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Updates from the Front

There’s never a dull moment in Open Source.
If you work in open source, for a vendor like Red Hat or as an independent, you should never be bored. Tired of writing code? Take a crack at public policy! With that in mind, here are some updates of various things underway.

Patent Reform& Improvement

In Europe, the European Commission (EC) has decided to have another go at a unified, European patent system. Unfortunately, the proposed approach, essentially adopting the European Patent Office (EPO) as the de facto patent office for the European Union (EU), is not terribly attractive. (By the way, the EPO is not part of the EU.) You see, the EPO can’t seem to follow its own rules. Article 52 of the EPO charter basically bars patents on software, but the EPO has routinely ignored its own policy mandate for years. The European Commission has been seeking feedback, but by the time this article prints, the deadline for comment will have passed. Should you want to learn more about their efforts you can find at http://europa.eu.int/comm/internal_market/indprop/patent/consultation_en.htm.
On a separate front, it now appears that the EC proposal to stiffen penalties for intellectual property infringement no longer includes criminal penalties for patent infringement. Let’s keep our fingers crossed in hopes that such an onerous concept doesn’t survive.
At the same time, the government of the United Kingdom (UK) has decided that it’s time to review the UK’s intellectual property framework. The government has engaged Andrew Gowers to lead this effort. You can learn more about this process at http://www.hm-treasury.gov.uk/gowers.
Of course, those of us in the United States have been waiting for the Supreme Court shuffle to end to see if Congress is serious about patent reform. It now appears that Senator Hatch will be introducing a Senate bill to correspond with or serve as an alternative to House Resolution 2795 (http://thomas.loc.gov/cgi-bin/query/D?c109: 4:./temp/~c109r6sSIh::). The House bill has been bottled up for the better part of the last year while various industry groups squabble over its provisions. Indications are the Hatch’s bill will be somewhat friendlier to the IT industry. That said, don’t hold your breath for meaningful patent reform in the U.S. anytime soon.
Reforming the U.S. patent laws is not the only piece of reform going on in the U.S. related to patents. As many of you may already be away, the U.S. Patent and Trademark Office (USPTO), in conjunction with the open source community has been considering new administrative procedures to improve patent quality. Following a meeting with community representatives in December 2005 and a public meeting this past February, the USPTO is considering such tools as a patent quality index, a prior art database of software maintained by the community, and greater public participation in the review process. If we can’t get rid of software patents altogether, at least we can work to reduce the number of bad patents that get issued.

U.S. Supreme Court Cases

The March 2006 “On the Docket” mentioned a number of pending U.S. Supreme Court cases that could have an impact on the open source community. One of those cases, Illinois Tool Works, Inc., et al. v Independent Ink, Inc., has now been decided. In an opinion issued March 1, 2006, the Supreme Court held that the mere holding of a patent, even though a limited monopoly in its own right, is not sufficient to confer market power upon the patentee in a case involving potential illegal tying (conditioning the purchasing of a patented good or service upon the corresponding purchase of a good or service not protected by patent) under U.S. antitrust laws. Plaintiffs must establish that market power but evidence beyond the mere holding of a patent or patents. Although this ruling denies a reduced burden of proof to parties fighting monopolists (most of the software industry), it was certainly a rational decision and one supported by all members of the court.

Competition Litigation

Things have started to get interesting in Europe, as the EC continues to challenge Microsoft’s anti-competitive practices. In late March 2006, the Commission held a hearing on whether it should proceed with the application of a substantially daily penalty for failure to comply with the remedies imposed on Microsoft in March 2004, when the Commission found that Microsoft had violated European anti-competition laws. By the time this article publishes, we’ll likely know the outcome of that hearing.
Microsoft is also appealing the original European Commission finding before the Court of First Instance in Luxembourg. That appeal is to be heard the last week in April 2006. The outcome of that appeal will be critical to the Commission’s ability to bring future enforcement actions. A ruling in favor of Microsoft would vitiate the remedies and the above referenced penalties.
Finally, several new complaints have been lodged with the European Commission about Microsoft’s ongoing practice to deny competitors the ability to create software that interoperates with Microsoft’s technologies. One such complaint was filed by the European Committee for Interoperable Systems on February 23, 2006, alleging abuses by Microsoft Office, email, collaboration, and media streaming. Of course, the mere filing of a complaint does not mean that the Commission will pursue the complained upon activities or that the complained upon activities violate European anti-competition law. But the filing certainly cannot be good news for Microsoft.
Bored? You don’t need to be.

Mark H. Webbink is Deputy General Counsel for Red Hat, Inc.

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