[Fsfe-ie] patent letter to be sent thursday night

[Ciaran O'Riordan]

Right, this isn't ready, but it should be sent by thursday and I'm not
going to have time to work on it on Wednesday, so can some people
suggest changes and bits to add or take away?

(it needs FTC quotes: http://www.ftc.gov/os/2003/10/innovationrpt.pdf)

I just merged our first letter with the draft of the third letter which
I posted here in January and then deleted the duplicate bits and added
some scratchy notes.  So it's a bit of a brain dump really.

This letter (when it is a letter) will probably be 3 pages long, that's
ok I think.  (it might be 4 pages now but some stuff can be optimised.)

we're not arguing for the EPO to be more selective about the patents it
hands out, so we're not highlighting that some patents shouldn't exist.

We're arguing for software to be excluded from the patent system
entirely, so we have to show how they're a bad fit, and how they're
abused.

---------------------------------------------------===========

Dear Person,

  I am writing on behalf of Irish Free Software Organisation (IFSO)
regarding EU Directive COD/2002/0047 "on the patentability of computer
implemented innovations".

  On September 24th 2003, we were pleased that the plenary voted for a
set of amendments which clearly exclude pure software innovations from
the patent system.  We were particularly glad that this majority
included all of the 11 Irish MEPs that voted.  I ask that Irelands
representation on the Commission uphold the decision of the Irish MEPs
and the plenary.  Below, I will outline why this position is
imperative to protect competition and innovation in software and for
the economy of Ireland.


Why is this issue so serious?
=============================

Stop thinking about the handful of software owners and concentrate on
the software users - patents make software incompatible and expensive,
and make for monopolies and lock-in.

A patent is an asset created without raw materials. In a patent
system, countries that hand out the most patents reap the largest
rewards, also, patent offices get revenue from the applications they
approve, not the ones they reject. Increasing patentability is a
slippery slope and there is no incentive to consider the affect that
restricting use of the technology will have on Europe's citizens and
industries.  (i.e. better criteria/review would not work)


Incompatible timeframes
=======================

When a patent is approved, it's claims are not made public for 18
months. This gives companies a period of privacy. In the software
industry this is long enough for a complete development and marketing
cycle. A company could have a new piece of software in widespread use
before it's even possible to check if it infringes existing
patents. Unbounded legal uncertainty would arise. The twenty year term
of patents is also out of sync with the software market. Patents exist
to give inventors a head start in developing their idea. In the
software industry twenty years is far too long.


Ease of complexity
==================

Developing most patentable inventions requires an investment in
materials, tools, production facilities, testing equipment, safety
certification etc. However, software can be developed by anyone with
programming experience and a PC, no material limits currently exist. In
just a few decades we have been able to develop software packages
comprising hundreds of thousands of components. Software is a relatively
new industry, thousands of new and old ideas are incorporated into each
new product. Companies with enough resources could accumulate near
limitless numbers of patents.

Software development has no constraints - patents would add constraints
(whereas in other fields it just increases constraints, which is simply
a matter of degree - for software it changes the development process
completely).


Collaboration and quality
=========================

Software companies currently collaborate to everyone's benefit. For
example, MySQL AB develop a database package. Other companies can
integrate this database into their own packages (for a fee). This type
of collaboration reduces the development time of new products that
require a database, and allows many companies to make use of widely
tested software. If software becomes patentable, companies will have to
ask "does this code infringe any patents, will it get us sued?". These
questions would be impossible to answer. Collaboration would become a
risky practice.


Software development resources
==============================

Software development companies would have to regularly perform patent
lookups while developing software, development resources would be
diverted to legal issues. Development would have to be done cautiously,
thus slowing innovation. Even the threat of a patent infringment charge
would damage a small companies trading prices, whether the charge was
true or not.


The American solution:
======================

In America, large software developing companies find it impossible to
develop new software without infringing a few patents. Companies with
large patent porfolios solve this by cross-licensing, thus forming
patent sharing agreements. These companies can continue developing
software but small and medium sized companies are locked out.  (NOTE:
this makes cartels.  must get that fitting word in there.)


Stagnation benefits market leaders, it allows them to maintain
their revenues without the burden of competition.



The company development problem:
================================

Laura Creighton, a european venture capitalist, gave testimony at a
software patents hearing in the European Parliament in May 2003. She
said that investing in small companies would be risky if software
patents existed because a cash injection would simply draw the attention
of "intellectual property firms". Without such cash injections,
companies will find it harder to make the transition from small to
medium sized enterprise. By impeding the growth of successful small
companies, competition and employment will be hurt, and many innovative
products won't reach the market.

Of course, the big companies will love having no competition - that's
why they're pushing for this change in the EPO.


competition
===========

For new software to compete with the market leader, it must be
compatible.  That is, it must be able to read and write data in the same
format as the market leader, and it must present a recognisable
interface.  When software packages are not compatible, users of one
software package become locked-in as the hassle of migration increases.

