The US and Japan offer the world’s two most competitive IT environments, according to a recent report published by the Economist Intelligence Unit. According to an "IT industry competitiveness index", published as part of the report, both offer “an ample supply of skills, an innovation-friendly culture, world-class technology infrastructure, a robust legal regime and well-balanced government support, not to mention a competition-friendly business environment”. The other countries making up the top 5 are, in order, South Korea, the UK and Australia.

Among the conclusions the EIU reaches in the report containing the index is that: “The legal regime is an important differentiator. Open competition in IT must be supported by robust protection for intellectual property rights (IPR). The US and west European countries - thanks partly to the galvanising efforts of the European Union - stand heads above the rest in the degree of protection afforded and in enforcement. A vigorous IPR regime is not incompatible with an “open approach” to innovation in IT.”

Interestingly in this regard, the countries at the top of the Index have very different views on the patentability of software. While the US, Australia and South Korea are, to a greater or lesser extent, relatively accommodating in protecting software-related inventions, the UK is less so - to the extent that the approach of one distinguished English judge has been directly criticised by an EPO board of appeal. The Japanese, meanwhile, sit somewhere in between the US and the UK – although the trend does seem to be moving towards greater tolerance of software patent grants.

That said, the EIU sees the legal infrastructure in a country as being much less important than other factors, such as IT infrastructure, human capital, R&D environment and support for IT industry development. Of course, it could be that all of these are actually affected by the IP infrastructure of a country (in other words, for example, maybe a company is more likely to invest in R&D or to attract funding for R&D, if the right IP protection is available); but it could also well be that, if the EIU is right, the vitriolic nature of the debate around software patents is actually little more than hot air because, in the end, as long as there is legal certainty – of whatever kind – other factors are far more important in ensuring strong competition in the IT industry.

In other words, if you know where you stand from a legal perspective you can plan around this, feel freer to take decisions and to make spending commitments. However, if you have no idea whether you can get protection and then enforce it, you may well be less inclined either to invest in an IT company or to get one up and running in the first place.

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