Monday, April 23, 2007

MAKE LOVE, NOT WAR: Except on a Slightly More Abstract Level

{Text of speech delivered in the Consilience 2006 - a two day event focussing Free/Open Source Software - at NLSUI, Bangalore on 26.7.2006 and in the International symposium 'Owning the Future: Ideas and Their Role in the Digital Age' jointly hosted by the Indian Institute of Technology, Delhi (IITD) and Red Hat, Raleigh, North Carolina, USA at New Delhi on 24.08,2006.
Summary: It talks about how software is protected.}

Michael Lewis wrote a book in 1999 on the success story of the Silicon Valley entitled ‘The new new thing: a Silicon Valley story‘. The most quoted line from this book is,
'The definitive smell inside a Silicon Valley start-up was of curry.'
I have no doubt that if we understand Intellectual Property Rights (IPRs) and harness the strength of Open Source Software (OSS) then not only inside a Silicon Valley start-up, but inside the operating system of e-commerce and cyberspace will there be the smell of curry. I am happy that this conference has been organised to discuss IPRs and OSS.

IPRs in computer industry are affected by the following areas of law:
  1. Copyright
  2. Undisclosed Information or Trade Secret
  3. Patents
  4. Contract
  5. Trademarks
  6. Layout - designs (Topographies) of Integrated Circuits
The first four have an impact on computer software. The fifth one (trademarks) and the sixth one (layout-designs) are more relevant to the Internet and to computer hardware respectively rather than to computer software.

The software consists of two parts
  • Source code;
  • Object code.

Nowadays, computer programmes are written in high level computer languages using compact English words. This part is known as source code. These languages also have a programme called compiler and with their help, source code is compiled into machine language so that computers may understand it. When it is so done, it is called object code or machine code.

Source code is a kind of a description. Copyright lies in the description and source code of a computer programme—being description—is a literary work as defined in the Copyright Act.

There was some debate as to how the object code is protected but Article 11 of the TRIPS mandates its members to provide authors with the right to authorise or to prohibit commercial rental of at least computer programmes and cinematographic works. This has also been so provided under Section 14(b) of the Copyright Act and now in our country, as in almost all other countries in the world, the object code is protected as copyright. However, before we discuss it further, some words about 'trade secret'.

As the name suggests, ‘undisclosed information’ or ‘trade secret’ is a secret. It has been explained by the US Supreme Court in the Kewanee case (see Endnote-1),

Trade secret may consist of any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it. …
The subject of a trade secret must be secret, and must not be of public knowledge or of a general knowledge in the trade or business. … This necessary element of secrecy is not lost, however, if the holder of the trade secret reveals the trade secret to another in confidence, and under an implied obligation not to use or disclose it. … These others may include those of the holder’s “employees to whom it is necessary to confide it, in order to apply it to the uses for which it is intended.” … Often the recipient of the confidential knowledge of the subject of a trade secret is a licensee of its holder.
Novelty, in the patent law sense, is not required for a trade secret. … However, some novelty will be required merely because that which does not possess novelty is usually known; secrecy, in the context of trade secrets, thus implies at least minimal novelty.’

The US Supreme Court in the same case also explained the remedies and defences available for a breach of the trade secret,

'The protection accorded to the trade secret holder is against the disclosure or unauthorized use of the trade secret by those to whom the secret has been confided under the express or implied restriction of non-disclosure or non-use. The law also protects the holder of a trade secret against disclosure or use when the knowledge is gained, not by the owner’s volition, but by some improper means …, which may include theft, wiretapping, or even aerial reconnaissance. A trade secret, however, does not offer protection against discovery by fair and honest means, such as by independent invention, accidental disclosure, or by so-called reverse engineering.’
Article 39 of the TRIPS talks about Protection of Undisclosed Information (Trade Secret). There is no specific statute dealing with the protection of undisclosed information in our country. We have Official Secrets Act, 1923; it protects information given to or with the government. One can also file a suit for breach of trust or confidence. It is not necessary to debate here, whether these remedies are sufficient compliance of Article 39 of the TRIPS or not; perhaps the Government is already looking into this aspect and may come up with specific legislation.

