anywhere else, though, because Amazon.com has a patent on using a single click to order. I kid you not. And the reason? As stated by CEO Jeff Bezos, it’s precisely to keep sites like Barnes and Noble from doing the same thing.

Software patents have been allowed in the US for some time; Wikipedia has a discussion on the subject. The European Parliament’s initial aim, prodded by large companies like Siemens and Microsoft and Nokia, was to harmonize EU patent law and make it more in line with American law. The proposed law voted down today would have allowed the patenting of inventions that combine software and hardware (such as the battery monitoring device mentioned in the blockquote above). Oddly enough, several companies, including Nokia and Microsoft, did not like the current proposal, precisely because it did not go far enough in software patentability. They wanted software to be patentable on roughly the same scale it is here in the US.

So why does this matter to the average American? Well, currently software patents in EU countries are left up to local laws, which vary widely. In those companies where software is patentable, the patents will tend to wind up in the hands of a few large corporations, because they are the ones with the money to develop and acquire the patents, and they will then have the economic muscle to enforce them. They won’t enforce them on each other, for the most part — they tend to have licensing arrangements with other large companies, each company allowing the other to use its patents in return for the same privilege. No, for the most part they’ll use the patents to force out small innovators who come up with something that looks like one of the Big Boys’ patents and who don’t have the money to defend themselves against a patent infringement suit.

This is where my personal interest comes in. I am one of those small developers. I haven’t written anything that would get the attention of the big companies, nor do I think I’m likely to anytime soon. But it is entirely possible that somewhere along the way, a company like Sun Microsystems or Toshiba will slap a cease-and-desist order on someone developing free software of the Free Software variety, who can’t defend himself from a massive lawsuit and is therefore forced to give up a labor of love. Just think what would happen had someone patented the RSS software syndication model. The RSS feed I announced earlier today (in this diary) would have to be pulled down. I get no money from it, I did it for the good of the community; but it would have to be pulled down all the same.

Some of these large companies say they want software patents to “protect innovation.” That is an Orwellian construct; the innovation would only be by those who can afford it. In countries without software patents, the real innovation — the kind where you can take an open algorithm, write it up, protect it via copyright and cast it out upon the waters — would still be allowed. But as PJ notes on Groklaw, this fight is not over. The big companies are rich and powerful, they want to stay that way, and they are used to getting what they want. Happily, the fight is not over from the pro-innovation side either. Direct action from ordinary Europeans was in large part responsible for getting this voted down, and with some vigilance, Europe may still have a level playing field for software.