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Don't believe IPR hype

Taiwan would be shooting itself in the foot if it were to go down the American route of ever-broader and stronger intellectual property protection, as suggested by Honigmann Hong and Lu Yi-hsun ("IPR should drive our tech-based economy," page 8, Tuesday, Aug. 10).

In the US this approach is beginning to be questioned -- last autumn the US Federal Trade Commission produced a report suggesting that the extension of patent protection in the US to cover software and business methods has been a failure. The report suggests what most software developers and small and medium-sized enterprises (SMEs) know already -- that innovation in IT is driven by competition, not by patentability, and that patents actually impede development in that field.

Clearly, then, it spectacularly fails Hong and Lu's test to "find an equilibrium between technological development and technological dissemination."

The article says that IBM collected "over US$1 billion" in license fees for its patents in 2001. But it misses the fact that the great majority of these patents are on programming methods that IT professionals regard as trivial -- ideas that would occur naturally to them and which certainly were not the result of expensive and time-consuming research. For example, one of IBM's patents is on the idea of marking text in a word-processor in different colors for correcting. As well as IBM, Microsoft uses patents to bully potential competitors; indeed Microsoft has openly stated its intention to use the patent system to drive Linux out of the software market.

Other patents are held by companies whose sole business is litigating over patents. Currently, Web sites are being threatened by Acacia,which holds a patent on the principle of playing music and movies directly on the Web. Another company, E-Data, is suing (legal) online music download services over its patent on downloading data on the Internet. A British company, the "British Technology Group," is now suing Microsoft and Apple over its patent on downloading software updates from the Internet. Yet another company, Divine, has extracted license fees from "e-retailers" over its patent on selling things over the Internet.

It is important to remember that these firms contributed nothing to the innovations to which they claim exclusive ownership. Instead they are playing the patent system like a lottery, patenting obvious ideas in the hope that they will become widely used.

Such is the nature of software "licensing" patents, or, as it is better characterized, legalized extortion. As US economics professor Brian Kahin notes in his essay called "Information Process Patents in the US and Europe," "The licensing market [for software patents], such as it is, seems to be characterized by patentees looking for infringers, rather than productive companies looking for technology."

It should be no surprise that there is great resistance within the EU to proposals to adopt an American-style patenting regime on new technologies there. If patents such as those mentioned above were to be made legally valid in the EU or Taiwan, the result would be a net outflow of license fees to the US and Japan, where most new technology patents are held. These "license fees" are money which would otherwise be spent on developing new innovative products.

Software and media piracy is undoubtedly a serious problem in Taiwan, albeit completely unrelated to patents. But adopting a US-style copyright regime, and in particular laws such as the US Digital Millennium Copyright Act, is not the solution. This law outlaws many ordinary consumer practices, and makes criminals out of ordinary honest citizens -- but would do nothing to prevent piracy. For example, the US law makes it illegal for consumers to try to bypass region-locks on legitimately-purchased DVDs.

There is no copyright law anywhere in the world which makes it illegal to play a movie legitimately purchased in another country, at least for one's personal entertainment. By making it illegal to bypass any technology designed to control access to content, this law overrides all safeguards in copyright law. Clearly it is not intended to stop piracy, but instead to enshrine the business models of the American movie studios. It is not in Taiwan's best interests, therefore, that this law be adopted here.

Taiwan should continue to be a nation built on innovation, rather than try to play the intellectual property litigation game of the US and Japan -- a game which it is sure to lose.

Alex Macfie

Taipei County
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