Writers have a right to publish their work; they may or may not do so. No one else can publish their work. If it is published without the author's consent or if an unpublished work is stolen and published as someone else’s work—it is illegal. Nevertheless an independent work cannot infringe any other work unless the other work is published. A work may purposely not be published as it is sought to be protected as a trade secret.

The object code of every software is available; it runs the computer or an application: it is protected as a copyright. However the source code may or may not be published/disclosed. In case it is published or disclosed, it is protected as a copyright. In proprietary software, the source code is generally never available; it is secret. In such an event it is protected as undisclosed information or trade secret.

Everyone is not using copyrights to have rights in computer programme. Some are using copyrights so that every one may have rights. They are copylefting it. In order to copyleft a software, the owner publishes/discloses the source code; states that it is copyrighted; and grants permission to everyone to freely use, modify, and redistribute the computer programme in the original or modified form only if the similar permission is granted in redistribution or distribution of the modified version. Thus, copylefting ensures that:
  • The software is royalty free;
  • The source code is disclosed;
  • There is freedom to modify the software; and
  • Anyone who redistributes the software, with or without changes, must pass along similar freedom to others i.e. disclose the source code and permit further modification.

Copylefted software is also called free software as there is freedom to modify it. In fact the term free software was used much before the term open source software was used. It all started in 1984 when Richard Stallman, a researcher at the MIT AI Lab, started the GNU (a recursive acronym for GNU is Not Unix) project under the umbrella organisation of Free Software Foundation (FSF). Stallman argued that only a few people would dominate the software industry unless there was freedom to modify software. The software industry could innovate and continue to grow if the source code could be freely available. This became the philosophy of the FSF and the GNU project. Their philosophy as explained on their website is as follows:
'Free software' is a matter of liberty, not price. To understand the concept, you should think of 'free' as in 'free speech', not as in 'free beer'.

Richard Stallman, with the help of lawyers, drafted the General public licence (GPL). It contains a condition that copylefts software. Most of the software under the GNU Project are under GPL. Software, under a GPL licence, is also known as GPLed software. GPLed software can be integrated with similar GPLed software but not with any proprietary software. However an LGPL (earlier known as Library and now Lesser General Public License) can be integrated with almost any kind of software including proprietary software.

Software—where the source code is disclosed—may or may not be copylefted and there can be degrees of copyleftness: it all depends on the terms of the licence under which it is released. In late 1990's, free software enthusiasts got together to start 'Open Source Initiative' (OSI) a non profit public organisation. It has come out with ten guidelines. These guidelines ensure that software is copylefted to some degree. Software satisfying the guidelines is known as 'Open Source Software' (OSS).

People still debate whether open source software should be called free software or not. FSF says there is freedom to modify the software and therefore it should be called free software. It is for this reason they say you should think of 'free' as in 'free speech', not as in 'free beer". However, the word free in English language has another meaning that ‘it is without any cost’. It could be mistakenly understood for the software that is of no cost or freeware. Unlike English language where there is one word 'free', the French language has two different words namely gratis and libre. Gratis refers to free as in 'free beer'. Libre is a word in various Romance languages e.g. Spanish and French (in Latin it is spelt as liber) and means free as in free speech or as in ' having freedom'. It is for this reason that to these software are also referred to as 'free/libre open source software' (FLOSS) or sometimes as 'Free/Open Source Software' (FOSS).

Anyone can copy, distribute or modify open source software. No one infringes copyright by merely using or modifying it. This does not mean that it is not copyrighted. There is copyright in OSS. In fact, OSS is copylefted by using copyright. Anyone who uses OSS contrary to the conditions governing the license infringes the copyright (see decision of the US Court of Appeals for the federal circuit in Robert Jcobson Vs Matthew Katzer decided on 13. 8 2008).

Patents {dealt under Article 27 to 34 (Section 5 Part II) of the TRIPS} are the most powerful of all IPRs. They can prevent a process or the manufacture of a product. It is an exclusive right given by law to the inventors to make use of, and exploit their inventions for a limited period of time in exchange for a full description of how to perform the invention.

Patents can be granted for inventions. The word ‘invention’ {section 2(1)(j) of the Patents Act} read with the word ‘inventive step’ {Section (1)(ga) of the Patents Act} means a new product or process that is capable of industrial application. Invention must be novel and useful. It should not be obvious to a person skilled in the art. It must be a significant advance in the state of the art and should not be an obvious change from what is already known.

