07.03.14
Posted in Free/Libre Software, Law at 11:24 am by Dr. Roy Schestowitz
“My background is finance and accounting. As a socially conscious venture capitalist and philanthropist, I have a very good understanding of wealth management and philanthropy. I started my career in 1967 with the IRS as a specialist in taxation covering many areas of the tax law including the so-called legal loopholes to charitable giving. […] However, the Gates Buffet foundation grant is nothing more than a shell game in which control of assets for both Gates and Buffet remain the same. […] The only difference is that the accumulation of wealth by these two will be much more massive because they will no longer have to pay any taxes.”
The Gates and Buffet Foundation Shell Game
Summary: The Yorba Foundation is denied tax exemptions while the world’s biggest thief, who increases his wealth by lobbying and investing under the guise of ‘charity’, receives tax exemptions
THIS is a major story that, unlike some stories (e.g. the No-IP takeover scandal which we’ll cover soon), has not received sufficient press coverage. The other day in our daily links we included a link that my wife had found and was made rather furious by. We linked to the original just hours after it was published (in June) and it took days until some sites — small sites — covered it very briefly. Susan Linton said: “The top story in today’s Linux news is the IRS denial of nonprofit status for Open Source projects.”
This was hardly the top story. It didn’t receive much attention and it took days for it to get any press coverage at all. Here is what Boing Boing wrote only yesterday:
In a disturbing precedent, the Yorba Foundation, which makes apps for GNU/Linux, has had its nonprofit status application rejected by the IRS because some of projects may benefit for-profit entities.
Will Hill said that there is “[a]n interesting comment from a lawyer on the pluss“:
If ICANN can be a 501(c)(3), and pull in around $400,000,000 in 2013 while benefiting pretty much every intellectual property protection agent in the world, I don’t see how someone who produces code that they give away for free can be refused similar status.
Thankfully, this issue has been getting some more coverage in some technology news sites very recently [1,2], but nothing else as far as we can tell. Apparently it’s OK for an investment and Microsoft lobbying body to get tax exemptions (that’s Gates Foundation), but it is not okay for a bunch of programmers who work without a salary to receive tax-free donations. This is how US ‘justice’ works, apparently. Rich people pay next to nothing to their government and diligent poor people are portrayed as some kind of “parasites” and forced to pay part of the meager donations they receive to the government. █
Related/contextual items from the news:
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Last year, as the IRS scandal blossomed over the IRS supposedly targeting “conservative” groups for extra attention concerning their non-profit status, we noted that the IRS had also been told to examine “open source software” projects more closely as well. We found that to be a bit disturbing — and it appears that for all that focus on the scandal, the IRS hasn’t quite given up on unfairly targeting open source projects. The Yorba Foundation, which makes a number of Linux apps for GNOME, has been trying to get declared a 501(c)(3) non-profit for over four years now… and just had that request rejected by the IRS for reasons that don’t make any sense at all. Basically, the IRS appears to argue that because there might be some “non-charitable” uses of the software, the Foundation doesn’t deserve non-profit status, which would make it exempt from certain taxes (and make donations tax deductible).
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The IRS denied a proposal to grant 501(c)(3) status to Yorba, a nonprofit organization that develops open source software for the Linux desktop. In a blog post yesterday, Yorba spokesperson Jim Nelson disclosed the full text of the IRS rejection letter. He fears that IRS policy has evolved to broadly preclude nonprofit open source software developers from obtaining 501(c)(3) tax exemptions.
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Posted in Patents at 11:09 am by Dr. Roy Schestowitz
Summary: Philip Johnson, a “patent extremist”, becomes the new head of the monopolies office, showing that nothing is going to improve any time soon
IF YOU thought David Kappos (software patents booster) was bad, wait until you meet the new head of the USPTO. The White House has just defended the USPTO from SCOTUS (against patents on “abstract” ideas) by putting what one writer called “patent extremist” in charge (not to be confused with the judge):
The selection of Philip Johnson, the head of intellectual property at Johnson & Johnson, is being resisted by tech industry groups as he is best known for spending years to halt against any effort to change the way patents are submitted and approved. The appointment of Johnson contradicts Obama’s stand against lobbyist in Washington as well as his promise to bring patent reforms. Appointment of Johnson would be the same kind of mistake that Obama made by appointing lobbyists for the cable industry Tom Wheeler as the head of FCC. Wheeler is all determined to kill the Internet and give the cable companies unprecedented control of the internet.
