No Opposition to Software Patent Exclusion from NZ Software Companies

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The Ministry of Economic Development has published the submissions in relation to the draft guidelines on for the Examination of Patent Applications Involving Computer Programs discussion document. The call for submissions was clear that this was not an opportunity to revisit the decision to exclude software patents, saying “"In releasing the draft guidelines for comment, it is not intended to re-open the debate regarding the patentability of computer programs, or whether an amendment should be made to clause 15(3A). This consultation exercise is intended to ensure that IPONZ gives proper effect to the provisions of the legislation, taking into account of the intentions of the Commerce Select Committee, in a manner that is likely to find support from a New Zealand court."

There were in excess of thirty submissions, primarily by the legal community, including patent lawyers and legal societies. There were also a few manufacturers and international business lobby groups. While the majority of these submissions were critical of the proposed exclusion of software what was notable by it's absence was a single submission by a New Zealand owned commercial software development company.

By far the largest number of submissions were received from patent lawyers who may see the exclusion hurt their practises. An exclusion of software patents would in a single stroke eliminate the risk of patent infringement for New Zealand software development companies. It is understandable that those earning a living from patent litigation would be opposed. While it may be understandable it is not desirable to follow a path leading to increased litigation like experienced in the United States.

So what do our major software exporters think of software patents? Ian McCrae of Orion Health, the largest software export earner in New Zealand has been open about their opposition to software patents, with McCrae saying "In general, software patents are counter-productive and are often used obstructively. We are a software company. Our best protection is to innovate and innovate fast."

In the paper “A Generation of Software Patents” released last week by James Bessen of the Boston University School of Law we see an examination of software patents over the last twenty years. The paper finds that a overwhelming majority of software patents are obtained by a few large companies, while most software firms do not directly benefit from software patents. It identifies the increasing legal risks to software companies with the number of lawsuits involving software patents tripling since 1999. The study concludes by saying “it is notable that after more than a decade of experience, this economic experiment played out in a highly innovative industry still lacks clear evidence of net benefit. ”

There have been a number of articles written by both law firms and legal societies critical of the software patent exception, along with some media attention. What these articles have failed to articulate is why software should be patentable. Other forms of expression like books, films and music are not covered by patents. There has been no clear case made identifying how software expression is different to other forms of expression. Neither have they explained how software patents are beneficial to either society as a whole or to the software industry. The only identifiable entities that do benefit are multinational companies and lawyers. Making a decision based on their interests is, in the opinion of the NZOSS, not the best policy for the well being of New Zealand.

Peter Harrison, Vice President, NZOSS