Berne convention and TRIPS specifically state that computer programme should be protected as a copyright but these documents are silent on whether computer programmes can be protected as patents or not. Why these two important documents are silent about it? Why have patents, at present, become so important in reference to computer programmes? Perhaps the answer lies in the transition of technology from Internet to web. This transition has actually changed our lives. It happened at the same time when TRIPS was being formulated and in fact became dominant only after WTO came into existence.

Patentability of computer software is controversial as well as debatable. Nevertheless the computer programmes are being patented: its degree differs from country to country. It will be beneficial to discuss this issue with reference to the following points:
  1. In case a computer programme can be patented then, what are its requirements?
  2. What should be the period of patent?
  3. The method of patenting inventions involving computer programmes.
There is no limitation for grant of patents in the US law as the Congress intended to include anything under the sun that is made by man, but the US Supreme Court in the Chakrabarty case (see Endnote-2) held,
‘This is not to suggest that … [law] has no limits or that it embraces every discovery. The laws of nature, physical phenomena, and abstract ideas have been held not patentable. Thus a new mineral discovered in the earth or a new plant found in the wild is not a patentable subject matter. Likewise, Einstein could not patent his celebrated law that E=mc2; nor could Newton have patented the law of gravity. Such discoveries are manifestation of nature, free to all men and reserved exclusively to none.’

The US Supreme Court in Parker v. Flook (437 US 584: 57 L Ed 2d 451) also held that a method for updating alarm limits during catalytic conversion, which is a mathematical formula, is not patentable.

The US Patents Act neither specifically refers to programmes for computers, nor to the business methods. The US Supreme Court in Gottschalk v. Benson, 409 US 63: 34 L Ed 2d 273 (the Gottschalk case) held that a computer program - involving a method to convert binary-coded-decimal numerals into pure binary numerals - cannot be patented for the reason,
  • The method was so abstract as to cover both known and unknown uses of the binary-coded-decimal to pure binary conversion;
  • The end use could vary and could be performed through any existing machinery or future-devised machinery or without any apparatus;
  • The mathematical formula involved had no substantial practical application except in connection with a digital computer; and
  • The result of granting a patent would be to improperly issue a patent for an idea.
In short, algorithm cannot be patented. A computer program - standing alone or by itself - cannot be patented in the US, but what would be the position if it were a part of an industrial or business process?

Industrial Process
Diamond v. Diehr, (1981) 450 US 175: 67 L Ed 2d 155 (the Diehr case) was a case involving a process for curing rubber that included a computer programme. Rubber in a mould is to be heated for a given time according to the Arrhenius equation, named after its discoverer Svante Arrhenius. The inventor had found a process for constantly measuring temperature inside the mould, which was fed to a computer that opened the mould at the right time. The court by a five to four decision held that a patentable claim does not become unpatentable merely if it uses a mathematical formula, computer programme, or a computer. In short, a computer programme may not be patentable as such but may be patentable as a part of an industrial process.

Business Methods
Traditionally, the processes concerned with technology only could be patented. Many other activities including business methods, or data analysis which one would consider processes, were excluded from patents. However, since the Diehr case, there has been a shift in the US. US Patent and Trade Office (USPTO) has issued a Manual of Patent Examining Procedures containing guidelines for patenting inventions. Its earlier policy for computer related inventions {Paragraph 706.03(a)} was as follows: (see Endnote-3)

‘Though seemingly within the category of a process or method, a method of doing business can be rejected as not being within the statutory classes.’
This was deleted and a new paragraph {706.03(a)} was added,

‘Office personnel have had difficulty in properly treating claims directed to methods of doing business. Claims should not be categorized as methods of doing business. Instead such claims should be treated like any other process claims’.
The aforesaid change was noticed by the US court of appeal in State Street Bank v. Signature Financial Group, 149 F. 3d 1352 (the State Street case) and the court held that,

‘Whether the claims are [patentable or not] should not turn on whether the claimed subject matter does “business“ instead of something else.’
The court also held that,

