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 Preliminaries

            I should precise that I am particularly concerned with the question, being personally invested into FFII and having actually begun my lobbying internship for the same association the 27th of April 2006, in Brussels. I have already done a case study concerning FFII and EICTA lobbying relating the vote of the European Parliament on July 6th, 2005. That’s why, as I am a natural supporter of FFII, some parts of this study may appear subjective or unfair towards FFII “opponents” like BSA or EICTA. But the interest of this paper may be the point of view of an “insider” attempting above all to produce a brief political analysis on lobbying processes.   

The European Commission Consultation on Community Patent


In January 2006, the European Commission started a consultation on a project that, if it goes according to current plans, will result in the legalization of software patents. The project is the Community Patent. The European Commission asks any interested party to fill-in a questionnaire  with their views. While the essential idea, having EU-wide patents, is a good one, the current Commission proposal would transfer EU and member state legislative and judicial power to the European Patent Office, “which would effectively legalize their hitherto illegal practice of granting software patents” as to FFII President, Pieter Hintjens. 

                                                   
FFII vs EICTA

The Foundation for a Free Information Infrastructure (FFII) is a non-profit association registered in several European countries (Germany, France, England, etc.), which is dedicated to the spread of data processing literacy. FFII supports the development of public information goods based on copyright, free competition, open standards (like Linux project). More than 850 members, 3,000 companies and 90,000 supporters have already entrusted the FFII to act as their voice in public policy questions concerning exclusion rights (intellectual property) in data processing. The FFII is also a European lobby issued from civil society and concentrating its very actions on MEP and mobilizing public opinion on the Web. The FFII is seriously opposing the community patent, which are said to be devastating to the software industry, tearing down any possibility of innovation. Europe's software industry would fall victim to unscrupulous extortionists. A cartel of large corporations will crush smaller competitors. Answering the European Commission Consultation, medium enterprise Red Hat specialised in free software development, finds that “a multiplicity of litigation systems would lead to forum shopping, inconsistent enforcement, and confusion in the market place. In addition such an approach will place an extreme burden on SMEs”.

Its major opponents are dominant U.S firms like Microsoft or Apple advocating for unlimited extension of software patentability in Europe. These firms are represented by powerful lobbies like BSA (Business Software Alliance) in the U.S or EICTA (European Information & Communications Technology in Europe). Combining 32 national digital technology associations from 24 European countries with over 50 direct company members,  EICTA altogether is told to represent more than 10,000 enterprises in Europe with more than two million employees and revenues of over €1000 billion. Its major actions are disinformation and financial pressure on European Commission to promote U.S patent system in European Union. EICTA calls itself the virtuous protector of free market and innovation.


Lobbying the European Commission and Parliament

The Foundation for a Free Information Infrastructure  (FFII) began by questioning the validity of the procedure, based on the serious lack of accessibility, which means that a majority of EU businesses are completely excluded from answering. That is to say, the European Commission consultation appears to be particularly unfair to small and medium EU business, comparing to the U.S majors clearly favourable to the Community Patent and practising financial lobbying on European Commission. So, FFII recommended participation to those businesses that are able to do so, since this will demonstrate to what extent businesses are affected.

The battle of interests between the two lobbies opposes two asymmetric visions of software financial system, liberalism and social-liberalism. While FFII practising “open diplomacy” organize legitimate information campaign toward MEP and web community, cheating EICTA pressures the European Commission. FFII’s victory would only mean parliamentary democracy’s victory and Europe’s general interest, being technically preserved from pressures from aboard. “Open democracy” means more transparency and effective hearings of all stakeholders…


The results of FFII Lobbying and other perspectives

           Following a formal complaint by the FFII to the EU Commission's President Barroso, and meetings between the FFII and the Commission, the Commission has agreed to extend its deadline from 31 March 2006 to 12 April 2006. The FFII has submitted its answer to the consultation organized by the European Commission on the Future of the Patent Policy in Europe last Wednesday 12 April.

 
To be continued 

            Brussels, on the 12th June, the European Commission was organized public hearings on the future of patent policy in Europe. The FFII was there and actually began fundraisings to finance its lobbying action.

