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09.18.10

If Patent Offices Ran the World

Posted in Europe, Law, Patents, RAND at 1:48 pm by Dr. Roy Schestowitz

“Staff at the European Patent Office went on strike accusing the organization of corruption: specifically, stretching the standards for patents in order to make more money.

“One of the ways that the EPO has done this is by issuing software patents in defiance of the treaty that set it up.”

Richard Stallman

Summary: The EPO thinks it’s the European Commission (EC), the EC thinks it’s a patent authority, and out of this whole affair comes a bastard child called software patents, lodged right inside people’s standards (which everyone must implement to and be taxed by merely to become compliant/compatible)

ACCORDING TO this announcement [PDF], the European Commission shows its close connection to the EPO and bending over regarding the sensitive subject of patents in standards.

The president of the FFII accuses the EPO of corrupting the European Commission. To quote:

EPO corrupting the European Commission to promote software patents barriers in standards, conference next 22 november: http://ur1.ca/1nw1r

The document is a one-page announcement about an event scheduled to take place two months from now. It says:

Tensions between Intellectual Property Rights and the ICT standardisation process : reasons and remedies

Brussels, 22 November 2010

The European Commission and The European Patent Office (EPO) are jointly organising a Conference to further discuss “IPR in ICT standardisation ” related issues; the objective is to find policy solutions for identified challenges.
Standardisation can make an important contribution to unlock the potential of innovative markets and strengthen the position of European economy through more efficient capitalising of its knowledge basis. European ICT producers in particular need to be able to rely on standards to ensure interoperability and success of new products as this would lead otherwise to fragmented ICT markets. However, as key ICT standards are perceived by many as critical technology platforms with a strong public interest dimension, concerns are voiced that Intellectual Property Rights (IPRs) and their exclusivity potential, may hinder or prevent standardization. Are today’s IPR features still compatible with fast moving markets and the very complex requirements of ICT standardisation in a global knowledge economy environment? Where are problems that we can we fix? To find out, the European Commission and the European Patent Office (EPO) are organising a conference to address some specific issues on patents and ICT standards.

Interoperability is a critical issue for the further development and market acceptance of innovative ICT services and applications. Consensus building between stakeholders on relevant technical matters often leads to standards. A common approach is therefore of importance both for European consumers and companies and will allow the EU to become a global leader in the sector.

However as technology, and thus interoperability, becomes more complex every day, ownership, patents, copyright and related IPR policies play an increasingly important role in ICT standardisation. Some maintain that problems related to Intellectual Property Rights (IPR) issues may hinder or prevent standardization and thus even become a barrier to the introduction of services and applications. On the other hand, the rights of those owning intellectual property incorporated in standards compliant solutions need to be properly taken into account and rewarded. Although all agree that this should happen in a fair, balanced and predictable way, there is often disagreement whether these principles are always followed, at least in key standardisation endeavours.

The conference is part of an open dialogue process that the Commission is undertaking with key stakeholders and the first in cooperation with the EPO in this very important domain.

The event aims to provide a platform to exchange ideas and suggestions on the following topics:

• Who needs standards-related patent registers and how should they look like?
• Is there a need to improve standards-related patents quality and how can we achieve it?
• How should ex-ante commitments of licensing terms be best drafted?
• How to ensure certainty on the availability and continuity of essential IP rights for licensing?
• What is the best relation between standards and open source software and freely available technologies?

The two conference partners envisage further events and meetings on relevant issues around IPR and ICT standards to improve transparency and predictability in this critical field. A previous workshop organised in November 2008 was a “fact finding” event to map the challenges and stakeholder positions. The current and future conferences aim at finding policy solutions to the identified challenges.

This is not acceptable because: 1) the EPO is not supposed to take the EC by the hand; if anything, things should be done the other way around and 2) software patents are not legal in Europe and some of the above legitimises them.

As a side note, patents — and not just software patents — have their basis challenged in TechDirt right now:

Gillette received patents in 1904 on both the razor and the blade. As Picker notes, conventional wisdom would suggest that this is the perfect point for Gillette to have used the famed razors-and-razor blades strategy, since it could use the patents to exclude competitors from offering compatible blades. But, it did not. The same “conventional wisdom” would then argue that once the patents expired, and others could offer compatible razors, the razors-and-blades strategy would not work. And yet, it was after the patents expired and when there were compatible blades on the market that Gillette finally went to this form of strategy…. and its sales and profits shot up.

[...]

The whole thing is quite fascinating in thinking about these kinds of business models. Printer companies, especially, might learn a thing or two, as they’ve now become quite aggressive in using patents to block competitors from offering compatible ink cartridges or ink refills. But, the example of Gillette suggests they could be better off not fighting it, but focusing on providing better quality that doesn’t annoy users quite so much.

Those who want patents in software (including software standards) are typically those who control this area of software and those who work for them, including lawyers. If the EPO is allowed to have a say in European policy, then the tail wags the dog and it harm’s the Commission’s reputation.

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