Software Patents Affecting Futures Exchanges

KontinMonet writes "The Financial Times reports European exchanges, brokers and traders are preparing for possible legal battles with Trading Technologies, a US software company. The situation is being made harder for potential defendants because the cases so far have all been sealed. No doubt, all those IP lawyers think this is a good thing..."

Comments

Excellent

[ultrabot]

Stuff like this is just what the doctor ordered to paint the software patents in as bad a light as possible. Let the parasites try to leech as much as possible, in most disgusting means available.

One day these leeches will be crushed, but they need to demonstrate to the wider audience that they *need* to be crushed. Hopefully this happens before they are too established.

Re:That's hardly fair

[whitespacedout]

Sure, the point is that the system is bad. However, it is pretty obvious that lawyers benefit from this, not the defendents or society at large.

The patent system ensures that it is perfectly legal to make money by such immoral means. Therefore it is the duty of companies like TT to do so because they are required to increase shareholder value.

This will continue as long as the patents system is in place.
Throw away patents and we won't have this kind of lawyer feeding frenzy.

Does priority date apply then?

[NigelJohnstone]

Does the priority date apply then?, will all these USA software companies apply for software patents quoting their USA application date as their priority date? Ouch.

I'm in a slightly different position than yourself.

Suppose I patent my stuff, it is worthless unless I also spend a lot of money defending those patents. I can't afford to both invest in my company AND play the patent/lawyer game. All it would do is divert money from 'making things' into money spent 'stopping other people making things'.

At the moment I can keep my code secret and that works well. But if I do that in a patent world, then someone else will patent in my area and I will be screwed.

Another voice in the EU patent debate

[mustrum_ridcully]

I wonder if this will add another voice to the EU Software Patent law debate - an anti one? Somehow I don't see the big financial houses in Europe being very happy about this happening. If they get annoyed enough they may potentially start lobbying against software patents...

Re:Aaah but patents are GOOD!! no really...

[NigelJohnstone]

Or you could just not disclose your code!

I mean Dyson put out a Vacuum cleaner and its obvious how it works just by examining it.

Microsoft put out a modified Kerberos and nobody can figure out how it works until they gave out the documentation...

Software patents in Europe

[DisprinDirect]

First off, lots of European software companies own patents. Not specifically on software, but on processes. These are permitted. Say for example an new process for compressing an image, or for searching. That is patentable, whheter it's software or not.
Secondly, most of these European software companies also patent their inventions in the US, and are thus protected by US law against infringment of their patents in the US.
Thirdly, If a US company does the same, and patents their inventions in Europe, under the European system, and then nationalises their patent in any of the European countries, they are protected against infringment in the contries they have nationalised in. Thats fair enough isn't it?
Finally, what we are talking about are property rights, which are generally protected in our western societies. Would you want someone to move in and take something that belongs to you, and not pay compensation? If you think you can ignore property rights, even ones you don't agree with, then thats a political issue. Lile most valuable posessions (wealth), thoes who have them, want them, thoes who don have their own want to take others! In Europe, I hope we are sophisticated enough in our appreciation of the compeating rights involved to be able to balance theese rights and accept that there is a place for patent laws that incentivise and reward creative thinking.

Re:Software patents in Europe

[Anonymous Coward]

"Finally, what we are talking about are property rights, which are generally protected in our western societies. Would you want someone to move in and take something that belongs to you, and not pay compensation?"

No; you are wrong.

What we are talking about here is the concept that something can be considered property in the US, that would NOT be considered property in the EU. And the process by which US corporations are attempting to both alter the set of things considered property, AND to get EU members to consider US law to be "de facto" EU law.

This is a VERY different concept from the one you wittered on about.

Essentially the US standpoint is that you can "own" and therefore have exclusive rights to, obvious and trivial ideas (expressing them as descriptions of software systems simply being the du-jour method for passing them off as something more than that).

The EU standpoint (in theory, though the EPO would dearly like to undermine the law), is that you CANNOT.

