Alan Cox (well-known Linux developer) writes:
“Currently, the companies are moving programming jobs offshore. The huge move away from the USA is not entirely driven by pricing but also by patent litigation and risk. Companies create a US holding company for the intellectual property rights which licenses it to a non-US body to write the software overseas and import it, so as to reduce risk. Adopting the same kind of patents in the EU will drive thousands of EU programming jobs overseas, too.”
This makes no sense. First, foreign companies don’t need American subsidiaries to hold US IP. Second, how would writing software overseas reduce risk? Outsourcing overseas (sometimes) saves money, by increasing per-dollar programmer productivity, but what matters, in terms of legal liability, is where software is available for sale and not where it is written.
But is a shifting of labor overseas possible? If software patents drive up the cost of creating software (by increasing legal overhead, which is likely given the transaction costs of enforcement, regardless that there will be winners and losers in patenting), the expected outcome would be higher software costs in Europe, because software would become more expensive to sell, and, minutely, lowered software production the world over. If there were a real cost benefit in moving production overseas, that would be one way of achieving a competitive advantage, of which, were it significant, firms should have already availed themselves. So the answer is no, probably not.
Still, even were jobs to move to the developing world in the wake of European software patents, it’s hard to finger IP as the culprit. Especially in programming, workers in the developed world are much more productive than their counterparts in the developing world, because of benefits from education and infrastructure. On a per-euro basis, higher wages, higher taxes, and rigid labor and workplace regulations chip away at this advantage. Legal expenses resulting from software IP are location-agnostic overhead, because companies have to pay no matter where they locate their workers. These other factors, however, really are a disadvantage for European workers competing in a global marketplace.