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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..."
Trading Technologies has written an open letter to the future trading industry about this...
/ TTsOpenLetter12.14.04.pdf
http://www.tradingtechnologies.com/news/documents
What would be a reason to seal these documents? I mean, what reason would the court accept to do that? I thought all court documents had to be public (IANAL, obviously ;).
EagerEyes.org: Visualization and Visual Communication
My Belgian company (which spent a couple of years developing a very sophisticated SMS product) got a phone call and then an email from some guy who has a US patent on a very broad and shallow aspect of our work. His claim: you are totally infringing, stop selling your product and sell mine. My answer: since when does a US patent apply in Belgium? Him: Ah, in about... (checks watch) 18 months.
My point being: I've asked the EPO several times in the past whether I could patent aspects of our company's software R&D, they have always rejected this out of hand. I know that they have allowed software patents anyhow, if described sufficiently bizarrely.
But if a flood of US software patents hits the European market it will have the effect of killing the European technology business almost overnight.
We have, so to speak, no immunity.
Sig for sale or rent. One previous user. Inquire within.
I bet most IP lawyers would very much like the cases to be open so they can learn what is going on in the field and keep up with develepments. Most IP lawyers are probably perfectly reasonable people with a job and many of them protect defendents.
Perhaps the comments wasn't meant this way but that was how it sounded.
If you liked this thought maybe you would find my blog nice too:
Im not trolling or anything, but how about we Europeans just ignore everything the US says law wise, treat their patents as null and void, and basically tell companies they can either trade with us or have a nice cup of STFU and we, and the rest of the world will live happily ever after.
This comment does not represent the views or opinions of the user.
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.
Save your wrists today - switch to Dvorak
Well, half... they don't really work.
/. can find prior art to help make the US invasion a little less easy for them (by US I mean just the nasty patent stuff! keep exporting your fast food and k3wl choons!) hahah just kidding, we are one big happy family here on /.
Dyson patented his cyclone technology for his vacuum invention. good.
He almost ran out of money twice when hoover copied him twice and deliberately tried to cut off his balls twice
(how do I real-life killfile hoover? mmm, a pda app that does company holdings lookups on bar code scans and warns you why you dont want to support them.... mmmmmmmmm nice)... hoover have thier money in a lot of pots. It'd be nice to steer clear of them. en-masse.
Not that I am domestically inclined, but <s>hoovering</s> vacuuming (cycloning?) is one thing I am for, and I regularly clean my motherboard this way (oh... and my room) anyway, not to stray too far off topic... Dyson was a case for and against patents.
A hoover patent for belly button fluff could never be contested by anyone = hoover because of money.
If patents were granted in a sane way, instead of just making shit loads of money, then people could use them to defend against bigger corps, and bgger corps couldn't shovel sandbag patents around thier corner of a market.
Also, a patent should be registered with a timelimit to make a move on it. to stop this company who is trying to sue dell for 'selling overseas on the internet' which is a premise (or a method, solution or something) that they developed.
Microsoft have given up on being a monopoly, they are letting the USPTO do it for them. And some lawyers with girly pony tails (Yes Schwartz, I said girly)
So while I see Dyson as a mixed case, I think software patents will never ever come to the aid of a little guy.
The problem is, are they really going to be steam rollered in? Isn't there some kind of pan-european IT union? Should there be?
Has the BCS (brit.comp.soc) done anything? doubt it.
Give some details on this guys patent, maybe
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Here is the first patent: a patent on some bar graphs to display market information.
I guess it is "functional" -- it does something. But that seems pretty shitty and obvious to me. And Click based trading with intuitive grid display of market depth"> is the other patent -- also for a UI.
http://www.thebricktestament.com/the_law/when_to_
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.
Hey, come on...as a law student who hates this as much as anyone here, that's just not fair.
Granted, it seems like there are plenty of lawyers willing to push for and litigate harsh copyright/trademark/(software )patent laws, but I don't actually know where they learn it. In colleges and unis, the IP professor/lawyers who are for expansive laws are few and far between. And in the 'wild,' the concentration appears higher than it is because, the software/entertainment pro-copyright-till-we-choke lawyers are the only ones who have control of the microphone (why do you think that is?).
