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<title>Allianz Group will suffer because of software patents - October 4th, 2004</title>
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<center><h1>Software Patents in Europe</h1>
[<a href="/projects/swpat/swpat.html">Introduction</a> | <a
href="/projects/swpat/background.html">Background</a> | <a
href="/projects/swpat/status.html">Status</a> | <a
href="/projects/swpat/documents.html">Further Reading</a> ]
</center>
<center> Open Letter
[<a href="/projects/swpat/letter-20040510.html">2004-05-10</a>]
[<a href="/projects/swpat/letter-20040531.html">2004-05-31</a>]
[<a href="/projects/swpat/letter-20040607.html">2004-07-06</a>]
[<a href="/projects/swpat/letter-20040802.html">2004-08-02</a>]
[<a href="/projects/swpat/letter-20040906.html">2004-09-06</a>]
[2004-10-04]
[<a href="/projects/swpat/letter-20041101.html">2004-11-01</a>]
[<a href="/projects/swpat/letter-20041206.html">2004-12-06</a>]
[<a href="/projects/swpat/letter-20050103.html">2005-01-03</a>]
</center>
<h2>Allianz Group will suffer because of software patents</h2>
<h3>October 4th, 2004</h3>
<p>Dear Mr. Diekmann,</p>
<p>
Have you ever considered offering general insurance for stock brokers
against the risk of losing money? As absurd as this sounds, the European
Commission is seriously considering equivalent measures at the moment.
</p>
<p>
The European Council and the European Commission seek to introduce
software patents in Europe. This is not only threatening any company
doing business in Europe, <a
href="http://mail.fsfeurope.org/pipermail/press-release-de/2004q2/000030.html">a
number of international scientists</a> also see it as a grave risk to
European economies. Adding to the studies already known, recent
publications by <a
href="http://www.pwc.com/Extweb/pwcpublications.nsf/docid/EC6DE73A846581CE80256EFD002E41FB">Pricewaterhouse
Coopers (PwC)</a> and <a
href="http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000175949.pdf">Deutsche
Bank Research</a> further underline the damaging
effect of software patents. As <a
href="http://www.theregister.co.uk/2004/09/15/pwc_swpat_are_a_threat/">The
Register</a> quotes PwC: "The mild regime [...] in the past has led to
a very innovative and competitive software industry
with low entry barriers. A software patent, which serves to protect
inventions of a non-technical nature, could kill the high innovation
rate."
</p>
<p>
The reality of software patents is well-known for its purely
speculative character. Although generally endorsed by noble goals such
as promoting innovation, studies from the <a
href="http://www.researchoninnovation.org/patent.pdf">Massachusetts
Institute of Technology (MIT)</a> or the <a
href="http://swpat.ffii.org/archiv/zitate/index.de.html#mopoko0207">German
monopoly commission</a> show that software patents are harmful to
innovation.
</p>
<p>
Software patent applications could be considered like the chips that
are bet on a roulette table that -- if successful -- will win you the
jackpot in form of a multi-billion Euro litigation. Any large
corporation making use of software could find itself on the receiving
end of such a bet. The more money at play and the more software used,
the higher the chance of being targeted. Valuable companies such as
Allianz group -- which are in the main dependent on software revenues
are especially at risk of being adversely affected by the legalisation
of software patents in the EU.
</p>
<p>
While I believe the plans of the European Commission should already
have you quite worried, the current plans are going to affect you in
another aspect, as well.
</p>
<p>
Having to acknowledge the harmful and potentially devastating effect
of software patents on European companies and national economies, the
European Commission recently introduced the idea of another directive
aimed at creating a <a
href="http://europa.eu.int/comm/internal_market/en/indprop/patent/docs/patent-litigation-insurance_en.pdf">compulsory
insurance</a> against software patents for all European
enterprises. This insurance should obviously be cheap
enough so that it does not immediately kill the European economy
altogether.
</p>
<p>
You, as CEO of Allianz Group will have to insure your enterprise,
because you are at risk of being the target of a multi-billion Euro
software patent litigation. This is essentially the same as asking for
cheap compulsory insurance of all stock brokers against losing money
-- and we are certain that you see the flaw in that logic.
</p>
<p>
We would appreciate the opportunity to discuss this problem with you
further, but now time is of the essence. The European Council is
planning to decide in November and the European Parliament will then
have to make a final decision early next year.
</p>
<p>With kind regards,</p>
<p>
<a href="/about/greve/">Georg Greve</a><br />
President<br />
Free Software Foundation Europe (FSFE)<br />
<a href="http://www.fsfeurope.org">www.fsfeurope.org</a>
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