Law and technology

IP dispute leads to Court order to seize source code

Computerworld reports on an Auckland High Court injunction requiring Codeshed, a software developer, to hand over the source code of its software to a customer. The injunction is an interim measure in a wider dispute between Codeshed and its customer, centering on the ownership of the intellectual property in the code. The customer obtained the injunction on a without-notice basis (previously known as an ex parte application) which meant the customer has to give an “undertaking as to damages” – i.e. once the final dispute is heard, if it turns out the customer is wrong, the customer must compensate Codeshed for having the injunction served on it. An ex parte injunction requiring the handing over of valuable IP is a relatively extreme remedy (it can include lawyers turning up on your doorstep with a court order in hand!) but the judge decided it was justified in this case (pending final resolution of the dispute).

According to the article, the matter is now being arbitrated, which usually means it will not be publicly commented on (by the parties) any further.

No iMonopoly for Apple

In Australia, Apple has been told that it does not have a monopoly on the letter “i” for technology products. The Trade Marks ruling said:

“[Apple] has not therefore demonstrated to my satisfaction that the person of ordinary intelligence and memory would be caused to wonder, or be left in doubt, about whether the Goods come from [Apple] merely because the Trade Mark terminates in the letter “i”, however that letter may be presented. Nor do I think the fact that the Trade Mark is made up of the letters of [Apple's] IPOD trade mark in reverse order would cause a significant or substantial number of relevant consumers to wonder whether the Goods were those of [Apple]“.

Amazon’s 1-click patent confirmed – with a Kiwi connection

Amazon’s infamous 1-click patent has been confirmed by the US Patent & Trademarks Office. To refresh, this patent is “A method and system for placing an order to purchase an item via the Internet” and, on the face of it, covers much of e-commerce. It has been rejected in the EU, and was not applied for in New Zealand. It has been widely criticised (rightly so) since first being granted. In 2005 New Zealand actor Peter Calveley filed a formal challenge to the patent with the USPTO. After some wrangling in the re-examination, Amazon was forced to make some very minor amendments to the patent in 2007. The amended patent has now been re-examined and affirmed by the USPTO.

While this highlights the need for reform of the patent system, a major development may occur next month when the US Supreme Court is expected to rule on the Bilksi case, involving the patentability of business methods.

An Australian version of the Peer-to-Patent initiative was recently launched in conjunction with IP Australia (official site). From the official announcement:

Peer-to-Patent Australia opens part of the patent examination process and invites the public to review patent applications volunteered for the trial… The process is designed to tap into the expertise of the public to help assess whether a particular application is eligible for a patent.

The system is currently being run as a 12 month pilot programme, limited to business method patent applications.

The original Peer-to-Patent initiative completed a 2 year US pilot in June 2009. While the US Patent Office has yet to report on its results, the first year report from the New York Law School was positive (some criticisms are listed at Wikipedia). The US pilot was not limited to business method patents, although interestingly the patent application which received the most user interaction was such a patent – “Method, apparatus and computer program product for providing status of a process” (hmm, maybe they could also give it a unique name like ps or top?).

It is a good idea for the Australian pilot to be limited to business method patents, which covers most manifestations of software patents. It appears that IP Australia is giving good support to it. Let’s hope that IPONZ watches this closely – IPONZ (like the MED) has good IT systems and has been quite progressive with IT. If the pilot works, it will be a major improvement to a currently in-need-of-improvement system.

Of course, as with any community-driven system, its quality will only be as good as the community supports it. For open source, could it be a case of “many eyes make bad software patent applications unsuccessful”?

Has IPONZ created a new category of registerable IP?

For the record:

• Copyright protects original works, not ideas.
• Trade marks protect origin, not ideas (or content).
• Patents protect novel, non-obvious, documented inventions, not ideas (or configurations).

Despite what the IPONZ homepage implies, there is no way to prevent someone “having your  idea”. A patent comes close, but protects the invention – not simply “an idea” as such.