Anyways, I have yet to meet a professor that supports the things we all complain about. In fact, I know such lawyers exist only looking at the amici briefs files for, say, Grokster. Most are shades of Lessig. And if they're having any effect, I guess I just don't see how there won't be floods of actual lawyers pouring out of the schools who advocate erring on the side of restrained law rather than expansive law.
They make and sell a "premier order system" called X_TRADER. They claim over 50% of the volume on the "big four" exchanges use it.
The report above says contradictory statements on profitability: they have had $40 million invested between 99-02. Currently have $8 million in the bank and hav been $32million net income loss over the past 6 years. . So the problem is they are losing money, have been trying for years to make it and become the "Microsoft" of trading platforms but have been failing. The 2.5 cent inclusiong they want (as a start) will give them $130 million profit per year.
"We believe in competition within every sector of the futures industry", except, obviously, from other competitors or indeed companies in the rest of the world. To quote again "The 2.5 cent inclusion would create a new era of competition for order-entry by extending TT's intellectual property to the world, forever".
Those quotes are from the press release above. This shows a) how fucked up the patent situation has become and b) how vitally important it is that US business interests are kept out of EU and Rest-of-the-world interests. The TT release is a money grab for sustained income from the rest of the world despite them having no legal basis to do so outside the US.
TT wants the right to an income and wants it enshrined across patent law that they will be the Microsoft of trading software, basically. No company has the right to an income and if they can't profit in 6 years and are net loss making, maybe they should fuck off then.
Acting stupid isn't much fun when there's someone around who knows better
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...
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.
"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!!
At least now the EU can see the DAMAGING effect of Software Patents. Patents make the EU more competitive? Give me a break...
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.
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I just checked for countries subscribing to the Patent Cooperation Treaty.
http://www.angenehm.com/pat_faqs3.html
The priority date (the date from which your patent is taken to have been submitted) is taken as the first submission to any patent office in any country in which you applied.
So it looks like Belgian's guys problem above would apply. His USA counterpart would come in and apply for a patent quoting a prior USA patent priority date.
He's then forced to try to show prior art in a world where prior software art isn't disclosed. So there's probably plenty of prior art, but can he get the companies to release their code to prove it?!
Groklaw has it's own story.
...What they have done here is patented an IDEA and haven't even TRIED to pass it
Read the comments:
off as a PROCESS. And they got a PATENT on it....
Grundgesetz * 23. Mai 1949 - 30. November 2007 - http://www.vorratsdatenspeicherung.de/
You've struck one of my pet peeves! Please stop blaming the lawyers. Blame the litigants and lawmakers.
Since when has this country used intellectual elite as a pejorative term?
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.
Laws affecting technology will always be bad until enough techies become lawyers.
The patent, is on something fairly obvious given any knowledge of market trading called a "Market Depth" display, which shows orders that are not just at the top of the market, but those at slightly worse prices. The ability to access the Market Depth is actually a function of the exchange itself. All TT are doing is presenting a horizontal representation of the bid-offer spread depths.
The main market is probably Eurex which is German based. US customers may be affected but not EU based ones.
See my journal, I write things there
75% of already granted European software patents are owned by US and Japanese companies. European companies have only something like 20% of all granted software patents.
US companies also patent processes implemented in software (to buy something with one click of a mouse, to load certain kinds of XML information, ...), and not individual computer programs.
A very nice report was published recently by the European Parliament's Directorate General on Economic and Social Policy, which completely debunks the "computer-implemented inventions are entirely different things that software", and which confirms that the European Patent Office's practice is not all that different from US practice.
The report is linked at the bottom of this PR.
Compressing an image is generally plain maths, and "mathematical processes" are not (should not be) patentable in Europe. Of course, the EPO (with the help of enterprising lawyers appealing to its Technical Board of Appeals) has found ways to interpret the European Patent Convention to get around this. I'm also not sure how you can say in general that "searching" is patentable.
I'd be very interested in seeing any numbers you have on this. Also, whether or not we have software patents in Europe is completely independent of those companies' abilities to get software patents in the US.
Patents are not about fairness, patents are economic means which can be used to correct an economic system running haywire due to relentless imitation. You do not introduce artificial monopolies in an economic sector because it's "fair".
