Friday, 20 July 2012

An offer they can't refuse?

I love the ambiguity in the title of this article from Canadian IP firm, Bereskin & Parr: Dealing With Inventors Who Refuse To Cooperate Or Disappear. In case the suspense is too much for you, I can tell you that it's concerned with employee inventors who become unavailable, not those who decline to make themselves scarce. As you guessed, of course.

Tuesday, 3 July 2012

The second-hand software market

The Court of Justice has decided in Case C‑128/11, UsedSoft GmbH v Oracle International Corp., that there can legitimately be a second-hand market for software licences, going in the opposite direction from that taken in the US (see my earlier posting about the Autodesk case, here). You can sell a licence for which you have no further use, but the one thing you can't do is sell excess user rights if you have paid for more users than you actually have working for you. The decision - a preliminary ruling on a reference from the Bundesgerichtshof - is based on the principle of exhaustion: the copyright owner's rights are exhausted once the software has been supplied on disk or downloaded from the Internet, so they cannot control subsequent sales.

No great surprise there, as the doctrine of exhaustion is central to the way intellectual property rights work in the European Union: but it seems at odds with the widely-used software distribution model that gives the end user only a licence. While it has been common practice to treat software as a good rather than a service (it doesn't fit happily into either category, does it?), assimilating software to audio CDs for certain purposes, the fact is that because "sales" of software are licensing transactions it isn't always appropriate to take this view. Of course, when a physical carrier is supplied there is a sale of goods involved too, but it's only an incidental part of the transaction, and focussing on that aspect gives a distorted idea of what the deal is all about. I think people take different views according to whether they are buying software or music: if I buy a CD I expect to be able to resell it, but if I buy a piece of software I'm not so sure about it - even if it's on disk, although clearly plenty of people do buy and sell software on disk. The Court directs us not to make such fine distinctions.

What is the software industry to do? There are technical solutions to part of the problem, of course, but it's not going to be possible to claw back those exhausted rights by technical means without getting into a whole new load of trouble. Perhaps more promising is the idea of granting licences for a limited time - most software licences, certainly the non-bespoke sort, are perpetual, which is only logical when a large sum of money is changing hands. But making licences expire and require renewal might be a good way forward - and can also assist customers along the upgrade path that software houses wish them to take rather faster than, left to their own devices, they would consider appropriate.

Unified Patent Court: progress - if that's the right word

Reports last week suggested that the UK government had successfully brought the EU patent behemoth to a grinding halt. More careful examination of what happened shows otherwise. There will be a Unitary Patent Central Court, and there will also be two sector-specific courts, one for mechanical engineering and the other for chemistry and "human necessities". I must be missing something, but patent agents used to divide the world into mechanical, chemical and electronic, and the last of that trio seems to be missing.

Munich gets mechanical patents, London gets chemical and that other category, and Paris gets the central division. Maybe I am missing something, but a classic piece of EU horse-trading hardly justifies celebration, does it? The so-called Intellectual Property Office is clearly happy, saying in its highly uninformative press release:
The Prime Minister has today secured a great result for UK business at the European Council on single unitary patent valid in up to 25 European countries and secured London to be the host for the unified patent court. (If one had to say one city was the host, surely Paris would be the candidate? But it's quite wrong to say that there is one host.)
The Prime Minister, David Cameron said:
"A vital part of the Court covering the pharmaceutical and life sciences industries, in which Britain excels, will be coming to London. This brings millions of pounds and hundreds of jobs. (The litigation, or the industries? If the latter, which I imagine is the case, how is this remotely relevant to the situation of the sector court?)
"And I secured the changes to the nature of the patent system that businesses were demanding." (I don't think there is much agreement among businesses about what changes were needed - and it seems abundantly clear that the vastly increased expense of obtaining patent protection and litigating at the EU level is as far from the interests of small businesses as one can possibly get. See that FT article a link to which I posted earlier ...).
The heads of state have suggested the deletion from the Regulation of the provisions dealing with enhanced co-operation, a typical EU-euphemism  (a EUphemism, perhaps?) for a form of co-operation which does not include all Member States, which most people would consider to be a failure of co-operation rather than an enhanced version of it. It is a steamroller that nine or more Member States can drive, to the exclusion of the others. Of course, in the patents field (apparently, according to Wikipedia so this must be correct, divorce law is the other area in which enhanced co-operation is being used) Spain and Italy are the outsiders. The suggestion that enhanced co-operation should not be used here is a welcome development as far as most people in the patents world are concerned - as the PatLit blog observes:
... the constant criticism by the experts in the field (see e.g. Professor Krasser's opinion and Sir Robin Jacob's opinion) has been successful despite of the deplorable lack of transparency (see J. Pagenberg's letter here).

FT on vanity patents

Patents as means in themselves rather than ends - a Nobel Prize-winning scientist puts the patent system in its place, brilliantly. Though patents can still serve a useful function ...

I hope this is accessible to all on the FT website:

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