199 lines
7.4 KiB
HTML
199 lines
7.4 KiB
HTML
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<title>
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Software patents putting International Financial Report Standards (IFRS) in danger - 5 April 2005
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</title>
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</head>
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<body>
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<center>
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<h1>Software Patents in Europe</h1>
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[ <a href="/activities/swpat/swpat.html">Introduction</a>
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| <a href="/activities/swpat/background.html">Background</a>
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| <a href="/activities/swpat/status.html">Status</a>
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| <a href="/activities/swpat/documents.html">Further Reading</a> ]
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</center>
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<br />
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<center>
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Open Letter
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[<a href="/activities/swpat/letter-20040510.html">2004-05-10</a>]
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[<a href="/activities/swpat/letter-20040531.html">2004-05-31</a>]
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[<a href="/activities/swpat/letter-20040706.html">2004-07-06</a>]
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[<a href="/activities/swpat/letter-20040802.html">2004-08-02</a>]
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[<a href="/activities/swpat/letter-20040906.html">2004-09-06</a>]
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[<a href="/activities/swpat/letter-20041004.html">2004-10-04</a>]
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[<a href="/activities/swpat/letter-20041101.html">2004-11-01</a>]
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[<a href="/activities/swpat/letter-20041206.html">2004-12-06</a>]
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[<a href="/activities/swpat/letter-20050103.html">2005-01-03</a>]
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[<a href="/activities/swpat/letter-20050207.html">2005-02-07</a>]
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[<a href="/activities/swpat/letter-20050307.html">2005-03-07</a>]
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[2005-04-05]
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[<a href="/activities/swpat/letter-20050502.html">2005-05-02</a>]
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[<a href="/activities/swpat/letter-20050606.html">2005-06-06</a>]
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</center>
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<h2>
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Software patents putting International Financial Report Standards (IFRS) in danger
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</h2>
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<h3>5 April 2005</h3>
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<p>
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The European Information & Communications Technology Industry
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Association (EICTA) combines 32 national ICT/CE associations
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from 24 European countries with 48 direct company
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members. EICTA altogether represents more than 10.000
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enterprises in Europe with more than 2 million employees and
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revenues of over 200 billion. The Association heavily supports the
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monopolisation of software ideas. Mr Provoost is
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president of EICTA and represents Philips Consumer Electronics
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as Senior Vice President and Chief Executive Officer.
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</p>
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<p>Dear Mr. Provoost,</p>
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<p>
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The European Council and European Commission are pushing for the
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introduction of software patents in Europe to such an extent and in such
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ways that they raise justified doubts in the democratic roots of Europe.
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</p>
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<p>
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Your association, the European Information & Communications Technology
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Industry Association (EICTA) has strongly supported this agenda in the
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past. In the discussion, you raised the argument that "We must be
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allowed to protect out innovations."
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</p>
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<p>
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This statement we fully agree with. However, if you believe that
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software patents help protect innovation, it seems you were being
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misinformed, as the role of software patents is not to protect, but to
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prevent innovation. Bill Gates pointed this out in an internal Microsoft
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memo in 1991:
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</p>
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<p class="quote">
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"If people had understood how patents would be granted when most of
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today's ideas were invented and had taken out patents, the industry
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would be at a complete stand-still today."</p>
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<p>
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He said this because he understood that patents on software inevitably
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are monopolies on abstract logic and ideas.
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</p>
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<p>
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If Pythagoras was to come up with his theorem today, in a software
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patent regime he would clearly be entitled to get a monopoly on
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it. Pythagoras could then arbitrarily select the conditions under
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which others could make use of or build upon his idea.
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</p>
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<p>
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Software usually embodies literally thousands of abstract ideas. Under
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a software patent regime, each of these could be turned into a
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monopoly and would constitute a no-go zone for competitors. That is why
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Bill Gates also said:
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</p>
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<p class="quote">
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"A future start-up with no patents of its own will be forced to pay
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whatever price the giants choose to impose. That price might be
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high: Established companies have an interest in excluding future
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competitors."
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</p>
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<p>
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In other words: software patents are an anti-competitive tool that
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serves to raise the burden on innovation. The height of that barrier
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is flexible and can easily be raised to trip established companies,
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such as Philips, and innovative newcomers alike.
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</p>
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<p>
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In previous letters we have explained how software patents cost jobs
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and economic power in Europe. Today we would like to inform you how
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they pose a threat to the International Financial Reporting Standards
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(IFRS) [1] as all the ideas used in these standards will be implemented
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in software and would therefore be patentable. This will affect all
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European companies as the IFRS rules have been mandatory to all listed
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companies in the European Union since 2002.
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</p>
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<p>
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If you check the US Patent and Trademark Office (USPTO) database, you
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will find that there are already hundreds of patents on software ideas
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concerning expressions like "account" or "financial report". One of
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them protects a system "for financial planning and advice" [2]. That
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particular patent is held by American Express Financial Corporation
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(Amex) - a company which we know better for its credit cards than its
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innovative software.
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</p>
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<p>
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After establishing a legal basis for software patents in Europe, Amex
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might arbitrarily choose to determine which software company is
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allowed to implement the IFRS or similar standards.
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</p>
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<p>
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This of course assumes that none of Amex' competitors has an interest
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in blocking such development and uses their patent on another
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necessary idea to stop the development. But even if no one does: As all
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systems have many components in common and the number of methods to
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make computer systems secure is limited, any such software would
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always be less secure in a software patent regime.
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</p>
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<p>
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People in Europe often seem to look to the United States for economic
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advice. This time, the CEO of Computer Associates, John Swainson, has
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made the message remarkably clear: Europe should not introduce
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software patents. [3]
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</p>
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<p>
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Copyright provides a very efficient protection for computer software,
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but in order for Copyright to protect your innovation, you first need
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to have an innovation. That is why we hope EICTA will stand up and
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oppose software patents because: "We must be allowed to innovate."
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</p>
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<p>With kind regards,</p>
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<p>
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<a href="/about/people/greve/">Georg Greve</a><br />
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President<br />
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Free Software Foundation Europe (FSFE)<br />
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<a href="/">fsfe.org</a>
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</p>
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<p class="footnote">[1] <code class="footnote">
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<a href="http://en.wikipedia.org/wiki/Ifrs">http://en.wikipedia.org/wiki/Ifrs</a>
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</code></p>
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<p class="footnote">[2] <code class="footnote">
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<A HREF="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=/netahtml/search-bool.html&r=7&f=G&l=50&co1=AND&d=ptxt&s1='accounting+standards'&OS=%22accounting+standards%22&RS=%22accounting+standards%22">US Patent 6,430,542: Computer-implemented program for financial planning and advice system</A>
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</code></p>
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<p class="footnote">[3] <code class="footnote">
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<a href="http://www.ftd.de/tm/it/1110009214683.html?nv=sl">http://www.ftd.de/tm/it/1110009214683.html?nv=sl</a>
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