IT body joins protest ranks

By ADAM GIFFORD

A bid by online retailer Amazon to extend its "one-click" patent to New Zealand will be opposed by industry heavyweights.

Information Technology Association executive director Jim O'Neill said Itanz would file its objection by today's deadline.

Itanz represents many of the country's major technology firms, and IBM managing director Nick Lambert is its president.

"We are keen as an industry to promote e-commerce and e-business, and complications like this patent could lessen the take-up," O'Neill said.

Amazon was granted a patent in the United States in 1999 for its ordering system, which uses previously-held information about customers to speed up the ordering process.

Amazon used its patent to sue competing bookseller Barnes & Noble over its 1-Click checkout.

The US patent was widely condemned when it was issued, because it was felt to be an obvious use of internet technology such as cookies.

O'Neill said indications were that Amazon's attempt to patent the technology in Europe would fail. It also was meeting opposition in Australia.

If Itanz didn't object, New Zealand could be the odd one out.

The Intellectual Property Office has received one other objection, from website operator Patrick Costigan, who did not wish to comment at this stage.

Lawyer Matt Adams, of AJ Park, who is acting for Amazon, said the company would have two months to respond to the objections, and the parties could then lodge further evidence before a hearing before a commissioner.

"It could be a year or two before this is settled," Adams said.

The case, and an earlier patent granted to Quebec-based DE Technologies, has prompted InternetNZ to set up a patent advisory group.

Group chairman Jim Higgins said its main function would be informing and lobbying.

"The society is adamant it won't get involved in legal action, and as we don't have a commercial interest in the [Amazon] patent it would be very difficult to object," Higgins said.

He said the advisory group was considering setting up a service warning subscribers when internet-related patents were filed.

It also would lobby for changes to the Patents Act, under review, including the introduction of the obviousness test - not now available to the Intellectual Property Office.

Higgins said it also advocated the adoption of the system used in Japan where the patent office must testify to the validity of a patent before an injunction could be issued.

This would stop a patent owner being able to take out an injunction against an alleged infringer even though the patent may not be enforceable.

He said the attempt by DE Technologies to charge e-commerce website operators royalties for alleged use of its patent highlighted problems which could occur if patents applications went unchallenged.

"We are not anti-patent. We are anti bad patents," Higgins said.

A "bad" patent might be where someone took existing technologies and combined them in such a way that they were able to get money from users of those technologies.

In the DE Technologies case, lawyers acting for the firm sent letters to New Zealand e-commerce site operators demanding up to US$10,000 ($17,000) in royalties. But patent lawyer John Terry, of Baldwin Shelston Waters in Wellington, said he had advised clients not to pay.

He said the patent described a process for conducting international commerce across the internet, and required sites to be able to handle multiple currencies and languages and calculate all the shipping and duty costs.

"We have not come across a site which is threatened yet, so we don't think the parties they have written to infringe," Terry said.

But he said allowing the patent to stand was undesirable because of its implications for future development of commerce, and it was likely to be challenged on procedural grounds.

Ian Finch, of James & Wells, the Hamilton lawyers acting for DE Technologies, agreed there were several elements which would need to be present on a site before the patent was infringed.

"The purpose of the letter was to put people on notice. Given the press coverage, there is no one running a site who should not be aware of the patent," Finch said.

He said there might be "follow-up action", but refused to say what that might be.

DE Technologies has also managed to get its patent approved in Australia, but the approval is being challenged.