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Petitions from Melbourne region, Victoria, 1 December 2011

STURMFELS, Mr Ben, Principal Petitioner, Petition on Patentable Subject Matter for Computation and Information Processing

[11:34]

Patentable subject matter for computation and information processing

CHAIR: Welcome.

Although the committee does not require you to give evidence under oath, I advise you that the hearing today is a formal proceeding of the parliament. I remind you, as I remind all witnesses, that the giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. Would you like to make an opening statement to the committee?

Mr Sturmfels : Yes. I am a software developer and a business owner in Melbourne. Last year we submitted a petition relating to the patentability of computer software, specifically computation and information processing. What we are really saying is that we think generalising the patent system to computer software does not quite work as it is expected to. The purpose of the patent system is to promote innovation in a particular industry by trading off some monopoly on the use of a particular idea for a time and publicising it to the wider community so it can be used to promote innovation in society.

In 1991 the first software patents were released in Australia. In comparing the times before and after those patents with the current period of wide patentability of computer software, we see that before 1991 there was huge and rapid innovation in computing all the way from the sixties through to amazing things like the internet and other software. Looking back on it with the hindsight of seeing software patents come in, there is a wide consensus that they are causing more harm than good to the industry. What we are essentially saying is that patents are a poor fit to computer software, and we think the software industry and the community as a whole would be better off if they did not apply to computer software.

CHAIR: How are other countries dealing with this issue?

Mr Sturmfels : It is a similar concern across the world. Our patent system is heavily affected by what the US does in their system and the dealings in the Federal Court there. In part, our legislation comes in through some of the negotiations we have had with other countries. In most places computer software is patentable, except for some countries such as New Zealand, which has recently made a groundbreaking arrangement to exclude computer software from patentability. They are one of the minority.

CHAIR: How have they achieved that?

Mr Sturmfels : Through a similar process to what I have been trying to do: by discussing it in public, collecting consensus about it and putting it to their government, which made a decision to exclude computer software from the legislation.

CHAIR: Are you aware of policies that have been adopted in other countries to establish the boundary between patentable and non-patentable software?

Mr Sturmfels : I do not have that much specific legal knowledge on patents. I am really coming to it as a person who is affected by them in my work and through my involvement in the community. I do not have specific detail, no.

CHAIR: Are you aware of any other countries that are considering introducing legislation to abolish software patents?

Mr Sturmfels : There has been a lot of discussion about it in the European Union. The patent office has a policy, as I understand, which states that they do not endorse patents on computing software and things like that, but there are still a lot of patents going through for what people in the industry would consider to be computer software.

CHAIR: The committee notes that the Advisory Council on Intellectual Property's current work program includes a review of the innovation patent system. One of the questions in a discussion paper released by the ACIP is whether the excluded subject matter for innovation patents should be amended to include computer software.

Against that background, to what extent have those involved in the petition been involved in the review process?

Mr Sturmfels : We came into this a little bit late. There was a 2008 review of patentable subject matter which, in hindsight, I would have loved to have been involved in and put in a submission for. Tut unfortunately I was not aware of it. We missed that one. We submitted an electronic letter to Senator Carr with 1,000 names on it and then we followed on with this petition to the House of Representatives. This was following the review process for that original ACIP review, which we could not actually technically have any impact on because it was after the thing. We were putting this in because we still felt it was a significant issue and we were happy to work on it in the long term.

The review on innovation patents came up recently and various people in the community made submissions to the review and a few of the ambassadors we have in our campaign put in a collective letter stating the concerns with that.

CHAIR: Did you participate in the October roundtable conferences?

Mr Sturmfels : No.

Mr VAN MANEN: Were you aware of them?

Mr Sturmfels : No, unfortunately. I recently found out that there is an email list that I can get on. So I now get all the updates from IP Australia and ACIP, which is good.

Mr VAN MANEN: And yet you put a submission into the review?

