[Ecommerce] (International Herald Tribune) Patents: Agreeing to disagree?

[Thiru Balasubramaniam]

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http://www.iht.com/articles/2005/10/05/business/iprsolutions.php

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*Patents: Agreeing to disagree?*

*By Victoria Shannon* International Herald Tribune
THURSDAY, OCTOBER 6, 2005


*PARIS*
<http://www.iht.com/cgi-bin/search.cgi?query=3DPARIS&sort=3Dswishrank> In
Britain, a typical neonatal unit used to pay about =A32,000 a year to
supply nitric oxide for newborn babies with breathing difficulties.
After the substance was patented in 1999, the cost rose to =A363,000,
according to a study published this year by Parliament in London.

What if governments abolished patents? Would those newborns and other
parts of society be better served? Or would inventors have fewer
financial incentives to give the world their bright ideas?

Increasingly, such questions are percolating through business
gatherings, Internet chat rooms, university lecture halls and the
corridors of legislatures. They are both ethical and economic, and for
many people, also largely rhetorical.

For while media, industry, lawyers and academics gnash teeth over who
owns what, the market simply demands ever sharper photographic images or
ever easier access to a favorite rock band - and progress marches on.

In the meantime, global conversations over who has the rights to ideas
and artistic products are grinding into stalemate. This summer, after
five years of intermittent progress, European legislation allowing
patents on software was lobbied to death. A rights treaty for
broadcasters before the World Intellectual Property Organization is
stalled for the second consecutive year, and talks have been going on
since 1998.

Tweaking the rights systems is now high on the agenda of legislators in
developed countries that fear a loss of profit, competitiveness or even
control. A long-awaited Patent Reform Act is just now getting an airing
in the U.S. Congress. After the bitter battle over software patents, the
European Union may move forward on EU-wide patent coverage. Japan is
starting to reexamine its system, and India and China are beginning to
enforce recent adjustments.

But the changes are largely at the margins and do not take into account
some of the more extreme views on "free" patents, open-source software
and shared copyrights that have emerged over the past decade out of the
generation that built the Internet.

In the end, many executives and academics who study intellectual
property conclude that the capitalist world is unlikely to toss out its
patent systems and other long-held approaches to generating innovation.
Many of the companies affected are content to let the systems quietly
evolve to catch up to the technology they have lagged behind.

"They were arguing about this 500 years ago, they will be arguing about
it 500 years from now," said Scott McNealy, chief executive of Sun
Microsystems, discussing the tussle between private control and public
good.

Unlike Sun, which both protects and shares its patents, Microsoft as a
rule does not share. The software leader has applied for more than 3,000
patents this year, spends more than $7 billion a year on research and
development, and is facing 158 legal challenges to its patents.

Officially, Microsoft this year issued detailed principles that it said
it hoped would guide U.S. patent reform, like elevating the quality of
patent applications that are approved and curbing litigation.

But Horacio Gutierrez, associate general counsel for Microsoft in
Europe, said that he believed the extreme views would converge over
time, at least in the software industry.

Pure commercial software companies, along with companies that want to
make a business out of the open-source software that is produced by the
developer community at large, "are actually being driven to the middle,"
he said, "while these other debates are happening at the religious level."

Microsoft, of course, is such a giant presence in computer operating
systems and desktop software that it stands to benefit from any changes
that emerge from the market, which it indirectly controls. So far, it
has also successfully skirted efforts by U.S. courts and the European
Union to break up what many perceive as a near monopoly in certain fields.

Activists determined to liberate ideas and technologies remain committed
to upending the system with their debates.

Some of them advocate replacing copyrights with "copylefts" - a license
to let the user modify a product for commercial gain while leaving the
underlying idea free for others to use.

Numerous licensing agreements that loosen the legal rights of the
creators to own ideas are now available and in growing use. There are
more than 50 different kinds of open-source licenses, for instance.

"The user has to have the right to do with software that he bought as he
wants - that is a must for us," said Joachim Jacobs of the Free Software
Foundation of Europe.

And recent moves by Microsoft seem to acknowledge that radical solutions
are influencing the system. Gutierrez cites two recent Microsoft deals
as examples of new thinking on intellectual property rights.

One is the agreement made last week with JBoss, a Swiss and American
open-source developer, on software collaboration, even though the
companies still compete for developers.

"The companies are exploring opportunities to improve interoperability
and ensure an optimized experience for customers using JBoss on the
Windows Server platform," Microsoft said.

The other is with Inria, the French computer science research institute,
on joint research that would be considered the intellectual property of
the institute.

Gutierrez even conceded that "it might be possible for Microsoft to use
some open-source licenses in the future" - a notable admission from a
company whose chief executive, Steve Ballmer, identified open-source
software like Linux as a threat to the company's own products in 2003.

Other small steps are being taken to free up inventions for essentially
unlimited access:

Creative Commons, a nonprofit organization based in San Francisco, was
started by the Stanford University academic and lawyer Lawrence Lessig
to allow users to copy and distribute a copyrighted work provided that
they give credit. The group makes no promise that its version of
copyrights is enforceable in court. But it is being used in about 30
countries, including China, Australia, Germany and Britain.

General Public Licenses, which date from the 1980s, when Richard
Stallman introduced them at the Massachusetts Institute of Technology,
let users change and distribute software and even charge for it.

As companies like International Business Machines, Sun and Nokia let
more of their intellectual property out into the open, keeping track of
what rights are shared and which ones are protected is becoming
unwieldy. To deal with this problem, one software group is championing
what it calls a "patent commons" - a database of such moves to give
users confidence that the correct rights are being enforced.

The World Trade Organization agreed in August 2003 to make it easier for
countries to use copied drugs - even when those drugs come from
locations where copying a patented drug would be illegal.

The move was seen as a sign of the strength of campaigners' arguments to
make drugs for diseases like AIDS affordable in the developing world.

Dietmar Harhoff, a professor and patent expert at Ludwig-Maximilian
University in Munich, is calling for a crackdown on overpatenting. "More
patents do not automatically mean more innovation," he wrote in a
position paper in August. "Patents per se are irrelevant. Their impact
on innovation and investment counts."

Some of the biggest companies in the world are starting to shift as
skepticism and frustration grow about a world in which you never know
when someone else may own - or claim to own - an important chunk of your
big idea.

In talking about software patenting this summer, Ed Black, president and
chief executive of the Computer and Communications Industry Association,
which operates in the United States and Europe, conceded that many
companies, like the public and legislators, had mixed views.

"Their legal departments are charged with getting as many patents as
possible, while their engineers don't believe patents help the creative
process of innovation," he said.

Richard Sutor, vice president for standards and open source at IBM,
said, "Fundamentally, the world is becoming more open. It's too early to
tell exactly what is going to happen, but the rise of open source and
increasing availability of open standards is driving a shift from
proprietary to more open models."

Said Gutierrez of Microsoft: "My bet is, you are going to start seeing a
lot more convergence and a lot more business sense included in these
discussions."



James Kanter and Kevin J. O'Brien contributed to this report.