As new software and fresh methods of conducting business flood our markets, every inventor must turn their minds to ways of protecting their inventions and ideas.
Whether to provide their company with a competitive advantage, or with the aim of making money from licensing opportunities, inventors` ability to protect intellectual property has become one of the most pressing concerns for individuals and corporates alike.
What intellectual property is patentable?
Intellectual property law has three sub-species: patents, copyright, and designs and trademarks. These laws exist so the State can afford the creators of intellectual property a monopoly, albeit for a limited time, to exploit the right of the invention.
The underlying principles of intellectual property law can be best summed up by the US Constitution, which states: Intellectual property law is there "to promote the progress of science and useful arts, by securing for limited time to authors and inventors the exclusive right to their respective writings and discoveries".
As a precedent with regard to intellectual property in the IT field has not been set in SA, it is expected that the country will follow the precedent set by the UK and Europe.
Unlike America, neither SA nor the UK recognise the patentability of a business method.
The mechanism of a business method or a subset of techniques within that method would be eligible for a patent if it fills the necessary criteria.
Chris de Villiers, attorney, Spoor & Fisher
In SA, the Patents Act states "a program for a computer" and "a scheme, rule or method for doing business" are not patentable subject matter.
Chris de Villiers, an attorney with patent specialist Spoor & Fisher, says that while a business method per se cannot be patented in SA, it is reasonable to assume the courts will uphold a feature within a business method which makes it unique.
"The mechanism of a business method or a subset of techniques within that method would be eligible for a patent if it fills the necessary criteria," he says.
"These would be that it is new or unique as well as non-obvious - that is, if it is not a natural progression of something already in existence and understandable to someone with a reasonable knowledge of that field of business," says De Villiers.
This would pave the way for local designers or inventors of new software or IT processes to protect their work within the preamble of what are, as yet, untried waters.
A closer look at local IT patents
Jason Berry, MD of first-tier Internet access provider Citec, has patented a number of IT business inventions. He holds Patent Co-operation Treaties or provisional patents on bandwidth on demand as well as prepaid Internet access.
Bandwidth on demand has been patented as Network Management Systems. Berry explains that bandwidth can be managed in the same way that electricity is managed by large providers such as Eskom.
To this end, he has designed a system where the amount of bandwidth a company uses can be managed and billed to allow the user to maximise the available bandwidth during off-peak times, and minimise it by delaying bandwidth-sapping large e-mail deliveries during peak times.
The decision to patent was taken to give Liberty and MyLife a jump on competitors by restricting the way they could offer the same service to their clients.
Joe van Niekerk, business development director, MyLife@bluebean.com
The billing system provides incentives to ensure users are prudent with bandwidth. This cuts costs to the provider, and these cost-savings can, in turn, be passed on to the end-user. Berry believes that like any form of energy, bandwidth is a perishable commodity and its sensible usage has become a priority - especially in SA.
Berry has also patented Cellular Internet, through a Citec subsidiary. He says this patent amounts to "infinite" bandwidth to the end-user.
MyLife@bluebean.com, the financial service initiative from Standard Bank`s Internet arm bluebean.com and the Liberty Group`s e-commerce venture MyLife, has also patented three parts of its financial offerings on bluebean.com. The initial authorisation process, when a client logs-on, as well as the contractual communication between client and Web site has been patented. It has also protected its Vault feature where client details are stored.
Joe van Niekerk, business development director at MyLife, says the decision to patent was taken to give Liberty and MyLife a jump on competitors by restricting the way they could offer the same service to their clients.
Added to this, explains Van Niekerk, is the fact that legislation on electronic signatures has yet to be finalised in SA and the company was unwilling to lay itself open to possible legal battles over the validity of transactions.
Y2K 'windowing` and other patent wrangles
The Y2K panic resulted in a scramble for organisations to change the dating system on their computer networks. Companies sprang up all over offering quick fixes to the dilemma. The most obvious fix was a process called windowing.
Patent number 5806063, filed in the US on 8 September 1998, defined "windowing" as a process that reconfigures software so that years entered as 00-29 are assumed to represent 2000 to 2029, and years entered as 30-99 represent 1930 to 1999. Windowing was regarded as a quicker and easier way to temporarily fix affected code than the more traditional expansion method, which changes the software and data formats to allow for four-digit dates.
US company McDonnell Douglas filed for and won the patent on windowing. Threats from McDonnell Douglas to recoup payment from companies that used the system have yet to be realised.
A recent high-profile local patent case is the battle between MTN and Nedbank, and Pierre Nel over the legality of a party`s rights to sell prepaid cellular airtime via automatic teller machines (ATMs).
According to Nel, his patent covers more than just prepaid cellular airtime. He says it extends to any product or service sold over ATMs or other financial terminals using a vendor database connected to the financial network, and he claims to have held this patent for years.
In responding to Nel, MTN called him "a dreamer" and said the claim would not survive scrutiny.
When is a patent better than copyright?
Copyright is another way to protect intellectual property and is the route most often followed by software designers. But when should designers patent and when should they copyright?
De Villiers explains that while copyright does protect intellectual property, this form of protection extends only to actual copying of the work.
While copyright does protect intellectual property, this form of protection extends only to a full copy of the work.
Chris de Villiers, attorney, Spoor & Fisher</P>
An Australian court case was recently heard between Data Access Corporation and Powerflex Services where Powerflex attempted to create a program to imitate functions of an existing Data Access program.
The court ruled that while 192 of the 254 command words in the Data Access program were identical and had been repeated in the Powerflex program, copyright had not been infringed.
Powerflex replicated the program through reverse engineering. However, the source code for the commands in the Powerflex program was different.
The Australian court found that while the ultimate purpose of the command words were to cause a computer to perform an operation similar to that of the plaintive`s program, infringement had not occurred because the set of instructions in the source code were different.
According to Australian attorneys, this case shows the merit for a company to protect the idea or purpose of the program by patent instead of merely stopping the duplication of the program by exact copying.
Costs and procedures
For local developers or inventors, patent registration remains a relative enigma. Yet, the process is simpler and less expensive than one would think.
The entire cost for an international (PCT) application is in the range of R35 000, although De Villiers points out that as SA is a developing country, South Africans qualify for a significant discount on the cost of the patent process. Local patents will cost about R7 000 to R10 000 for a provisional and R8 000 to R10 000 for a complete application.
A written motivation for the patent, as well as a description of what it does, must be submitted. The patentee is then granted a provisional patent and given a year in which to refine the invention.
Unlike its US counterpart, SA`s patent office does not conduct a search to check if a similar or existing patent exists. The onus rests with third-parties to contest either the validity or the uniqueness of the patent.
De Villiers says that if the patent is to be filed in the US, a lengthy two- to three-year period of searches and consideration will be undertaken by the patent office before final judgement is made.
Experts agree that whether by patent or copyright, protecting South African intellectual property must become a priority, particularly as the country`s increasing brain drain takes its toll.
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