Mr Sturmfels : Yes, we found out after the roundtable had occurred. The roundtable was three weeks before and then there was the date that the review closed. We managed to squeeze some things in.

Ms BURKE: Tell me the generic concerns of the software community. What is it that precludes you? Is it sharing information? Is it the same issues that gene patents have about blocking intellectual development? What is the narrowest definition of what patents are prohibiting you doing?

Mr Sturmfels : We do not think anyone actually likes dealing with software patents. It is as much a hassle and a cost to the large companies as it is to all the small to medium businesses. But to them it is actually a cost of business and it has some benefits in that they can use it to suppress smaller players in the market if they have a monopoly on a particular thing. The unfortunate thing is that these patents are almost weaponised in the way that they are used. Large companies do not actually come in with specific demands about it. If you write a piece of software you might get a letter saying that you have violated 20 of these patents. They are used in bulk as a way to—

CHAIR: Crush you?

Mr Sturmfels : Yes. They are not looking to go to court; it is a way to get—

Ms BURKE: It is a nice, threatening letter—you will back off. Let's face it, you are not going to take on Microsoft or Apple, are you? You are not.

Mr Sturmfels : That is right.

Ms BURKE: They are going to win. They have got more money than you have, so you know—

Mr Sturmfels : It has that chilling effect on people writing software. We find ourselves trying to write software we are not going to get sued for rather than writing good software, which is really unfortunate situation.

Ms BURKE: And so much of it would be interlinked. How do you demonstrate whose intellectual property it was and where it started? I suppose nowadays, because we are so far down, you would use a lot of the basis of everybody's software to develop and grow.

Mr Sturmfels : Yes. I can tell you specifically about some of the things I think are different between the software industry and other industries. The components of software can be quite rapidly built. They do not exist physically and they do not need industrial processes to build them. They do not wear out, they do not overheat—things like that. You do not need a factory. You can build systems that have vastly more components than a car, a house or a building. An equivalent piece of software that took a certain amount of time might have 100 times more components in it that might be considered patentable than a building. That is the actual complexity of it. There is also the rate. Because of the nature of software, it can be built a lot faster and the industry evolves a lot quicker than other industries. So blocking an idea in software out for 20 years is effectively killing it.

I would imagine that, if the hyperlink—the link text—on the web was patented, we would still be in the period when that was patented and would not be able to widely use that without licensing.

The cost of duplication of software is almost zero compared to that of something physical. That means that a piece of software can be widely used and rapidly distributed, which is quite different to how a physical device or a drug et cetera can be used. As you said, building on existing work is really fundamental. In computing, the goal is always to reuse other components, because they have been tested and they work. We focus on building something better—the idea is always piecing together small parts which work to build a whole which is better than what was there before.

The other thing is that patents do not consider the independent invention of a particular thing to be an excuse for violating a patent. So, if someone somewhere else does the same thing as I do, even if I did not know about it, they can still sue me for it. Independent invention is very, very common in software because people are facing the same problems everywhere. If you think about them hard enough you will come up with the same solution as someone else does, and that is quite unfortunate because it works in a different way to the way that the patent system works.

Mr VAN MANEN: So, in that situation here in Australia, if you decide to go and register that idea to get a patent, is the system here in Australia based on your being the first person to register it, or is it the supposed date of the—

Mr Sturmfels : I have not studied law in any way, so I sometimes get a bit confused between the very widely-spread information about the US system and our system. As I understand it, our system is the date you actually register it, not the date you invent it.

Mr VAN MANEN: Whereas, I think, the US system is the opposite for that.

Mr Sturmfels : The other way, yes: the date you invent it—or the date you publicise it.

Ms BURKE: So the petition process started because people are feeling stymied. You are filling stymied.

Mr Sturmfels : Yes.

Ms BURKE: So you went the petition route because you did not know there were those other things happening?

Mr Sturmfels : Which other things?

Ms BURKE: The enquiry and the review and—

Mr Sturmfels : Yes.