Ergo; your argument about porperty rights falls down, because you failed to understand that there is a DISPUTE over whether the property right actually EXISTS.

done SHOUTING now, THANKS!!

Perhaps...

[The Tyrant]

Perhaps this will be the proverbial "kick in the nuts" that will wake up the whole of the EU to firmly reject software patents once and for all, and to laugh at any american company attempting to use them for such an underhand tactic as this.

A mis-quote from the article:

[tod_miller]

She added: "Independent software vendors may have to reconsider the way they do business, and in particular the way they roll out new software to customers."

I think she meant to say:

She added: "Independent software vendors may have to reconsider doing business, and in particular the way they make new software, perhaps they should just crumble under the weight of patent law and become resellers for larger firms?."

damn TT.

AGGGH

[c0dedude]

You've struck one of my pet peeves! Please stop blaming the lawyers. Blame the litigants and lawmakers.

Re:That's hardly fair

[ooze]

500 years ago you needed an army of mercenaries to defend your interests. Today the people that would have been mercenaries back then, are lawyers. The resemblies are striking.

They benefit from all conflicts, and all sides of the conflicts.
They rape, loot and soil everything they get their hands on.
Whole areas are starved by them.
They still are asskissing servants. ...the list could go on and on. The major difference actually is, that mercenaries had balls and risked their life while doing all this.

No Doubt

[Compulawyer]

"No doubt, all those IP lawyers think this is a good thing..."

As an IP lawyer, and specifically a registered patent attorney who handles software patents, I could not disagree more. Courts are supposed to be PUBLIC fora so that EVERYONE can see justice being dispensed. Closing hearings and sealing files inevitably leads to suspicion that proceedings are not being conducted fairly. Therefore I am strongly FOR keeping things open.

That said, there are sometimes portions of proceedings that SHOULD be closed to the public. One example is a hearing where a defendant's trade secrets will be discussed. Most times such a discussion, or at least details of it, are not crucial to understanding the basic proeeding. A defendant should not have to lose its trade secrets merely because it chooses to defend itself in court instead of settling the case.

Take the IBM v. SCO case, for instance. SCO is trying to force IBM to hand over the source code for IBM's *NIX versions. Should SCO be able to force this? Theoretically, yes, but in that instance, SCO would have shown some more concrete proof of its claims. Having so forced IBM to turn over the source code, should SCO be able to make it public? NO. IBM has the right to protect its property and SCO should not be able to (mis)use the courts to destroy potential trade secrets of a competitor.

I have found that people who make blanket statements about what lawyers love or about the evils of intellectual property usually understand neither of those topics. Software development is (properly, I might add) now an engineering endeavor. Engineers have had to deal with patents in every field for literally hundreds of years. Software development is no different. If you think it should be otherwise, I challenge you to examine the basis for that opinion. I suspect you will find it is because you think or know that you could create a patented piece of software yourself without using anyone else's code because you have the necessary skills. In that case, you are no different from the skilled artisan in any other field. In that case, if you are against software patents, then you must be against any type of patents because it would not be fair to have a special exemption for one type of invention and not another.

Think about it. Think long. Think hard. Think critically. Then let me know what you think. Flamers - save your keystrokes. I sleep very well at night knowing I am providing a valuable service to my clients - many of then small and individual inventors who are looking at being able to actually PROFIT from their hard work BECAUSE they have a patent and not in spite of it.

Re:No Doubt

[starseeker]

"If you think it should be otherwise, I challenge you to examine the basis for that opinion. I suspect you will find it is because you think or know that you could create a patented piece of software yourself without using anyone else's code because you have the necessary skills. In that case, you are no different from the skilled artisan in any other field."

The incremental cost of software duplication is near zero, which makes software engineering unique. All other cases I am aware of, the use of a patent also entails some expendature of physical resource required to create the (physical) product. Blueprints for a bridge are of no value unless the bridge (or some bridge) is actually built. Circuit diagrams are of no real impact unless someone actually builds a circuit. But in the case of software, the expression of the knowledge and the application of it are one and the same.

