"Software Patents in Malaysia?"

In ComputerWorld Malaysia, next to the article about Linux in schools in Philippines, was this interesting box. Im not sure whether it was an advertorial, but it seems like a reignition of the software patent debate.

5 Minute Reading:
"Software Patents in Malaysia?"
by Noriswadi Ismail

Challenge me if this statement is quite misleading: "Intellectual Property Rights (IPR) within the Information Communications & Technology (ICT) industry in Malaysia is largely segmented". To quantify, ideally, most of the IPR components that hit the national headlines are mostly on infringement. And of all the decided cases in our national courts - are purely surrounded by invalidation and infringement cases - so much so, the ICT industry is still hoping for more development and progress.

There are some initiatives by Multimedia Development Corporation (MDeC) to suggest a move towards software patents. It was sometime, in the first quarter, this year; I had attended a well-organized conference by MDeC. Officials form the Japan Patent Office and Malaysian Intellectual Property corporation (MyIPO) were invited to provide their views and stance on software patents. There were invited consultants who impressed the attendees with their overall insights to - from basics to the advanced level understanding. During the wrap up session, I had personally opined:-

i) That MDeC and MyIPO should gauge extensive feedbacks, through a public consultation paper, from Malaysia's ICT stakeholders on software patents;

ii) That the result of the consultation should be diffused and disseminated to the stakeholders; and

iii) That MDeC and MyIPO should consult a well-coordinated forum with the Attorney General' Chambers ("AG Chambers") to consider such practice notes, guidelines or amendments to the existing Malaysian Patents Act.

Though these three (3) items may sound such a Herculean task, however, from the ICT industry perspective, it's timely for Malaysia to have its own stance. Putting the legal debate on patentability of software aside, for the time being, the ICT industry is hoping for a quantum leap that could stimulate software innovation culture. Some players may argue that software patent stifle innovation. To a certain extend, it has its merits. Arguably, the global software patents landscape are diversified due to its territorial nature of IPR protection and enforcement. Some countries allowed software patents. Some countries allowed software patents with conditional guidelines and some countries are very much grey on this subject matter. On this case, where is Malaysia heading to?

Assuming: If software are deemed to be patentable, the next challenge that will be faced by Malaysia's ICT industry is the monopoly of other competitors and big players. Whilst there is no competition regulations and laws addressing such concerns, perhaps, MDeC, MyIPO and the AG Chambers should add this in their must-to-do list in the nearest future. To move forward, my urge to all the readers - policy makers, stakeholders and ICT industry players, what do you think about Software Patents from other angles - business, economic and others? Your views are highly sought in shaping our public policy engagement in Malaysia.

Email me your thoughts at: noriswadi@heitech.com.my

The writer is a British Chevening Scholar and Group General Counsel / Company Secretary of HeiTech Padu Berhad.

Although this call for comments appears to be neutral, there are some issues which cause concern regarding Noriswadi's position:

1. He only says that there are some countries who allow it, some who allow it with conditions and "some countries are very much grey on this subject matter." There is no mention that there are countries which have clearly rejected software patents, namely India, UK and the entire European Union.
2. He seems to be calling out for more proactive moves on MDeC and MyIPO to re-invigorate the local software scene and "hoping for a quantum leap that could stimulate software innovation culture". Maybe a policy move could achieve the effect, but encouraging software patents I believe is the wrong way to go about it.
3. He forgets to include are the most important stakeholders of this issue; the Malaysian public. We are unfortunately net importers of technology. We need the freedom to choose whatever technology available, be it proprietary to FOSS (Technology Neutrality). Software patents will hinder FOSS adoption due to scare tactics or legal suppression by patent holders. End users will have to bear the burden for artificial monopolies, legal and licensing costs.
4. He does not elaborate on what actual benefits software patents would bring to the local ICT industry. He just says "To a certain extend [sic], it has its merits". Perhaps the merits and demerits could be elaborated on to give a complete picture for Malaysia to decide?

Back in 2006, PIKOM held a seminar on this very issue, and I had the pleasure to listen to and summarise talks by Ng Wan Peng and Deepak Pillai. Wan Peng was from MDeC, and she concluded in her talk entitled "Policy considerations in the patentability of computer implemented business methods"

 

Here are some interesting points from her presentation.

