A government representative said that 648 out of 729 members of the European Parliament voted Wednesday to reject the proposal, called the Computer Implemented Inventions Directive, which would have.
The Foundation for a Free Information Infrastructure, or FFII, described the decision as a "great victory for those who have campaigned to ensure that European innovation and competitiveness is protected from monopolization of software functionalities and business methods."
While many software developers have spoken out against the directive from the start, large companies have lobbied in its favor, often via campaign groups such as the Business Software Alliance, CompTIA and the Campaign for Creativity.
These groups and the companies behind them, such as Microsoft and IBM, have put significant money and effort into arguing their cause.
The future of the directive is currently unclear. It is possible that a revised version could be debated in the future. But back in March, Charlie McCreevy, a member of the European Commission, said theif the Parliament chose to reject the current version.
Ingrid Marson of ZDNet UK reported from London.