NZ Software Patent Story

Conformity to international conventions has its benefits. Adopting common standards for things like measurement and electric voltage, and medical qualifications helps us innovate and compete, and improves our quality of life. Some conventions, however, are not beneficial.  On 19 September 1893, our kiwi ancestors decided to break with international convention, becoming the first country in the world to grant women the right to vote

Today, our community of kiwi software developers has the opportunity to help New Zealand make another principled stand.

We kiwi software developers have been watching with horror as our colleagues in other parts of the world tear themselves and their profit margins apart as a result of litigation, extortion, and liability created by the abuse of software patents.  Rather than providing an incentive for innovation, software patents have become a new class of commercial weapon. Today, they are wielded by market incumbents and non-practicing entities to control markets, discourage competition and extort royalties from successful innovators. There is no reason to think that our own local industry will not eventually succumb to similarly destructive forces.

In 2010, a Commerce Commission Select Committee, as part of our transparent legislative process, heard many submissions from commercial software developers. Nearly all requested that software be excluded from patentability - that we essentially innoculate our domestic industry against the scourge of software patents.

The Select Committee agreed, recommending unanimously that the new Patents Bill explicitly exclude software. Their report said:

We recommend amending [the Bill] to include computer programs among inventions that may not be patented... A number of submitters argued that there is no "inventive step" in software development, as "new" software invariably builds on existing software. They 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 Select Committee did, however, make one important caveat: that inventions containing embedded software should still be patentable:

We received advice that our recommendation to include computer programs among the inventions that may not be patented would be unlikely to prevent the granting of patents for inventions involving embedded software. We recommend that the Intellectual Property Office of New Zealand develop guidelines for inventions containing embedded software.

For the past two years the wording of the Patents Bill included a specific exclusion of for computer programs. To be sure, some industry participants, particularly multinational corporations and Intellectual Property lawyers, but also a small number of kiwi companies have fought that exclusion. Rather than requesting the exclusion be reversed, their gambit has been to request a rewording to the legislation. They pitch this as a "harmonisation" with European Union patent legislation with the goal of adhering to international convention. 

On 28 August 2012, Commerce Minister Craig Foss announced a Supplementary Order Paper (SOP) to change the Bill by adding clause 10A(2) as part of a new clause 10A. On the face of it, the rewording appears to support the exclusion of software from patentability, as the Select Committee recommended. Students of patent law, however, will recognise the proposed wording - the addition of two small words "as such" to the legislation - as the source of  substantial controversy in European. Ultimately, as  software patent supporters well know, those two small words have created much legal confusion and effectively invalidated the intented European Union software exclusion, and software is, for most intents and purposes, patentable in the EU.

The Minister describes the change as a "minor amendment". Unfortunately, it is not. It is a major change that undermines the Select Committee's recommendation to exclude software patents.

We do not want this same ambiguity to tarnish our legislation and undermine the Select Committee's unanimous, clear recommendation to exclude software patents. We would rather lead the world by actually excluding software patents, while ensuring that inventions containing embedded software are not excluded.

If you are a software developer in New Zealand, please help our government make the right decision on Software Patents. Add your weight to this measure to support our weightless economy by signing this petition.