FW: [EW] Small company makes big claims on XML patents

Developed by the World Wide Web Consortium (W3C) between 1996 and 1998,
XML has become the dominant way of describing and structuring data so
that it can be shared across the Internet and displayed in any browser. 

But now executives at Scientigo <http://www.scientigo.com> , a small
software maker based in Charlotte, NC, say the company owns two U.S.
patents (No. 5,842,213
<http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PAL
L&p=1&u=/netahtml/srchnum.htm&r=1&f=G&l=50&s1=5,842,213.WKU.&OS=PN/5,842
,213&RS=PN/5,842,213>  and No. 6,393,426
<http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO1&Sect2=HITOFF&d=PAL
L&p=1&u=/netahtml/srchnum.htm&r=1&f=G&l=50&s1=6,393,426.WKU.&OS=PN/6,393
,426&RS=PN/6,393,426> ), that cover one of the fundamental concepts
behind XML: the idea of packaging data in a self-defining format that
allows it to be correctly displayed wherever it travels. 

Scientigo CEO Doyal Bryant says the company plans to capitalize on the
patents either  by reaching licensing agreements with big corporate
users of XML or by selling them to another company. 

The very idea of patents on software is a contentious one, though. In
July, the European Parliament threw out a bill that would have legalized
software patents across all EU member states. In the United States,
where the courts have recognized software patents for some time, groups
such as the Electronic Frontier Foundation (EFF) have charged that many
of those patents are too broad and granted without adequate review. 

In EFF's view, that makes it too easy for patent holders (sometimes
labeled "patent trolls" or "patent assertion companies") to threaten
legal action against alleged infringers if they don't pay license fees. 

That's why actions like Scientigo's, which could affect every company
that uses XML, spook the community of Internet engineers and Web
developers. 

Most programmers and computer scientists agree that open standards like
XML are a big reason why the Internet works as well as it does and has
spread as far as it has. The majority of the people who invented the
protocols underlying basic Internet features -- packet switching,
electronic mail, the World Wide Web -- never bothered to copyright or
patent their contributions, or else have waived most of their
intellectual property rights under various open-source licenses. As a
result, anyone can build new content or software on top of existing
Internet technologies without having to obtain permission or pay a fee.
So if a business is thinking of building a new product or service using
technologies they think are open source, the sudden prospect of owing
license fees can dampen enthusiasm. 

Take the ongoing case of SCO versus IBM. After a Utah company, SCO, sued
IBM in 2003 for allegedly including Unix software code owned by SCO in
its version of the Linux open-source operating system, Linux adoption
slowed in the business world for more than a year. 

Bryant says Scientigo's claims -- which relate to XML "namespaces," a
universal system for naming data types, which was added to the XML
standard by the W3C in 1999 -- are not a repeat of the SCO episode.
According to him, the company simply wants to find a way to earn a
reasonable return on its intellectual property. And when South
Carolina-based e-business software developer Commerce One auctioned off
a collection of their own XML-related patents last December for $15.5
million, a way appeared. 

"It was the Commerce One transaction that really got our attention,"
says Bryant. "If there was no interest in this [technology], there
wouldn't have been a last-minute bidding frenzy by the major players." 

According to Bryant, the company so far has held talks with more than 40
companies about its patent claims, including Microsoft and Oracle, and
this week Bryant says he's finalizing an agreement with an IP licensing
firm.