It is certainly a good thing to be able to use intellectual property law to protect the improper taking of your intellectual property, but making sure someone else doesn’t “have the same idea”? Not a good idea.

Credit: good spotting by Jonathan Hunt, HuntDesign

Software patents are once again in the news in New Zealand as part of the long-awaited review of the Patents Act 1953. I don’t deal with the filing of patents in my work as a lawyer. Filing patents is a specialist field usually handled by specialist firms, with staff who have qualifications in relevant fields (electronics, engineering, chemistry, biochemistry, etc). But everyone in IT needs to be aware of the threats to innovation posed by software patents.

There has been so much written on this subject (though I have yet to read anything much in favour of them) that I will only add a few brief comments to the debate.

Patents have never been considered inherent rights of inventors. They must be applied for and granted by the state subject to specific terms. They are limited in scope, duration and availability. As was once taught in Form 5 History, the origin of patents in our legal system was the “monopolies” granted by the Kings and Queens of England. After various abuses and reforms (some by way of the English Civil War), the modern system of patents emerged. The economic rationale of granting limited patents was to encourage innovation by protecting the investment made in creating those innovations. By and large, this system worked well over several centuries and could, in fact, be shown to have encouraged many key innovations. In other words, the system worked.

Enter software patents. These can be shown to have the opposite effect (or at least have the likelihood of that) – discouraging innovation, or in some cases attempting to shut down innovation altogether. Software patents operate to limit the possible uses of an infinitely configurable device – the computer. Virtually all computer programs, except the most basic, low-level electrical systems, rely on implementing processes and functions to manipulate and configure a computer to produce a desired result. With software, there are no physical constraints as to how the functions and processes could be used, merged, integrated, or otherwise hacked. The result is an unfettered ability to innovate. This can include, where permitted, freely adapting or integrating someone else’s code to create an entirely new program (the basis of open source software).

Should this ability to innovate be blocked – possibly at a fundamental level – by the fact that someone else has patented the manipulation or configuration of a computer in a particular way? To do so is contrary to the current purpose and rationale of patent law. Software patents have a clear tendency to limit the innovations which may be derived from computers, for economic purposes. Patent law is not intended to protect commercially valuable intellectual property (although that is a valid economic effect). It is intended to encourage innovation. When the opposite result is occurring, it is time to either change the law to correct its operation (by banning software patents), or acknowledge the problem and redraft the law in light of a changed purpose of protecting commercially valuable intellectual property. The stated purpose of the Government’s review is:

“to ensure that [the New Zealand patent regime] continues to provide an appropriate balance between providing adequate incentives for innovation and technology transfer while ensuring that the interests of the public and the interests of Maori in their traditional knowledge are protected.”

Software patents are an international issue. Successive Governments here and overseas make endless statements about “embracing the digital age” to acheive a “high value economy”. Whether the software patent problem is fixed – and soon – will be an early test of their commitment to that cause.

Two recent events concerning trade marks, one in New Zealand and one in the US, highlight the same underlying issue, albeit in different ways.

The first incident: local blog Editing the Herald received a cease-and-desist letter from APN, publisher of the NZ Herald, on the basis that EtH was using a modified version of the Herald masthead, a trade mark of APN.

The second incident: the author of a book on Ubuntu, whose website used the Ubuntu logo without authorisation from Canonical (owner of the US Ubuntu trade mark) sparked much comment by claiming that “trademarking is almost totally incompatible with the essential freedom offered by open source. Trademarking is a way of severely limiting all activity on a particular product to that which you approve of.”

Both of these incidents highlight that trade marks are not about “ownership” in the way that copyright is, but are about identity and origin. As the Intellectual Property Office of New Zealand says:

“A trade mark enables businesses to distinguish their products or services from similar products or services offered by competitors.”