The USPTO was bad enough as it was, approving almost every patent application. The new leadership is against any kind of reform:
White House poised to name patent reform opponent as new head of Patent Office
The Obama Administration’s expected choice to lead the Patent Office is a Johnson & Johnson lawyer who has been a key figure in blocking attempts to reform the patent system.
‘Hope’ for the protectionists and ‘Change’ for no-one other than corporations, which the high US court now deems “people”. Welcome to crony patent regime. It’s getting worse over time. █
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Posted in Courtroom, Law, Patents at 10:29 am by Dr. Roy Schestowitz
Justice gone backwards
Photo from Reuters
Summary: A patent case in the United States gets sent from SCOTUS to CACF, showing a rather odd hierarchy of justice (top-to-bottom, back to notorious patent boosters)
THE Rader corruption and the impact on CAFC was mentioned here just weeks ago, noting that the Court had been put under mortal danger (some people call for its abandonment/abolishment). This is the court which was responsible for software patents in the United States, home of software patents (universally). According to this update from the EFF, CAFC may actually have a go at overriding SCOTUS. As the EFF put it: “The Ultramercial case has been bouncing around the federal courts for years. In 2010, a trial court held the patent invalid on the grounds it claimed an abstract idea. On appeal, the Federal Circuit reversed, finding the patent non-abstract because it “clearly require[s] specific application to the Internet and a cyber-market environment.” The Supreme Court then sent the case back to the Federal Circuit for reconsideration. In a remarkable decision by former Chief Judge Randall Rader, the lower court thumbed its nose at Supreme Court authority and upheld the patent for a second time. The defendants returned to the Supreme Court. EFF filed an amicus brief urging the Court to take the case and find the patent abstract.”
The US patent system seem to favour those with money (for more motions and appeals), not those with original ideas. It is a real problem. Watch how the USPTO, led by corporate masters like IBM, stops beneficial products from reaching their full potential:
We’ve seen this many times before, how patents can hold back very useful developments. Notice how 3D printing is suddenly a big thing? It’s not because of any new miraculous breakthroughs, but because some key patents finally started expiring, allowing real innovation to move forward. We saw something similar in the field of infrared grills, which were put on the… uh… back burner (sorry) until key patents expired. Derek now points us to a similar example.
This article goes on to showing how microwaves got retarded by patents, and there’s no exception here. Patents just tend to harm innovation and those who promote them (usually lawyers) do a great disservice to society.
One day the patent system (if it still exists in its current form) might actually be reshaped by people representative of society, not patent lawyers. █
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Posted in Europe, Law, Patents at 5:17 am by Dr. Roy Schestowitz
Summary: Continued discussion about the meaning of the US Supreme Court (SCOTUS) ruling and what it means to programmers all around the world, not just patent lawyers who seek to monopolise and tax software development
THE recent SCOTUS ruling on patents ended software patent scope where it reaches "abstract ideas" (whatever exactly it means, as no criteria were specified or even a test). The ruling left room for patent lawyers to exploit (pretending nothing has actually changed). We have demonstrated, based on dozens of analyses from patent lawyers, that lawyers’ responses are quite consistent, ensuring only that people still come to them to patent algorithms.
Here is another new analysis from Dykema Gossett PLLC, saying that “Litigants involved in current or future litigation over software patents will want to study the claims at issue to assess their vulnerability under the framework laid out in Alice Corp. While patent eligibility of any particular software claim will remain a case-by-case, fact specific inquiry, at least now there is some guidance by which to conduct that inquiry.”
“Basically, the corporate media is now a platform by which lawyers ‘report’ to the public on a decision in which they have vested interests.”Dr. Glyn Moody looks at the glass as half full, celebrating the fact that the SCOTUS is at least recognising that there are limits to software patents. He also, however, bemoans Europe moving in the opposite direction. To quote Moody: “I’ve written a number of times about the curse of the “as such” clause in Article 52 of the European Patent Convention, which has allowed software patents to creep in to Europe by the backdoor. In the US, which has a far more liberal attitude to patenting everything under the sun, there has been a cognate problem, whereby patent applications have been made on a abstract/trivial idea simply by appending “using a computer” to make it novel. At long last, the US Supreme Court has addressed this issue.”
“European Unitary Patent system will work means that there is no independent court to which appeals can be made – only an appeal court within the new patent system itself. That lack of an external check is an extremely dangerous feature – and one that the European Union may well come to regret.”
The European angle is interesting as the EU’s position on software patents has been gradually morphing/assimilating to the US position.
