Where are we now?

Hopefully this diagram will make it clear how the process works, and where the Directive now stands:

Diagram of the European Co-decision Process

This is based on the Wikipedia description of the codecision process; please mail me if you have any corrections or updates

The colour of the stages varies on the result of the stage: if it's a red colour, that means that the text output at that point was a broad implementation of software patents which would have endangered the software industry. If it's a green colour, that means that a favourable text that protected the rights of innovators was output. As the text moves from stage to stage, it is invariably altered, so the colour is expected to change. If a stage is white, that indicates the text hasn't got that far yet.

There is currently some concern over the Council 1st reading. The text they agreed has not yet been formally approved, so there is a chance the Council will re-review their changes and output a better text before it goes to the Parliament for second reading.

Any time after the 1st Parliamentary reading, the text can be formally agreed if the body looking at it do not want to make any changes. Any time after the 1st Council meeting, the text can be summarily dropped if the body looking at it do not think that they would be able make changes such that the text would become acceptable to them. As the text moves further through the chain of steps, it becomes harder and harder for a body to make changes at any given stage.

Usually, the Parliament would not be allowed to make new changes at its second reading: it would only be able to accept or decline changes made at the first Council reading. However, it is thought that this doesn't apply to the software patent directive, because the Parliament did not exercise an option to return the directive to the first reading (effectively resetting the procedure) after the accession of new countries to the European Union. I haven't confirmed this, though!