Peter Griffin: Australia buoys patent-owner

COMMENT

Remember DE Technologies and Ed Pool, the Canadian company and its founder who rattled a few cages here last year when they sent patent infringement letters to a bunch of tiny e-commerce operators demanding hefty licence fees?

Don't worry, he hasn't reared his head locally again.

In fact, the DE Technologies case has gone cold in New Zealand. Not one operator is known to have paid the company a cent and the online movement sparked by Pool's demands (www.fightthepatent.co.nz) has had little to report of late.

But the gameplan hasn't changed for Pool, whose confidence has been buoyed by a couple of things lately.

First, his broad-ranging patent, covering a seemingly universal method of electronic commerce, was given the stamp of approval in Australia.

That despite the firestorm of criticism of the licensing demands here, which hit as time began to run out for opposition to be put forward against the patent being granted across the Tasman.

You see, Pool's patent, which is already set in stone in New Zealand, covers e-commerce processes that appear to be used by a fair number of existing web merchants.

Alarm bells should have been ringing all over Australia.

Remarkably, the man who was most vocal in his criticism of Pool's patent, Matthew Tutaki, didn't end up lodging an objection with Australia IP, the country's intellectual property office. He reckons it all would have ended up in court and he wasn't willing to pay the legal fees.

Even a slamming speech from Australian Senator John Tierney late last year failed to dent Pool's Aussie plans.

But Tutaki has kept up the rhetoric, lambasting Pool in an online message forum dedicated to the patent issue.

"The gaul [sic] you have in sending innocent business-owners your threats in New Zealand is nothing more than piracy in itself.

"Where is your so called product Mr [P]ool? Where is this solution that you can buy? Isn't this just another example of some [A]merican thinking he can get away with pulling the wool over people's eyes?" Tutaki wrote.

The second fillip for Pool is the publication this month of what he considers the first accurate piece of commentary on the DE Technologies case to be aired in the press.

Penned with the lack of emotion typical of any lawyer, it's one of the first pieces to hint that Aussie e-commerce companies have something to worry about in Pool's patent.

Trademark and patent lawyer Brad Fitzpatrick pointed out in the Sydney Morning Herald that the granting of the patent gives Pool numerous options. With the opposition period gone, companies face the prospect of having to prove "prior art" - that they were transacting long before DE Technologies kicked off the patent process in 1997.

This is a potentially expensive exercise.

"What Pool will do next is known only to Pool. However, if we take the European and New Zealand cases as guides, Pool appears to believe strongly in his patent and has a predisposition of enforcing his rights.

"As with any patent, if it impacts on your ability to operate your business, it should be assessed and a strategy developed," Fitzpatrick wrote.

It will be interesting to see if the game of bluff-calling that went on in New Zealand will start in Australia.

The DE Technologies issue is in danger of going the way of another IP case with a New Zealand connection - Melbourne company Genetic Technologies and its patent on using "junk DNA".

Back in the late eighties, New Zealand-born immunologist Dr Malcolm Simons went against scientific convention and in the process earned himself a patent covering methods of using junk DNA.

Everyone thought it was worthless, but junk DNA is now regarded as holding key information.

Simons no longer has claim to the patent, but Genetic Technologies is successfully enforcing it, extracting licence fees from research institutes around the world that are using its techniques.

The scientific community was up in arms, but Australian geneticist John Mattick summed up the matter when he said: "The failure to recognise the implications of the non-coding DNA will go down as the biggest mistake in the history of molecular biology."

It's a clearcut example of a company with a direct claim to a technology reaping the rewards of cutting-edge research.

With its patent, DE Technologies appears to stand on the same firm ground, but many e-commerce operators are claiming prior art.

The Canadians' case is a lot less clearcut and claims of prior art have yet to be tested except by various patent office officials.

But the only thing stopping DE Technologies following the same path as Genetic Technologies is probably money. Lots of it will be needed to pursue "infringing" companies through the courts.

Pool has his hands full appealing against a European Union decision to reject his patent application.

In Europe, business methods are not patentable, as they are here and in Australia and the US.

In the meantime, Pool is going all out to produce evidence that DE Technologies was not created for the sole reason of growing fat off licence fees from e-commerce operators.

He stopped corresponding with me last July after complaining about my "Jayson Blair quality of journalism".

But the information is flowing again in the form of a collection of correspondence that took place between 1998 and 2000.

There are emails to a Ministry of Foreign Affairs and Trade official based in Washington in which Pool wrote: " ... before the year ends we should be in possession of a patent that will give us legal ownership of any 'international internet' transaction. Patent enforcement will then allow us to us [sic] US Customs to seize any products imported into the US that were sold on systems that do not have legitimate licences."

Emails show Pool was also in touch with Jade Software.

"Things are moving extremely fast with Jade and we are being visited by the highest levels within IBM," wrote Jade's general manager of sales and marketing, Owen Scott, in an email to Pool in March 2000.

"Is there still an opportunity to do something with Jade?"

Pool was also corresponding with the Canterbury Development Corporation, suggesting he may have been interested in basing DE Technologies' operations in the region.

He was inquiring about telecoms costs with Clear Communications, and then there were the discussions with IBM.

"In order to expedite and successfully integrate the system worldwide, we feel it would be in our interests to partner via the variable licensing vehicles with an American multinational corporation who has expetise [sic] in the software, telecommunications and encryption fields," Pool told IBM.

Other emails between Pool and a company called Cybercash discuss partnering. There's a US Department of Commerce contract document outlining plans to set up a pilot using DE Technologies' BOES (Borderless Order Entry System) 1998.

The documents show that Pool was talking to a lot of people in the US and New Zealand as he looked to build business alliances and take part in a trial of e-commerce technology with the US Government.

But that's about it. The correspondence cuts off abruptly, presumably because IBM and other firms approached decided to steer clear of the patent-waving Pool. We watch with interest to see what his next trick is.

* Email Peter Griffin