HATS OFF TO ANDY REINHARDT - In a deliciously scathing article in BusinessWeek, correspondent Andy Reinhardt tears apar the EU Parliment's decision to scrap the Computer Implemented Inventions (CII) as politicking gone amok, and describing the decision-making process as nonsense squared:

The sad truth is that everybody lost. Europe still has no clear solution to handling one of the most strategic and vexing issues of the Information Age: In what circumstances and on what terms should software innovations be patentable?

Many Europeans had hoped legislators would find an approach that avoided the worst excess of the U.S. system while affording appropriate protection to European innovators. Instead, the process was hijacked by interest groups whose intransigence and ideology scuppered intelligent compromise.

The biggest hypocrisy is that everyone claimed to be acting in the interest of innovation and small businesses. Now, with no new rules to go by, businesses large and small don't know what will happen to software patents they've already been granted by national authorities or the European Patent Office -- and which, in some cases, they have already used as the basis for global cross-license deals.

But the most vociferous opponents were backers of open-source software, for whom patents are anathema to their philosophy and business model. They issued fiery manifestos proclaiming software patents "a danger to democracy" and a threat to Europe's position as a hotbed of open-source software development.

Europe is back to square one, only worse. While the rival camps have bickered, the European Patent Office and its national counterparts have issued tens of thousands of software patents.

With little legislative guidance, and assuming that some sort of Europewide rules eventually would come into effect, they granted patent protection to ideas as diverse and far-reaching as a technique for audio compression that includes the MP3 format, a technology for video-on-demand transmission of live events, and a scheme for adding tabs to Web pages. Clearly, it's in the interest of society and the technology sector that such broad, and likely indefensible, patents not be enforced.

What's frustrating is that Europe was really onto something in questioning the value of software patents. As the evidence from the U.S. and other countries with liberal patent regimes suggests, patents can be a Pandora's Box -- one whose contents choke software innovation by miring programmers in endless legal battles.

What of the small European businesses and innovators that patent opponents wanted to protect? They must now hire lawyers and pay fees to file patent claims in 25 different countries to gain protection just within the EU. Their enforcement costs could skyrocket. And they're no better protected against counterclaims by U.S. or Asian rivals holding patents in those places than they were before.

The outcome in Europe entrenches a system that, like many national laws on the Continent, is increasingly out of step with global realities. The people who killed smart patent rules may have had noble intentions. But instead of scoring a hit for the little guy, they've actually put their compatriots at a disadvantage on the global stage. That hardly looks like progress.