Thursday, October 06, 2005

Rhetoric vs. Reality.

Patents: Agreeing to disagree?

By Victoria Shannon International Herald Tribune

THURSDAY, OCTOBER 6, 2005

PARIS: In Britain, a typical neonatal unit used to pay about £2,000 a year to supply nitric oxide for newborn babies with breathing difficulties. After the substance was patented in 1999, the cost rose to £63,000, according to a study published this year by Parliament in London.

What if governments abolished patents? Would those newborns and other parts of society be better served? Or would inventors have fewer financial incentives to give the world their bright ideas?

Increasingly, such questions are percolating through business gatherings, Internet chat rooms, university lecture halls and the corridors of legislatures. They are both ethical and economic, and for many people, also largely rhetorical.

For while media, industry, lawyers and academics gnash teeth over who owns what, the market simply demands ever sharper photographic images or ever easier access to a favorite rock band - and progress marches on.

In the meantime, global conversations over who has the rights to ideas and artistic products are grinding into stalemate. This summer, after five years of intermittent progress, European legislation allowing patents on software was lobbied to death. A rights treaty for broadcasters before the World Intellectual Property Organization is stalled for the second consecutive year, and talks have been going on since 1998.

Tweaking the rights systems is now high on the agenda of legislators in developed countries that fear a loss of profit, competitiveness or even control. A long-awaited Patent Reform Act is just now getting an airing in the U.S. Congress. After the bitter battle over software patents, the European Union may move forward on EU-wide patent coverage. Japan is starting to reexamine its system, and India and China are beginning to enforce recent adjustments.

But the changes are largely at the margins and do not take into account some of the more extreme views on "free" patents, open-source software and shared copyrights that have emerged over the past decade out of the generation that built the Internet.

In the end, many executives and academics who study intellectual property conclude that the capitalist world is unlikely to toss out its patent systems and other long-held approaches to generating innovation. Many of the companies affected are content to let the systems quietly evolve to catch up to the technology they have lagged behind.

"They were arguing about this 500 years ago, they will be arguing about it 500 years from now," said Scott McNealy, chief executive of Sun Microsystems, discussing the tussle between private control and public good.

Unlike Sun, which both protects and shares its patents, Microsoft as a rule does not share. The software leader has applied for more than 3,000 patents this year, spends more than $7 billion a year on research and development, and is facing 158 legal challenges to its patents.

Officially, Microsoft this year issued detailed principles that it said it hoped would guide U.S. patent reform, like elevating the quality of patent applications that are approved and curbing litigation.

But Horacio Gutierrez, associate general counsel for Microsoft in Europe, said that he believed the extreme views would converge over time, at least in the software industry.

Pure commercial software companies, along with companies that want to make a business out of the open-source software that is produced by the developer community at large, "are actually being driven to the middle," he said, "while these other debates are happening at the religious level."

Microsoft, of course, is such a giant presence in computer operating systems and desktop software that it stands to benefit from any changes that emerge from the market, which it indirectly controls. So far, it has also successfully skirted efforts by U.S. courts and the European Union to break up what many perceive as a near monopoly in certain fields.

Activists determined to liberate ideas and technologies remain committed to upending the system with their debates.

Some of them advocate replacing copyrights with "copylefts" - a license to let the user modify a product for commercial gain while leaving the underlying idea free for others to use.

Numerous licensing agreements that loosen the legal rights of the creators to own ideas are now available and in growing use. There are more than 50 different kinds of open-source licenses, for instance.

"The user has to have the right to do with software that he bought as he wants - that is a must for us," said Joachim Jacobs of the Free Software Foundation of Europe.

And recent moves by Microsoft seem to acknowledge that radical solutions are influencing the system. Gutierrez cites two recent Microsoft deals as examples of new thinking on intellectual property rights.

One is the agreement made last week with JBoss, a Swiss and American open-source developer, on software collaboration, even though the companies still compete for developers.

"The companies are exploring opportunities to improve interoperability and ensure an optimized experience for customers using JBoss on the Windows Server platform," Microsoft said.

The other is with Inria, the French computer science research institute, on joint research that would be considered the intellectual property of the institute.

Gutierrez even conceded that "it might be possible for Microsoft to use some open-source licenses in the future" - a notable admission from a company whose chief executive, Steve Ballmer, identified open-source software like Linux as a threat to the company's own products in 2003.

Other small steps are being taken to free up inventions for essentially unlimited access:

Creative Commons, a nonprofit organization based in San Francisco, was started by the Stanford University academic and lawyer Lawrence Lessig to allow users to copy and distribute a copyrighted work provided that they give credit. The group makes no promise that its version of copyrights is enforceable in court. But it is being used in about 30 countries, including China, Australia, Germany and Britain.

General Public Licenses, which date from the 1980s, when Richard Stallman introduced them at the Massachusetts Institute of Technology, let users change and distribute software and even charge for it.

As companies like International Business Machines, Sun and Nokia let more of their intellectual property out into the open, keeping track of what rights are shared and which ones are protected is becoming unwieldy. To deal with this problem, one software group is championing what it calls a "patent commons" - a database of such moves to give users confidence that the correct rights are being enforced.

The World Trade Organization agreed in August 2003 to make it easier for countries to use copied drugs - even when those drugs come from locations where copying a patented drug would be illegal.

The move was seen as a sign of the strength of campaigners' arguments to make drugs for diseases like AIDS affordable in the developing world.

Dietmar Harhoff, a professor and patent expert at Ludwig-Maximilian University in Munich, is calling for a crackdown on overpatenting. "More patents do not automatically mean more innovation," he wrote in a position paper in August. "Patents per se are irrelevant. Their impact on innovation and investment counts."

Some of the biggest companies in the world are starting to shift as skepticism and frustration grow about a world in which you never know when someone else may own - or claim to own - an important chunk of your big idea.

In talking about software patenting this summer, Ed Black, president and chief executive of the Computer and
Communications Industry Association, which operates in the United States and Europe, conceded that many companies, like the public and legislators, had mixed views.

"Their legal departments are charged with getting as many patents as possible, while their engineers don't believe patents help the creative process of innovation," he said.

Richard Sutor, vice president for standards and open source at IBM, said, "Fundamentally, the world is becoming more open. It's too early to tell exactly what is going to happen, but the rise of open source and increasing availability of open standards is driving a shift from proprietary to more open models."

Said Gutierrez of Microsoft: "My bet is, you are going to start seeing a lot more convergence and a lot more business sense included in these discussions."

James Kanter and Kevin J. O'Brien contributed to this report.

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