The EC yesterday unveiled a controversial proposal for a harmonised law on software patents that's less encompassing than laws in the US and Japan.

The proposed law, which would replace 15 different regulations in the 15 countries within the EU, would only allow patents for software applications of a technical nature — that is, software that runs a mechanical device or changes how a mechanical device works — and it would not permit patents on business methods.

Examples of the kinds of software that could be patented would include software that runs an x-ray machine, or that make a PC run faster.

The American and Japanese laws allow patents on a much wider range of software and they both permit patents on business methods.

Business methods include innovations such as one-click purchasing, for which online retailer received a patent in the US in 1999.

Amazon used the patent to get an injunction against use of a similar purchasing feature by rival Barnes & Noble, but that injunction was lifted by an appeals court this year pending a trial.

"The Commission thinks that allowing a patent for the 'one-click' purchasing technique goes too far in restricting trade," said Frits Bolkestein, commissioner in charge of the internal EU market.

He described the EC's proposal as a compromise between the stance taken in the US and the position of the open source software community, which opposes all patents on software products. "The US approach is too restrictive, while the [open source] approach is too liberal," Bolkestein said.

In anticipation of a hostile reaction, he added: "We will take complaints from the US on the chin."

Criticism is also expected from within Europe, not least from the European Patent Office, based in Munich. "The EPO has of late taken a more restrictive approach, issuing patents to software applications themselves," Bolkestein said. "The member states of the EU are waiting eagerly for the Commission's position."

The EPO can register patents for every country in the European Union. However, the system is expensive, because applicants have to pay each country's national patent office to exercise their protection in that country.

The EPO will eventually have to bow to the directive once it is transposed, as expected, into national law in the member states, but even then there could be some confusion, said Ari Laakkonen, a lawyer with UK law firm Linklaters & Alliance.