            Moreover, EPLA project (European Patent Litigation Agreement) is on the way. That is to say, if European Commission Consultation on the Future of the Patent Policy does not make good results as to the European Commission or European Patent Office, an international agreement superposing to Community law would be the option to legalize software patent. The project is recent and FFII still have counter-attacked into sending “Open questions on EPLA to hundred MEPs “friends” to make them react in the following days. We hope they will address these very questions and points the patent problem.


12.10.06 Europe vs US: which IP strategy?

In the context of dematerialisation of products and the emergence of knowledge society, intellectual propriety rights (IPR) are of growing importance. A well-sorted patent-portfolio increases the competitiveness of enterprises and contributes to general prosperity and economical growth. For intellectual capital is the resource of the future, patents can be considerate as intellectual propriety (IP) weapons for many reasons (R&D, benchmarking, business intelligence and suing concurrent businesses). Patents should be better strategically used by important and medium-sized structures. Europe and US particularly diverge on the very spectrum of IPR. While US authorise a quasi-unlimited legal protection of any trivial invention, Europe refuses to patent everything that blow out human’s mind. Some sectors are sensitive, e.g. software or drugs. 

What are the states and evolutions of IP systems in these two different models?

The US national strategy is actually to promote patentability in every sector without restriction though there is a tendency in US is to reform the IP system to limit abuses. The US global strategy is to influence the normalization process and diffuse of their specific model principally through bilateral treaties (e.g. Free Trade Agreements with special IP closes) outside the sphere of the World Trade Organization.

In Europe, the strategy has been to limit patentability since now. With the liberalisation process, there is a serious tendency to get closer with the US model. In the software sector, see the recent aborted directive on the computer-implemented inventions in 2005 and the future European Patent Litgation Agreement (EPLA) which FFII, an European NGO, regards as an "IP horse Trojan" meant to introduce US standards destabilize European software economy

In the software sector, the strategy – as elaborated by the French depute Bernard Carayon – might be to promote interoperability to break Microsoft monopole for instance, encourage the development of free software and oppose software patentability (counter-influence)



08.10.06 Why Business Intelligence is taboo in France

Business Intelligence is extremely recent in France contrary to Anglo-Saxon countries. Its first apparition came officially with “Rapport Marte” in 1997. Business Intelligence has been denying since a long time. The first obstacle resides in its definition, its ideological miscomprehension. The dominant Anglo-Saxon definition defined Business Intelligence as the process of collecting sensitive information to make business plus-value. The synergy between public authorities and national enterprises may be an important part of this process
 
But in France, there are also some cultural obstacles to the practice of Business intelligence. These structural hindrances are first the consequence of the two World Wars: European have been growing pacifist since the butchery of 1914-1918 and the shameful defeat of June 1940. There is no more combativeness. The term of “war” has been becoming taboo like in Germany

Moreover, there is an important defiance of politicians toward intelligence services resulting in part from notorious scandals (from the accusation of Alfred Dreyfus at the beginning of the 20th century to the attack of Greenpeace Rainbow Warrior in the 1980’s)

Intelligence services in France are not only despised by politicians but they do not serve directly national enterprises because of the relative absence of public-private partnership, and incapacity for French enterprise to collaborate, put together sensitive information and organized in solid network. Concurrence between national enterprises in France appears to be more important than the necessary solidarity of these in the context of globalization!

07.10.06 Why Lobbying is taboo in France

Lobbying is generally viewed as an obscure traffic of influence in French. This spontaneous denial of lobbying originates in the French idealist comprehension of democracy. This dominant paradigm in Europe poisoned the action of interest groups regarded as opposing the realisation of the general interest by public authorities. Paradigm can be defined as a pre-analytical font determining scientific theories in a civilisation like would say Thomas Kuhn.

The European paradigm takes its origins in the French Revolution of 1789. Briefly, it implies a Jacobean unitary conception of the Nation excluding in theory any interventions of corporations in the public debate. Thus, Le Chapelier Act dated of the 14th June of 1791 banned interests groups from the political arena. The relation between the Government and citizens must be the most immediate one and not adulterated by some intermediate private corporations. Today, this deep-rooted collective belief sets up the defiance of French citizens toward lobbies. This Jacobean ideology is inspired from Jean-Jacques Rousseau who said that “nothing is more dangerous than the influence of private interests in public policy”.