‘To be patentable an algorithm must be applied in a “useful“ way.
We hold that the transformation of data, representing discrete dollar amounts, by a machine through a series of mathematical calculations into a final share price, constitutes a practical application of a mathematical algorithm, formula, or calculation, because it produces a useful, concrete and tangible result’

In short the law in the US is that, ‘an abstract idea by itself never satisfies the requirements of the Patents law. However an abstract idea when practically applied to produce a useful, concrete and tangible result satisfies it. Today, USPTO has one chapter on Patent Business Methods and is granting patents to software techniques for business methods and data analysis, if they are useful. Australia and Japan have also followed suit. Some examples of patents of business methods granted in the US are:
  • Single click to order goods in an on-line transaction;
  • An on-line system of accounting;
  • On-line rewards incentive system;
  • On-line frequent buyer programme; and
  • Programmes letting customers set their own prices for hotel booking etc.
The law as to whether a computer programme is patentable per se or in conjunction of business methods is still in flux. In the US ‘Business Method Patent Improvement Act of 2000’ was introduced in the Congress on October 3, 2000 and would apply to all pending applications as well as to all patents issued. It will restrict the ability of the USPTO to issue business method patents. Among the others it would create a presumption of obviousness where a computer has been used primarily to implement a known business method. It has not yet been passed and many feel that it may never be passed.

However, since the State Street Case, the US courts have become strict: at least in granting injunctions during pendency of the cases. The appellate court in vs. {239F. 3D 1343 (Fed. Cir. 2001)} reversed the interim injunction granted by the trial court in the case relating to single click patent infringement on the ground that there are substantial questions regarding validity of the patent. Similarly in Netzero had filed suit against Juno Online for infringement of a patent regarding pop up advertisements (US patent No. 6,157,946 issued on 5.12.2000). The trial court had initially granted an injunction order but subsequently refused to extend the same in April 2001 on the ground of serious questions regarding validity of the patent.

Article 52(2)(2) of the European Patent Convention 1973 (EPC) specifically states that ‘schemes, rules and methods for performing mental acts, playing games or doing business, and programmes for computers’ will not be regarded as inventions. This is also the law of the member countries of the European Patent convention: computer programmes and business methods cannot be patented there. However in practise, it is not so.

The European Patent Office (EPO) is an organization formed by convention EPC; it does not work under the European Commission. The EPO and a number of patent offices of the EPC's member countries have been granting software patents. However, there’s been no consistent practice among all EPO member countries, and there’s been a good deal of uncertainty whether software patents are even enforceable. (An informative study on Article 52 of the EPC regarding computer programme titled ‘Art 52 EPC: Interpretation and Revision' may be seen here). In order to harmonise the practise, the European Commission proposed a draft directive in 2002 on the subject. But the text was never agreed upon. Some feared that Europe would get a much more liberal regime, like that of the US. Others feared that they would lose the patent protection they already enjoyed. As a result, on 6th July 2005, the proposal was defeated in the European Parliament.

The result of the aforesaid debate is that the inconsistent practice regarding software patents is still continuing. The European Patent Office (EPO) has now launched a site to provide information about 'the law and practice under the European Patent Convention in the field of computer-implemented inventions' and 'proposed legislative reforms in Europe in this field.' The EPO stresses that it does not grant patents for computer programs or computer-implemented business methods that do not involve a technical contribution. The EPO claims that its practice to grant software patents is significantly different from that of the US Patent and Trademark Office.

Section 3 of the Patents Act provides what are not inventions and thus cannot be patented. Section 3(k) provides that mathematical or business method or computer programmes per se or algorithms are not inventions for purposes of the Patents Act. The word 'computer programme' is modified by the word ‘per se'. This word means standing alone, or by itself, or in itself. It shows that under section 3(k) a computer programme standing alone or by itself cannot be patented. Nevertheless it also means that a computer programme—not standing alone— may be patented; it leaves doubts regarding its scope. The courts may interpret it in the same manner as the Europeans are doing or could go all the way as is being done in the US: of course its finer boundaries will be determined when courts actually interpret these words (see Endnote-4).

Many feel that patents may not be granted for doing business on the Internet and in any case the period of 20 years is too long as computer technology changes every two years.(An informative article ‘Patently Absurd‘ by James Gleick is available here).

The question regarding patentibility of computer software or the period for such patentibility should be settled globally.

