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Software Patents Affecting Futures Exchanges 261

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..."
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Software Patents Affecting Futures Exchanges

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  • Open letter.. (Score:5, Informative)

    by Folmer ( 827037 ) * on Thursday February 24, 2005 @05:36AM (#11764850)
    Trading Technologies has written an open letter to the future trading industry about this...

    http://www.tradingtechnologies.com/news/documents/ TTsOpenLetter12.14.04.pdf [tradingtechnologies.com]
    • That letter basically amounts to blackmail;

      "Take this offer, because the next will be worse..."
      • Re:Open letter.. (Score:5, Interesting)

        by js7a ( 579872 ) <james@COMMAbovik.org minus punct> on Thursday February 24, 2005 @06:27AM (#11765006) Homepage Journal
        That letter basically amounts to blackmail;

        "Take this offer, because the next will be worse..."

        Blackmail is a threat to expose embarassing information unless paid off.

        Extortion is a threat against property or persons unless paid off.

        Threatening to worsen the terms of a license to GUI software patents if it isn't accepted is neither. It is, however, criminally stupid in the present Euorpean patent law environment.

        • Re:Open letter.. (Score:5, Informative)

          by Hope Thelps ( 322083 ) on Thursday February 24, 2005 @07:23AM (#11765195)
          Blackmail is a threat to expose embarassing information unless paid off.

          In the UK, at least, "A person is guilty of blackmail if, with a view to gain for himself or asnother or with intent to cause loss to another, he makes unwarranted demand with menaces..." (Theft Act 1968 Section 21 - based on age old common law).
          • Re:Open letter.. (Score:2, Interesting)

            by Hope Thelps ( 322083 )
            I should add that I'm not saying that this necessarily is blackmail. That would depend on whether the demand was unwarranted which in turn would depend on whether "he has reasonable grounds for making the demand" and whether "the use of menaces is a proper means of reinforcing the demand". I suspect TT would claim to satisfy both of these conditions. However, blackmail at least in the UK is not limited to a "threat to expose embarrasing information unless paid off".
    • Re:Open letter.. (Score:5, Informative)

      by carnivore302 ( 708545 ) on Thursday February 24, 2005 @06:03AM (#11764932) Journal
      Unfortunately, the exchanges will just divert the extra costs of 2.5 cents to their costumers. For private investors, this will be a small amount, but institutions and market makers who are charged much lower costs now (compare 40 - 60 cents to 2 euro/dollar for private investors) will be severely hurt. Especially since they do massive amounts of trades.

      The problem is that for traders there is almost no choice. You trade on Eurex because it is very liquid. And by trading it stays liquid. If a smaller exchange offers to lower the fees it is still not attractive because the risk of trading illiquid futures are to big. So, essentially a successful exchange can do whatever it wants.
      • by bakes ( 87194 ) on Thursday February 24, 2005 @07:15AM (#11765167) Journal
        Unfortunately, the exchanges will just divert the extra costs of 2.5 cents to their costumers.

        Well, you can't blame them - costumes can be really expensive. Especially the frilly period costumes and all the sci-fi stuff.

        (Score -1: Cheap hit at simple tyop)
    • Re:Open letter.. (Score:5, Interesting)

      by gl4ss ( 559668 ) on Thursday February 24, 2005 @06:49AM (#11765084) Homepage Journal
      it's a letter that reasons why the following would be true: "The solution that TT has offered to each of the 'big four' exchanges is as follows:
      TT and the participating exchange (PE) would guarantee each other level access, permanently.
      Inside the world of PE futures and future options (this includes traders, customers, FCMs, ISVs, exchanges, etc.), TT would forfeit the right to be the aggressor in any patent infringement lawsuit, permanently; in that way allowing absolutely anyone to use TT's current and future patent protected concepts any way they desire.
      TT would receive from PE 2.5 cents per side for every PE future and future option transaction, permanently."

      then they go on rambling abou "competition, competition, competition", apparently it's just for eveyone else since they want permanently 2.5c on any transaction made(with no way to end the agreement). basically tt could just sit on their asses after that and keep receiving money to the end of the world even when their patents expire! the letter is also full of stuff that you would expect to find from a 419 letter(using capitals in wrong place, yes i know the irony in that i don't usually bother with them myself, also they ramble a fair amount on how the 'customers' would benefit from this 2.5c agreement, make zillions with their magic technology and so forth).

      amazing that they got such advanced tech.. yet need to protect it with sealed court procediings(if it's so much out there that they need go around suing people, do they really have something unique?).
      • Re:Open letter.. (Score:5, Insightful)

        by Yaruar ( 125933 ) on Thursday February 24, 2005 @07:40AM (#11765256)
        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.. (Score:4, Interesting)

          by hughk ( 248126 ) on Thursday February 24, 2005 @08:00AM (#11765338) Journal
          These are the guys who decided that it was pretty cool idea just to multicast everything. In the early days they never bothered with any error correction so they were dropping packets all over the place. The customers were never told of this, of course!