Ms BURKE: I am just trying to get to why you signed to a petition for something that is—

Mr Sturmfels : The petition came about after we had found out about the review. I found out about the review because we were getting criticised by a person in Ireland who does a lot of work on patents saying, 'Why didn't you guys do anything about this?' I said, 'Whoops—we missed that.' This is why we came in to try to do something.

CHAIR: So you have found the petitioning process useful in getting the issue ventilated?

Mr Sturmfels : Yes, I think it has been useful way to interact with the government. It is a good way to formalise people's opinions on these things. It is a lot of legwork. If you count the number of minutes it takes to talk to someone about the issue—

CHAIR: Please share some of the experience that you have had with those people who signed your petition—tell us about it.

Mr Sturmfels : We did a little bit of work at some conferences—there was a recent one in Brisbane that I went up to—and I spent quite a bit of time between talks walking around talking to people about this issue. Software people are actually quite understanding of this issue, and, mostly, when they understand what you are talking about, they are like, 'Right—give me the piece of paper,' because it is such a widely discussed issue in the software industry. The interesting thing is that computer people are also a little bit wary of licensing type documents that look like they have to sign something. They are like, 'What are you asking me to sign?' They are perhaps more like that than other people, so it was an interesting balance. But I think it was a good way to show people that you are serious about an issue.

CHAIR: Perhaps bearing in mind the subject of the petition, do you think that if we introduced electronic petitioning in Australia it would better facilitate an awareness and give greater capacity to get more signatures and have a better outcome in terms of putting all the issues before the public and the government?

Mr Sturmfels : Perhaps it might help to show the widespread nature of the concern. I guess your concern is that there is less overhead when someone just has to click a button than when they actually have to read a piece of paper, sign their name with a pen, collect all the papers in one physical place and then post them off.

CHAIR: Let me just share an experience. We get an enormous number of emails these days. I am talking about members of parliament. There have been any number of campaigns this year in respect of a wide diversity of issues that concern people. At one stage a staffer who monitors my computers found that I was getting 750 emails an hour. Imagine trying to sort out the genuine ones you get from constituents and your staff. It is little wonder that some slip through the cracks. It is a powerful tool, isn't it?

Mr Sturmfels : Yes, definitely. We preceded this with a similar type of online sign-up letter thing that we built, and once it had been on our public tech news website we got 1,000 signatures within a week, which is amazing. The paper petition took us months to do the same thing—and a whole lot more time and work. But, that said, the actual overhead of having to do this petition and people having to walk in and read it and sign is actually useful, because it shows you that there is a certain amount of weight to it. It is quite easy for someone to set up a campaign where everyone just has to click buttons and send it around on websites and things like that. I guess you just have to balance—

Ms BURKE: There is a software community, a computing community who are working at the pointy end. Do you think it also helped to raise awareness within the community about the issue? So that was also good you being at the conferences, although they knew it, that there was a way of dealing with it, people were taking it on board, so there was a double-edged sword to inform us but to also inform people—

Mr Sturmfels : Definitely. It has been a big help to me to have to formalise the ideas and write them up in 250 words and speak to a friend about it.

Ms BURKE: Instead of having to distil down 'what do you want?' A lot of people come to see us, so they send their emails and there is this absolute rant. You sit there and think, 'What do you want?' In this, is there still some need for protection that is not as heavy as patent, or are you saying, 'free it up completely'? There is a big argument about the internet and that it should be completely free.

Mr Sturmfels : In software we like to work in generalisations. We like to use the same solution to multiple problems, and that is great because it saves us work. But in this particular situation generalising the patent system to software does not work, and we just think it would be better for everyone not to make that generalisation at all and to completely exclude computation information processing.

Mr VAN MANEN: Is that because a lot of the source code and the underlying framework for the programs you are writing is going to be the same, and therefore is there possibly a greater advantage in better trademark protection for the software that is actually produced that is marketed?