The need for compatibility is currently a major problem in the software
industry as market leaders change data formats regularly, thus making it
hard for the competition to maintain compatibility.  If the market
leader could patent a technique required to read or write it's data,
competition could become all but impractical.  At present,
anti-competitive practices can sometimes by tacked by the EU or by
national governments, but software patents would introduce a legal tool
for holding back competition, free from government regulation.

Software already has legal protection in the form of copyright.
Copyright law is a good fit because it costs nothing to use, requires no
processing time, and it doesn't restrict others from independent
development.

Software is developed by individuals (GNU by freelance programmer, Linux
by a student).  Copyright is useable by individuals, the patent system
is not.  Any expense is too much, and any requirement to research
existing patents is too much.

NOTE : remember that we are arguing for NO software patents, none at all
- not just fewer or better review, or whatever.  Once there are any
software patents, MS will find a way to work it into their next
"standard" and FS will be shut out, as per the plan.


Innovation
==========

Software is very easy to develop because there are no material or legal
restrictions on it's development at the moment.  This ease of
development has made it possible for new businesses and even individuals
to write highly complex software packages incorporating thousands of
ideas.  Some will be new innovative ideas, but most will be known ideas,
or ideas required for compatibility.

If known ideas were to become ownable, individuals and new business
would find it hard to write new software without infringing patents.
The traditional incremental development of software would become a legal
minefield, and many software innovations would never reach the market.

Large businesses could also face endless law suits due to the massive
number of ideas incorporated in their packages, and development would be
slowed down as the software developers of these companies would have to
split their time between development and researching patents so as not
to leave the company open to such law suits.

In some fields of development, it is hoped that the barriers created by
patents will lead to new innovative solutions to problems (lateral
innovation), but when trying to read or write data in an arbitrary
format, there are many situations where only one technique can be used.
Thus, lateral innovation will not be encouraged, because it would be of
no use.


The Irish economy
=================

The revenue generated from patents will be distributed roughly according
to how many patents each country owns.  Ireland is unlikely to own more
than 1% of European software patents, so 99% of patent royalties from
Irish companies will be leaving Ireland, mostly going to the US.  This
"patent tax" may prove too high for many small, medium, or new
businesses, and would certainly be too high for individuals.

Irish software developers will have to either license the patents or
avoid them.  If they license, they will be maintaining a stream of
royalties leaving the country.  If they avoid the patents, (something
that is very difficult, or sometimes impossible) we will not be
producing competitive software.

The security of our government, industry, and citizens is increasingly
dependent on software.  For this reason, Ireland must retain control of
it's software systems, and it must be permitted to develop it's own.


Learning from others
====================

When the US ruled that software patents would be legal, they didn't have
the benefit of being able to study how other economies handled software
patents.  Recently, more than a decade after software became patentable,
the US Federal Trade Commission have released a damning report on what
effect they have seen with software patentability.

[insert comment about FTC report]

The US is seeing a new problem in the last three years in the form of IP
Law firms, specialising in "monetising software patent assets".  The
firms buy unused software patents, and sue whoever they can.  The
typical targets are small businesses which can't afford to defend
themselves in court.  They can make a lot of money from sueing software
development companies, and they face no risk because they don't
development any software of their own.  This parasitic form of business
is legal in the US, but it is having terrible effects on software
development.

In contrast, the one software innovation that has produced the greatest
social benefit in the last decade, is the World Wide Web.  This is a
completely unpatented innovation, which has fostered the highest levels
of competition and innovation in the history of computing.

FIXME : submarine patents: Patents that are filed but not enforced for a
decade, then the owner starts fleecing people (Like Microsoft are doing
with the FAT filesystem patents).  Another *great* example is the recent
jpeg patent.  31 users of a web standard are being sued for using that
standard - and it's thought that some companies are were singled out
because they spoke out against software patents - so selective
enforcement is being used to attempt to silence people.



Free Software, also known as "Libre Software", or "Open Source"
===============================================================

Free Software is software that comes with royalty-free permission to
run, study, modify, copy, and redistribute the software.

In a market encumbered by software patents, development of Free Software
would be severely restricted.  Due to it's innability to force per-user
fees, or to restrict what a user does with the software, it would be
almost impossible for Free Software projects to get licenses for
patented technologies.

Instead of charging users for rights which cost nothing to give, Free
Software businesses get revenue from customisation, distribution, setup,
and support of the software.  The European Commissions' Information
Society Initiative recently released a report on "Free / Open Source
Software F/OSS", which says:

    ``On the provider side, F/OSS creates new opportunities for software
    and service providers, which may be a unique opportunity for the
    European software industry - somehow this may be a proverbial
    "second and last chance".''



-- 
Ciarán O'Riordan
http://www.compsoc.com/~coriordan/
Irish Free Software Organisation: http://ifso.ie