Thumbs down for software patents in NZ

Commerce Select Committee tips its hat to open source submissions

Open source software champions have been influential in excluding software from the scope of patents in the new Patents Bill.

Clause 15 of the draft Bill, as reported back from the Commerce Select Committee, lists a number of classes of invention which should not be patentable and includes the sub-clause "a computer program is not a patentable invention."

"We received many submissions concerning the patentability of computer programs," says the committee in the preamble to the Bill. "Under the Patents Act 1953, computer programs can be patented in New Zealand, provided they produce a commercially useful effect.

"Open source, or free, software has grown in popularity since the 1980s. Protecting software by patenting it is inconsistent with the open source model and its proponents oppose it. A number of submitters argue that there is no 'inventive step' in software development, as 'new' software inevitably builds on existing software."

Software can still be protected by copyright and by the terms of its licence.

A requirement for a genuine "inventive step" -- a development that would not be obvious to a person skilled in the appropriate field -- is a feature of the Patents Bill, which in general imposes tighter requirements than the existing Act before a patent can be obtained.

"[Some submitters] felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques. In general we accept this position," the committee says.

It admits that there was some doubt over embedded software, which forms an integral part of a machine. It sought ways of making a distinction between embedded and other software and decided drawing a "clear and definitive" line would be too difficult.

In addition, "we received advice that our recommendation...would be unlikely to prevent the granting of patents for inventions involving embedded software," the committee says.

NZ Open Source Society president Don Christie applauds the move in his blog Pass the Source.

"New Zealand MPs of all parties are to be congratulated on recognising what to many, for many years, has been patently obvious," he writes. "There are some members of that committee that paid particular attention to the detail of the debate; there were also lots of submissions made by patent lawyers in favour of patents.

"These MPs weighed up the arguments and came down against software patents. This is ground-breaking and visionary. I congratulate our law makers today.

"To all who took the time and effort to write submissions and who took the unique step of coming to Wellington and backing up those submissions orally...congratulations."

Reaction to the change among a broader range of developers at a Computer Society meeting in Wellington last night was also positive.

Christie and other supporters acknowledge the battle is not won yet. The Bill now goes back to the full Parliament for its second reading.

It has also been divided into two parts; the sections concerning registration of patent attorneys have been extracted into a separate Bill, which will be delayed, because of the need to co-ordinate these provisions with Australian law.

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So does this mean that the use of a peice of software to acheive a result in an environment not addressed before 'can' still be considered innovative and as such could be patented? (i.e. the innovation is in where you put it and how you use it rather than the code itself.)

PL Hayes


Even if the arguments and evidence for software patent eligibility were stronger than they actually are, this would likely be a good decision for NZ: NZ software developers will still be able to obtain patents everywhere else in the world if they wish, but at the same time, the home market will remain free of the software patents of foreign and multi-national companies. IIRC (a pie chart I saw in ~2005) even the EPO database is dominated by US and other foreign held patents (at least for the software field).



Either this reporting is bad, or the committee got swayed by really poorly made arguments, judging from the quotes in the article.

"Open source, or free, software has grown in popularity since the 1980s. Protecting software by patenting it is inconsistent with the open source model and its proponents oppose it."

What does opposition of the "proponents of open source" have to do with law-making that could affect ALL software developers, open source or otherwise, and even more importantly, the people who *invest* in those developers? Should someone be kept from patenting something just because a *subset* of people in the field do not like it? These days you find open source hardware projects. If *they* don't like patents, would hardware patents be excluded too?

Open source may be all over the place today, but what about *developing* stuff like video codecs? I highly doubt the open source model could make fundamental advances like that in the wild. All open source software of comparable complexity (Linux, ffmpeg, you name it) is built by referencing research paid for by institutions which, I am pretty sure, would like to protect as their Intellectual Property. Research isn't cheap.

"A number of submitters argue that there is no 'inventive step' in software development, as 'new' software inevitably builds on existing software."

A completely ridiculous argument. How many patents, or indeed any inventions, in any field do not build on existing technology? This argument would suggest that nothing is patentable.

"[Some submitters] felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition,..."

The only sensible argument here, but the significant word here is "CAN". "..CAN stifle innovation and competition...". Were there *any* statistics or peer-reviewed studies cited to back this up? And to make it worse, this sentence is followed by...