You might want to look at this presentation by a lawyer and law scholar specialised in software patents on that. Trying to paint it as a "communists vs capitalists" is sooooo last 5 years (although Bill Gates doesn't seem to know that yet either).
Even if you unconditionally believe that any sort of intellectual creation should be associated with the broadest possible form of property rights, there's still the problem that software patents conflict with the property rights of software authors, granted to them by copyright. They prevent the normal exploitation of their works, which is even in conflict with the often cited TRIPs agreement.
Again, this has nothing to do with rewards, respect for work or whatever. It's
Donate free food here
I am a futures trader, and I use TT's x_trader product. I'm actually staring at it right now on one of my other 7 monitors. TT is not just pure evil. They do offer an original and unique product (at least when it first came out).
first, market depth has been available at the exchanges for some time, what TT does is provide a vertical display (extremely intuitive compared to previous methods of displaying depth) and make the display totally clickable and easy to manipulate. This makes order entry, cancellation extremely fast and easy- oh yeah, and their product is lightning fast. For you non-traders, i cannot emphasize enough how important speed is. a > 300 millisecond delay on an order entry is considered slow.
anyway, TT was the first to provide this, most futures traders use TT (for a while it was a disadvantage to not use it. For what it's worth, I was one of the first at my firm to use it, they even tried to avoid it, now it is required by all traders).
also, you geeks should like this: they offer an API which, i must say, is pretty slick.
Do they deserve 2.5 cents per trade? who knows, probably not, but they do have a great product so i can see why they are trying to defend it.
> 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.
...
Steady there, cowboy
The big difference with 'hardware' patents
(including, say, pharmaceutical patents) is the
utter disproportion of the protection offered by a
patent in the software case. Pharmaceuticals
by now cost hundreds of millions to develop, and
this has to be recouped in a very short time.
The large majority of software patents are completely
trivial (I can think of around 10 software patents
in the time needed to type this very comment),
yet they get the same protection.
How can this be beneficial to the advancement of
the state of the art? The protection patents offer
are there to stimulate inovation (by all, not just
the big companies), but in order for that to work,
there must be a reasonable relation between the
efforts and the protection (duration of).
Since you are an IP lawyer in favor of public dispensation of justice, and are currently providing services to many "small and individual inventors", I am quite curious how these individuals have fared with you as their champion.
:)
Could you provide an example or two of an individual successfully defending a patent against a corporation with much deeper pockets?
I work on electronic trading systems for one of the big investment banks and I take care of the GUIs used by our fixed income traders for trading both cash and derivative instruments on all the exchanges mentioned here - Eurex, LIFFE, CME, CBoT - as well as many, many others.
I've been following this issue and I hope that TT's patents will be challenged and overturned. Here's why (note that you should read this and then read the two patents.
Futures exchanges are generally order-drive - i.e. you submit an order to buy/sell a certain amount of a particular instrument at a certain price. There are hundreds of market participants, and they all want to do different things. For a given instrument - Al might want to buy 100 contracts at 100.00, Bob might want to sell 50 contracts at 100.01, Charles wants to buy 1200 contracts at 99.99, Dave also wants to at 99.99, but he only wants 77 contracts, and Egon wants to sell 492 contracts at 100.02.
Now, a typical way of showing this in a graphical manner is as follows:
NB: Apologies for the crap formatting. The extra spaces are Slash's fault - if you're confused, pipe it through 'tr -d` `' - or, if you're a lamer, cut'n'paste it into an editor and delete the spaces.
'Bid' means 'Buy' and 'Offer' means sell. 'BQ' and 'OQ' stand for 'Bid Quantity' and 'Offer Quantity' respectively. Note how Charles and Dave's orders are added together.
Now, the term for this sort of representation, is the "depth". If I'm a trader looking at this, I know that, if I want to (and assuming the depth doesn't change before I submit my order), I can sell 100 contracts at 100.00 and/or sell 1277 contracts at 99.99.
So, how obvious is it to represent the depth as a horizontal bar chart?
