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Debate rages over Software Piracy and IP Rights

Serious fault lines have emerged around the highly unpopular Anti-Counterfeiting Trade Agreement (ACTA), which seeks to curb the huge amounts of software piracy taking place across the globe.

Worldwide, software piracy cost the industry a mighty $63.4-billion in 2011, an eight percent rise from the US$58.5 billion in 2010. A recent Business Software Alliance (BSA) study suggests that emerging economies, including those in the Asia Pacific, are the main culprits - emerging markets had an average piracy rate of 68 percent, far exceeding the 42 percent global average, and the 24 percent in mature economies.

According to Elaine de Beer, Associate at ENS (Edward Nathan Sonnenbergs) this has resulted in the big software players putting serious pressure on the US government to bolster intellectual property protection both domestically and overseas, which has led to the US government putting pressure on the rest of the world in the form of the ACTA.

“This move is resulting in a rift between countries along socio-economic lines,” says de Beer.

“Countries in the developed world are looking at the need for greater criminal enforcement and border control to combat piracy and counterfeiting, and grappling with the challenges posed by the internet and new communications technologies (like online file-sharing). Developing countries, on the other hand, do see the need for tougher IP protection measures, but they face far more pressing issues, and, of course, a serious lack of expertise and resources.   So the enforcement debate is as much about politics and morality as it is about economics.”

De Beer says the sympathy that people feel for the software giants is also tempered somewhat by the ongoing controversy about software patenting. “A patent is the right you get in a new invention. Unlike copyright, a patent is an absolute right, which means the owner of a patent has the right to exclude others from making or using the invention, irrespective of whether or not there has been copying. And, unlike copyright, a patent is registered, which means that ownership of a patent is far easier to prove than ownership of copyright. So the software manufacturers are not content with copyright protection, they want patent protection too.”

She says that in many countries including South Africa, on the face of it, they’re not entitled to it.

“The South African Patents Act of 1978, like patent legislation in many countries, specifically says that a ‘program for a computer’ cannot be patented. But this exclusion is followed by the qualification that the prohibition only applies to a computer program ‘as such’.  It is this that has led to all the controversy.

For years companies have been registering software patents by arguing that the software achieves a technical result or solves a technical problem, so they’re not registering a program as such. This argument has been endorsed by the courts in many countries including the UK, in decisions like the famous Aerotel and Symbian cases. It has also been endorsed by the patent authorities in the UK.

Amazingly, says de Beer, no software patent case has ever been considered by a South African court, but it does seem very likely that South African courts will follow the UK approach, given that South African patent law is very similar to UK patent law.

“It’s also important to know that  South Africa has a so-called ‘deposit’ or ‘non-examination’ patent  system, which means that patent applications are not examined in regard to merit. Instead, the validity of a patent only becomes an issue if it’s raised in legal proceedings, usually as a defence to a claim of infringement.  This means that you can effectively patent anything in South Africa, and it means that there are hundreds, if not thousands, of software patents in South Africa which may or may not be valid. Microsoft alone has some 300 software patents in South Africa.

De Beer says it remains a contentious issue whether or not to allow the patenting of software in South Africa “There are those who feel that it stifles software development in this country, but there are others who think that patenting provides South African software developers with the means to compete with the foreign giants on an equal footing.”

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