Canadian firm DE Technologies has applied for patents in 26 of the world's most developed economies in connection with a broad framework for software design allowing international transactions that DE Technologies claims it developed in the early 1990s.
The company claims that anyone that conducts a broad range of of e-commerce transactions across international borders electronically or develops ecommerce platforms is using its' intellectual property.
Matthew Tutaki, head of business development with Web technology firm Syntropy, told ZDNet Australia he had received information confirming that IP Australia had awarded DE Technologies' patent claim.
Technically, said Tutaki, this means that every company conducting business transactions across Australia's borders over the Internet is liable to be slugged with a royalty fee.
"It's simply ludicrous" said Tutaki who believes the situation is so urgent he is dropping everything to lead the charge to have the situation reversed immediately.
According to Tutaki, the awarding of the patent could cost Australian industry hundreds of millions of dollars a year.
"If you are Toyota in South Australia and you are purchasing mufflers from a manufacturing plant in Indonesia and you use the e-commerce platform in order to purchase those mufflers then technically you should be paying a $US10,000 licensing fee for the pleasure of conducting your business over the Internet," said Tutaki.
At the same time, said Tutaki, the supplier in Indonesia would be liable to pay a royalty fee. Tutaki reasons that the royalty fee would also apply in the case of popular online stores such as book seller Amazon.com.
Tutaki has drafted an urgent letter to all members of the Senate and parliament, insisting that they direct IP Australia to review and overturn the patent.
Tutaki said that unlike a defined e-commerce software solution, DE Technologies patent claim isn't a unique enough as a proposition to warrant its award.
"It's like a Catholic charging for the air you breathe because their CEO invented the Universe," he said. "That's the stupidity of the situation."
DE Technologies has been involved in a high profile clash with United States Congressman Rick Boucher who has argued vehemently against approving the patent in the U.S.
IP Australia did not respond to ZDNet Australia's requests for comment in time for publication.
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This patent is clearly invalid and any decision by IP Australia to approve it is absurd. However, Tutaki should be careful to contest it only on the grounds of novelty and compliance with patent requirements, and avoid reference to commercial effects. IP Australia is correct in saying that adverse commercial effect is not a reason to reject a patent claim.
There is plenty of substance to a claim that the patent is invalid without referring to commercial effect - as tempting as it may be to illustrate the economic devastation that approval of the application could cause.
For anyone to suggest that there is any novelty in the idea that one might display product descriptions, allow selection from a list of described products, and facilitate the purchase of and payment for that selection is clearly nonense. Such commercial activity began soon after the invention of the printing press!
The facilitation of that process on the internet was no more than a natural and obvious adaptation of an existing concept to a new medium, and did not in any way involve an inventive process, novel thinking, or technical risk.
Patents are intended to apply to the product of inventive thinking and experimentation (usually with a degree of technical risk) in order to protect the rights of those who conceive novel devices or methods to be rewarded for their work. There is no novelty whatsoever in this method - any more than there was novelty in the idea that one could purchase by ticking a form and mailing an order rather than by physically entering a store. To approve this patent would be to make a mockery of the whole patent system and to insult every genuine inventor.
Posted by Lorraine Cobcroft on Saturday, July 19 2003 07:05 AM