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eZ Systems Opposes Software Patents

eZ Systems' business model relies on our ability to license many of our rights as the copyright holder to others at no charge. This practice encourages innovation around our products, promotes fair competition for services related to our products and provides tangible value and asset security to every person and group who uses our software.

This article does not attempt to explain the complex field of patent legislation. To learn more about the patent system, visit the resources listed at the end of this article.

Each patent system in every jurisdiction where a company does business exposes the company to additional risk and incurs additional costs. Even when the company competes in an area unencumbered by software patents, they must still protect themselves from future patent activity.

As eZ Systems begins to compete in areas that support patents relevant to our business, we have to spend significant additional resources on our legal infrastructure, must have more liquid capital, and must take on an additional element of risk that can make it more difficult to acquire customers.

At eZ Systems, we protect our work with a combination of copyright and trademark. The patent system interacts with these other grants of intellectual title and in some cases could easily grow to override them.

We do not need patents. eZ Systems' technologies are not patented. We would only be forced to acquire patents for defensive purposes (such as patent pools, etc).

Regardless of eZ Systems' thought on the matter, software and business method patents might become a reality in Europe. If this is the case, it is essential that patent reform occur to make the patent system more fairly balance the needs of rights holders, competitors and the public.

eZ Systems believes that a fair patent system would include (at least) the following characteristics:

  • Processes to ensure that patents are only granted to truly innovative work.
  • Stringent requirements for patent holders to disclose sufficient information to ensure that a practitioner skilled in the art can reliably and easily reproduce the invention.
  • Sensible limits on the term of patents in industries with rapid innovation cycles.
  • Legislated and licensee-friendly limits on maximum patent royalties.

To reform the patent system, all stakeholders (including public citizens) must be involved in a process that analyzes the current and proposed patent system. Is the system a viable and sustainable method for supporting innovation, fostering growth and improving quality of life for society as a whole? The broad socio-economic effect of a patent system includes (but is not limited to):

  • Additional costs required to start a business due to patent-related risks and requirements.
  • Additional patent-related costs borne by organizations, including insurance, filing, licensing, legal fees, research, etc.
  • The financial burden on the society supporting the additional administrative, legislative, judicial and other systems.
  • Additional revenue potential for companies and patent holders.
  • Additional costs passed on to consumers, particularly the working poor and to the governments that support them.
  • The interrelationship between national patent systems, in particular with that of the United States. The dysfunctionality of the US patent system, particularly in the area of software and pharmaceutical patents, stifles innovation, fosters industry monopolies and causes demonstrable harm to society.

This kind of study would not only help countries and citizens all over the world understand the particulars of the patent situation, it would also help illustrate the tremendous scope and complexity of the issue.

eZ Systems believes that, if the European Patent Litigation Agreement (EPLA) were to enforce patents on software and business methods, the results would be harmful to all industries affected by such patents.

Unfortunately, while harmonization of the current patent regimes would implement some of the characteristics of a fair patent system, eZ Systems believes that broad-ranging reform must occur before harmonization will lead to benefits for SMEs and citizens.

Harmonizing the existing patent law will merely extend the scope of the existing flaws, spreading them throughout the system. The fundamental purpose, limits and benefits of patents must be clearly understood before such harmonization should occur.

The commission should consider fundamental reform of the patent system: aggressive simplification; increased rigor of the patent application and granting processes; the assurance that sufficient administrative, legislative and judicial systems are in place to serve the reformed system.

Without a fundamental reform that leads to a simple, just and enforceable patent system, eZ Systems believes that software patents will harm our interests as a software company and harm the societies in which we live. The current lack of software and business method patents allows us to serve our customers and to innovate and thrive.

Software and business method patents give the advantage to a few large patent holders andopportunistic patent monetization firms. These kinds of patents ensure that the participants who can afford to litigate reap the benefits, rather than those whose expertise is in technological innovation but who cannot afford to carry out large-scale administrative and legal activities.

The protections provided by copyright and trademark allows eZ Systems (and many other software companies) to earn sustainable revenues for growth while becoming the cornerstone of a healthy ecosystem of innovators, together providing value to the people who use our products. We could not have achieved this success under a regime of restrictive and litigious patents.