In the French law you can observe the defiance toward interest groups; see Art.3 of the French Constitution of 1958: “National sovereignty belongs to People through its Deputies or Senators and Referendum. No section of people or individual can appropriate it”. Consequently, there is an absence of legal regulation of interest groups though existing. The recent European Transparency Initiative might be an issue to regulate lobbying activities, an initiative supported by the French corporation of lobbying groups, AFCL (Association Française des Conseils en Lobbying et Affaires Publiques).

Lobbying has clearly of a higher legitimacy in Anglo-Saxons countries such as in the US. This might be cultural as said Alexis de Tocqueville, the investment of US citizens in public policy through a multitude of associations defending private interests. 

Americans of every age, conditions, and cultures keep associating. No only have they commercial and Industrial associations to which everyone participates but they have thousand of other species: religious, moral, grave, futile, general and particular, immense and very little ones; Americans associate themselves to celebrate, organizes seminaries, build inns, sell books, send missionaries everywhere; thus, hospitals, prisons or school are created.  

How lobbying is legally defined in the US? Refering to the « Lobbying Discolure Act » (1995), lobbying is defined as: « Any oral, written or electronic communication to a covered official that is made on behalf of a client […] » (Definitions, « Lobbying Contact »). In the US Constitution, it is a fundamental right for citizens to form groups to defend private interests. It is a also another comprehension of the notion of common good percieved as the agregation of private interests while in France common good is indivisible and transcend one's interest. 

Joseph Schumpeter proposed a deconstruction of the idealist conception of democracy, tearing down its very principles that the rationality of people determination implying the existence of a clear and unique finality. The evidence of a clearly defined common good is demolished by Joseph Schumpeter because largely abstract and undetermined, explaining that there is no entity consisting in a unique and determined general interest on which people would rationally agree, and may it exists, it could not be put into practice. Why? Because people are fundamentally egoist, they are constantly seeking for their own private interest in despite of any public general interest. Consequently, the conception of a general will issued from a unified corpus is not realist. Common good can only be identified as the agregation individuals' interests. Consequently, interest groups can be legitimate.

Joseph Schumpeter’s deconstruction of the Jacobean ideology implies an individualistic re-definition of general interest defined as the aggregation of private interests. The author refers directly to Adam Smith’s economic conception of common good. The general interest is generally better served when individuals conduct themselves selfishly. This paradigm, which is dominant in Anglo-Saxon countries such as in the US, authorises indirectly the formation of corporations or interest groups aggregating private interests susceptible to influence public authorities. This pragmatic approach of policy, legitimating lobbying activities differs totally with Jean-Jacques Rousseau theory of “Contrat social” categorically excludes the influence of private interests in public policy.

We may suppose that the Jacobean paradigm, though deep-routed in France and in many Latin countries in Europe, will evolve in a pragmatic way because of the European Union construction and the globalization process. 
 

28.09.06 The Concept of Open-Lobbying

Lobbying defined practically the practice of influencing public authority. In that sense, a lobby or interest group seeks to influence the legislative process in its favour. It is possible to determine two different kinds of lobbying: NGOs’ open-lobbying and business lobbying from industrials. While NGOs practice a transparent lobbying grassroots based, industrials relayed on grasstops lobbying based in great majority on financial pressures. The particular example of the FFII (Foundation for a Free Information Infrastructure) seems to illustrate my definition of open-lobbying.

In France, lobbying is commonly associated with a non-democratic and obscure traffic of influence. However, there are many ways to practice influence, referring to the particular example of NGOs which relay on a large pool of militants, a massive e-lobbying and public relations seeking for public opinion. 

It is even possible to speak about open-lobbying with the example of the FFII, a European NGO promoting open standards, interoperability and advocating against software patentability. I use this new paradigm to define FFII lobbying, pointing out the free information infrastructure used to diffuse free accessible and contestable information because based on the Wiki. Briefly, the quality of the information diffused remained on its refutability like Karl Popper would say. There are no ideological contents. This open-source lobbying authorizing a technological transparency permits set the conditions of a free debate.   

