16 April 2010

Software patents banned in New Zealand: advocacy and opponents

Software patents banned: As reported here and elsewhere, the parilament of New Zealand voted for a major patent reform bill that tightens the standards of patentability, especially with respect to software-implemented inventions, which are now broadly eliminated in New Zealand. The bill was drafted by the Select Commerce Committee after consulting the country's (open source) software industry, such as the Computer Society or the Open Source Society, which obviously convinced the lawmakers that patents are detrimental to open source software development and seriously stifle innovation. In this sense, the bill summarises that
Protecting software by patenting is inconsistent with the open source model, and its proponents oppose it. 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.
Saying that, the Commerce Committee is confident that the ban on software patents will not block companies from patenting hardware inventions that encompass embedded software, whereas it remains to be decided by the Intellectual Property Office of New Zealand what kind of embedded software is patentable.

Criticism: However, as reported here, there are not only happy faces in New Zealand now, especially since some buisiness voices expressed their fear that the decision damages investments that the New Zealand software development industry needs. However, it is said that those unhappy about the decision are limited to the local subsidiaries of major international patent holders (e.g. Microsoft), their association (NZICT) and their local business partners - as well as software patent attorneys. That is, the usual suspects.

In fact, Chris Auld, director of strategy and innovation at New Zealand based  Microsoft-specialist developer Intergen predicts in this article that any exclusion of software from the New Zealand patents regime will “suck the lifeblood” out of the New Zealand software development industry, since venture capitalists will be discouraged from investing in the industry and investors would be less willing to sink money into a project whose results will not have adequate legal protection.

He added that the justified criticism agains software patents should not have led to ban them at all but to overcome the under-resourcing of New Zealands Intellectual Property Office to especially improve prior-art searches and examination. Alternative ways of protecting software, such as copyright and licensing, would not offer as much protection as a patent, Mr Auld correctly analysed. He also criticised that the Commerce Select Committee has particularly listened to the open source lobby, which he finds rather passionate and religious about this issue - just like the campaigners in Europe one would like to add. 

Comparison to Europe: In the above referenced post in the New Zealand based Law & Technology blog, it is analysed in favour of the decision that
banning software patents will align New Zealand with the European Union and remove a significant threat to the local industry. The general unavailability of software patents in the EU does not seem to have held back the IT sector in that region (or indeed the development of the internet itself).
This view, however, is only partly correct, since software-related inventions may well (and comparatively easy) represent statutory subject-matter in the sence of Article 52 EPC (see my earlier posts here and here). Beyond that, such inventions may also be granted in Europe if the technical features of the claimed subject-matter solve a technical problem in a novel and inventive way. In this respect, the European approch on software-implemented inventions appears to be much more balanced and pragmatically as compared to New Zealand's stricht and open source influenced approach.