The debate in the second reading of the Patents Bill yesterday afternoon was intense.
At the heart of it was why Commerce Minister Craig Foss had made, what on the face of it, seemed like an ill-conceived decision to change the wording of a key clause which will affect our local software industry adversely. By moving away from a position which blankly said a software program could not be patented, he has qualified this hugely by adding the following:
..prevents anything from being an invention for the purposes of this Act only to the extent that a patent or an application relates to a computer program as such
The “as such” change opens to the door to big multinational corporates being able to take advantage of an ambiguous clause to dominate and stifle smaller innovative software developers in court.
Foss claims it won’t. Labour, the Greens and NZ First claim it will. We don’t know what the Maori Party, John Banks and Peter Dunne think yet. I hope they’ll look at it carefully and listen to local developers.
The Kiwi software industry certainly thinks it will affect them badly. They put together a petition and in just 4 or five days with almost 1100 signatures asking the Minister to reconsider. And it might be worth noting that among the 1100 signatories are some of our biggest software innovators; Jade, Orion Health and Xero (PS: Xero didn’t sign, but their head of design did).
Now it emerges that, despite the on record commitments of previous Commerce Minister Simon Power since 2010 that the recommendation by the Commerce Select Committee to exclude software from patentability would stand, there were backroom meetings with the multinationals from the moment the Bill was reported back to the House, pressuring the Minister and officials to change their minds and open the door to software patentability.
Somehow the language used in Craig Foss’s amendment is precisely that requested by those lobbyists. This “as such” language both undermines the software exclusion to the point where software is, in fact, patentable, while at the same time it’s asserted to be the best language to implement a software exclusion? One of those positions is false. We know – and the pro-software patent lobby’s support for it is ample verification – that the “as such” wording will rapidly be used to circumvent the software patent exclusion.
Here’s the evidence. A blog post by NZICT, which represents those multinationals, including Microsoft and IBM specifically, requested that the Ministry of Economic Development change its language to that used by the European Patent Convention “because that language can easily be circumvented” and in effect undoes the software patent exclusion. The NZICT Group (claimed to have) had assurances from the MED that it was never the ministry’s intention to ban software from patentability in any case.
Note: this blog post has since been taken off the NZICT website. I wonder why?
Labour yesterday tabled this blog post in the House during the debate and raised questions about how this backroom deal was done and why the select committee’s intent had been circumvented and hijackedby the multinational’s agenda against the interests of our local software development industry.
It’s worth noting that the main MED actor in all of this is Rory McLeod, who is also the main IP negotiator on behalf of MFAT in the TPPA negotiations. Coincidence? I think not.
What does the government think it’s doing stifling our most important innovators. This is bloody ridiculous.
The Foss amendment now provides the pro-patent multinational lobby with exactly what they specifically requested in June 2010.
Yet somehow Foss and MED are trying to sell this as the most certain way to ensure a software patent exclusion. It can’t be both.
The Kiwi software developers vehemently oppose the Foss amendment because they believe that they will be vulnerable to multinational corporate patent suits on software inventions. This has proven the case in the European jurisdiction. There are hundreds of comments on the petition website from Kiwi software developers about this.
I have been contacted directly in the last few days by a Canadian software company which has planned to relocate to NZ because of the patent ban on software because it was a better environment in which to innovate.
I was told late last week about a synthetic biology start up which is a co-investment of $170m between NZ and Taiwan. It came about because NZ was seen as being proactive for digital start ups because of this Patent Bill sitting on our books.
In the US over the last 20 years, its been estimated that the cost to the US economy of patent litigation is half a trillion dollars. We don’t want the US system because it’s all about patenting this and that and patenting trolls who trawl the planet looking for inventions they can pretend to have ownership over. We don’t want the European system as it stands either. It’s the European system whose ambiguous “as such” has resulted in 30 years of expensive litigation, and has resulted in most software being patentable despite that being contrary to the spirit of the legislation.
What we want is a law that’s as clear and unambiguous as we can make it. That protects our innovators and allows the physical invention to be patented (such as a washing machine) but keeps the software code which runs the washing machine protected by copyright and not by patent.
The moment the prospect of patent litigation looms on the horizon, there’s only one group who benefits and that’s patent lawyers who can tie companies up in the courts for years. The big corporates don’t mind as they are protecting their market share and stifling competition.
Copyright adequately protects software development.
Software is lines of code, like music is lines of notes, or books are lines of text. Software is a collection of mathematical equations. In order to create new software you have to build on existing software.
Everyone – including National – has accepted that software patents should be excluded – I don’t think that’s being re-litigated here. What we need to take National to task for is the fact that the way they have chosen to implement the software exclusion won’t, in fact, work. Moreover, it appears that they’re consciously adopting the means for implementing it which fundamentally undermines their stated goal.
How can they claim, with a straight face, that the wording of the bill requested by the pro-software patents lobby – because it effectively reverses the exclusion – is the best way to exclude software patents? The same language can’t achieve both ends. It appears that, either due to incompetence or malice, the Minister and/or his advisors have adopted language which fundamentally undermines their stated aim of excluding software patents.
As I said in my speech in the House yesterday (9 minutes into this clip), we need to encourage our innovators not stifle them. Labour hopes the government will work that out before this Bill passes.
Patents exists purely to provide an incentive for inventors to create for the greater good. Patents categorically DO NOT exist “to protect an inventor’s investment”. Given that the software industry has spoken decisively about the language it wants to use to implement the broadly supported ban on software patents, why not accept that these people have done their homework.
Given that they are the ones who will have to live with this legislation from day to day, let’s accept that the kiwi software industry has offered better language for the software patent exclusion than the pro-software patent lobby’s preferred language proposed by Foss’ ill-advised SOP.
