Software patent bill thrown out
The European Parliament voted 648 to 14 to reject the Computer Implemented Inventions Directive.
The bill was reportedly rejected because, politicians said, it pleased no-one in its current form.
Responding to the rejection the European Commission said it would not draw up or submit any more versions of the original proposal.
Hi-tech firms supporting the directive said it was vital to protect the fruits of their research and development.
Opponents said, if passed, the bill would lead to the patenting of software which would jeopardise the prospects of small firms and open source developers.
The vote on Wednesday was on the more than 100 amendments made to the original bill.
The rejection looks like the end for the bill as the European Parliament will also move to stop the version of the bill that has already been approved in the 25 EU member nations becoming law.
The bill was intended to sweep away individual EU nations' patent dispute systems in favour of one common procedure.
"Patents will continue to be handled by national patent offices ... as before, which means different interpretations as to what is patentable, without any judiciary control by the European Court of Justice," said EU External Relations Commissioner Benita Ferrero-Waldner, representing the EU head office at the vote.