Justice Sandra Margulies wrote, “The Legislature did not anticipate the use of electronic signatures when it drafted the statute and has since taken no action that can be construed as approving them for this purpose. “

“The Legislature…is the proper body to determine whether and how to incorporate this technology, with its new risks and equal promise, into the process of initiative endorsement.”

This is ruling stands in marked contrast to the Utah Supreme Court ruling in an earlier post.  In this case the Utah judges ruled that by not making rules regarding the use of electronic signatures and by endorsing UETA, as well as “liberal interpretation” of the nominating petition they implicitly allowed electronic nominating petition signatures collected on a web site.  This ruling led Utah to pass SB165 explicitly forbidding electronic signatures for ballot initiatives or nominating petitions.

These cases certainly bring up an issue.  Will electronic signatures result in better government?  The LA Times talks about it in today’s op-ed piece, but I think that the discussion is just beginning.  What do you think?

Rpost clearly spends a lot of money  protecting their IP as you can see from this page featuring all of the infringement suits in process.  If you look a little harder you can find even more, one of the companies that isn’t listed but was also sued in East Texas is Amazon.com.

These lawsuits also show the mythical status that East Texas courts have for patent lawuits.  RightSignature (Santa Barbara), Farmer’s Insurance (Los Angeles) and Rpost (Los Angeles) all have their principal place of business within a couple of hours of each other, so why have a trial in East Texas?

This tactic is so common that a local Tyler Texas directory site even has a post on it: East Texas and Patent Trolling.   Isn’t the US patent system grand?

Last summer Utah’s Supreme Court ruled that electronic signatures on a petition to nominate a gubernatorial candidate must be honored.  The court overruled the state’s election commission and required that signatures on an online nominating petition be accepted, see Anderson v. Bell.  As a result of this ruling Mr. Farley Anderson was listed on the ballot for Utah governor in 2010.  While Mr Anderson was not successful in his campaign to become the governor of Utah this ruling is likely to have significant impact on electronic signature gathering in elections in Utah and beyond.

Meanwhile a case in California is wending its way through the courts.  Michael Ni, a founder of Verafirma, submitted an electronically stored petition containing his electronic signature to the San Mateo County Elections Office.  Verafirma is an electronic signature technology company focused on use of electronic signatures in politics.  His submission was rejected by the elections office and the rejection was upheld by the Superior Court in San Mateo County.  This is now being appealed at the state Court of Appeals and will probably be heard soon.

Briefs have been filed on behalf of Mr. Ni by the Asian American Action Fund, Citizens in Charge, the Humane Society of the United States, the National Taxpayers Union, the Electronic Signature and Records Association, Antonio Gonzalez, and Joe Trippi.  Links to many of the filings and briefs can be found on Verafirma’s Twitter feed.

Verafirma believes that the use of electronic signatures can dramatically reduce the cost of qualifying ballot initiatives, encourage more citizen involvement and increase the quality of legislation submitted to voters.   This seems reasonable and  I think that the effects of reducing friction and increasing participation in our democratic process could be staggering.  What will a democracy of the late 21st century look like?

Not surprisingly the Free and Open Source community is filing briefs in support of the decision and patent attorneys and large patent holders such as IBM are filing briefs urging the court to overturn the Circuit Court’s decision and/or test.  For a some coverage of the range of opinions this article in The H is informative, even though it arises from an “Open Source” perspective.  And for a nicely written brief in support of the Circuit Court and the “machine or transformation” test Red Hat’s amicus brief is a fairly readable statement of many of the arguments in defense of open software.

Then there is a Microsoft et. al. brief which supports rejecting Bilski’s patent but also rejects the “machine or transformation” test and strongly supports the patentability of software, reaching way back for precedent:

To be patent-eligible, therefore, a claimed method must involve one or more disclosed physical things–that is, it must describe a series of steps that use physical means to produce a result or effect in the physical world.

Indeed, this standard (and not “machine-or-transformation”) has been the law for more than a century. See Tilghman, 102 U.S. at 727 (“Whoever discovers that a certain useful result will be produced, in any art [i.e., process], machine, manufacture, or composition of matter, by the use of certain means, is entitled to a patent for it”) (emphasis added). As explained in a Nineteenth Century treatise, the patentee must describe “a practical application to some useful purpose . . . and his specification must show the application of the principle to such a special purpose, by its incorporation with matter in such a way as to be in a condition to produce a practical result.” George Ticknor Curtis, A Treatise on the Law of Patents for Useful Inventions as Enacted and Administered in the United States of America § 242 (4th ed. 1873) (emphasis added).

I don’t know much about Mr. Curtis’ Treatise but it sounds pretty authoritative. In fact the filers of the brief even chose to add emphasis to the parts that one presumes make their software patentable!

The “machine or transformation” test is a major bone of contention for many of the “in support of neither party” briefs.  These are often filed by patent attorneys or companies such as Microsoft, IBM and Yahoo that own lots of patents and spend lots of money on patent attorneys.