Now, please consider the PURPOSE of patents - the original purpose for creating the patent system. It was to reward inventors in order to encourage them to invent further and thus allow society to progress. This is the only legitimate reason the patent system has to exist. So, the question now becomes - in the case of software, which produces useful products without needing to physically duplicate them, does society benefit more from the controlling of those ideas or the free distribution of them? Does the patent system provide a net gain or net loss to society (NOT, please note, to the business community alone.)

I don't know the answer, not for sure. But the zero cost of software duplication is a fundamental difference between this and other fields. I am not prepared to argue the point as to whether matters in software would stand where they are today without patents - I suspect they would, personally, since so much of the key work was academic in nature, but I have no hard facts - so you are free to disagree. But remember that even the patent system itself is secondary to the best interests of society, however little we might remember that today. A new situation requires re-examination of fundamental assumptions, and software is a new situation.

Re:No Doubt

[Teancum]

if you are against software patents, then you must be against any type of patents because it would not be fair to have a special exemption for one type of invention and not another.

As most software patents can be expressed as a mathmatical formula, and since by law mathmatical formulas are specifically excempt from patent law, I don't see where this is necessarily the case.

It is also very easy to come up with software that violates a patent simply because some idiot in the USPTO decided to permit the patent. In other words, the non-obvious standard is set so low that most software that is patented usually is duplicated elsewhere. From my experience in the software industry, if they followed a similar standard of non-obviousness that is applied to mechanical engineering, you would only have about 5-10 software patents granted in the USA per year, if even that. It would be something very rare indeed.

As a matter of course, I do think all patents are a bunch of waste paper tying up courts when judges could and should be worrying about many other much more important things. Basically patents are a major scam that should be eliminated altogether, and I would like to find a good example of an independent developer making money off of a patent when pure innovation and competing in a fair market would not have made them more money.

I can name many inventions where the inventor was totally ripped off instead and the patent system failed, even when the idea was totally novel and the patent was properly filed. Philo T. Farnsworth and his television patents come to mind as a classic example. The patent system basically killed this poor man. Patent law cases for the rachet socket driver and the weed eater are also legendary in the time it took to get the patents enforced, and companies that blatently ignored that the inventions even existed. And in all three of these cases the courts eventually ruled that the inventors did have patent claims with punative damages against major corporations for patent violations. Even here, they were at the mercy of a judge providing an arbitrary decision, and had to be won on appeal as well. Too often these patent disputes had to go all the way to SCOTUS. That is just plain wrong.

Re:No Doubt

[Anonymous Coward]

Engineers have had to deal with patents in every field for literally hundreds of years.

True, but that doesn't automatically make it right. Or wrong.

Software development is no different.

IMHO it is different, as I'll try to explain below.

If you think it should be otherwise, I challenge you to examine the basis for that opinion. I suspect you will find it is because you think or know that you could create a patented piece of software yourself without using anyone else's code because you have the necessary skills.

By and large, yes.

In that case, you are no different from the skilled artisan in any other field.

And here comes the crucial difference. If that were true, I would agree with what you write below:

In that case, if you are against software patents, then you must be against any type of patents

but not necessarily with what you go on to write:

because it would not be fair to have a special exemption for one type of invention and not another.

I'm not so sure about the word 'fair'. Fair to whom? The poor inventor whose idea gets copied? That's not why we should have patents. Patents serve society as a whole, not just an inventor and his competitors.

The role of patents is not to make sure inventors can earn a living doing what they like doing. Real entrepeneurs aren't sissies who need special protection. The argument in favour of patents is an economic one. Free riders can lead to market failure: If research isn't rewarded, less of it may be done than would be optimal. Society as a whole suffers as a result of that. When we gain more because of patents than we give up, they are a good thing.