"...and can be granted for trivial or existing techniques."

What? Isn't this a shortcoming of the authority *granting* the patents rather than the concept itself?

"...would be unlikely to prevent the granting of patents for inventions involving embedded software"

Seems like a loophole. Probably means you throw language like "computer-implemented method" in front of the claim and say, "Hey, we're claiming the computer not the software!"




I agree the article does conflate F/OSS issues and patents a tad. However, the arguments against software patents are still overwhelming.

There are plenty of studies indicating that software patents have a detremental effect on innovation and are particularly harmful to SMEs:

"J Bessen and R Hunt, An Empirical Look at Software Patents, Federal Reserve Board of Philadelphia Working Paper No. 03-17"

Rivette & Kline, 1999, "patents can be used to delay or stifle innovation through the use of patent pools, patent thickets, exclusive licensing, and other abusive patent enforcement tactics"

Torrance, Andrew W. and Tomlinson, Bill, Patents and the Regress of Useful Arts(May, 28 2009). Columbia Science and Technology Law Review, Vol. 10, 2009. Available at SSRN:

Pricewaterhouse Coopers study into nonpracticing entities in patent litigation:



The TRIPS agreement requires all fields of technology to be protected by patent. Does this mean the committee felt software is not technology, i.e. it is part of the fine arts not useful arts? Copyright protects only expression. Do software developers only care about how the code is expressed? Software functions can be performed by hardware. Why distinguish between the two?

Peter Ashford


As a software engineer, I applaud this decision. There are plenty of cases in the US where patents have prevented software being developed or competition being applied in the market. Software implements algorithms, algorithms are clearly ideas and ideas are supposed to be non-patentable.

As Donald Knuth - one of Computer Science's founding fathers said - if software patents had been around when he was producing software, much of what he made would have been illegal.

"Open source may be all over the place today, but what about *developing* stuff like video codecs? I highly doubt the open source model could make fundamental advances like that in the wild."
- oh, so Theora doesn't exist eh? Open source HAS developed video codecs.

Case in point of patents screwing innovation: the in-development HTML 5 standard is in stasis due to the inability to decide on the provision of a video codec BECAUSE OF PATENTS:

"Patent encumbrance is one of the driving forces behind the HTML 5 video codec controversy. The patent licensing requirements mean that H.264 codecs can't be freely redistributed, making the format a non-starter for Mozilla and most other open source browser vendors. Opera also objects, saying that the licensing fees are too high. Mozilla and Opera strongly advocate Ogg Theora as an alternative because its freedom from known patents could ensure that there are no licensing barriers that prevent ubiquitous adoption.

Apple objects to Ogg Theora, claiming that the lack of known patents on Theora doesn't rule out the threat of submarine patents that could eventually be used against adopters"

I notice that most of the pro-patent comments here are woefully unaware of the actual state of affairs regarding patents and how they are actually applied to software in the real world.

Michael Seadon


I objected to a Microsoft patent, on the grounds that I had done this work years before the patent was granted by NZ Patent Office. When it was pointed out by the NZ Patent Office that on appeal I could be forced to pay all legal costs if my objection failed I stopped. My own, limited, money was no contest if all Microsoft's resources were against me.

The patent in question was the XML format for documents.



What... you ask?

An intelligent committee of politicians... This has to be a first.



My 2 cents

The argument that patents stifle innovation has been proven many times to be rubbish. More and more patents are filed every year... have you noticed a reduction in innovation? No, on the contrary, innovation and the number of new technologies continues to increase, ironically in-step with the number of patents? Curious huh?

Patents often receive poor publicity because of poor reporting by the media. Journalists don't have a clue how patents work so they will often misreport and make the patent seem like an injustice, thereby making the public emotional about it - as they try to do with all media.

One common error is the media reporting granting of what seems like simple ideas. However, the media often simply cites the patent's abstract or description in summary. But this is not what the patent is for. A patent only provides a monopoly on the invention AS CLAIMED, nothing else. So read patent claims, not the descriptions.

"....and can be granted for trivial or existing techniques. In general we accept this position," the committee says."

Ummm, how can our laws be made by people who don't understand even the fundamentals of patents? A patent CANNOT be for something already in existence. That is the fundamental rule of patents. The invention has to be new.

"trivial" is of course completely subjective. In any case, patents cannot cover something that lacks an inventive step which should get rid of any 'trivial' inventions. This is true even in NZ where our Law is 57 years old.

