Orion Health backs moves to block patents

Negatives outweigh positives, says one of New Zealand's biggest software developers

Ian McCrae, CEO of Orion Health, which claims to be New Zealand’s largest application vendor, supports a Commerce Select Committee proposal to rule out software patents in New Zealand.

The negatives of a patent system outweigh the positives, he says.

“Obvious things are getting patented. You might see a logical enhancement to your software, but you can’t do it because someone else has a patent. It gets in the way of innovation.”

If an inventor has a really original and outstanding idea, then a patent might be merited, he says. But, in general, software patents are counter-productive and are often used obstructively.

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“There are patent trolls, people who buy up companies just to get their patents and then pursue other people aggressively for supposedly infringing them. There are small companies filing patents for the sake of pursuing others, not to commercialise the innovation.”

Just increasing staff numbers at the Intellectual Property Organisation of NZ to look more deeply into what may be trivial patents, as suggested by Intergen’s Chris Auld, will not fix the problem, he believes.

McCrae does not believe a patent offers an innovative software company like his any practical protection in any case.

“We would have to change the nature of our business and become a patents company,” he says. “We are a software company. Our best protection is to innovate and innovate fast.”

He says a patent may gain some short or medium-term windfalls, but companies can’t patent their way to success.

“I admire the open-source guys. They put a lot of effort into this and it looks like they have won,” he says.

Others in the software industry come down on Auld’s rather than McCrae’s side, however.

Brett O’Riley, CEO of industry body the NZICT Group says his phone ran “red-hot” after the select committee’s report.

While recognising that many things about software patents don’t work, many software developers who are NZICT members still see a patent for their original work as a fundamental property right, O’Riley says.

There are plenty of software companies that choose not to patent, he says, such as those in the open-source camp; but both options should be available.

“Both open-source and proprietary models are valid and a developer should be free to choose one or the other,” he says.

Like Auld, O’Riley sees the protection of a patent as an important element in obtaining funding for further development.

“One of the first questions a potential funder will ask is what protection there is around your intellectual property,” he says.

IP protection is particularly important when it comes to taking a product to overseas markets, says O’Riley. An overseas move is virtually a necessity given the small size of the local market.

“If you don’t have a patent on your product it is a pretty significant constraint.

“Like it or not, that is the way business is conducted globally,” he says. Successful New Zealand technology exporters have made extensive use of patents.

O’Riley welcomes a “healthy debate” between pro and anti-patent lobbies, but for the select committee to rule out patents at this stage is “a pretty draconian step”, he says.

Orion Health is not a member of the NZICT Group.

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Lawrence D'Oliveiro


Glad to see somebody understands how to run a business.

This reinforces the point that patents are of little use to innovators in a growing business, instead they tend to be used by incumbents in a mature business to block new competition.

Dave Lane


"both options should be available." What a ridiculous suggestion. An apt analogue would be to say that both options should be available for people either wanting to or not wanting to dump toxic waste into the local drinking water. The only ones who win with Software Patents are lawyers and (to a lesser degree) monopolistic incumbents (how's that second appeal against the i4i patent infringement conviction going, Microsoft? Can you still sell MS Office in the US?).

Thomas Jefferson


It is hardly any wonder that Ian McCrae would come out with this position given the utter lack of innovation that occurs at Orion. The portal and integration products they sell are mediocre copies of other products on the market, and it is no surprise that they have had to make dozens of people redundant in the last two years. What is surprising is the level of ongoing media interest in this company as a success story and the failure to report on the ongoing rounds of redundancies and the associated HR practices.

Ian McCrae


Patents are intended to reward those who make a PROFOUND invention or discovery. However this is not how they are being use in the software industry. The ideas being patented are frequently obvious technology progressions and are generally being used to commercial blackmail or trip up others, i.e;

1.*We have large companies being extorted by small companies.
2.*Failed smaller companies with patent libraries have been bought by companies of lawyers solely interested in suing anyone they can.
3.*The large multinationals patent anything and everything (so if another multinational should attack then they can respond)#..and this ends up in a nuclear arms race
4.*Companies patent obvious idea (like electronically transferring health data ) and then endeavour to tax everyone.

All of these things are bad for innovation and society.

While there is the view that a dramatic tighten up of software patenting is all that is needed, I am not persuaded that this is practical or would work.

For these reason I am of strongly the opinion that software should NOT be patentable!

Chris Auld


"While there is the view that a dramatic tighten up of software patenting is all that is needed, I am not persuaded that this is practical or would work."

Can you please provide some more reasoning on this? This is very much the approach that I would propose.

Here is a question for you: Why should PROFOUND inventions in Biotechnology be protected but PROFOUND inventions in software not be.
Is software simply not amenable to profound invention?

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