Episode 27: Information technology and intellectual property

Synopsis

The Summit TV speaks to Ross Addis from Siemens IT Services & Solutions and James Davies from Adams & Adams Attorneys about how information technology entrepreneurs can protect their software intellectual property rights.

Transcript

The Summit TV speaks to Ross Addis from Siemens IT Services & Solutions and James Davies from Adams & Adams Attorneys about how information technology entrepreneurs can protect their software intellectual property rights.

Stephan Lamprecht: Welcome to the Intellectual Property show. Joining me in the studio to discuss the protection and commercialisation of software is Ross Addis technical architect from Siemens IT Services & Solutions, and James Davies from Adams & Adams Attorneys. James, if I understand correctly the global Microsoft company is currently one of most prolific patenters in the South African patent office - why would you say is that?

James Davies: Microsoft believe quite strongly in the protection and the enforcement of their intellectual property - of software programs, and software implemented inventions they create not just in South Africa, but worldwide - so they file many thousands of patent applications to protect their software programs, and to exclude others from copying them. It’s a commercial decision at the end of the day - so they clearly think that it’s commercially viable to file patents in South Africa to protect that aspect of the software related invention that’s covered by the patent to exclude others from being able to copy them.

Stephan Lamprecht: But if I’m not mistaken in the South African context does our system allow for patenting software?

James Davies: That is a little bit of a grey area. The South African Patent Act - like the European and British patent laws, the South African Act says that software or a program for a computer as such is not patentable. That probably relates to the code itself - but a computer system, or a method that uses software - that has some new and inventive step may well be patentable. So often the subject of a patent isn’t focused on the software code itself - but rather on the method or the system that runs the software.

Stephan Lamprecht: The software code itself - how do you protect that?

James Davies: The software code in the terms of Copyright Act is a “work” that’s protected by the Copyright Act. “Work” is very broadly defined - it can be a document, a picture, a drawing, or computer code whether source code or machine code - so it is protected by copyright. In terms of copyright you can prevent others from copying the actual code - although there is no copyright in ideas. That’s why to protect the idea or the functionality of a computer program you would normally try and use a patent…

Stephan Lamprecht: Ross, from your point of view when we say patents, copyright and so on - what’s the open source point of view regarding software development and the protection of software?

Ross Addis: The open source community think it’s more beneficial to release your code - release your software - and even sometimes collaborate with your competitors therefore making the software stronger with more features.

Stephan Lamprecht: Why is it beneficial?

Ross Addis: Because we have this little thing called the internet that allows open source software developers to collaborate around the globe with each other almost in real time on coding features - of course more minds behind a problem often leads to it getting fixed faster…

Stephan Lamprecht: I can understand if I’m a big corporate company - for example I’m Vodacom and I spend a lot of money on software licences for a database, so if for example I use an open source database those costs theoretically can be lower - so I can understand the usage of open source software. But say for example I’m an entrepreneur - I am coding in my garage - how do I derive revenue? How do I make money out of open source software?

Ross Addis: Open source doesn’t preclude you from making money - there’s a lot of commercial models around different open source products…

Stephan Lamprecht: Elaborate on some of those?

Ross Addis: For instance a well known Linux vendor called Red Hat have a subscription based model - where you pay for support, to make sure that you get updates on time, that security is looked at and everything works. If you have a problem you have someone to phone. Another one is Canonical - the guys who produce Ubuntu - they also have a subscription model.

Stephan Lamprecht: So they make money on services and support - maybe training and so on?

Ross Addis: The open source business model is geared towards the services industry that does actually have very good margins - as opposed to selling licences. So it fits well - you will notice that large vendors whom you would have never have thought would be going open source 10 years ago - they’re now beefing up their professional services side. IBM is one of the instances because they are making money off the services - seat management, training and all of that sort of stuff…

Stephan Lamprecht: The key thing here is the collaboration - the ability to get input from your users and so on. James, from your point of view if I listen to this - doesn’t it sound a lot like a normal licence agreement? There is some kind of propriety code - call it the software program - making it available to somebody in the form of a licence, and maybe there isn’t a royalty involved so it’s a zero royalty - but how is that different from a normal licence transaction?

James Davies: It’s a type of licence that falls broadly into the category of contracts. With a contract or a licence agreement you can really agree to anything you want to agree to - or that the other person will agree to - as long at it is not illegal or immoral. So if you want to open up your source code in terms of a licence agreement - where you may limit developers down the line that anything they develop must also have the same licence for example - that is an option you have. Also, on proprietary software you have licence agreements as well - that just regulates the use of that software even though you are not opening the code, and you are keeping it secret or keeping it closed.

Stephan Lamprecht: The question would be are there some learning experiences taken from the open source movement, and do you see more maturity in the way we that we now deal in terms of licensing computer software?

James Davies: With respect to closed source software?

Stephan Lamprecht: Yes, in terms of the collaboration clauses and so on…

James Davies: The one thing that I have seen become more prolific recently is end user licence agreements. Previously vendors used to rely more on copyright - now every time you install a new software package there is an end user licence agreement that you have to agree to, and that is becoming more popular because I think it’s a little bit more versatile. You can put more clauses in there than you could with conventional copyright or with patents - and I think it just helps extend the rights of the vendor. Whether or not it helps them collaborate I don’t know - probably not with the end user licence agreement.

Stephan Lamprecht: Ross, from your point of view in terms of open source have there been some remarkable South African successes? You mentioned Canonical - that’s Mark Shuttleworth if I’m not mistaken - have we seen some big market successes in the open source domain from South Africa?

Ross Addis: In South Africa there are open source developers - and we collaborate with the international products - but where there is a lot of movement is within the public sector. The government sees great value in going with open source for many social, political and economic reasons - so we are one of the countries that are leading with open source in government and the public sector.