We can't fight patents alone, ITANZ says

The IT Association has stepped forward to act against a second pending e-commerce patent, but warns it can't carry the burden of challenging questionable applications alone.

The IT Association has stepped forward to act against a second pending e-commerce patent, but warns it can’t carry the burden of challenging questionable applications alone.

A patent for a “Network-based ordering system and method” was due to be sealed last week. ITANZ has instructed Wellington lawyer John Terry to request an extension of the time allowed for public comment.

A similar request was accepted last month over the controversial “one-click” patent held by giant e-tailer Amazon.com. Both requests were made shortly before the feedback period ended.

ITANZ executive director Jim O’Neill says the request for an extension could be the last action it takes against patents unless the industry can help fund appeals. “ITANZ is essentially representing the whole of the industry, which is something we can’t maintain.”

O’Neill is hopeful an “industry defence group” of industry organisations, including retailers and developers, would be able to muster the resources to successfully appeal against patents. “It potentially impacts on everybody.”

The patent application, made by E-mmediate Delivery Company of Auckland, last month drew the attention of InternetNZ’s patent advisory group. The advisory group was created to investigate patent applications but not to take legal action.

O’Neill says discussions have been held with groups who might join in a patent defence group. “It’s a case now of meeting and putting some terms of reference around it,” he says. “Ultimately we need a fighting fund, and that’s where the rubber hits the road.”

Legal costs are difficult to estimate, O’Neill says. “It could be in the tens of thousands for every appeal, and perhaps closer to $50,000. Bear in mind that a lot of the patents put in probably have a bit of muscle behind them. It’s pretty difficult for small organisations such as us to fight those.”

O’Neill hopes some progress can be made over the next three to four weeks.

One potential partner is the New Zealand Software Association. President Wayne Hudson says NZSA will want some indication of likely costs before deciding how to proceed. “I’m sure we will try and do something,” he says.

However, Hudson says the NZSA is wary of expensive courtroom battles, and would prefer to negotiate with patent holders or to rejig software to avoid patented designs.

He’s critical of the New Zealand lawyers acting for DE Technologies, a Canadian company which has written to local e-tailers demanding licensing fees for an e-commerce patent it holds, for not attempting to negotiate with retailers.

NZSA says it doesn't have a big pot of money and it’s a similar story at the New Zealand Retailers Association. Government relations consultant Barry Hellberg says the association will become involved if a legal opinion says its members should be concerned.

“What we do is basically go the industry and say ‘Is this an issue for you?’,” he says. “If we joined opposition to that patent or any other patent as a party, what we would do is get industry support. I think our involvement is more a matter of general concern and principle, and general education.”

The Retailers Association is planning a “major” seminar for chain stores in Auckland, Hellberg says. “The only patent that’s really raised concern is the DE Technologies one, [although] there’s a whole raft of others coming on behind.”

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