Mr Sturmfels : I guess it depends on what your goal is. If you are saying, 'How do we allow people to make money out software?' then perhaps increasing trademark protection would be useful. With this issue we focus on the fact that the patent system is not designed to give individual benefits. It is not designed for individual profits or improving business viability and things like that at all. It is designed for the benefit of the community and we only make this trade-off of a monopoly for 20 years for the sake of the community. And if it is a bad trade then we just should not be doing it. I think it is a bad trade, unfortunately.

CHAIR: Your campaign has brought into focus a number of arguments against the patenting of software, but what are the main arguments in Australia and globally in favour of maintaining software patents? Are there any, in your opinion?

Mr Sturmfels : People who are in favour of software patents are large corporations, multinational corporations, who have bucketloads of these patents. They can trade these patents with each other. One big corporation will try to sue another big corporation. They will say: 'You've got these patents on this issue and we've got these bucketloads of patents on this particular issue. How about we just trade these, or we pay you a certain amount, and it will all be fine?' That works okay for them because they have these bucketloads of patents. Small to medium businesses do not have these things to trade with so they get the nasty end of the stick, which affects their businesses.

Mr VAN MANEN: Is the Apple-Samsung argument in Australia a good example of that?

Mr Sturmfels : Possibly. I have not been following that one in detail. I know little about it in that Apple have been using it to suppress Samsung's distribution of this device in Australia. I do not know whether it is on software grounds or hardware grounds. I am focusing specifically on software grounds. It would not actually be a useful example in this case because they are not actually just trading the patents and going about their business. Normally they do not impact each other too much. It might cost a few lawyers, a few dollars and a few patents here and there, but they go about their business as usual.

The multinational corporations benefit from these. There is a group of companies across the world known as 'patent trolls', which are companies that exist solely for the purpose of holding patents and threatening, and suing if they need to, other companies to make their money. That is how they deal.

The third group of people who benefit from this are patent attorneys. That is their job: they make money by writing patents, writing letters about them and taking them to court. Other than that that is really where the benefit is. I do not think there is any benefit to individuals to get a patent on a particular idea that they want to use in software because of the amount of work involved in doing it, and the rate that the computing industry changes means for me that I can better spend my time writing software than writing a patent, waiting two years for it to be approved and then worrying if other people had used it. I could do a lot of things in that time. And there is the cost as well.

CHAIR: On your opposition to patenting software, do you think the petitioning process could be beneficial to educating the wider public? I say that against the background of my recent visit to Berlin where I spoke to the chair and members of the petitions committee at the Bundestag. For major issues, the German parliament allows petitioners to register and go online, and there is a constant blogging and dialogue to thrash out the issues. Do you think that could be useful with an issue like the one you have raised to get the truth out there?

Mr Sturmfels : I always jump to the technical details about this sort of stuff. How do you show that someone is not submitting it twice or how do you trust that they actually exist at all? These are the sorts of things.

CHAIR: I am sure there are always ways of manipulating the numbers, but how do you actually get the issue out there? You are an expert—

Mr Sturmfels : It is definitely an issue out there. People feel they can be involved in the system if they can put their voice in some way, and that is what people in the software industry have thought.

CHAIR: I recently discovered that the German parliament tries desperately to get an outcome for all the petitions—they call them requests—and to get some resolution to them even if, ultimately, the principal petitioner does not get the ultimate answer they want. They have a long negotiation process to try to get some improvement of the issue brought before the parliament. You will always get crushed by a big multinational company that sees something like this as a threat to their commercial imperatives.

Mr Sturmfels : Do you mean in the negotiation process with government?

CHAIR: In any discussion in the media about it, because they will be protecting their patch.

Mr Sturmfels : That is true, except that I think it is such a widespread issue in Australia.

CHAIR: That might be stifling creativity and greater productivity because an individual like you might have a very good idea but feel as though they cannot go anywhere because they are going to be knocked over by someone like Microsoft.