          The problem with support always existed, even back to the time of VMS. They needed to keep all platforms on as narrow a release and patch range as possible.

    • TT has problems.... (Score:5, Informative)

      by hughk ( 248126 ) on Thursday February 24, 2005 @07:40AM (#11765255) Journal
      The market for their product, Xtrader has become much more static in recent years as the growth of electronic markets has slowed and margins have been considerably reduced by competition They need something else to demonstrate the growth their funders demand.

      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.

      • I Use TT (Score:2, Informative)

        by Anonymous Coward
        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, cancellati
        • Re:I Use TT (Score:3, Interesting)

          by hughk ( 248126 )
          What Eurex originally did was to provide the Futures Market Depth down the screen. The screen wasn't dynamic but people would just scrape the screen and refresh it and then distribute the results.

          As for speed, that was variable. Many packets in former times would just be lost and nobody would be wiser. When it worked it was fast, but hey, no error checking! Someone explained that it was like being a dwarf in the T-bills pit in Chicago. You could hollar but nobody could hear you.

          All the exchanges provide

        • what TT does is provide a vertical display (extremely intuitive compared to previous methods of displaying depth)
          That might be a good design decision in terms of ergonomics and in that context, but is it novel? Excel has x number of vertical displays. Even a thermometer has one.
        • A nice GUI should not be a patentable innovation.
      • This looks like TT staked a claim on a process that would have been obvious to someone reasonably skilled in the area of electronic trading. Its a good thing for TT that theres nothing in patent regulations that prevents this.
        • Actually, there is, but it relies on somebody arguing the case in court. May the guys with the most money win!!!

          Many markets don't actually have that much money themselves. The cash is in the infrastructure. Euronext has some money and so do Deutsche Boerse (50% owner of Eurex).

    • Re:Open letter.. (Score:5, Insightful)

      by idlake ( 850372 ) on Thursday February 24, 2005 @09:01AM (#11765768)
      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.
  • Sealed? (Score:4, Interesting)

    by ghoti ( 60903 ) on Thursday February 24, 2005 @05:41AM (#11764863) Homepage
    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 ;).
    • Re:Sealed? (Score:5, Informative)

      by yaddayaddaslashdot ( 811353 ) on Thursday February 24, 2005 @06:32AM (#11765023)
      It's fairly common for some documents in a patent case to be filed under seal. For example, if I sue Microsoft, and allege that certain code in XP infringes, I might need to put into evidence some of the source code. Microsoft, in that situation, likely would insist that such filings be submitted under seal, to protect trade secrets. A court likely would allow this.
      • Re:Sealed? (Score:4, Interesting)

        by ghoti ( 60903 ) on Thursday February 24, 2005 @07:24AM (#11765201) Homepage
        Ok, I understand why specific documents would be sealed. But the way I read this, all of the documents related to those cases are.
        Plus, this is about patents, which should be public anyway, right?
        • Re:Sealed? (Score:2, Informative)

          Ok, I understand why specific documents would be sealed. But the way I read this, all of the documents related to those cases are.

          The article does indeed say the "cases" are sealed. If they are talking about US cases, that's simply incorrect reporting. Patent "cases" don't get sealed in the US. Documents, though, may be. In many cases, so many documents are filed under seal that it's difficult to get a clear understanding of what is going on in the case.

          Plus, this is about patents, which should be p

      • I might need to put into evidence some of the source code.

        Why should you? SCO did not....
  • by ites ( 600337 ) on Thursday February 24, 2005 @05:44AM (#11764874) Journal
    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.
    • by tod_miller ( 792541 ) on Thursday February 24, 2005 @05:59AM (#11764923) Journal
      Well, half... they don't really work.

      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 /. 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 /.
      • by NigelJohnstone ( 242811 ) on Thursday February 24, 2005 @06:23AM (#11764988)
        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...