The MDeC report [in 2005] also noted that in the Malaysian Software Development environment, we are still a net importer of technology. It asked these questions,

Will Software Patents help:

• increase Foreign Direct Interests?
• reduce the deficit in Technology balance of payments?
• reduce transactional and social costs?

For all three queries, the answer was a resounding 'No'. A strong legal framework is an important but relatively small criteria in selecting a country for investments. The other criteria comes from able workforce, stable government, language and cultural preferences and other major economic reasons. IP protection is important, but not as important as the rest.

In conclusion,

MDeC's position on Software Patents are:

• Retain status quo: Software Patents are possible on stringent criteria: if it shows innovation and novel ideas
• Business Methods are clearly not Patentable
• and a review of position in 3 years time ...

I guess 3 years on, the 2005 report is now due for a review, and that is probably why we are getting renewed interest in software patents.

Deepak's presentation  "Intellectual Property - Know your rights," was just as interesting;

He notes that Software patents are seen as an inhibitor of the production of  both FOSS and proprietary Software Development in Malaysia. Reason being is that it puts developers and users at risk of patent infringement suits. It also requries developers to conduct searches to be aware of existing patents before proceeding with development work. This is wasteful in both monetary, manpower and time resources. The USPTO system of granting software is open to abuse as registration is easily acquired and a challenge requires substantial financial capacity which not many start-ups have the deep pockets.

However Software Patents are not the cause of the problems facing the software industry now... its the ease in which the USTPO is awarding patents to the applicants. A regular mechanical patent requires detailed schematics and actual operational machines before it can be awarded to the applicant. However Software Patents just requires a 'concept' to be documented. No actual implementation in code is necessary! This provides huge leeway in terms of approval criteria and subsequently interpretation in enforcement. To me, it highlights the huge difference between Hardware (Traditional) Patents and Software Patents. One being undeniably useful, and the other redundant.

I had the opportunity to ask him: "Why do we need Software Patents to protect software? Does Copyright Law provide sufficient protection?"

Deepak immediately answered "Yes, current Copyright Law is sufficient in protecting Software Intellectual Property."

I do hope that En. Noriswadi's intentions are sincere in that he is looking genuine input from stakeholders. I do also hope that he is more sensitive to aspects of this debate from the FOSS perspective. More importantly he does his homework on the full benefits and disadvantages of software patents.

It is interesting to note that globally,  the software patent mess is starting to rear its ugly head yet again. In the EU, Charlie McCreevy is trying to legalise software patents with a US-EU patent treaty, and in India the Patent Office is working on a Draft Patent Manual to allow software patents.

Candlelight Vigil held to protest against
software patents on 23 Aug 2008 in Bangalore

... and it looks like Malaysia is also going to join the party.

yk. 

Comments

[Noriswadi Ismail]

Dear YK,

Thanks very much indeed for your constructive comments.

I have, read in great apt, the links and the progress that had taken place on your post. Personally, I would say; software patent has it's advantages and disadvantages. Granted that it gives very much monopoly to the large companies which have investment to protect their software, via patents. On the other hand, given the technical formality of patenting that requires "handsome" cost, it gives slight disadvantage(s) to the start ups and SMEs. So, the debate has been always surrounded on: cost, monopoly, stifling innovation and to a larger scale; a boon or a bane?

Globally, patent filings are very much territorial. The Registrar of Patents powerhous[es]; such as the European Patent Office, US Trade Marks & Patents Office and Japan Patent Office have slightly different approache(s) and acceptance in granting software patents. In the US, the criteria of novelty in software patent is slightly lower when it comes to patentability, as compared to the EU and the UK. Japan, on the other hand, has formulated their software patents guideline, by slightly "mirroring" the US approach but emphasizing on "technical applications and contributions". In this case, if such potential hardware patent is to be applied via the JPO, it maybe categorised a straightforward case - subject to the substantive examination and the patent claims.

The point here is that; the movement to inhibit or undermine software patents are largely a public policy concern(s)and due to the turnaround of market sentiments, as opposed to the laws. Generically,some judges in the EU have accepted software patents and some judges rejected software patents. The decisions by the judges of EPC seem to be slighlty contradicting, somehow or rather. Recent case such as the Macrossan's case has opened a new debate and encouraging analysis on the openness of accepting software patents in the UK regime. So much so, it has been always the issue of technical interpretation of the patent claims as well as the art of patent drafting - especially in the specification; whether generic or carrying very much independent claims or dependent claims.

