Patents and Copyright: the Patents and Copyright: the Open Source battleOpen Source battle

Belgrade Belgrade –– Nov 2010Nov 2010

Simon Simon DaviesDavies

Partner, D Young LLPPartner, D Young LLP

srd@dyoung.co.uksrd@dyoung.co.uk

IntroductionIntroduction

�� “Open source and software patents “Open source and software patents are generally regarded as two things are generally regarded as two things that go together like peanut butter that go together like peanut butter

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that go together like peanut butter that go together like peanut butter and a punch to the face”and a punch to the face”

�� (The Register: 11 September 2009)(The Register: 11 September 2009)

The FSF Perspective …The FSF Perspective …

�� “Any free program is threatened “Any free program is threatened constantly by software patents”constantly by software patents”�� GPL v2.0GPL v2.0

�� “Every software patent is harmful, “Every software patent is harmful, and every software patent unjustly and every software patent unjustly

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and every software patent unjustly and every software patent unjustly restricts how you use your restricts how you use your computer”computer”�� Richard Stallman Richard Stallman ((http://www.gnu.org/philosophy/fightinghttp://www.gnu.org/philosophy/fighting--softwaresoftware--patents.html)patents.html)

The Microsoft PerspectiveThe Microsoft Perspective

�� “Linux is a cancer that attaches “Linux is a cancer that attaches itself in an intellectual property itself in an intellectual property sense to everything it touches sense to everything it touches …. …. Our goal is to try to educate Our goal is to try to educate

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sense to everything it touches sense to everything it touches …. …. Our goal is to try to educate Our goal is to try to educate people on what it means to protect people on what it means to protect intellectual property and pay for it intellectual property and pay for it properly” properly” �� Steve Ballmer (Microsoft CEO)Steve Ballmer (Microsoft CEO)�� http://www.theregister.co.uk/2001/06/02/ballmer_linux_ishttp://www.theregister.co.uk/2001/06/02/ballmer_linux_is

_a_cancer/_a_cancer/

IP Protection for SoftwareIP Protection for Software1960s/1970s perspective1960s/1970s perspective

�� Copyright Protection for SoftwareCopyright Protection for Software

�� similar to literary work; verbatim + digital copyingsimilar to literary work; verbatim + digital copying

�� no formalities (US copyright registration)no formalities (US copyright registration)

but software not part of the “arts”but software not part of the “arts”

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�� but software not part of the “arts”but software not part of the “arts”

�� what about binary code ?what about binary code ?

�� Patent Protection for SoftwarePatent Protection for Software

�� pprotects functionalityrotects functionality

�� searching problems ? (lots of binary distributions)searching problems ? (lots of binary distributions)

�� is software an “invention”is software an “invention”

�� ppolicy issues, e.g. IBMolicy issues, e.g. IBM

Legal Basis for Copyright Legal Basis for Copyright ProtectionProtection

�� Copyright protection formalised in lawCopyright protection formalised in law

�� European Copyright Directive European Copyright Directive –– 19901990

�� rrecent ECJ referral by UK courts (SAS)ecent ECJ referral by UK courts (SAS)

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�� rrecent ECJ referral by UK courts (SAS)ecent ECJ referral by UK courts (SAS)

�� WIPO Copyright Treaty 1996 WIPO Copyright Treaty 1996

�� special agreement to Berne Conventionspecial agreement to Berne Convention

�� computer programs explicitly protected as computer programs explicitly protected as literary workliterary work

�� (also required via WTO)(also required via WTO)

US Copyright caseUS Copyright case--lawlaw

�� Whelan Whelan –– 19871987�� structure sequence organisationstructure sequence organisation

�� Computer Associates v Altai Computer Associates v Altai –– 19921992

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�� Computer Associates v Altai Computer Associates v Altai –– 19921992�� abstractionabstraction--filtrationfiltration--comparisoncomparison

�� Apple v Microsoft Apple v Microsoft –– 19891989--19921992�� graphical user interface graphical user interface –– “look and feel”“look and feel”

�� Apple lostApple lost

�� Lotus v Borland Lotus v Borland –– 19961996�� US Supreme Court US Supreme Court –– no rulingno ruling

Patents Patents –– EP LawEP Law

�� Article 52(2) EPC excludes software “as such”Article 52(2) EPC excludes software “as such”

�� EPO EPO –– VicomVicom; T208/84 ; T208/84 �� software implementation and hardware software implementation and hardware implementationimplementation

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implementationimplementation�� hence invention was underlying image processing method hence invention was underlying image processing method (technical process)(technical process)