        • Which is precisely why patents were created in the first place, and is one of reasons why they should not be extended to include software.

          With a physical item, you can take it apart and examine it and figure out how to make it yourself. For anything truly novel, that's a hell of a lot easier than coming up with the design yourself. Thus, such things need to be protected for a limited time to ensure that the inventor can recoup their investment. If not, then fewer people/companies will be willing to make th
      • Quick overview of the Dyson/Hoover story for those who missed it :
        http://www.golds.co.uk/articles/articles_corp_pate nt_law.htm [golds.co.uk]

        Dyson finally got £4m out of Hoover (they initially agreed to 1m, but Hoover appealed).

        I wonder what the outcome would have been outside of Europe...
      • Microsoft have given up on being a monopoly, they are letting the USPTO do it for them

        Do you ahve any evidence that MS are suing anyone for patent violation? I know they're filing for a lot of patents, but so are IBM, etc.

        Isn't there some kind of pan-european IT union?

        I've been working as a programmer in the UK for almost 6 years, and I'm not aware of there being any IT union at all, let alone a pan-EU one. I've not looked into it recently, though.

        keep exporting your fast food and k3wl choons!

        Actu
        • by tod_miller ( 792541 ) on Thursday February 24, 2005 @08:52AM (#11765692) Journal
          Microsoft have given up on being a monopoly, they are letting the USPTO do it for them

          Do you ahve any evidence that MS are suing anyone for patent violation? I know they're filing for a lot of patents, but so are IBM, etc.

          No suing is far to petty for them. They just email thier corps and gets nice new headlines saying 'XYZ project infringes patent'. Patents are like guns in a knife fight. You don't really have to fire them to win the fight.

          Mircosoft own IP in opengl, I am sure some whoresome games developers (EA?) are thinking about not doing linux stuff (gl only) because of this.

          Basically, the sandbag theory is you artificially inflate the cost of entry to market with patents, and also hang big 'beware of the monopolies' sign up for new comers with ideas of rebellion.

          Where would google be if M$ had been more proactive of the net all those years ago (where would the net be?) (I dropped the 'net - just net know)

          keep exporting your fast food and k3wl choons!

          Actually, if it was up to me, they could keep them too; I don't eat burgers or listen to very much American music. That's just me though :-)

          I thought brits were up on sarcasm. ;-)
      • Has the BCS (brit.comp.soc) done anything? doubt it.

        Thought the BCS were pro-patents anyway.
      • Healthmore (aka filter queen) was building stuff based on the Dyson patents before Dyson was even born.
      • I always laugh at this word. We used to have an intern that said one of here sorority sisters was nicknamed "Hoover" - and she said "It's for the reason you think". Hah! One day my buddy looked over and just said "ya, I wanna meet that girl 'Hoover'". ROFL
    • 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 th
    • Fortunately it seems like the danish socialdemocrats are now supporting a danish no to software patents, which would make Denmark vote against it.. lets hope that this will force the directive to be dropped!
      source: http://politiken.dk/visartikel.iasp?pageid=366576 [politiken.dk] (in danish.. theres no international stuff on it yet..)
  • by logicnazi ( 169418 ) <gerdesNO@SPAMinvariant.org> on Thursday February 24, 2005 @05:45AM (#11764879) Homepage
    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.
    • 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.

    • by ooze ( 307871 ) on Thursday February 24, 2005 @07:19AM (#11765178)
      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.
      • This is why the use of Mercenaries, especially the Swiss ones, was heavily regulated about three hundred years ago. the only legal Swiss Mercenaries left are the ones defending the Pope.
  • by t_allardyce ( 48447 ) on Thursday February 24, 2005 @05:48AM (#11764888) Journal
    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.
    • by Flyboy Connor ( 741764 ) on Thursday February 24, 2005 @06:26AM (#11765002)
      but how about we Europeans just ignore everything the US says law wise, treat their patents as null and void,

      Basically, US patents ARE null and void in the EU. They only hold in the US. The problem is that if a company wishes to sell something to a US-based firm, that firm will need to comply to US patent law. The company, if based in the EU, has nothing to fear, but its clients have. And these clients may ask for indemnification from the company, which the company is probably unwilling to provide.

      So what I expect to happen, is that many European companies will not trade with the US anymore. This is probably a big step in getting the US a saner patent system anyway.