Mr Sturmfels : Yes, that is the thing. It is hard to put into words, though I think there is a whole lot of useful software that cannot be built because of this issue and the fear that it causes in businesses. The speed of some of these things is helpful and would help the Petitions Committee too. You can receive the petition faster and perhaps you can get a response to it faster. I am not sure. It certainly makes people feel as if they can be involved in it more quickly.

CHAIR: There are a lot of clever people out there who do not write for newspapers or broadcast on television or whatever. If something is put out there and there is discussion and dialogue with many messages going back and forth, that would have to be a strong point for electronic petitioning, wouldn't it?

Mr Sturmfels : Yes, definitely. It definitely has a place in going forward in the petitioning process. It is just weighing it up. Perhaps you give a little more weight to a paper petition. So it definitely has a place but perhaps should not be treated exactly the same.

Mr VAN MANEN: Have you had any personal experience, or do you know of anybody you are acquainted with that has been sued for a payment infringement that we are talking about here in this sort of context?

Mr Sturmfels : I should have mentioned in my introduction that I run my own business. I do not own any patents and I have never been sued about a patent—probably because I am not attractive enough as a target yet.

CHAIR: One day!

Mr Sturmfels : One day! I look forward to that! I decided to take this up because people are so concerned about it and I think people in the technology industry are perhaps less inclined to get involved in making themselves heard than in other areas. I do not know. That is a generalisation.

Ms BURKE: Because you are all computer geeks! You are stuck at your computer. You do not actually talk to people. You do not interact with them. The other thing you said at the beginning was that you fear that people are stymieing the development of software because they fear what could happen—the cloud.

Mr Sturmfels : Yes. As a practical example, it is 2011 and we do not have a standard for video formats on the web. Some browsers work with some videos and some do not. It is a horrible mess. I do this for work. so it is more of a mess to me than it probably is to the public. The reason we do not have a standard video format that everyone can use is the patents affecting some of the leading video formats that are pushed by some of the large companies.

The software industry is quite practical in how they deal with problems. They think, 'Can we write some software that would fix this problem?' So they do. The current fashion, if you want a standard to be widely used, is to publish an irrevocable patent licence, whether or not you actually have a patent on it—not just to anyone who uses that format. They are working around the patent system by saying, 'Please use this standard format. You can use it forever without being sued and we cannot revoke that licence at any point.' That is how they are working around it.

The other way they are working around it is through copyright licensing. They put specific clauses into the licences of the software—when you open up software and it has a licence on it—that say, 'Anyone who contributes to this piece of software cannot sue you for the software.' If they do sue you, they will no longer be able to use the software themselves. It is kind of a self-destruct mechanism in the software as a protection against people. It does not provide full protection, but it provides some. It also publicises the issue for the community.

Mr VAN MANEN: How many people read those licence agreements?

Mr Sturmfels : I guess that is not the point though. It affects the people who are trying to sue with patents more than the actual individuals. It is really just a protection to the individuals that they may not know about.

CHAIR: Thank you, Mr Sturmfels, for your evidence this morning. You will get a copy of the Hansard transcript to make sure that your comments today have been faithfully recorded. If you want to provide anything else to us, by all means do so. We thank you for your interest and your time. It has been a most illuminating exchange.

I thank all of our participants for their contribution to this public hearing. It has been most interesting. As our participants today know, the committee's practice is not to make recommendations on the basis of this kind of public hearing, nor is it the committee's role to investigate petition issues beyond today's session. The aim of today's hearing is to amplify the issues raised by petitions and to look into them further, particularly in the light of any government response, and an official transcript will be published on the committee's website in due course.

I thank the staff of the Victorian parliament for their assistance with the venue arrangements and I thank the Broadcasting officer, Mr Peter Treloar, for the services he has provided here today.

Resolved (on motion by Mr Broadbent):

That this committee authorises publication of the transcript of the evidence given before it at public hearing this day.

Committee adjourned at 12:07