US threat to Free Software

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This was published 19 years ago

US threat to Free Software

Another election under our collective belts, and like old soldiers, the issues that dominated the past few weeks of our lives - interest rates, Tasmanian forests, interest rates and education - fade away.

Fading perhaps faster than all others is the Australia-US free trade agreement: most notably the infamous "Chapter 17" covering the harmonisation of intellectual property (IP) laws between the two countries.

Initially lost among the concerns of cane growers and graziers, IP harmonisation hit the big time when the impact to our Pharmaceutical Benefit Scheme was realised.

IP's importance is belied by its innocuous nature. Chapter 17 is the biggest chapter of the FTA because intellectual property will take a central position in future business decisions.

Garnering the limelight are software patents. Particularly outraging the free-software community are software patents, which "menace the field of software like landmines", says linux.org.

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Richard Stallman, the man who coined the term "free software", and others in the community understand their biggest threat. The right a patent grants to its holder to exclude others from making, using or selling their invention is a direct contradiction to their aspiration to allow software to be freely copied, distributed and modified. Little wonder also that Microsoft has latched on to the ambiguity this issue has created. Steve Ballmer's open industry email highlighted indemnification along side costs and security as Windows' three key strengths over Linux.

Windows' latest feature is litigation protection.

The software patent is an issue that we as a nation of net consumers observe passively. This will not be the case with business method patents.

A 1998 ruling by the US appeals court in State Street Financial v Signature Financial Group overturned a near-century-old interpretation of patent law that prohibited a method of doing business from becoming patentable intellectual property. Australia's landmark ruling in the case of Welcome Real Time v Catuity set us down the same path.

In the US this spawned the class 705 patent, which covers "machines and methods for performing data processing or calculation operations in the: 1) practice, administration or management of an enterprise; 2) processing of financial data; or 3) determination of the charge for goods or services". Both the high-profile cases of Amazon.com v Barnesand noble.com (single-click purchase method) and Priceline.com v Microsoft (reverse auction method) were about business method patents.

So what was seen as little different to an abstract mathematical concept is now an intangible asset that organisations need to manage.

This coincides with trends such as organisations using enterprise architecture programs to frame their IT decisions by directing their information, application and technical sourcing, and management efforts. This is usually built on an enterprise business architecture so organisations will recognise unique, novel and not obvious methods (the tests for patent protection) within their business while seeing them in the context of the IT systems required for their support.

There is also a shift towards business process management, in which possible ways to conduct business are simulated before their use.

So the future intellectual assets our businesses will produce are not only ones to which we are generally unaccustomed, they are supported by processes and applications that are still evolving. It raises interesting questions over the future relationship that organisations will have with their business application suppliers, especially as they increasingly build systems from many competing suppliers.

Organisations must differentiate between "commodity methods" and "patentable methods" - which can only be done by the business working closely with IT staff. Should they wish to patent a process, a vendor may be useful as a channel to sell or license the method to others. But if the business chooses a "trade secrets" approach, obscuring the processes from outside eyes, it will have to shield these from their contracted integrators and outside consultants.

In the new world of patentable business process, the old argument of build versus buy becomes one of build, buy, or sell.

And when considered against the backdrop of Chapter 17 of the FTA, this should have some very interesting ramifications for the future of Australia as a net producer of intellectual property.

Brian Prentice is senior analyst, technology research services, at META Group Asia Pacific.

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