Syntropy heads up e-commerce patent fight

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Syntropy's business development director Matthew Tutaki has cried foul over IP Australia's decision to grant a patent to DE Technologies, a Canadian company that is trying to generate revenue from international e-commerce transactions.

Tutaki claimed that granting the patent gives DE ownership over all international e-commerce transactions conducted by Australian business, allowing the company to charge license fees related to these transactions.

IP Australia is the government agency which is responsible for granting rights, patents, trade marks and designs.

He claimed the move could cost Australian e-tailers and other business conducting international e-commerce transactions hundreds of millions of dollars a year.

DE's patent is a software design for international transactions--a cross border electronic pipeline from buyer to seller, handling everything from letters of credit to shipping, freight forwarding, exchange rate calculations, import duties and tariffs. It is believed that IP Australia granted the patent in February this year.

DE has also previously been granted patents in New Zealand, the US and Singapore covering international e-commerce processes.

In July 2001, DE Technologies' CEO Edward Pool planned to make New Zealand a "cyber-Switzerland" and wanted to relocate his company's operations there. DE also claims on its Web site that Pool was the first to "conceptualise that present computer technology combined with the global capabilities of the Internet could revolutionize the integrated import/export transaction".

The New Zealand Herald last Wednesday reported that DE is now demanding that Internet retailers pay licensing fees to the company to avoid being shut down.

DE has already threatened a two-man New Zealand operation with legal action, demanding a signing fee of US$10,000 and a royalty rate of 1.5 percent of Web transaction value. It threatened the business with an injunction unless it paid up for a three-year licensing fee, the NZ Herald reported.

While no Australian organisations have received similar threats, Tutaki claimed it's just a matter of time. “It's only a hop, skip and a jump across the Tasman [to Australia]. This needs to be stopped before they get to the point where they start charging Australian e-tailers. It's probably going to be sooner rather than later,” he said.

“We're talking about all e-commerce transactions as they relate to international trade. Does this mean that patent jurisdiction takes over from international trade agreements?” he said.

Tutaki has compiled a letter to IP Australia to have all existing patents held by DE reviewed or held pending a full investigation into the implications of the issue of such patents.

“The whole sorry situation of allowing one person or entity in a foreign land to attempt to hold the global e-commerce community to ransom is ludicrous. The threat this off-shore company has made to businesses in New Zealand should be equally worrying to business here in Australia,” he said.

Tutaki has backed United States congressman Rick Boucher who also argued against the US approving patents of this kind. Tutaki suggested that the same position must be formalised by Australian authorities. He intends to approach the Australian Federal Attorney General Darryl Williams and Senator Richard Alston to see if the matter can be resolved before action is mounted against NZ businesses in the courts.

He said this is not just a case of holding business to ransom, but is an attempt at restricting fair and free trade of products and services in a global market.

IP Australia could not be contacted at time of going to press.


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