Govt should act to save e-trade

Decisive government action would be preferable to spending thousands on lawyers fees to see off the patent claim threatening New Zealand e-traders.

The lawyers were circling last week when the story broke — again — of Canada-based Ed Pool’s patent from which he hopes to reap royalties on “computer-to-computer” trade. Pool’s aspirations have been known since 2000 – on September 25 Computerworld published a front page story about his 1997 patent application, and we’ve followed developments off and on since then. Last week the story broke afresh when lawyers acting for Pool and associate Doug Mauer began getting heavy with New Zealand online traders. On the basis of his patent for a Borderless Order Entry System, he is demanding licence and transaction fees from New Zealand outfits using e-commerce to do business overseas. They’ve been given 14 days to comply but, needless to say, no one is keen on coughing up.

Pool’s patent is another in a series of opportunistic, after-the-event attempts to cash in on well-established internet processes. Amazon.com wielded a patent to force rival Barnesandnoble.com to change its “one-click” shopping system; British Telecom tried to assert a patent for internet hyperlinking; Microsoft claims one for web page style sheets.

In the Pool case, there are plenty of New Zealand traders saying they were doing electronic business overseas before his patent came along. Computerworld reporter Matt Cooney can even claim to have created some of those pioneering websites. Even so, when we first wrote about Pool in 2000, awareness of the disruptive potential of the patent was low. The Dairy Board (now part of Fonterra) told us the effect on it would be slight, but it would be watching developments “very closely”. Others would be too, the board said, including IT and commerce minister Paul Swain, whose office was “intrigued” by the patent.

Three years on the intrigue has gone and the meters have begun ticking in law firms across the land. InternetNZ is apparently considering hiring a QC to test Pool’s patent. Lawyers spoken to by Computerworld are busily schooling themselves in the details, undoubtedly with a view to representing any e-tailer wanting to make a fight of it.

But hopefully it won’t come to that. New Zealand as a whole has too great an interest in being able to trade internationally via the internet for this issue to be allowed to linger. We have a government that has been a vocal champion of ICT. It has also shown itself not afraid to intervene when industries go awry (for example, transport – with its Air New Zealand and, now, rail bail-outs). In this instance, it should wipe Pool’s patent (according to one lawyer, the attorney general might have such powers), so that like Europe, New Zealand is no longer at the mercy of such opportunists.

If it takes buying him out, offer him a $1 million to go away. But decisive action’s needed, otherwise the lawyers will end up pocketing a whole lot more than that.

Doesburg is Computerworld’s editor. Send letters for publication to Computerworld Letters.

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