The concept of open-lobbying, defining a transparent and democratic practice of influence relaying on a free information infrastructure that is open-source, has German philosophical origins. Indeed, Jürgen Habermas developed the idea of a principle of discussion based on the Kantian moral. The ethic of rational communication set the minimal conditions for human beings to proceed to a “productive” verbal exchange. The benefit of a public diplomacy is based on four idealistic conditions:

Initial establishment of universal conditions of rational debatePrivilege of communicational reason banning strategic and interested behaviourAuthentic research of true banning defiant and unfaithful manners   Use of logic declining sophistic arguments and sceptic attitudes

In a sense, FFII open-lobbying would incorporate these minimal conditions in its practice of influence and thus producing confident information. FFII would be implementing the “European Transparency Initiative” in advance. 

Transparency may be used as a weapon against discrete business lobbying too. NGOs benefits in Europe of a high degree of legitimacy comparing to powerful firms privileging only networking and financial. The critical solution for these firms is to convert artificial their practice of lobbying into a grassroots lobbying (astroturfing).

See also: http://en.wikipedia.org/wiki/Open-lobbying


28.09.06 European Transparency initiative

Today's situation in the European Union (EU) is critical; citizens are defiant toward institutions, they do not have the feeling to be European, the feeling to build something together. The causes are the reminiscent nationalism and the growing individualism, the disinterest for politics and too many scandals dishonouring the political class. In his speech of the 20th October 2005, Siim Kallas, Vice President of the European Commission, said:

The European Union is facing a crisis of political legitimacy at a moment of major global change. France and The Netherlands have rejected the draft European constitutional treaty. Opinion polls show eroding support for European integration throughout the European Union. According to the latest Euro barometer poll citizens’ confidence in the European institutions fell significantly during the first half of 2005, to one of the lowest levels recorded since 2001

As to Siim Kallas, the right answer to restore confidence in the EU is to increase the level of transparency. Too many citizens regard Brussels as a “black box” in which decisions are taken in complete obscurity. Lack of knowledge turns the European Union into an anonymous entity in which unknown people produce mysterious measures 

Transparency is needed to gain the trust of the public. But what Siim Kallas sees exactly behind the concept of transparency in politics? The “third pillar” of the European Transparency Initiative concerns lobbying activities. Presently, there are about 15.000 lobbyists established in Brussels, while around 2,600 interest groups have a permanent office in the capital of Europe. Brussels, the European capital, is the second place in terms of lobbying activities (behind Washington D.C., the World Capital). Here is their approximated distribution: European trade federations (32%), consultants (20%), companies (13%), NGOs (11%), national associations (10%), regional representations (6%), international organizations (5%) and think tanks (1%). Siim Kallas, in his speech, utter effectively: 

There is nothing wrong with lobbies because each decision-making process needs proper information from different angles. But transparency is lacking. There is no mandatory regulation on reporting or registering lobby activities. Registers provided by lobbyists’ organisations in the EU are voluntary and incomprehensive and do not provide much information on the specific interests represented or how it is financed. Self imposed codes of conduct have few signatories and have so far lacked serious sanctions

The need to regulate lobbying is all the more urgent under the light of the Abramoff scandal in Washington and the massive impact on the lobbying scene in the US. For as you will have probably understood, if there is a “K Street” in Europe, there is neither “Lobbying Disclosure Act” nor “Foreign Agents Registration Act”. Lobbying remains a “taboo” word in Europe and it is highly probable that a legal acknowledgement would ensure a societal one. It is clear transparency contributes, in particular, to enhancing the credibility and legitimacy of the activities of lobbyists. I would dare to say that Transparency in politics becomes a high reached value in our post-modern democracy

Here’s the state of the long-term process to regulate lobbying

* 3rd May 2006: adoption of the Green Paper on a European Transparency Initiative.
* 31st August 2006: end of the open public consultations launching a debate on lobbying, on the introduction of legal obligations for Member States to publish the information about the beneficiaries of funds under shared management, as well as on the Commission’s consultation practices 

Here is an exemplar of the AFCL (Association Française des Conseils en Lobbying et Affaires Publiques), the French lobbyist major corporation.