Many people are incensed with software patents for what appears to be simple ideas that are now ubiquitous.

However, people forget that it takes many years to get patents through most countries. It can take 10 years+ to get a software patent through the USA. This is because of the huge backlog of applications as well as the difficulty the examiners have of searching prior art.

By that time the technology has moved so quick it becomes 'mainstream' and so when the patent is granted and the owner tries to recoup some of their development costs they get a harsh backlash. In the meantime larger companies and others have copied the inventor's idea and made squillions and then receive the support of the public. How is this fair?

Software has proven difficult for the patent offices purely because the technology has moved so quickly and so expansively (thanks to the internet) that the patent offices simply don't have the resources to adequately determine if the idea is new and inventive.

Anyway, after this rant I don't actually think this law change will hurt NZ too much. Perhaps foreign software companies won't bother marketing in NZ any more as copycats will be able to freely operate much more cheaply. I guess that will make software cheaper in NZ.

Also, NZ is such a tiny market, our developers probably are not concerned about it anyway. Most of the rest of the world has software patents so they can benefit elsewhere.

There's also still Copyright, though this is infinitely weaker than patents as it only covers if someone "Copies".



Last I checked there were no software patents in the EU. Or atleast in quite a few countries. Each time lobbyist tried pushing through software patents in the EU it was struck down. As a side effect the EPO also has no mandate in the EU and all those patents are a lot of hot air.

I know that here in Slovenia swpats are not recognised as valid.

Hans-Peter St#rr


The big difference between software and other technologies is that it consists of extremely many ideas, and almost none of these has any significant development cost that needs to be recovered.

I can see the necessity of patents in industries where you need to invest millions of dollars to create new ideas, which could then easily copied by other companies. or instance if medical drugs could not get patents, nobody might go through the immensely expensive processes of finding new ones.

In software, however, it is a rare exception that generating a single innovative idea here is very expensive, so patents are not necessary to ensure innovation. Its value lies in the well executed composition of elements, which is not patentable, anyway - the appropriate way to protect software investments are copyright laws.

So the primary business case for software patents is to go after competitors, which is not good for competition and a serious latent threat to innovative small businesses who do not have the ressources to check for every small detail whether someone snatched a patent one needs to work around.



While I agree with some of the comments of the previous poster ("patents do not necessarily limit innovation), I do not agree with expanding the concept to software - or other areas where patent law has barred the use of patent protection. If you have been following the news stories in the US, lives and people's health, not innovation, have been put at risk due to the granting of patents on basic genes or DNA components. Potential licensees would like to see patents extended to everything, but that is just the easy way out of truly competing in a free market.

I would also comment that I do not subscribe to the notion that technology move so fast that 'innovation' becomes commonplace before a relevant patent is granted. If you actually dig into the history of much of this innovation, it is *usually* based on "prior art" in legalese terms, or something that shouldn't be patented based on existing patent law. Where technology has moved quickly, along with government patent offices, is in granting patents long before the courts (and case law) catches up and establishes clear guidelines. Here in the US, with software patents, the number of companies trying to patent 'algorithms' first discovered by the ancient Greeks is overwhelming (not to mention anything close to an 'algorithm' described since that time).

Patents were invented not to stifle innovation, but to promote it. By providing a time-limited protection to inventors, they no longer needed to keep everything secret. They could publicly disclose their invention, get protection from others capitalizing on their hard work, license the technology and benefit from their effort. In return for this protection, the inventor agreed to give up that protection after a certain amount of time and allow everyone to benefit from this invention (the "public good" aspect of government intervention in this area). Further, you could only patent processes: you cannot patent the light bulb, but you can patent the process for making a specific light bulb, etc.

Whether software, in specific instances, delineates specific processes is arguable. However, the literally billions of lines of code written to date, in reality, means that no one can definitely prove that a particular method for accomplishing a task in software is either unique or non-obvious. Imagine trying to patent a particular way of using a pen. The rest of the software patents really describe UI, which courts have viewed as having only limited protection even under copyright law.

I support this committee's view of software patents, and hope that the US finally gets it together and joins the rest of the world is throwing out this unwelcome expansion of patent law semantics. It is not so much that software patents stifle innovation; it is that software patents have no basis in either law nor actual software development.

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