Power backs deletion of software patents

Minister plans to back Commerce Select Committee recommendation

Commerce Minister Simon Power says the Government will back changes proposed by a select committee that will mean computer software can no longer be patented.

Parliament's commerce select committee proposed amending the Patents Bill, which passed its first reading in May last year, after receiving many submissions on the controversial issue.

See also: Thumbs down for software patents in NZ

NZOSS expects powerful opposition to patent reform

The recommendation has attracted considerable attention outside New Zealand, particularly from the open source software community, which claims large software makers have gamed the patent system and stifled innovation.

At present, software can be patented so long as it produces a "commercially useful step". The committee said it accepted that new software invariably built on existing software and that software patents were often granted for "trivial or existing techniques".

Power says the issue is not simple or straightforward. "However, the Government believes the committee has dealt with the issue in a sensible manner and has found a reasonable solution."

The Government would support a select committee recommendation that the Intellectual Property Office develop guidelines for inventions that involve "embedded software" — software that is built into a physical device. Software will still be protected by copyright, which prevents outright copying.

Open Source Society president Don Christie welcomed the decision, while Microsoft expressed reservations.

Christie says there are lots of high-profile cases of "patent trolls" trying to milk the efforts of people doing real work. "New Zealand is a net buyer of software and that is having an effect in that we are paying more for software."

His own firm, software developer Catalyst IT, was now having to indemnify customers for potential intellectual property infringement stemming from open source software that it on-supplied.

"How on earth can we predict what is going to happen on a global scale?"

Large software companies are earning significant royalties from software patents, he says. "More chilling is the way they are able to use their patent portfolios to strong-arm people."

Microsoft New Zealand national technology officer Mark Rees says the company is concerned by the prospect of patent protection for software programs being removed.

"In New Zealand we don't do product development, but we do have a large number of partners that do. It is really important for New Zealand that those organisations are able to commercialise their ideas and intellectual property protection is a key element of being able to do that successfully."

Rees says obtaining a patent had been a necessary step for some export-oriented software firms when seeking investment capital.

"We are not sure why software entrepreneurs shouldn't be given the same protection afforded to leaders in other industries. It is not clear to us why they have been singled out."

Christie says it would be a special case if software was patentable.

"Nobody thinks that academic papers or lawyers' arguments in court should be patentable. Software is a case of putting ideas into code in the same way that you would in a novel."

Software Association past president Wayne Hudson, who is a co-founder of intellectual property law firm Hudson Gavin Martin, says researching and filing a software patent is a lengthy and expensive process because of the "myriad patents being filed in virtually every space". If granted, they were costly and difficult to enforce.

Large software firms had used patents "in a war among themselves", but had not tended to pursue small software firms for infringement.

Equally, there were few cases where small software firms had managed to secure patents and defend them successfully.

"For the most part we have got small software development houses as our membership base and they are going to have a different interest to the IBMs and Microsofts of this world who can afford to play the patent game. Most of our members can't."

Most members of the association are probably apathetic, given copyright is generally sufficient to protect what they have got, he says.

Rees says the irony is that the reform of the patent law is an opportunity to deal with some of those issues. "Microsoft believes there is a need for patent reform in many jurisdictions and this was an opportunity for us to lead the way."

It would talk to its partners and to industry body NZICT before deciding whether and how to press the case for patents, he says.

"It is a conversation about what the New Zealand ICT industry wants and where it wants to go. It would be a shame if it became about Microsoft."

Despite being "a cynic" about patents, Mr Hudson says software will become harder to protect through copyright as more applications are delivered online, where innovations can be more easily dissected and copied.


Dave Lane


This is a wise move by the minister. Good on you, Simon. Efforts by law offices (let's be clear here: lawyers are the <em>only</em> ones who stand to benefit from overturning the software patents exclusion). This decision is good for ALL domestic software developers <em>and software users</em>.

As a submitter on this issue to the Commerce Commission's Select Committee, I must say I was surprised and impressed by the level of understanding of this rather technical issue among the participating MPs.

Dave Lane


Especially when a tiny little Canadian company called i4i who are taking Microsoft to the cleaners on patents. Did you know that technically, Microsoft isn't allowed to sell Microsoft Word in the US!? Hoist on their own software patents petard.

If Microsoft support patents in NZ, it's only because they have more money here relative to NZ companies, and as a result, assume they'll prevail in any software patent litigation... And they can use the threat of software patent litigation as a major stick to beat independent software companies in NZ into "seeing things their way"... Despicable.

Please note, contrary to what Mr. Rees assers, the NZICT <b>does not</b> represent kiwi IT businesses. Its constitutional voting structure <em>ensures</em> that it is led, and suits the agendas of, major overseas multinationals - like Microsoft - who do business in New Zealand (and send most of their profits overseas). It is not the voice of the vast majority of kiwi IT practitioners, who work for smaller local companies or as independent consultants.



Patents are currently used more to kill competition than protect ideas.
"Patent trolls" are quite good at attemepting to extort money out of companies using at best dubious patents.
These trolls do not actually produce anything it should be noted. They simply use the threat of patent litigation in the hopes the companies will settle out of court because it is cheaper than the litigation.

Copyright is what should be used to protect software, not patents.

Oh and on a side note , IBM does hold a large number of patents. Over 300 of them they have allowed Open Source developers to use with a promise to never sue as long as the developers abides by one of the open source licences, basicly they have stated they don't like patents either, and only use them defensively.

albert in chicago


Congratulations, NZ! You are doing the right thing, and doing the right thing means you'll get a lot of flack from US multinationals. Microsoft, for example, spends millions of dollars a year lobbying to keep its monopoly. A few years ago, they spent $1.5 billion in legal bills alone (granted some was for defending itself). I look forward to seeing a lot of innovation in your software markets.



Patents are absolutely impossible thing in software world. I accept patents for industrial hardware but not in software. They are so much different cases. Besides in world of internet these software patents only bring big mess. Let's them die.

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