18 July 2005

Another Argument in Favour of Software Patents

An online IPAustralia name search (excluding PCT applications, details of which are recorded by IPAustralia) today revealed 337 entries for "Microsoft". While we all know that this is a minor investment for a company like Microsoft, It is clearly only a matter of time before it enforces its patent rights.

Many in the Australian ICT industry do not place sufficient value on software patents. This is both short-sighted and dangerous. It is important to understand that according to our law, software patents are fully recognised and enforceable. Furthermore, for the purposes of litigation, patents are presumed valid and the onus is on a defendant to prove that the patent is invalid. Those practitioners who have experience with software patents will agree that such an onus could be extremely difficult and expensive to discharge.

Most Australian investors are beginning to rely on patents for some degree of comfort. However, apart from the obvious reasons associated with the ability to protect their investment, there are other, perhaps even more significant reasons. These relate to identification of the intellectual property.

An effective agreement must define the intellectual property. Without a patent application, a software product can usually only be defined as a set of instructions stored on computer readable media. It follows that there is no inherent breadth in the definition. This can limit the effectiveness of an agreement. In other words, it may be impossible to expand the reach of a license agreement beyond a reference to a particular set of instructions. On the other hand, if a software product is defined in a patent application, then the license agreement can refer to the patent application and automatically cover a broad definition of the software product.

Software producers in Australia need to stake their claim. Software is an ever-developing field. However, Bazpat is certain that there will come a time when our industry will start clashing with organisations such as Microsoft. Without a patch of patent land, the results of such a clash could be catastrophic.

1 comment:

  1. Barry,

    You've no doubt heard of "Brain Drain", what we have here is what I call the "Rights Drain".

    Unfortunately the sad reality is that overseas filings are very lucrative and most Aussie firms are fat cats as a result, whereas supporting local creators to get IP savvy and hook up to patents and other rights, is currently more the social work end of IP.

    Working on this side of the fence is literally one CEO at a time, and feels rather like banging one's head on the wall.

    But if we don't train our business leaders that IP is in fact the ESSENTIAL business discipline they will cry all the way to bankruptcy.

    You and I are tooting it to the valley, my friend.

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