So you may have concluded that eSignature is sympathetic to the arguments of the Software is Free group and you would be correct! My sympathies originate from the pragmatic perspective that it is almost impossible for a small software business to be certain that they aren’t violating somebody’s patent.  This is made even more odious by patent trolls and world domination quotes from the likes of Mr. Gates and Mr. Myhrvold. This can’t be good for encouraging innovation and rewarding invention.

I am strongly in favor of copyright protection for software.  I believe that copyright protection combined with compilation and obfuscation should be adquate protection for software.  Awesome algorithms should be worth something!

I once asked a very smart friend that had invented some speech algorithms and founded a speech recognition software company  if his company had many patents.  His reply was no, they published instead.  Not enough detail to give away their secrets but enough to “make sure nobody else can patent it.”  This struck me as a beautiful thing at the time.

Utah, Washington, Oregon, North Carolina, California, Nebraska and Texas have all adopted electronic record and signature guidelines where they have chosen to license or register certificate authorities to do business with the state. In many cases they have updated laws that specifically required handwritten signatures as a response to their states ratification of UETA.

I am not sure how well they deal with the distribution aspect of issuing credentials, this has proven to be a challenge for the federal government as well when trying to deploy credentials for FDA and other governmental applications.  In fact, FDA regulation 21 CFR Part 11 on Electronic Signatures and Records, approved in 1997, is still not being enforced and when enforcement commences it is likely to be relatively lax.

As I have stated on other postings and papers this is still the crux of the problem.  This has led governments to adopt an ad-hoc array of electronic signature methodologies with some success but has thwarted ubiquitous adoption of electronic signatures government.  If people have any updates or success stories in this area I would love to hear them.

“According to the Consumer Protection Law, the processes for warranty papers and after-sale service papers have been done via electronic media since Jan. 1, 2008.

In 2008, as a result, 2.6 million signatures were not scribbled on paper in 54,214 transactions, thus saving 1.9 million pages of A4 size paper, which weighs 9.4 tons. This amount saved the felling of 1,600 trees, which equals 8 square kilometers of forestland. It also prevents 3,382 tons of greenhouse gas from being released into the atmosphere.”

Interesting math as it seems to assume that the documents are never printed, maybe a good assumption for this category of document.

Justice

The Best and Worst Laws of 2008

The NGO Law for People named the most fair and unfair laws of 2008 last week.

…

Law for People says the most fair and effective law of 2008 was the one adopted on March 14, 2008 about Electronic Signing and Electronic Documents. This law enables people to use an electronic document which has the same power as the hard copy of the document. Both documents are valid if they are approved by electronic signature. This would cut red tape and make the citizen’s relations with various organizations easier. The amendments to the Law About Public Registry is also a positive improvement, the NGO says. The amendments allow for a faster payment service, grant the Public Register the authority to identify the owner of a property, clarify the rights and obligations of the owners of immovable assets etc.

Law for People has been conducting annual monitoring of new laws since 2004, saying it wants to encourage the creation of just laws.

Also – Silanis had a recent webcast where Patrick Hatfield of Locke Lord Bissell and Liddell, LLP presented on recent case law around use of electronic signatures. You can download the presentation from Silanis or get a PDF summary from Locke Lord Bissell and Liddell. The gist of it is: Make sure that the intent is confirmed, i.e. make it very clear that the signer is aware of the affirmative action of the electronic “I agree.”  The courts will enforce the signature like any other, even in insurance recission cases!

An interesting point made by Patrick in the presentation: there are still no cases where the purported signer has denied that he signed the contract.  Does this mean that we are spending too many calories worrying about signer authentication?

Many electronic signature solutions use the ubiquitous MD5 hash algorithm to insure the integrity of digital documents. While methods for creating “collisions” for data signed with the MD5 hash have been known for a while, it is highly unlikely that such a collision would actually be a readable document.  So the use of MD5 as an internal document checksum for document integrity is probably not a big problem.

The problem is that researchers created a collision that produces a bogus digital signature.  This is foundational for SSL on e-commerce sites, and may also be used in electronic  signatures that use SSL digital signature algorithms and certificates as part of an authenticating signature.  This can be a big problem for electronic signatures.

Fortunately Verisign and many other certificate authorities had already begun the transition to SHA-1 as the signing algorithm of choice.  Now everyone can make sure that they update their SSL certificates for their digital signing solutions to certificates that are signed with the more modern SHA-1 algorithm and the makers of electronic signing/verifying applications should not honor MD5-based digital signatures on certificates associated with newly signed documents.

The original European Directive mandated that they would have interoperable e-signatures and electronic identification for government by the end of 2009, but it doesn’t look to me like they will make it. It seems that they now have an “Action Plan on e-signatures and e-identification to facilitate the provision of cross-border public services in the Single Market”

Gosh – and I thought that they were so far ahead of us!