2 August 2004

Trade deal a free kick for US software racketeers

The outcome for Australia is clear. We are a net importer of software. So software patents, by allowing monopoly profits with monopoly pricing and monopoly standards of quality, can do us a great deal of damage.

A large quantity of the Australian software budget is spent overseas buying such monopoly products. So encouraging the already existing drift towards US-style software patent laws that favour the existing incumbents could result in this expenditure increasing indefinitely.

This is especially sad since there is one area in software where Australia punches well above its weight, and that is in collaborative open source software. In the open source model, when a number of people and companies find they have a need for a software product, they co-operate to create it.

This allows firms and individuals to gain access to the product for significantly less than it might otherwise cost them. Since the cost of replicating software is almost zero, a free licence to use the software is granted to all comers, who are then free to improve it themselves and feed those improvements back to the original users.

Software built on this principle is widely used. It runs most of the internet, most of the world wide web, and provides a vast number of free and open tools for software engineers. It is also used as part of many, many commercial products, such as Apple's OSX operating system, IBM's web products, Sun's java offerings and so on.

Australian software developers excel in this area, and are enthusiastic and frequent participants in world software.

Unfortunately, open source software, and open competition based on open engineering standards, represents a serious threat to those existing software producers who are too inefficient to compete on a level playing field, or who simply want to lock past successes into an indefinite tax on the future.

Like the canal owners of old faced with the threat of railways, some desperate (or greedy) businesses are attempting to use the courts as a substitute for talent.

Already in the US litigation and threats of (often unspecified) patent and copyright violation are used regularly by software giants to either suppress completely, or acquire on favourable terms, smaller and more innovative firms.

Importing this legal circus to Australia could only harm the smaller players in the local industry, both open source developers and independent software companies.

I don't think it is at all clear that either major political party knows what the FTA's impact on the country will be. The current farce of Labor planning to announce its policy as soon after the Senate inquiry reports as the government did after the JSCT reported suggests that it's about spinning the electorate rather than analysing the beast's impact. Tony Windsor told the House of Representatives during the FTA debate:

Independent Member for New England, Mr Tony Windsor has joined with other Independent Members of the House of Representatives Peter Andren (Calare), Bob Katter (Kennedy) and Michael Organ (Cunningham), to oppose the Federal Government�s attempt to push the Free Trade Agreement (FTA) with the United States of America through the House of Representatives before proper scrutiny has been applied to whether the FTA is in Australia�s best interest.

�This so called �Free� Trade Agreement should not be allowed passage into legislation before it has undergone strong scrutiny and the public should not be fooled by Government attempts at a pretence that proper scrutiny has been carried out.

�I am on record through a question to the Prime Minister in Parliament in February this year when this arrangement was first proposed, as requesting the Prime Minister to hand the agreement to the Productivity Commission for an Independent and thorough review.

�The Joint Standing Committee on Treaties (JSCoT) delivered the first attempt at a report on the FTA yesterday, yet within twenty minutes, the Government has attempted to drive the agreement through the Parliament in the next day,� Mr Windsor said.

The thing is being rushed by both sides and no-on is reading the footnotes.

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