Now, let's say I decide to sell 50 contracts at 100.00 - i.e. I want to 'hit' that 'bid' (the opposite is to 'lift' someone's offer). Do I want to click on a 'Place Order' button, then select which instrument it is from a list, tick a 'Buy'/'Sell' radio button and type in the quantity and price before hitting select?
Do I hell! I want to click on the '100' and have a "Submit Order" pop-up appear straight away with the 'Instrument', 'Quantity' and 'Price' fields pre-filled, with a big fat 'Submit' button that I hit to send the order to the market. The order goes in, the exchange's order matching system matches it against Al's order and executed the trade. I then get a pop-up that says "You've just sold 50 contracts at 100.00" and Al gets a pop-up saying "You've just bought 50 contracts at 100.00".
The depth will then change to look like this:
Now, let's say that by some amazing coincidence, I have 1377 contracts that I want to sell. I can get out my calculator and figure out that if I offload my position by hitting those two bids (I neither know nor care that the 1277 bid is actually two orders), I'll get an average price of approx. 99.99073.
Or, how about instead of having to pull out my calculator, my GUI calculates and displays this automatically, as follows:
What will finally put an end to this madness?
Legal method patents.
"Provided by the management for your protection."
See http://www.linuxinsider.com/story/The-Fuzzy-Softwa re-Patent-Debate-Rages-On-40676.html
"Look Beyond the Rhetoric
Leaders of the open-source software movement have long been harsh critics of software patents. The GPL itself says, "any free program is threatened constantly by software patents." The appeal contends that copyright provides adequate protection for the creations of software authors. The Appeal advocated reliance on copyright law, rather than patent law, for the protection of software.
Not long afterward, in late January, the European Parliament's Legal Affairs Committee recommended scrapping the pending directive, extending the debate until at least the end of the year. There may ultimately be an EU software directive that affects the scope of software patenting in Europe, but not any time soon.
Once upon a time, we intellectual property lawyers got to live peacefully in our ivory towers. Those were the good old days. Now it seems that intellectual property policy issues have become fraught with partisan rhetoric. Most open-source promoters are against software patents. Most corporate spokesmen side with patents, period, whether they cover software or not. But it is worth looking beyond the rhetoric.
Copyright is an odd champion for the side of light. It would be neither original nor controversial to observe that copyright is an awkward scheme to protect computer software. At best, it is a square peg in a round hole. Before you take up the crusade of copyright, remember what it covers. Copying -- sounds like something you do to a book. Public performance -- sounds like a play or a film, right? Derivative works -- that sounds like an album by Vanilla Ice. This should be no surprise: The copyright law was written to cover books and music and plays and films.
Protecting Expression
Copyright protects expression, not ideas. But software is not really all that expressive. When was the last time you went to a poetry reading and heard someone reciting C++? ("Wow, that recursive reference in his data structure was so deliciously ironic!") More important, software does not derive its value from expression; it derives its value from function. The fact that most software companies can get away with distributing software in object code form proves this point.
Code may be as elegant as a Chanel suit, but most people don't care. They want products to work, and they want software that makes them work. Users not only don't care how elegant code is, they actively don't want to know. I love my TiVo (Nasdaq: TIVO) and I love my PDA -- not because they contain lovely code, but because I will never have to see what code is in them. I know in my heart that I am not alone.
This makes protection of software via copyright tricky, because functional elements or ideas are not protected -- only expression. Not surprisingly, actually identifying software copyright infringement is like reading tea leaves. It's straightforward, of course, when someone wholesale copies a piece of software. This catches up the shameless counterfeiters. But people using software to develop products rarely copy software without modification.
If they re-write code, they can come up with a very different looking set of expression that performs the same function. Have they infringed the copyright? That is not so straightforward. The serious copyright battles are over the copying of bits and pieces, structures, design elements and so forth -- and applying copyright law to those cases is difficult, expensive and unpredictable.
Leave It to Lawyers
Unless you are a copyright lawyer, you probably don't know that the rule for assessing infringement in several U.S. judiciary circuits is the "abstraction, filtration, comparison" test. The court will "first break down the allegedly infringed program into its constituent structural parts. Then, by examining each of these parts for such things as incorporated ideas, expression that is necessarily incidental to those idea
--- "To pee or not to pee, that is the question." ---
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.
--- "To pee or not to pee, that is the question." ---