This ongoing debate is still not being finalised, though, there are attempts to "legalise" it as soon as possible through political backing and other movement(s).

I like your point on considering the FOSS. Yes, technology neutrality, has to be taken into context in determining the legal positioning of software patents. Nevertheless, in our regime (Malaysia's), aggressive mode need to be done to synchronise the understanding of these groups: technologists, drafters of the legislation, MyIPO, MDec, as well as qualified patent drafters and software innovators. The situation that we are generally facing now is that: we rarely speak on the same generic tone, as everyone of us has our own perspective(s). What more if a specific "technology" or "invention" within the software is to be taken into the context of "technology neutral legislation". Simply put; how would a drafter define technology refresh or a defined technology in the laws. This is the challenge that interfaces many jurisdictions today. Attempts have been been made in several states in the US to lobby on such move(s). i.e., having to introduce a technology neutral legislation. But the readiness and effectiveness, has been argued, by others due to civil liberties' concerns and public policy groups.
I personally opine that Malaysia has to strategize it's stance on this area as well.

I am also very interested on the feedback that you have gauged on copyright protection in software. Indeed, that, has been the case globally. The answer on "it's adequate to protect software to copyright" is very much a "safe answer". It is my assertion that; it depends on how a software developer or owner would want to protect a specific software as it's intellectual asset. That is when the IP mapping strategy comes into the picture, i.e., via technology mapping and offering every component(s) of intellectual property rights protection within a software. Again,and notwithstanding however, budget / cost / fund is the key barrier. In this scenario, big players win, and small players are trapped. It is my strategic finding that, a software could be protected not only via copyright, but also other means; trade mark,trade secrets, licensing and enforcement of its rights. Whilst it has always been understood that patent is the most commercialised one, but it does not mean it inhibits other aspects of commercialisation - comparing with the other IP component. One could license a trade mark of a software and generate revenue from it. One can also issue a software license certificate and generate a licensing module through the usage of its source code, whether; it's one time or recurring and one could still commercialise it via cross licensing of each respective source code(s), when it comes to business partnering.So much so, there is always / potential flexibility of co-existence in IP rights protection.

And to answer on what is my stance on software patent, I would answer; it's commendable. Why?

i) It opens to a reversion of patentatibility principles of novelty and technical contribution;

ii) It will engage a teaming / partnering of start ups to cross license their source code(s) that will be able to generate a larger technical contribution within one (1) layer of integration to another layer of integration or even a sophisticated ones;and

iii) It will balance the view of those who oppose the non-patentaibility of software.

However, the proposed amendment(s) - if any, to our Malaysian Patents Act as to allow software patents MUST be thoroughly made through public consultation, the best, so that the feedback(s) by various stakeholders could be analysed for the benefit of stakeholders and all

Respectfully commented.

Cheers
Noris

[Dinesh Nair]

Your comment is illuminating, En Noriswadi.

However, many of us believe that the fundamental issue is if software by itself is patentable or not. Patents,a as you're well aware, are an IPR construct which were originally created for mechanical design, and has traditionally with the expansion of the electronics and electrical industries been used for things like circuit boards, ASICs and the like.

These are physically instantiated objects in meatspace, while software which came much after the concept of patents were created is the written word and is an instantianted of many mathematical models. To argue for software patents thus is akin to arguing for the patenting of plots devices in a work of written fiction, for example.

Many of us believe that adequate protection of software is already provided for in the form of copyright, while the other protection mechanisms you raise (trademarks being the most obvious) are more akin for branding and marketing as well as to protect against dilution of image.

I do however find it quite telling that of the on average, it is the software developers who are against software patents while its lawyers, patent agents and the non-software creators who seem to be in support of it.

I wonder why.

[Dinesh Nair]

God, my English grammar and spelling sucks in that comment. We should really do something about increasing the size of these comment boxes.

Hasan, boleh ka ?

[Linux User]

Software Patents - unlike copyrights do not require working implementations. Furthermore, the only use of patents is to prevent others from using a particular concept - not an implementation of the concept, but the entire concept and as many related concepts as the patent holder can get away with.

Copyright, on the other hand requires a 'working implementation' (in the form of the copyrighted code), but leaves the door open for others to continue to innovate by creating more efficient implementations of the concept embodied in the code.

Copyright does not prevent innovation or stop others from using an idea (no matter how obvious), only a particular implementation of an idea.

