Patent threatens to cripple Australia's e-commerce

Australian enterprises are now liable to pay royalty fees to a Canadian company in order to conduct business over the Internet, says a senior IT executive.

Australian enterprises are now liable to pay royalty fees to a Canadian company in order to conduct business over the Internet, according to information received by an industry figure.

Canadian firm DE Technologies has applied for patents in 26 of the world's most developed economies in connection with a broad framework for software design allowing international transactions that DE Technologies claims it developed in the early 1990s.

The company claims that anyone that conducts a broad range of of e-commerce transactions across international borders electronically or develops ecommerce platforms is using its' intellectual property.

Matthew Tutaki, head of business development with Web technology firm Syntropy, told ZDNet Australia he had received information confirming that IP Australia had awarded DE Technologies' patent claim.

Technically, said Tutaki, this means that every company conducting business transactions across Australia's borders over the Internet is liable to be slugged with a royalty fee.

"It's simply ludicrous" said Tutaki who believes the situation is so urgent he is dropping everything to lead the charge to have the situation reversed immediately.

According to Tutaki, the awarding of the patent could cost Australian industry hundreds of millions of dollars a year.

"If you are Toyota in South Australia and you are purchasing mufflers from a manufacturing plant in Indonesia and you use the e-commerce platform in order to purchase those mufflers then technically you should be paying a $US10,000 licensing fee for the pleasure of conducting your business over the Internet," said Tutaki.

At the same time, said Tutaki, the supplier in Indonesia would be liable to pay a royalty fee. Tutaki reasons that the royalty fee would also apply in the case of popular online stores such as book seller Amazon.com.

Tutaki has drafted an urgent letter to all members of the Senate and parliament, insisting that they direct IP Australia to review and overturn the patent.

Tutaki said that unlike a defined e-commerce software solution, DE Technologies patent claim isn't a unique enough as a proposition to warrant its award.

"It's like a Catholic charging for the air you breathe because their CEO invented the Universe," he said. "That's the stupidity of the situation."

DE Technologies has been involved in a high profile clash with United States Congressman Rick Boucher who has argued vehemently against approving the patent in the U.S.

IP Australia did not respond to ZDNet Australia's requests for comment in time for publication.

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