..Information to Pharmacists
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Your Monthly E-Magazine
AUGUST, 2003

JAMES ELLERSON

Marketing Consultant Perspective

Software Hijack Through Patenting

One of the more curious arrangements Australia has negotiated with the US, is that under certain circumstances, software can be patented if it demonstrates novelty and uniqueness. New Zealand also appears to be part of this legislative framework, but most other countries around the world, particularly Europe, have not sanctioned legislation of this type

Quite commonly we read in the media that some giant (usually US-based) corporation is prosecuting an Australian business for infringing on their registered trademarks.
Recent examples include Dick Smith defending his "Tem-Tin" chocolate biscuit brand against the former Australian icon Arnotts, who claimed it was too close in name and design to their "Tim-Tams".
Dick Smith eventually settled with Arnott's, but he essentially lost his case, simply because it was going to cost too much to fight.

More recently, an Australian clothing designer and retailer registered the trade mark"Harry Potter" at least three years before the first Harry Potter book was launched (the book subsequently made publishing history).
Despite the fact that the Australian trademark was registered first and that the product is presented in a completely different way, the Australian organisation has ended up in court with the better known Harry Potter trademark stating that it is trying to avoid confusion by having the Australian patent quashed (or pay a substantial royalty!)

Maybe I am naive, but doesn't this seem back to front?
Similar problems are emerging with patents.

One company has now really gone the whole hog and has patented the system of international e-commerce in Canada, US, New Zealand and approximately thirty other countries.
The patent is almost registered in Australia.

Canada-based D.E. Technologies and its principal Edward Pool, state that the patent describes a broad framework for a software design to electronically automate and transact paper exchanges involved in international commerce.
And further, that they own the patent rights.
This is unbelievably the system already used by thousands of businesses, that is given the generic name of e-commerce.

The patent has created an outcry in the US and, more recently, in New Zealand where there have been attempts to enforce commercial levies on e-commerce users.

Early this month, thousands of New Zealand businesses received letters demanding licence fees and transaction royalties up to US$25,000, for conducting international business on the Internet.

Edward Pool is quoted as recently stating that he was "entitled to a royalty on international transactions done computer to computer. Those New Zealander's are using our technology, for heaven's sake, and they're going to pay or they're going to stop violating the 505284 patent."

The problem reached Australia around mid July when an alert member of the IT community gave details to the mass media, and advised that the patent was only a few days off being sealed in Australia.

The US government previously attempted to block the patent by introducing legislation, limiting claims to processes that are already widely used.
This damage control failed.
Edward Pool succeeded in registering a US patent for e-commerce at the end of 2002.

The registering authority, IP Australia, has agreed to accept any challenges to the patent, and has extended the cooling off period allowed under Australian legislation for patent applications.

Politically, within Australia, Senator John Tierney has taken up the fight to prevent the registration of this patent or any similar attempts. The matter has been raised through industry parliamentary secretary, Warren Entsch.

John Tierney has also stated that the patent represents a serious threat to the nation's e-commerce industry and that he is prepared to seek new laws to protect Australian businesses from any attempt to enact it locally.

He also stated that he would be consulting closely with IP Australia for preliminary advice on how to deal with the matter, and that he has found it "quite breathtaking that something that is so broad in its methodology, can actually be patented."

The patenting procedure in Australia begins with the process of filing a provisional patent application.
A patent is a monopoly right granted in return for the full disclosure by the patentee to the public by way of a patent specification of an invention, disclosing at least one way on how to "perform" the invention.
The disclosure must clearly identify the features, supported by a detailed description, diagrams etc. that would enable a technical person in the same technological field to actually create the invention.

A patent claim must also include boundaries of the monopoly sought, which should distinguish the invention from any existing or precursor models that may have similarities.
The patent monopoly right is conferred in Australia only at the date of filing a complete patent application (not a provisional patent application) that includes a complete specification.

Thus a provisional application needs to theoretically describe the invention, without the need for a comprehensive and detailed disclosure.
However a fully detailed provisional application will establish an early "priority date" for the invention to be protected.
The full application for standard patent protection has to be submitted within twelve months of filing a provisional application.

There is a second tier of patent protection for "lesser" inventions termed an "innovation patent", which need only meet a lower threshold of inventiveness.
These patents were devised to protect "smaller inventions" and improvements that were not previously able to be protected.
Innovation patents are granted after a formalities check only, but are unable to be enforced until a substantive check has been made as to novelty.
After a successful check, the innovation patent is "certified" and can be enforced.
An innovation patent has an eight year term of protection compared to twenty years for a standard patent, and the innovation patent is only useful for products of short market life.
This can include software, given the rapid rate of change in IT applications.

Many software applications are being generated from the Australian pharmacist community, which meet the criteria of being unique and/or novel.
To prevent predatory global companies from cashing in on the hard work of these pharmacists a new advisor may need to be added to the range of specialists already established--that of patent attorney.

And this leads one to speculate how many "dispense" systems have patent protection.
The only one I am aware of is the system for remote dispensing that was written up in the last edition of this publication.
Does your situation need reviewing?