Therefore under a software patent regime, it is possible for patent trolls (that make no product, write no code) to intimidate the entire market and keep certain software off the market and out of public use by use of the legal system. Copyright would require such trolls to actually produce product - and if their prices were too high - would allow others to write competing software so that all can benefit.

Where is the corresponding analysis that shows that software patents are 'good' or somehow beneficial to any country's economy ? On what do the software patent proponents base their claims of 'benefit' from software patents ?

[Noriswadi Ismail]

Dear Dinesh (and Linux User),

I concurr with Dinesh's view in the penultimate end of your post. The fact that software creators oppose to software patents are much influenced by "competition" and "monopoly". The debate has been ongoing since 1970s between Apple and Microsoft and also other new players that are mushrooming in the market. There is also a grave concern that one could apply for software patents quite "smoothly" and "without much fuss" in the US. There is a hearsay which states: "Hey, in the US, you could patent anything under the sun!" - I disclaim that. But again, that assertion is baseless. The point here is that, it has always been the standard of substantive examination in patent filing. That triggers whether an applicant could be granted potential patents within a few years time. The standard of Registrar of patents' examinations from one filing office to another filing office via the Patent Coorperation Treaty's maybe different. To reach a quality patents examination, is by and large, a challenge to the respective offices' resources.

Put the technical and formality subject matter aside, what is more interesting and engaging in software patents is that; software creators, in my opinion, come and go. They hop in and hop out from one company to the another. They maybe your good buddy, but who knows, they maybe also your potential competitor(s). So, arguably, software creators may be able to create creative reverse engineering, adaptation, alteration, abstraction and filteration whilst designing a software that they used to do. It's their trade, cup of tea and bread and butter. If copyright protection seems to be the best for software creators, the next round of contention is that; how would software creators draw the thin line between literal infringement and non-literal infringement in the look and feel, source code, technical illustration and others slightly similar software creation in software? The similar sentiment also applies to software patents.

Huge debate emerged when the US Patents & Trademarks Office granted software for it's renowned "One Click Patent" also known as "Amazon" - online shopping. There were several oppositions and invalidations filed. But, the basis of granting the same was purely on "technical applicability, contributions and integration that produces an end-result". Various patentability approaches and tests have been established in determining the patentability. Yet, many arguments against and for the "Amazon" patents overloaded online legal and IT literature, public policy discussions and economic scale on the same.Yet, the World Intellectual Property Organization, in my opinion, has partially failed to addressing such monopoly and competition issues in this area.

As to gauge the Linex User's concern on software patents' contribution to one's economy; I personally view that it is very much a qualitative and economic reasoning. The situation would and could only be measured to developed economies like Japan, the US and the EU. Note that these countries have an established competition laws and regulations within their IT markets. But beyond, they are very much lucrative - especially in Malaysia. Reason: we [do not] have competition laws yet. Even though the EU has been quite relaxed on its EPO and EPC decisions, the impact of software patents are largely derived from the extensiveness of its commercialisation through licensing. Licensing, has always been the key in patent commercialisation. IBM, has the highest granted software patents in the world and they generate revenue on the same via software patents. Microsoft, on the other hand, was behind the league, but they managed to adopt IBM's route through their R&D efforts as well as global software patents efforts in Silicon Valley, Bangalore and China. Now, Microsoft, is within the rank of top five (5) highest granted software in the world.

On the other hand, if we are to analyse the small start ups and SMEs as measurement of business growth, it may take some time. Perhaps,"Linux User's" concern has its merit because it is something very much "subjective" to substantiate that software patents are "good and beneficial" to one country's economy. Nevertheless, in the world of IP and particularly software patents, the "proponents" shall generally base their claim(s) on the basis: exclusive licensing of the granted software patents within a territory. It maybe based on the business module, marketing module as well as the reach that software patents may achieve (which means, cost versus returns of investment). Net-Net.Software proponents may also assert many contentions and strategies to reach their desired sales target. They have been, or are the preacher of "licensing, licensing and licensing". That has been the commercially driven business module that we could see why IBM leads the pact.

You may want to retrieve all granted IBM software patents directly via their website and perhaps, analyse the patent claims that have been granted by the Trilateral Offices (Japan, US and the EU). Thousands of them. Somehow,I am also wondering - the beauty of patent claims is not enough, but, the political and public policy push to recognise software patents in a particular country may reach a certain level of economic incentive. Or else, it is beyond our reach.

Cheers
Noris