[Linux-aus] Joint media release on the effects of the USFTA on the local ICT industry

Fri Aug 6 12:36:02 UTC 2004

While comments are welcome, you don't have much time before this goes out 
at 3:00pm today.

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OSIA Limited & Linux Australia: US-FTA a Danger to the Australian Software
Industry

Australia -- 6th August, 2004

The entire Australian software development industry is at risk as a result
of the Intellectual Property legal framework required on adoption of the
US-FTA, Australia's Linux community and Open Source Industry bodies said
today in a joint statement. It will increasingly hamper Australia's
ability to efficiently compete in global markets. Much like the
introduction of a flawed patenting regime for pharmaceuticals, a flawed
patent regime for software is not in Australia's interests.

"Firstly and most importantly, this is not an open source issue, nor
will it merely affect Australian-based open source developers," said
OSIA director and lawyer Brendan Scott. "The FTA may introduce obstacles
and legal traps which will have serious and harmful effects on almost
all Australian software developers. It's a whole-of-industry issue for
Australia."

Here's why:

1) The wording in the FTA suggests that there will be a harmonisation of 
   Australia's software patents law with the US laws. The US patent 
   system for software has been broadly condemned as flawed by many 
   industry observers, even by the former Patent and Trademark Office 
   director himself [1]

2) Any non-trivial piece of software embodies possibly thousands of 
   code processes, algorithms or software modules, any one of which 
   could fall foul of one or many US software patents. 

3) Most Australian developers have probably built products which 
   'infringe' on US software patents. Introducing a system which makes 
   it simpler for these patent holders to bring such legal hooks into 
   Australia is very damaging to the local industry.

4) Australian developers face hefty fines if they re-create software 
   processes unaware of the possibility that they may been patented. 
   Ignorance of such patents is no excuse. In future, Australian 
   developers may not be able to make any software without the fear of 
   paying ransom.

5) Most Australian software developers do not have the resources to 
   check their software code-bases against the tens of thousands of 
   software patents which may flood the market if Australia degrades its 
   stringent software patent laws. 

6) US patent law allows for the imposition of punitive damages. If 
   Australia adopted a similar law, local developers could be sued for 
   many times more than any actual 'damages' they may have 
   caused the patent holder, merely as a warning for others.

7) Obtaining software patents is expensive. Most Australian software 
   developers do not have the financial or organisational resources 
   to obtain them. Most US software companies do have such resources
   The introduction of US-style software patenting will therefore be a 
   one-sided affair, and definitely not in the local industry's 
   favour. 

8) Most Australian software developers lack the resources to go
   toe-to-toe with US firms on any IP legal issues. This includes
   situations where the Australian developer is the one which owns a
   patent. 

9) Most software patents are owned by huge US-based ICT firms, which
   storehouse them in legal battle chests, to be invoked when necessary 
   to do an opponent serious damage or for legal leverage in deal 
   negotiation. They are not used to 'extend the art and science' of
   technology.

10) Many or most US software patents have been granted on processes or
   algorithms which are exceptionally vague or even worse, quite obvious
   to most competent software development practitioners. They should not
   have been granted in the first place, as they are not 'novel' in any 
   way shape or form. By degrading Australia's patent system to match 
   the US approach we will burdening our local developers needlessly.

"We've covered just some of the dangers to the local industry embodied
by the introduction of a US-style system," continued Scott.  "There are a
similar number of serious issues which will arise with the introduction
of DMCA-style legislation, also mandated by the FTA. It suffices to say
that anything which stops academic research into security and which also
stops any endeavour towards software interoperability engineering is a 
serious problem for R & D in this country."

"The FTA puts anti-competitive tools into the hands of large players,
without any real accountability," said Pia Smith, president of Linux
Australia. "It grants a monopoly over technology, innovation,
competition, and even the research sector. The DMCA in the US has been
used to threaten competitors, stifle innovation, halt research, gaol
developers, and systematically remove the rights of consumers. Allowing
the same to happen here, especially under an FTA where we lose the
ability to fix the issues locally is naive, and dangerous to Australia."

Linux Australia and OSIA support the proposals below by David Vaile, of
the UNSW's Baker & McKenzie, as a starting point to solving some of the
problems in the FTA:

 1. Tighten the criteria for software and
   'business process' patent applications.

 2. Establish a public interest litigation fund
    to enable Open Source software developers,
    integrators or users to respond to anti-competitive
    and tactical patent infringement claims,
    if they would otherwise be unable to do so.

 3. Official support for global 'prior art' research
    projects to assist research of the viability
    of such claims.

 4. change IPaustralia.gov.au page to make lodged
    patents easier to track, so that developers can
    protect themselves from bogus patents.

 5. Limit the implementation of controversial DMCA-style*
    laws, to the extent they'd inhibit development of open,
    compatible tools for common file formats and networks.

 5. Introduce US 'Fair Use' amendments to Copyright Act.
    (give us the good pro-consumer parts of US law too!)

 6. Establish court oversight of 'take down notices',
    and penalties for 'fishing expeditions' by
    copyright owners against ISPs and Internet users.

 7. Compensation for copyright users, especially students,
    libraries, schools and universities cheated of
    material coming into the public domain (or charged
    for incidental use of Internet 'caches')

"We also call upon all firms which purport to represent the interests of 
the Australian ICT industry and local developers, such as the AIIA, 
Software Engineering Australia, the ACS, the Internet Industry 
Association and Software Queensland, to make public statements about 
this topic. Now is the time to make a stand to keep local software 
development unencumbered and efficient, so we have a chance to compete 
in the global marketplace," concluded Scott.

References:

 [1] http://zdnet.com.com/2100-1107-5298785.html

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About Linux Australia

Linux Australia is a national organisation that exists to support and  
promote the Linux and Open Source community in Australia.

http://www.linux.org.au/

About Open Source Industry Australia Limited

OSIA Limited is the industry body for Open Source within Australia. We
exist to further the cause of Free and Open Source software (FOSS) in
Australia and to help our members to improve their business success in
this growing sector of the global Information and Communication
Technology (ICT) market.

http://www.osia.net.au/

Spokesperson/Contact: Brendan Scott
Phone: 0414 339 227
Email: media at osia.net.au

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-- 
Con Zymaris <conz at cyber.com.au> Level 4, 10 Queen St, Melbourne, Australia 
Cybersource: Australia's Leading Linux and Open Source Solutions Company 
Web: http://www.cyber.com.au/  Phone: 03 9621 2377   Fax: 03 9621 2477