If you are the registered owner of a trade mark, then you have the exclusive right to use that trade mark in connection with the products and services that it covers. If anyone else uses your trade mark (or something similar to your trade mark) without your permission in the course of trade, you are entitled to take action against them. Use of a trade mark that is not in the use of trade is not infringement, however the meaning of “in trade” is wide.

It is important to note that a trade mark will usually only apply to the goods and services that it is registered for. That is, it does not amount to a blanket monopoly on a word or phrase. For example, the word Kiwi is registered as a trade mark by a number of companies for different products such as shoe polish, bacon, beer, milk and packaging. If you owned the Kiwi trade mark for beer, you could not prevent someone using the Kiwi name to sell clothing, for example.

The trade mark (logo) for “New Zealand Herald” is registered for the following goods and services:

“printed matter; publications; paper and cardboard; stationery; posters and photographs; instructional and teaching materials (except apparatus)”

and

“publishing; electronic publishing; education, entertainment and cultural activities in this class including (without limitation) the organisation and running of competitions for education and/or entertainment; information services (including, without limitation, on-line information services) relating to education or entertainment”

The terms “publications” and “publishing” are very broad, and would clearly apply to someone publishing a blog. So using the New Zealand Herald logo (or an imitation of it) on a blog without authorisation would infringe the trade mark, if the use is “in trade”. But is a non-commercial blog “in trade”? EtH sums it up well: “I would have at least an arguable case in court but it would cost both money and time, only one of which I have in appreciable amounts”.

Should there be “parody rights” for trade marks? Probably not – trade marks are used to designate origin, not protect content. Copyright, on the other hand, should expressly protect parody as fair use.

As for the trade mark and open source issue, this is far from the first time it has arisen. Indeed, early on in the history of Linux, one opportunistic William R. Della Croce, Jr registered the US trade mark Linux and attempted to extract royalties for its use. Fortunately the matter was soon resolved, and the US trade mark is now owned by Linus Torvalds.

The Ubuntu author’s statement that trade marks are “totally incompatible with the essential freedom offered by open source”, is off the mark. The “essential freedom” of (fully) open source software is that you are free to copy, modify and redistribute the code. If someone releases software under their trade mark, you are free to take their code and re-release it under your own name or trade mark (subject, of course, to any terms and conditions of the specific licence such as attribution). Of course, the trade mark owner may allow you to release it under their name. But that is their choice. The unfettered ability to release software under any given name (and therefore possibly mislead as to its origin) would certainly be a “freedom” but is not the essential freedom.

The inverse makes the point. It would be unfortunate if a someone could simply take any well-known open source project, modify it into a buggy version, and then promote it under the original name. Admittedly, in some cases the issue is slightly less clear cut, as in the Firefox / Iceweasel tussle. In that situation, a more light-handed trade mark policy may have solved the problem.

Ultimately, it is the “essential freedom” that wins the day. If a project becomes too oppressive on a matter such as trade marks, it can be forked and rebranded, the prospect alone of which may help common sense to prevail.

In a case that will possibly influence New Zealand law, the High Court of Australia (their highest court) last week handed down a major decision that makes it harder for companies to claim copyright over compilations and databases such as television schedule listings.

After a hearing involving no less than six QC’s (or Senior Counsels as they are now known in New Zealand and most Australian states), the High Court unanimously ruled in IceTV Pty Limited v Nine Network Australia Pty Limited that IceTV, which provides electronic programme guides, did not infringe the Nine Network’s copyright by partially reproducing its television schedule listings.

Continue reading ‘Aussie copyright decision increases scope for fair (dinkum) dealing’ »

New Zealand’s copyright laws contain an important feature known as the “commissioning rule”. Software developers – whose stock in trade is intellectual property – need to beware of this rule.

Note: the Government is proposing to repeal of this rule. As of April 2009, the amending Bill (carried over from the previous Labour-led Government)  sits at number 18 on the Government’s Order Paper (right after the Dog Control Amendment Bill), so the rule may not be repealed for some time.

Continue reading ‘Copyright ownership and software development’ »