Method of Patenting
Presently, patent applications for inventions involving computer programme merely contain flow chart but not the source code. Patents are granted in exchange for a full description of the invention as well as how to perform it. In case source code is not disclosed then whether there is full disclosure. These questions need to be addressed judicially.

The law regarding patentability of computer programmes is not settled. What may be done till the law is settled: get your computer programme patented. In case it cannot be done due to time or expenses involved, publish it on the website. This would indicate prior art and at least others will not be able to get it patented.

'Make Love, Not War, except on a slightly more abstract level', is a quotation from the autobiography of Linus Torvalds—the man who gave us Linux—‘Just for Fun: the Story of an Accidental Revolutionary’. It sums up the relationship between OSS and IPR, the philosophy of OSS. Here, how he explains it,

'Open source model ... prevents the hoarding of technology and ensures that anyone with interest won’t be excluded from its development.

So open source would rather use the legal weapon of copyright as an invitation to join in the fun, rather than as a weapon against others. It’s still the same old mantra: Make Love, Not War, except on a slightly more abstract level.'

Endnote-1: The case is reported in Kewanee Oil Co. v. Bicron Corp., 416 US 470. The plaintiff company was engaged in making synthetic crystal useful in the detection of ionizing radiation. It developed a novel 17-inch crystal as a result of processes that were considered trade secrets. Some of its employees—who had entered into an agreement to maintain secrecy—joined the defendant company. The defendant also started manufacturing 17-inch crystals. The plaintiff filed a suit for injunction and damages for misappropriation of trade secrets. The trial court applied the Ohio trade secret law and granted permanent injunction. The appellate court reversed the decision on the ground that the Ohio trade secret law was in conflict with the patent law of the US. The US Supreme Court allowed the appeal and upheld the Ohio trade secret law.

Endnote-2: This case is reported in Diamond vs. Chakrabarty, 447 US 303: 65 L Ed 2d 144. Plasmids are hereditary units physically separate from the chromosomes of the cell. In a prior research, Chakrabarty and an associate discovered that plasmids control the oil degradation abilities of certain bacteria. In particular, the two researchers discovered plasmids capable of degrading camphor and octane, two components of crude oil. In the work represented by the patent application at issue here, Chakrabarty discovered a process by which four different plasmids, capable of degrading four different oil components, could be transferred to and be maintained stably in a single Pseudomonas bacterium, which itself has no capacity for degrading oil. The new bacteria were not ‘products of nature‘, because Pseudomonas bacteria containing two or more different energy generating plasmids are not naturally occurring.
At present, biological control of oil spills requires the use of a mixture of naturally occurring bacteria, each capable of degrading one component of the oil complex. In this way, oil is decomposed into simpler substances which can serve as food for aquatic life. However, for various reasons, only a portion of any such mixed culture survives to attack the oil spill. By breaking down multiple components of oil, Chakrabarty’s micro-organism promises more efficient and rapid oil-spill control and his patent application was allowed.

Endnote-3: See Hotel Security Checking Co. v. Lorraine Co., 160 F. 467 (2nd Cir. 1908) and Wait (in re:), 24 USPQ 88, 22 CCPA 822 (1934).

Endnote-4: Section 3(k) as it stands today was substituted by the 2002 Amendment. It was replaced by section 3(k) and 3(ka) by the Patents Amendment Ordinance 2004 (the 2004 Ordinance). Section 3(ka) as substituted by the 2004 Ordinance excluded mathematical method or business method or algorithms from the field of invention. It was the same as was provided by the 2002 Amendment in Section 3(k). However, the law regarding computer programme was further clarified in section 3(k) by the 2004 Ordinance. After the 2004 Ordinance, computer programme per se was further qualified by the phrase 'other than its technical application to industry or a combination with hardware'. It showed that the computer programme in its technical application to industry or a combination with hardware only could be patented: a scope narrower than US approach but perhaps wider than European approach. The 2004 ordinance has been repealed by the Patents Amendment Act 2005 (Act 15 of 2005) (the 2005 Amendment) however it left the section 3(k) as was substituted by the 2002 Amendment intact; it did not incorporate the amendments in 3(k) or substitution of 3 (ka) as proposed by the 2004 Ordinance.

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