      • Not quite (Score:4, Interesting)

        by NigelJohnstone ( 242811 ) on Thursday February 24, 2005 @06:45AM (#11765070)
        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?!

  • Excellent (Score:5, Insightful)

    by ultrabot ( 200914 ) on Thursday February 24, 2005 @05:52AM (#11764901)
    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.
    • Hopefully this happens before they are too established.

      I can hear it already: "But an insane patent law creates jobs!"

    • Does anyone know what the patents in question are for? While this certainly sounds like yet-another-case of someone exploiting the brain dead USPTO examiners and then extorting other companies, isn't it POSSIBLE that the patents are the result of somebody's hard work? Maybe some finance wizard spent years in his basement perfecting an algorithm (something like Black-Scholes) but he didn't have the resources to start his own futures trading firm, so he's just trying to get paid for an invention that everyb
  • by putko ( 753330 ) on Thursday February 24, 2005 @06:01AM (#11764930) Homepage Journal
    Here [uspto.gov] 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"> [uspto.gov] is the other patent -- also for a UI.
    • Is this a patent on the method of doing it or the idea??? cos if you can do the same with an entirely different method then their patent can't touch you.
      • It looks like a patent on the method of displaying that information, and the UI that allows someone to enter the data for trades simply. We're not talking "look and feel" here -- it is something like a can opener or drill bit, and they have a patent on it. Clean room reimplementation won't save you (nor will ignorance of their patent). They "own" that method of communicating with the market.

        It is as if someone patented a special kind of interactive graph: copy that and you have copied the thing, no matter
    • There is clear prior art on all that nonsense. Some of that was done decades before they did it.

      If any company pays these idiots, they deserve what they get. If they want to break the patent, find prior art. Its out there. If they can't find it, hire the right people to find it.
  • by MunchMunch ( 670504 ) on Thursday February 24, 2005 @06:13AM (#11764958) Homepage
    "No doubt, all those IP lawyers think this is a good thing..."

    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.

    • by Anonymous Coward
      ""No doubt, all those IP lawyers think this is a good thing..."

      Hey, come on...as a law student who hates this as much as anyone here, that's just not fair."

      If it squeaks, and looks like a mouse; call it a mouse.

      Evidence is; lawyers are mice :)
  • by Red Moose ( 31712 ) on Thursday February 24, 2005 @06:15AM (#11764968)
    TT Open Letter (PDF [tradingtechnologies.com]

    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.

    • The CTO, Gary Kemp is ex-Andersen Colsulting (he worked briefly at Eurex before leaving to make his own company). In those days the consulting and accounting arms were quite close.
    • 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.

      That's a pretty broad statement to make. Are you implying that Tucker (of automobile fame) should have had no patent protection from the big automakers because he failed to make a profit on his own? Obviously his ideas were worthless if he failed to profit from them. Right?

      The case in question sounds fishy, but let's not go off the deep end with the sweeping generalizatio

  • TT has proposed to the four main futures exchanges - two in Chicago, plus Euronext.Liffe and Eurex - that it should be paid a fee for not starting patent infringement cases against them.

    This sounds an awful lot like a Mafia protection racket... along the lines of "pay us money and no accidents will happen to your store".
  • by mustrum_ridcully ( 311862 ) on Thursday February 24, 2005 @06:22AM (#11764985)
    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... (Score:2, Insightful)

    by The Tyrant ( 472050 )
    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.
  • I, for once, am glad (Score:3, Interesting)

    by HogynCymraeg ( 624823 ) on Thursday February 24, 2005 @06:32AM (#11765027)
    At least now the EU can see the DAMAGING effect of Software Patents. Patents make the EU more competitive? Give me a break...
  • by tod_miller ( 792541 ) on Thursday February 24, 2005 @06:43AM (#11765064) Journal
    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.
  • by NoSuchGuy ( 308510 ) <do-not-harvest-m ... dot@spa.mtrap.de> on Thursday February 24, 2005 @06:53AM (#11765096) Journal
    Groklaw has it's own story [groklaw.net].

    Read the comments:
    ...What they have done here is patented an IDEA and haven't even TRIED to pass it
    off as a PROCESS. And they got a PATENT on it....

  • AGGGH (Score:3, Insightful)

    by c0dedude ( 587568 ) on Thursday February 24, 2005 @06:56AM (#11765108)
    You've struck one of my pet peeves! Please stop blaming the lawyers. Blame the litigants and lawmakers.
  • No Doubt (Score:5, Insightful)

    by Compulawyer ( 318018 ) on Thursday February 24, 2005 @07:21AM (#11765185)
    "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.