�� allowed method and apparatus claimsallowed method and apparatus claims

�� EPO case law postEPO case law post--VicomVicom generally favourable generally favourable to “technical subject matter”to “technical subject matter”

�� Confirmed (not overturned) by G03/08Confirmed (not overturned) by G03/08

Patents Patents –– US LawUS Law

�� US s101US s101�� inclusive rather than exclusive inclusive rather than exclusive

�� US Supreme Court became more favourable US Supreme Court became more favourable

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�� Gottschalk v Benson, 409 Gottschalk v Benson, 409 U.S.U.S. 6363 (1972) (1972)

�� Diamond v. Diamond v. DiehrDiehr, 450 , 450 U.S.U.S. 175175 (1981) (1981)

�� CAFC CAFC –– State Street BankState Street Bank�� business business methodsmethods

�� BilksiBilksi –– US Supreme Court US Supreme Court �� aa little more limiting (probably)little more limiting (probably)

Patents v Copyright c1990Patents v Copyright c1990

�� CopyrightCopyright�� clear coverage in lawclear coverage in law

�� but casebut case--law problematiclaw problematic

�� OK for verbatim copying (e.g. piracy) but difficult to OK for verbatim copying (e.g. piracy) but difficult to

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�� OK for verbatim copying (e.g. piracy) but difficult to OK for verbatim copying (e.g. piracy) but difficult to extend to software functionalityextend to software functionality

�� PatentsPatents�� legal position less certainlegal position less certain

�� but casebut case--law favourablelaw favourable

�� more natural (only ?) way to protect functionalitymore natural (only ?) way to protect functionality�� so lots of people went down this route so lots of people went down this route –– US + EPUS + EP

Software Patents by Stealth?Software Patents by Stealth?

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�� or is it just the march of technology …or is it just the march of technology …

Open Source Open Source -- originsorigins

�� Software made freely available, e.g. public Software made freely available, e.g. public domain, in 1960s and 1970sdomain, in 1960s and 1970s�� only minimal restrictions on end useronly minimal restrictions on end user

�� Major shift with GNU projectMajor shift with GNU project

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�� Major shift with GNU projectMajor shift with GNU project�� started by Richard Stallmanstarted by Richard Stallman

�� 1985 Free Software Foundation (FSF)1985 Free Software Foundation (FSF)

�� opposed to copyright opposed to copyright –– too restrictive (“too restrictive (“copyleftcopyleft”)”)

�� “free” as in liberty, not in price“free” as in liberty, not in price

�� virulently opposed to software patents virulently opposed to software patents –– limit freedomlimit freedom

GPLGPL

�� v1 in 1989, v2 1991 and v3 in 2007v1 in 1989, v2 1991 and v3 in 2007

�� vv2 is philosophy2 is philosophy--based licensebased license�� reads bit like a manifestoreads bit like a manifesto

“freedom” is selective“freedom” is selective

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�� “freedom” is selective“freedom” is selective�� complete freedom for end usercomplete freedom for end user

�� highly restrictive for highly restrictive for distributersdistributers

�� most significant of modern open source licenses most significant of modern open source licenses (~50%)(~50%)�� covers Linuxcovers Linux

Open SourceOpen Source

�� Open Source Initiative (OSI) Open Source Initiative (OSI) -- 19981998�� community based developmentcommunity based development

�� less antagonistic towards business than FSFless antagonistic towards business than FSF

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�� disliked confusion over “free”disliked confusion over “free”

�� defined standard for “open source” licensedefined standard for “open source” license

�� some rivalry between OSI and FSF (and some rivalry between OSI and FSF (and Linux)Linux)

Open Source BenefitsOpen Source Benefits

�� IntrinsicIntrinsic�� access to source codeaccess to source code

�� right to reright to re--distributedistribute

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�� right to reright to re--distributedistribute

�� neither of significant interest to average userneither of significant interest to average user

�� DerivedDerived

�� no vendor lockno vendor lock--inin

�� free or lowfree or low--cost codecost code

MySQLMySQL

�� MySQLMySQL -- main open source main open source databasedatabase

�� Company acquired by SunCompany acquired by Sun�� Oracle to purchase SunOracle to purchase SunOracle biggest supplier of Oracle biggest supplier of

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�� Oracle biggest supplier of Oracle biggest supplier of proprietary databasesproprietary databases

�� Commission Commission investigated investigated from competition law from competition law perspectiveperspective�� implies lockimplies lock--in still relevant?in still relevant?

