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  5. Software patents harm banks - 7 February 2005
  6. </title>
  7. </head>
  8. <body>
  9. <center>
  10. <h1>Software Patents in Europe</h1>
  11. [ <a href="/campaigns/swpat/swpat.html">Introduction</a>
  12. | <a href="/campaigns/swpat/background.html">Background</a>
  13. | <a href="/campaigns/swpat/status.html">Status</a>
  14. | <a href="/campaigns/swpat/documents.html">Further Reading</a> ]
  15. </center>
  16. <br />
  17. <center>
  18. Open Letter
  19. [<a href="/campaigns/swpat/letter-20040510.html">2004-05-10</a>]
  20. [<a href="/campaigns/swpat/letter-20040531.html">2004-05-31</a>]
  21. [<a href="/campaigns/swpat/letter-20040706.html">2004-07-06</a>]
  22. [<a href="/campaigns/swpat/letter-20040802.html">2004-08-02</a>]
  23. [<a href="/campaigns/swpat/letter-20040906.html">2004-09-06</a>]
  24. [<a href="/campaigns/swpat/letter-20041004.html">2004-10-04</a>]
  25. [<a href="/campaigns/swpat/letter-20041101.html">2004-11-01</a>]
  26. [<a href="/campaigns/swpat/letter-20041206.html">2004-12-06</a>]
  27. [<a href="/campaigns/swpat/letter-20050103.html">2005-01-03</a>]
  28. [2005-02-07]
  29. [<a href="/campaigns/swpat/letter-20050307.html">2005-03-07</a>]
  30. [<a href="/campaigns/swpat/letter-20050405.html">2005-04-05</a>]
  31. [<a href="/campaigns/swpat/letter-20050502.html">2005-05-02</a>]
  32. [<a href="/campaigns/swpat/letter-20050606.html">2005-06-06</a>]
  33. </center>
  34. <h2>
  35. Software patents harm banks
  36. </h2>
  37. <h3>7 February 2005</h3>
  38. <p>
  39. "<a href="http://en.wikipedia.org/wiki/Basel_II">Basel II</a> is a round
  40. of deliberations by central bankers from around the world, under the
  41. auspices of the International Bank of Settlements in Basel, Switzerland,
  42. aimed at producing uniformity in the way banks and banking regulators
  43. approach risk management across national borders."
  44. Mr Nout Wellink is the Chairman of the Board of Directors and President
  45. of the International Bank Settlements.
  46. </p>
  47. <p>Dear Mr. Wellink,</p>
  48. <p>
  49. in our <a href="/campaigns/swpat/letter-20041004.html">open letter</a> to
  50. the head of the Allianz insurance group, Mr. Diekmann, we explained how
  51. <a href="/campaigns/swpat/swpat.html">software patents</a> are likely to
  52. become a massive cost and risk factor for all money and information
  53. technology intensive businesses like insurance companies. The same holds
  54. true for banks.
  55. </p>
  56. <p>
  57. Software patents establish monopolies on abstract ideas which are
  58. available to anyone, including those who do no software development but
  59. do have legal departments. Like all larger software projects, all parts
  60. of Basel II consist of a multitude of ideas, each of which may become
  61. subject to a monopoly by anyone. If you for instance check the database
  62. of the US Patent and Trademark Office (USPTO), you will already discover
  63. <a href="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&amp;Sect2=HITOFF&amp;p=1&amp;u=%2Fnetahtml%2Fsearch-bool.html&amp;r=0&amp;f=S&amp;l=50&amp;TERM1=%22credit+risk%22&amp;FIELD1=&amp;co1=AND&amp;TERM2=&amp;FIELD2=&amp;d=ptxt">180 patents</a>
  64. on software ideas concerning "credit risk" -- the central issue of
  65. Basel II.
  66. </p>
  67. <p>
  68. There is no compulsory licensing for any of these, the particular
  69. patent holder gets to determine the terms on which they will grant or
  70. deny use of the monopoly on each individual idea.
  71. </p>
  72. <p>
  73. But the implementations of Basel II will naturally also depend upon a
  74. multitude of standard components, such as file services, databases,
  75. transfer protocols and more. Each of these is similarly subject to
  76. software patents. Since the number of methods to secure computer
  77. systems is limited, this may mean that Basel II will have to implement
  78. its features on a known insecure basis.</p>
  79. <p>
  80. Once Basel II becomes widely used, a dramatic increase in software
  81. patent infringement lawsuits for this area is likely to occur on a
  82. global basis. Any bank or any of its customers for Basel II based
  83. software may become target of such legal action -- the risk is
  84. incalculable and can bring about multi-billion Euro lawsuits.
  85. </p>
  86. <p>
  87. Most banks are still unaware of this threat -- they have not realized
  88. that software patents will affect them to such an extent. When
  89. we were recently talking to a German bank, they were shocked when they
  90. realized what software patents will mean to their business.
  91. </p>
  92. <p>
  93. Software patents will dramatically reduce the innovation rate and
  94. competitiveness of European economy in general, and to you they mean
  95. introducing an incalculable risk that can generate huge damages.
  96. </p>
  97. <p>
  98. That is why we ask you to protect your interests and take initiatives
  99. against software patents -- directly and by supporting our work. Also,
  100. should you have further questions, please do not hesitate to get in
  101. touch.
  102. </p>
  103. <p>Best regards,</p>
  104. <p>
  105. <a href="/about/greve/">Georg Greve</a><br />
  106. President<br />
  107. Free Software Foundation Europe (FSFE)<br />
  108. <a href="/">fsfe.org</a>
  109. </p>
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