The EU Competitiveness Council today formally adopted an agreement on patents, pushing the Council of Ministers one step closer to battle with the Parliament over the controversial legislation.

The agreement was originally reached in May 2004, but its formal adoption has been postponed three times as protestors and MEPs have raised significant doubts, leading to Poland taking advantage of its new powers to put a stop to the process.

The adoption means that the process of approving the legislation will be restarted. The text now passes back to MEPs for debate. They are expected to demand far-reaching changes to ensure that the legislation does not apply to computer programs or to software itself.

They are also particularly incensed that their formal request to restart the entire decision-making process was ignored last month.

Under the EU’s co-decision-making process, the Parliament and the Council must try to reach agreement on the proposed legislation. The Parliament can choose to reject a deal put forward by the Council, and some MEPs have already warned that this could happen.

The decision to push ahead also faces increasing opposition from European governments, which expressed concerns with the proposed legislation today, even as they advanced it to the next stage.

Poland, for example, said it will only support the legislation when it next comes up for discussion by the Council of Ministers if changes are made to ensure that it will not permit computer programs to be patented. Six other countries also expressed concerns with the proposal: the Netherlands, Latvia, Hungary, Denmark, Portugal and Cyprus.

Denmark’s deputy Prime Minister Bendt Bendtsen, who attended the meeting, had asked for the agreement be debated openly, with the support of Portugal. But Luxembourg’s economics minister, Jeannot Krecke, who chaired the meeting refused the request.

The agreement was being adopted for "institutional reasons", he admitted, to avoid creating a precedent that could lead to delays in EU decision-making in future.

Approval of the agreement was welcomed by EICTA, an association representing the biggest IT and telecom companies in Europe, which includes Microsoft Corp., Nokia Corp., Telefonaktiebolaget LM Ericsson, Adobe Systems Inc., Apple Computer Inc. and Dell Inc.

Mark McGann, the association’s secretary general, called the Council’s decision “excellent news.” The decision had been too long in the making, he said, noting that it took the Council nearly a year to formalize its agreement of May 2004. The directive is “extremely important to the European hi-tech industry and the European economy,” McGann said.

McGann argued that the proposal provides a balanced framework that would protect and encourage innovation. The concerns expressed by some countries can be addressed when the directive is discussed for a second time by E.U. governments and MEPs in the so-called "second reading" part of the legislative process, he said.

One of the most active opponents of the proposed legislation, Florian Müller of the campaign, said his group would be campaigning for an outright rejection of the directive, either by MEPs or by members of the Council such as Poland. “The European Parliament will have three of four opportunities for rejection,” he said.

The Council admitted that it adopted the May agreement for procedural reasons, he noted. His organization no longer has to argue that the deal is “illegitimate,” and it probably only enjoys support from a minority of governments, he said.

Opponents of the legislation, including the open source software community and some IT vendors, including Sun Microsystems Inc., say the proposal agreed to Monday would open the door to a U.S.-style patent regime. Small software developers would be shut out of the market, opponents claim, because they would be unable to pay for licenses for patented technology and could face crippling legal costs in order to use patented software in their own products.

The proposed law is open to interpretation, and supporters of the directive say the Council agreement would not allow software to be patented.

However, in 2003 the Council rejected an attempt by the European Parliament to create safeguards that would prevent patent protection from being extended to software, which could potentially prevent the Council and MEPs from reaching an agreement.