EU Software Directive EU Software Directive -- originsorigins

�� WTO Trips WTO Trips –– 19941994

�� patents in “all fields of technology”patents in “all fields of technology”

�� EPC computer program exclusionEPC computer program exclusion

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�� EPC computer program exclusionEPC computer program exclusion

�� confusion over legal effect and practiceconfusion over legal effect and practice

�� Rise of the InternetRise of the Internet

�� Information Superhighway; Information Superhighway; dot.comdot.com bubblebubble

�� State Street Bank decision in USState Street Bank decision in US

European Software DirectiveEuropean Software Directive(that never was)(that never was)

�� An attempt to codify existing EPO An attempt to codify existing EPO practicepractice

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practicepractice�� not originally expected to be controversialnot originally expected to be controversial

�� consolidated open source resistance to consolidated open source resistance to patentspatents

�� ddisagreement as to current state of lawisagreement as to current state of law

�� Mutual Escalation of arguments …Mutual Escalation of arguments …

Directive Abandoned (2005)Directive Abandoned (2005)

�� Only option OK for Only option OK for both sidesboth sides�� for profor pro--software patents, software patents, maintains status quomaintains status quo

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maintains status quomaintains status quo�� for antifor anti--software patents, software patents, did not codiy status quodid not codiy status quo

�� Also European Parliament Also European Parliament could demonstrate could demonstrate independence from independence from Council of MinistersCouncil of Ministers

Patents v Open SourcePatents v Open Source

�� Patents are economic toolPatents are economic tool

�� encourage innovation and investmentencourage innovation and investment

�� Much of Open Source is based on moralityMuch of Open Source is based on morality

e.g. “free” softwaree.g. “free” software

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�� e.g. “free” softwaree.g. “free” software

�� focus on Open Source movement, not society as a wholefocus on Open Source movement, not society as a whole

�� Difficult to balance economic v moral factorsDifficult to balance economic v moral factors

�� Many Open Source advocates don’t understand Many Open Source advocates don’t understand patent systempatent system

Software Patents Software Patents –– some nonsome non--issuesissues

�� Software is protected by copyrightSoftware is protected by copyright

�� copyright protects against literal copying, patents copyright protects against literal copying, patents protect functionalityprotect functionality

multiple IP protection is now common, e.g. multiple IP protection is now common, e.g.

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�� multiple IP protection is now common, e.g. multiple IP protection is now common, e.g. unregistered design, 3unregistered design, 3--D trademarks, etcD trademarks, etc

�� Patents are too expensivePatents are too expensive

�� not specifically a software issuenot specifically a software issue

�� litigation litigation isis costly costly –– especially in US especially in US –– and UK and UK

�� (but hardly any patents litigate)(but hardly any patents litigate)

Software Patents Software Patents –– more nonmore non--issuesissues

�� Software patents are difficult to searchSoftware patents are difficult to search

�� a lot of prior art out there a lot of prior art out there -- e.g. Internete.g. Internet

�� classification not always correct, but can use classification not always correct, but can use keywordskeywords

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keywordskeywords

�� some mistakes in the past (workload a problem)some mistakes in the past (workload a problem)

�� Software patents only used by big (foreign) Software patents only used by big (foreign) companiescompanies

�� patents are often used by small, innovative patents are often used by small, innovative companiescompanies

Growth in Software PatentsGrowth in Software Patents

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Growth in Open SourceGrowth in Open Source

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�� From: From: http://dirkriehle.com/publications/2008/thehttp://dirkriehle.com/publications/2008/the--totaltotal--growthgrowth--ofof--openopen--source/source/

A Positive Correlation!A Positive Correlation!

�� Qualitative graphQualitative graph�� no sign of a negative no sign of a negative correlationcorrelation

�� Likewise, no apparent Likewise, no apparent

Open source

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�� Likewise, no apparent Likewise, no apparent negative correlation on a negative correlation on a spatial rather than spatial rather than temporal basistemporal basis

�� See also IBM submissions See also IBM submissions on Bilskion Bilski Patents

Challenges for the FutureChallenges for the Future

�� Patent SystemPatent System�� educationeducation�� justificationjustification�� focus on qualityfocus on quality

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�� focus on qualityfocus on quality

�� Open SourceOpen Source�� economic valueeconomic value�� maturitymaturity�� competition law issuescompetition law issues

�� Coexistence?Coexistence?

The EndThe End

�� ThankThank--youyou

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�� Simon Davies srd@dyoung.co.ukSimon Davies srd@dyoung.co.uk