Mr Siim KALLAS
Vice-President
European Commission
200 rue de la Loi
B-1040 BRUXELLES

Paris, 2 March 2006-09-27

Dear Mr Kallas,

Following my letter of May 10th 2005 and on your recommendation, myself and Thierry Kunicki, secretary general of the AFCL, met with your Deputy Head of Cabinet Kristian Schmidt on July, 19th 2005.

On this occasion, we presented the French Lobbying Consultants Association (AFCL), which was founded in 1991, and discussed lobbying practice in France, as well as the differences between the European and the American systems.

We also pointed out the voluntary Code of Conduct AFCL’s members have adopted when te association was created and revised in 2005 to set the highest of professional standards. Needless to say that the recent lobbying scandal in the US highlights the relevance of such a high-standard ethical approach.

As we told Mr Schmidt, we strongly support any action that may contribute to reinforcing the legitimacy and deontology of our profession such as the “European Transparency Initiative” you have launched. All lobbying professionals should fully and openly take on theur responsibilities, for example by publicly signing the implementing a common Code of Conduct. Legislation could not bring further warrant to this commitment, and we hence fully agree with the self-regulatory approach you encourage.

You can be assured that the AFCL will contribute actively to the forthcoming consultation on lobbying and transparency which will be launched soon by the Commission in the form of a Green Book. We would welcome the opportunity to discuss our contribution with you and would like to propose a meeting at your convenience.

In the meantime, we will keep on explaining to both the politicians and the media here in France the common vision which grounds the Commission’s approach and the action we have been leading for over 15 years.

Yours sincerely,

 
Jean-Christophe ADLER
President


27.09.06 The French Antipatriotism

I am French and I am denying my own country. This paper is not nationalist and I am not an extremist. But as a French student in political sciences, I have to reckon that there is a profound disease in France concerning the notion of patriotism. Why there is patriotism is criticized in France? What are the main consequences on the dynamism of economy?

France is one of the sole countries where patriotism is a “taboo word” and regarded as not justifiable though absolutely necessary and legitimate. Patriotism can be defined as the national investment into the defend and illustration of one’s country’s grandeur. There are two main reasons to explain this unfortunate deficit of nationalism with important consequences on the dynamism of economy as to Christian Harbulot, initiator of the French School of Economic Warfare. The two grounds are the absurdity of the First World War with some frightful human costs and the shameful defeat of June 1940

The consequences of the illegitimacy of patriotism on economy in France are a lack of vital investment into the active defence of our enterprises abroad, the absence of an efficient partnership between public sector and private one and an offensive firms’ network to gather strategic information

Today, there is an urgency to build together European patriotism to build a strong European economy to challenge the omnipotence of the US for instance


26.09.06 Illustrating the software patent threat: the Blackberry Case

Briefly

Blackberry is a product of Research In Motion (RIM), the innovative leading marketer of wireless solutions. Since 2001, RIM has been sued for infringing five software patents held by NTP. In 2006, RIM had to pay $612.5 million to settle a patent lawsuit with NTP. Presently, RIM is being sued by Visto. The Blackberry case illustrates that software patent are dangerous to innovative and competitive businesses. The Blackberry case is not an isolated one. Recently Apple and Creative Labs have been engaging in a software patent war, undoubtedly an expansive and non-profiting one. If software patent were legalized in EU, as it is in the U.S with the USPTO, they would not serve innovation and free competition. They would certainly used by powerful companies to sue innovative and high-profiting SMEs


RIM, a model of innovative and competitive company

Research in Motion (RIM) is the leading manufacturer and marketer of wireless solutions for the worldwide mobile communications market.