Here is America Online (AOL) giving a ‘report’ (not analysis) about the SCOTUS ruling. Guess who wrote it. That’s right, AOL treats ‘IP’ groups as journalists now, boosting their position, which is what we foresaw and worried about. The article begins with the following promotion: “Michael Gulliford is the Founder and Managing Principal of the Soryn IP Group,a new breed of patent management and advisory company that provides a host of patent-centric services to a select group of innovators.”
“The great majority of patent trolls use software patents, so rather than speak about stopping trolls we need to concentrate on patent scope.”Basically, the corporate media is now a platform by which lawyers ‘report’ to the public on a decision in which they have vested interests.
Here is an analysis from Davies Collison Cave, separate from the press (legal sites host these). It says: “To be eligible for a patent in the US, a computer implemented invention will probably now need to provide a technological improvement, solve a technical problem or effect some improvement in technology or a technical field. It will certainly need to involve more than simply implementing an abstract idea on a generic computer.
“Whether it was intentional or not, the US Supreme Court may have introduced into US law technical contribution requirements similar to those of European patent law.”
Yes, so the US is moving closer to EU patent law while EU patent law is moving closer to US patent law, which includes software patents. There seems to be some kind of dangerous convergence here. We need to fight hard to stop it.
Here is another new analysis from Stinson Leonard Street LLP (another patents firm):
Software patents vulnerable: use of a computer is “not enough”
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This decision will likely be cheered by technology companies with patent portfolios directed to more sophisticated inventions that go beyond computer-implemented business methods. However, software patents directed to general business processes, such as those that involve the performance of well-known financial transactions on a computer, may be in jeopardy of being invalidated.
That basically sounds like the “as such” nonsense that we have in Europe and to some degree in New Zealand as well. This is not good. This might mean that spurious patent litigation (over software patents) can soon break out of places like the Eastern District of Texas, where stories like this one are being reported by the patent trolls-obsessed:
A controversial patent that has been used to wring millions of dollars in settlements from hundreds of companies is on the verge of getting shut down.
US Circuit Judge William Bryson, sitting “by designation” in the Eastern District of Texas, has found in a summary judgment ruling (PDF) that the patent, owned by TQP Development, is not infringed by the two defendants remaining in the case, Intuit Corp. and Hertz Corp. In a separate ruling (PDF), Bryson rejected Intuit’s arguments that the patent was invalid.
Notice the type of patents they are using. The great majority of patent trolls use software patents, so rather than speak about stopping trolls we need to concentrate on patent scope. Here is Steven W. Lundberg (highly vocal proponent of software patents [1, 2, 3]) boosting software patents again (as if nothing has changed) and several other patent boosters like Fenwick & West LLP and Stroock & Stroock & Lavan LLP. Perhaps they view all this as an opportunity (in the long run) to file their patents in yet more continents, making even more money by taking away from society and tying the hands of programmers.
Timothy B. Lee is a little more optimistic than us. He says that “the Supreme Court might kill software patents” and here is why:
Last week I argued that the Supreme Court’s widely anticipated ruling in the case of CLS v. Alice wasn’t the knockout blow software patent opponents had been hoping for. The Supreme Court struck down the specific patent at issue in the case, but it was vague about when, if ever, other software patents were allowed.
Reading commentary on the case has made me more convinced that software patent owners should be worried.
In a nutshell, the Supreme Court said two things: you can’t patent abstract ideas, and merely implementing an abstract idea on a generic computer isn’t enough to turn it into a patentable invention. The big question is: what’s an abstract idea?
The patents the Supreme Court struck down last week and in a 2010 case called Bilski v. Kappos were extremely abstract. In essence, both patents took an abstract business strategy — like holding money in escrow to prevent either party to a deal from backing out — and claimed the concept of implementing it on a computer. In both 2010 and 2014, the Supreme Court said that wasn’t enough for a patent.
Some software patent supporters, like former Patent Office director David Kappos, have concluded that the decision leaves most software patents unscathed. But the respected patent scholar Robert Merges, a software patent supporter himself, is not so sure.
David Kappos is not credible because he worked both for the patents-greedy USPTO and for IBM, one of the most aggressive patent-rattling companies and leading lobbyist for software patents, even in Europe. The argument we made some days ago is that all software patents are — by definition almost — abstract. Unless there is a working implementation to be patented, all that the application allude to are ideas, barely any function at all.
What it boils down to is this; if a judge was competent enough to tell the difference between pseudo code, programming, UML etc. (which is unlikely, especially in clueless, biased and corrupt courts like CAFC), then every software patent would be deemed “abstract”, hence invalid. To construct a legally-cohesive argument along those lines might require a lawyer. Are there any “good” patent lawyers out there? █
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