Example: it sometimes costs hundreds of millions to develop a new drug. The reason is that there are zillions of promising substances that might be a cure for some ailment. It's very expensive to find the few needles in the haystack. Once you've found them, it's very easy and cheap to produce them. If there weren't any patents to protect drugs, companies could never recoup their investment. That's allright, because large corporations don't deserve our pity. But, of course, then they wouldn't make those investments, *so we wouldn't have those drugs*. And that's the problem. We want those drugs. All in all we're better off giving up the right to use someone else's drug research for free in exchange for getting the necessary research done. In this case, patents are a good thing. In addition, maybe governments should fund more research, patents are not the whole solution or the only solutions. But definitely a good thing in this case.

So, patents solve part of the problem. However in doing this they create another market failure, namely a monopoly. And as you know better than I do there are safeguards against that: inventions have to be innovative, non-obvious, they need to be made public, there needs to be a licensing structure and the patent expires eventually.

We have to strike a delicate balance between protection and safeguards. Patents should reward and therefore encourage expensive research that might otherwise not be done, so that society as a whole benefits. At the same time they must not lead to market failure in those areas where research is already being done, or else society as a whole suffers.

Now, back to the difference between software inventions and physical inventions:

In a word or two: there's no such thing as a software invention! The computer itself is the bleeping invention. It's a machine that slavishly and mindlessly follows instructions. Any instructions. Hardware is meant to obey software.

Futures trading, one click shopping, streaming video: all of this and much more is what computers are for.

Re:Open letter..

[Yaruar]

the problem is that TT don't have particually good tech. their platforms are universally flakey (almost daily i needed to reset accounts and restart the x-trader platforms) I used to get daily patch updates to iron out bugs. When i left my previous job as a tech support manager for a Futures and options traders we were actually looking to move away from TT to other vendors.

we couldn't even patch the servers that their gateway software ran on because they refused to support on any platform above a 2 year old windows 2000 service pack.

Our traders used to lose a fortune in exchange fees due to their downtime. It's no wonder they are desperate for money.

Re:Open letter..

[idlake]

Anybody who has to mention "innovation" repeatedly in their press releases, and even put it in italics, probably doesn't have much of it. Companies that actually do innovate just advertise with their product features, and the innovation is self-explanatory.

debunking a pro-patent claim

[N3wsByt3]

I'm getting sick and tired of hearing the 314th trol comming along with the "if I have worked hard and long, and put a lot of work and energy into it, why shouldn't I be able to patent my idea/software/method?"

First of all, as others (such as Halo1) and myself have already pointed out, there is no inherent right for a 'fair compensation' by a patent. A patent is a monopoly, given by the state, because it (is supposed to) promote innovation. For all those claiming to be capitalists: a monopoly given by the state does not sound all that capitalistic, does it?

But regardless: if it doesn't achieve it's goal of promoting innovation, it should not be granted, period.

But secondly, let's assume to agree with the 'I've earned it'-concept. Would that, in effect, be fair? Patents, these days, are more about ideas then anything else: even the original needed working model isn't any longer necessary... so, is it 'fair' to be compensated for an idea?

Well, imagine some other dude thought of the same idea a little bit later then you, but he gets to the patent-office first, and he gets the patent...where does that leave you? Shouldn't you be compensated for 'all the hard work and energy' you put in the idea? And imagine you were first to apply for it, but he had the actual idea first, independently from you...shouldn't it be 'fair' that he get compensated for his energy and work? Would it be fair if he put in years and years of hard work, but you suddenly had an aha-moment and filed for the same idea first, and thus got all the benefits?

As one can see, it is not about fairness at all, and not even about being compensated for hard work. not who came up with the idea first. It's just a matter who filed for it first. There is no justice in this system; the idea you had can be the same idea anyone else had, at the same time, even. Therefor, there is (or at least should) no such thing as an idea that can be 'owned'. This is also why copyright differs on a basic level from patents: while the chance that anyone else writes the exact same book is nihil, having the same idea can happen all too easy.

And would it be 'fair' that someone else got a monopoly for 20 years for an idea that you had come up with independently, and maybe even earlier, but filed it one minute before you? Me thinks not. Let's face it: patents are not about fair compensation or inherent rights; they are issued for the benefit of the public at large and for the promotion of innovation.

If it doesn't do that, there is NO reason why anyone should get a state-ordained monopoly.