The USPTO context

For most of US history, patents had traditionally been issued in tangible objects. Thus, the USPTO took a hard line against granting patents only on intangibles like software or “business methods”

All that changed in the 1980s, when Congress concentrated patent’s appellate duties in a single court – the Court of Appeals for the Federal Circuit. Over time, that court changed course on software and other questionable areas of patent, transforming the system from one that was highly conservative to one that’s much more liberal

The result was a rush for software and other patents that began in the 1990s and continues today. The irony of the patent system is that while it’s relatively easy to get a patent, the vast majority of the assigned patents are completely worthless. Yet companies like NTP were smart enough to realize that if you played the odds, there might be a billion-dollar case out there somewhere

RIM vs NTP

It was in this environment that David Stout, co-founder of New Technologies Products (NTP), a former examiner and experienced patent lawyer, filed for a series of patents premised on wireless e-mail in the early 1990s. Arguably his patents should never have been granted; the idea of “wireless e-mail” is just too obvious to merit patent

NTP did not make the popular a wireless e-mail product, like the now ubiquitous RIM’s product Blackberry. But NTP had five trivial patents concerning wireless e-mail technology. These software patents enabled NTP to sue the profitable RIM

Hear is the chronology of the Blackberry case

November 2002. Accused of infringing five patents belonging to NTP, RIM is first condemned to pay 23.1 million dollars in a simplified procedure.

August 2003. In vain, the Canadian company makes the decision to go the Court of the first instance in August. The judge raises the condemnation to 53.7 million dollars and prohibits the selling of Blackberry terminals on the American territory. The only problem is that the U.S market represents nearly 70% of the RIM’s sales...

2004. To suspend the application of the judgment, RIM decides to inject appeal. The company makes publish very good financial results

March 2005. Having a really good financial health, RIM tries to reach an amicable agreement with NTP. They first agree on an amount of 450 million dollars. But finally NTP does not sign the agreement because of a different concerning the licences.

2006. To avoid the threat of the prohibition of the Blackberry, RIM settled its case with NTP and agrees to pay 612.5 million dollars.

As we can see below, the amount of the amicable agreement paid is far beyond RIM profits in 2005. How can we say that software patents aims at promoting free innovation and fair competition?

Last close: $83.64
Change from previous: down 12¢
52-week intraday high: $105.39
52-week intraday low: $62.01
P/E ratio, trailing: 29.72
Dividend yield
- Market cap: $15.48-billion
Price/book ratio: 6.96
1-year total return: -.90%
Revenue, fiscal 2005: $2.07-billion
Profit, fiscal 2005: $382.08-million

Source: Bloomberg Financial Services

RIM vs Visto

Visto, mobile E-mail technology to wireless carrier’s marketer, recently won a case in which a federal court ordered Seven Networks to pay it $3.6 million in damages for patent infringement

Emboldened by the win, Visto attorneys that same day filed a lawsuit against RIM, claiming it infringed on four of its patents, three of which are identical to those in Visto's lawsuit against Seven Networks

The future of RIM

Three scenarii remain possible for RIM

1. RIM maintains its existing strategy and is overwhelmed by competition. Being a high-profiting firm, RIM will probably remain the target of patent firms. And the Canadian firm will carry on accepting patent claims, even unfair ones, because it is cheaper than fighting them. But RIM will have alos to lower prices to face the concurrence and resist software patent attacks. And finally, having lost all possibility of profits, all investors left, RIM will disappear

2. RIM increases its software patenting and lowers prices to compete. RIM will have to adopt the same strategy of of concurrent firms and will lose his money in patent attorneys instead of increasing innovation

3. However, a third optional scenario is possible that is software should not be patentable. If patent system was not applied to software in the US, RIM would remain competitve and would not be threatened by patent trolls. Software market will be better with copyright protection

The software patent threat in Europe

Software patents granted by the European Patent Office (EPO) belong in majority to US (43%) or Japanese (30%) powerful Companies, thus creating software patents oligopolies

If software patent were legalized in the European Union, they would surely be used by these companies to sue innovative and competitive EU businesses

EU Businesses are often small and medium enterprises that cannot afford a long and costly trial

Moreover, the legalization of software patent would encourage the development of « patent trolls » as specialised firms in patent litigation collecting strategic patents to sue high-profiting companies to get royalties. A patent troll neither performs research nor manufactures products incorporating its patented technology. A patent troll is a non-producing entity profiting from the patent system failures. Basically, patent trolls are bad for software economy

If software patents were legalized in the European Union, as it the case in the US, such menace as patent troll and other Blackberry case would be reality

 
     
 
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