ABSTRACT
Union has been disregarded mainly because of Article 52 of the European Patent Convention (EPC) which regulates patenting activities inside the Union and expressively prohibits the patentability of software and business methods. This exception is not applied in practice indeed we show that more than 40,000 patents have been accorded by the European Patent Office (EPO) in the period 1981-2004. It must be stressed that industries where the innovation process relies mainly on improvements made by others, namely cumulative system technologies (Mazzoleni and Nelson 1998), are more likely to be characterised by strategic patenting behaviours such as cross-licensing, blocking rivals or gaining licensing revenues. It is for this reason that our work is going to analyse the software patenting by European firms. In order to achieve this, we first discuss the extent of patenting taking place in the EU (Section 2). After that, Section 3 shows that software patenting is a phenomenon common to the European Union as well and not only to the US patent system. Second, a theoretical model explaining factors affecting software patenting at the firm level is put forward in Section 4, together with the most suitable estimation strategy for the problem at stake. In particular, econometric analysis via different types of count data models is put forward in order to find out the most relevant factors affecting software patenting decisions for firms belonging to the software and hardware sectors. As a third step, in Section 5, an original dataset for the period 2000-2003 is constructed, which links the number of software patents filed at the EPO with the R&D spending and other relevant variables of applicants. Finally, in Sections 6 and 7 we present the main results and comment upon them briefly.
