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BSA figures do not add up

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Statistics,
BSA

Ingrid Marson ZDNet.co.uk

Published: 24 Jun 2005 15:15 BST

The BSA's latest study claims to prove that software patents are of equal importance to SMEs and large companies, a claim that political parties and some media organisations have taken at face value. But does the study really show that SMEs are of equal importance, or has the BSA presented the facts in a misleading way to lead people to the conclusions they want them to draw?

This study comes at an important time. In a few weeks time MEPs are due to vote on the software patent directive. This vote is crucial if essential changes are to be made to the directive that will restrict the degree to which software can be patented. The BSA, which is keen for the directive to be passed in its current form, published the study to persuade MEPs to vote against any amendments that would restrict patentability.

The results of the study have already been quoted by an MEP from the Alliance of Liberals and Democrats for Europe (ALDE), as an excuse for their decision to vote against many of the amendments, in apparent contradiction to their party policy. The Liberals pitch themselves as the party for SMEs, so the study was conveniently offered as proof that SMEs need this directive.

Toine Manders, the intellectual property spokesperson for ALDE, said in a press release on Tuesday: "The directive has been portrayed as benefiting only major industrial conglomerates at the expense of the small software developer, but this is simply not true. A recent study by the Business Software Alliance indicates that SMEs account for 20% of all CII (Computer Implemented Inventions) patents granted since 1998 and 81% of them rely on patent protection for their businesses."

Interesting, 81 percent of SMEs rely on patent protection for their business? Even for politicians who are used to massaging statistics that is bad maths. The study actually found that around 2000 SMEs have filed patents, which is only 0.018 percent of the 11 million SMEs that exist in Europe. So what could have caused this dyscalculia in the liberals? The BSA press release appears to have the answer.

"[These figures] show that thousands of European innovative SMEs have patents -- in fact 81 percent depend on one patent and a further 10 percent hold just two patents -- and rely on these to help develop their businesses," said Francisco Mingorance, BSA's director of public policy.

The 81 percent that Mingorance refers to is the percentage of SME patent holders that hold one patent, but you'd be forgiven for thinking it refers to all European SMEs. In fact, I'd hazard a guess that the majority of people would make this error. But then, if most people reading the release came away thinking: "81 percent of SMEs hold software patents, of course we should let this directive go through," would the BSA be upset? I doubt it.

I put this to the BSA, and they replied: "The 81 percent figure refers to those in the study". Well, surely they can be forgiven for just one example of bad English. If only it were that simple. An ALDE spokesperson told me on Wednesday that the proportion of SMEs holding patents has increased over time. In fact, the study found that the proportion of SMEs patent holders has remained constant over the past six years. Another mistake by the Liberals?

Perhaps, but this one has been repeated by the Guardian, in a story that appeared on 9 June. "The battle over the EU's software patent directive heated up yesterday when a survey showed small and medium-sized firms, the alleged victims, accounting for a growing proportion of such patents in the past few years," said the Guardian in the article.

What could cause both the Liberals and the Guardian to make this mistake? Again, the BSA's unfortunately worded press release appears to hold much of the blame. The first line of the press release states: "A new study published today by the Business Software Alliance demonstrates the growing importance of patents on Computer-Implemented Inventions (CII) for European small and medium-sized enterprises."

A few paragraphs later the BSA states that "European small- and medium-sized businesses account for more than 20 percent of all CII patents granted since 1998; And the number of SME patents granted has been rising steadily in recent years." The BSA omits to mention the important fact that the proportion of patents granted to SMEs has remained constant, so taken in conjunction with the first paragraph, it is understandable that both ALDE and the Guardian misunderstood this.

When I suggested to the BSA that it would be more accurate to change the first paragraph to say "…demonstrates the importance of patents…", the BSA replied, "Honestly, you seem to be nitpicking here."