Patent nuisance travels across the Tasman

A controversial Canadian company has begun seeking tens of thousands of dollars from e-tailers in New Zealand for a controversial patent on e-commerce transactions – and may soon attempt the same in Australia.

DE Technologies is a Canadian IT firm - led by a president who is a qualified patent attorney - that has been attempting to have a patent approved for international e-commerce transactions since the late 1990s. The company finally succeeded in the US in October 2002, and has since successfully filed the same patent in New Zealand, Singapore and Australia.

The scope of the patent has only since been realised in New Zealand where DE Technologies hired Hamilton-based law firm Parks & Wells to send letters to local e-tailers claiming intellectual property rights for some of the features of their e-commerce sites.

The letter claims that by merely accepting international orders on their sites the e-tailers are infringing on the patent. In order to avoid legal action, they are asked to license the technology for a fee of $NZ10,000 to $NZ25,000 as well as paying a 1.5 per cent royalty on all transactions. The letter demands a response within a fortnight.

New Zealand’s e-tailers and Web hosting firms initially reacted with bemusement to the letter but have since realised the massive ramifications of the issue after realising that the Intellectual Property Office of New Zealand had already granted the patent.

The saga has rung alarm bells in the office of Matthew Tutaki, a vocal member of the IT community in Australia. Although he does not run an e-commerce site, Tutaki fears for the local IT industry if DE Technologies’ strategy in New Zealand travels across the Tasman.

Tutaki wanted to warn the industry that IP Australia granted the patent (PCFUS98/26220) to DE Technologies in February of this year, and as a significant amount of time has since passed without the patent being challenged, local e-tailers may be in for a rude shock.

“It appears this company is using New Zealand as a test-bed to see if it gets up,” Tutaki said.

“What the hell is IP Australia doing approving this?” he asked. “At no stage should IP Australia have allowed a foreign company the rights of ownership of e-commerce in this country.”

“This is like being the pope, and putting a patent on the air we all breathe, because you fundamentally believe that your CEO, God, invented the Universe,” he said. “It is ludicrous.”

Tutaki said that only civil action in the Federal Court could have the patent overturned as the review and response period for the patent has passed.

He would undertake a “personal crusade” over the marter, and was seeking support from the wider Australian IT industry, Tuitaki said.

In New Zealand, e-tailers have banded together to lobby against the patent (http://www.fightthepatent.co.nz/) and are considering legal action to force their Government to intervene.

Tutaki said he had discussed the issue with the Australian Government.

He said Government intervention would be required to save Australian businesses from having to fight the patent in the courts.

Interested parties can contact Matthew Tutaki at: matthew.tutaki@syntropy.com.au