    • 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.

      GAAAAHHH!. This is pure ego-driven, self-serving nonsense. It is simply not (and should not be) enough to claim 20 years of ownership and punitive litigation simply because you got to the patent office before I did. There is very little that is so unique i
      • I totally concurr here.

        I would like to see a single patent that was "invented" by an independent software developer where the patent developer actually made money from patent licenses. Especially where it could be documented that the concept really was original, novel, and no prior art could be demonstrated (as patents supposedly should be but software patents rarely are).

        Indeed, with only a very few exceptions, I don't see many independent inventors making money from a device of any sort (mechanical, bi
      • simply because you got to the patent office before I did...

        The US patent system is unique in the sense that it grants a patent to the firt to INVENT, not the first to file an application. If you can prove you are the first inventor and meet the statutory requirements, you get the patent. Plain and simple. If someone else gets a patent issued first, theirs is invalidated.

        I will not waste my company's money throwing money at a patent lawyer since I'd rather reinvest the money to make my ideas better and

    • Re:No Doubt (Score:2, Interesting)

      I agree with this (and I am not a lawyer!).

      The real issue of substance is whether TT really has a case, not in US law, but under EU law. We simply don't know this until someone challenges them. TT have been very clever in pitching their cost per trade metric well below the pain threshold, so it's cheaper to pay TT then take it to court. As its not challenged, there are no papers to make public, and TT can request as part of the agreement that the agreement terms and conditions are confidential.

      There is a

      • A fine point: The US doesn't allow for the patenting of a mere idea either. You must show, in your application, that you have sufficienit possession of the invention by teaching a person of ordinary skill in the relevant art how to make and use the invention. This is often referred to as the "enablement" requirement. A patent that does not enable the claimed invention is invalid.
    • > 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
    • 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? :)
    • Re:No Doubt (Score:4, Insightful)

      by starseeker ( 141897 ) on Thursday February 24, 2005 @08:59AM (#11765758) Homepage
      "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.
    • it would not be fair to have a special exemption for one type of invention and not another.

      What's the US constitution say? Either:

      All types of invention are created equal, with the right to be patented,...

      or rather

      Congress shall have Power To promote the Progress of Science and useful Arts, by securing for limited Times to Inventors the exclusive Right to their Discoveries

      Do you think the constitution should be changed on that point?

      • It says the latter, but my point is that why should one art, especially an art that has been proven to be "useful," be singled out as unworthy of patent protection?
    • Re:No Doubt (Score:3, Insightful)

      by Teancum ( 67324 )

      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

      • Excuse the terse response, but your post shows a complete lack of understanding of patent law. Individual cases may highlight some problems, but they are not proof of the failure of the system as a whole.
  • by Jack.Gavigan ( 254548 ) <jack AT gavigan DOT co DOT uk> on Thursday February 24, 2005 @09:47AM (#11766128)
    Now, I'm no expert on trading systems... No, wait - I am an expert on trading systems!

    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 [slashdot.org] 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 [uspto.gov] patents [uspto.gov].

    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:

    |..BQ.|...Bid..|..Offer.|..OQ.|
    |.100.|.100.00.|. 100.01.|..50.|
    |1277.|..99.99.|.100.02.|.492.|

    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:

    |..BQ.|...Bid..|..Offer.|..OQ.|
    |..50.|.100.00.|. 100.01.|..50.|
    |1277.|..99.99.|.100.02.|.492.|

    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:

    |TotBQ|..AvgBid..|..BQ.|...Bid..|..Offer.|..OQ.|..

  • to handle teh abstractions of the the abstract markets...

    Just how damn far can you get away from the concrete basis of patents and still obtain a patent?

    Depends on the organization granting patents apparently.
  • by 4of12 ( 97621 ) on Thursday February 24, 2005 @10:44AM (#11766756) Homepage Journal
    1. software patents
    2. gene patents
    3. business method patents

    What will finally put an end to this madness?

    Legal method patents.

  • by N3wsByt3 ( 758224 ) on Thursday February 24, 2005 @11:47AM (#11767431) Journal
    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
  • by N3wsByt3 ( 758224 ) on Thursday February 24, 2005 @01:37PM (#11768660) Journal
    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.

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