That’s why I moved an amendment this week to follow this statement:
10A(1) A computer program is not an invention for the purposes of this Act.
My amendment simply says
10A(2): Subsection (1) does not prevent an invention that makes use of an embedded computer program from being patentable.
This means a computer software program is not patentable. Fullstop.
Two observations:
- Comms and IT Minister Amy Adams claims her portfolio has nothing to do with software and patents. Extraordinary as she claims to represent the software and IT industry.
- David Farrar on Kiwiblog has been very silent. Would love to know what he thinks
The big problem is, of course, the fact that patents were designed to stifle innovation as innovation decreases profits. Someone comes up with an idea, someone else improves that idea and so the original idea is no longer selling which would mean that the original person no longer gets a return. Of course, that latter is only true in a capitalist society and the original person probably wasn’t getting much of a return anyway – the corporation that they worked for would be.
That would actually be wrong. Patents were put in place so that someone who came up with an invention could then have a monopoly in which they could get their investment and a profit back from the development of that invention. The only way that it doesn’t protect the investment is that it can’t force people to buy the invention.
Good post Claire. I am supportive of your SOP and do plan to blog more on the issue. Won’t be today as heading off to Mt Ruapehu, so probably Monday.
What a load of rubbish. What you are saying Clare, appears to be; because roads have been invented, it is impossible to bring railroads into existence. Yes it is possible to “invent” without just adding onto existing lines of code. IE, There is a difference between an accounting program and an innovation in software and I’m also not convinced Rod (Drury of Xero) knows what his head of design is up to so I wouldn’t take that signature to a petition as a sign of confidence. Clare, you have possibly been hoodwinked by these so-called open source community “representatives”. These guys, ie Don Christie are not innovators. They are a bunch of bludgers and whingers who do not want to pay license fees. They are the arbiters of the “open-source” religion opposed to software innovation. They are hesitant to back themselves in any invention in case they breach patent. This is not okay because business is not a non-competitive sport. If it were, that would be the end of innovation
I am puzzled as to why you object to, “as such”. Do you know what this means? The “as such” legislation merely confirms the status quo. That software cannot be patented unless it has an effect in the real world. This prevents the vexatious Amazon type “one click” patent but allows for innovation. There has to be a threshold for patentability otherwise why bother innovating? What you seem to be suggesting is a world where individuals have patentable ideas but no investors will back them. Instead of patent trolling, which limits the big damages to big companies, the behemoths will cherry pick the good ideas and copy them outright, there being no patent protection in place.
QC confirms “as such” will allow software patents
So, one of the Queens Counsel thinks that it will do the exact opposite of what the minister said it would do.
“Good post Claire”
“What a load of rubbish”
One’s right, but nearly always wrong.
And one’s a wrong’un and seldom ever right.
The opposition in waiting, fractured before the event.
The proposed amendment to introduce ‘as such’ will have little any particular effect on the assessment of patentability in New Zealand. With respect to the learned Mr Brown’s quoted comments – the amendment will not now allow something to be patentable that would have previously been unpatentable. To make that change there would need to be a change in the fundamental concept of ‘invention’ in New Zealand. The retention of reference the Statute of Monopolies 1624 (yes, 16) in the patent bill and all of the jurisprudence that is dragged along with it which will define the bounds of patentability. Only when this anachronism is removed from the legislation will things change. The rest is all window-dressing and handbags at dawn.
Previously software was patentable. The new legislation would have made it unpatentable except for the inclusion of “as such” into robbing it of it’s purpose.
Monique Watson
>What you seem to be suggesting is a world where individuals have patentable ideas but no investors will back them. … behemoths will cherry pick the good ideas and copy them outright
Let’s look at what the VCs say …
http://www.avc.com/a_vc/2011/06/enough-is-enough.html
http://www.feld.com/wp/archives/2011/11/the-real-cost-of-patent-trolls.html
http://www.webpronews.com/mark-cuban-patents-2011-08
http://www.usv.com/2010/02/software-patents-are-the-problem-not-the-answer.php
http://cdixon.org/2009/09/24/software-patents-should-be-abolished/
Least you think cherry-picking results, there are quite a few academic papers looking at the role of patents in innovation (weak) and in the case of software, Bessen actually showed it was negatively correlated. As a matter of public policy, a law should only be enacted if the social benefits outweight the detriments.
> They are the arbiters of the “open-source” religion opposed to software innovation.
This is a strawman argument, if each patent clearance takes $500 x #patents x #jurisdictions, as a business-owner software or otherwise, the deadweight costs escalate. If the only point is defensive patenting, then this creates an arms race which means more legal jaw-boning and less software-engineering.
Do you have a solution to the Notice problem? Can you define the boundaries of a software patent? I can give you the recent US case of Akamai v Limelight, where the user of the health portal was held to infringe. As for the notion of competition, NZ firms seem to welcome it so long as the playing field doesn’t have the goal posts moved by the referees.
Who cares what the VC’s think. That first link is a waste of time by the look of it.
I’m a housewife and I live in the real world. A world where innovators can’t protect the value of their business if they can’t patent, can’t make sales or attract investors.
It’s all redundant anyway. You can’t rule out patenting software because innovation is patentable regardless of the vehicle. Always has been and always will be.
“I’m a housewife and I live in the real world”
I’m an AL1EN, and any world that has a charity like the sally army bagged on a blogsite for feeding hungry people, needs more than an electro therapy jolt or two to redefine the meaning of ‘real’.
It’s mathematically impossible to avoid infringing on software patents
http://www.techdirt.com/articles/20120309/04304018046/why-its-mathematically-impossible-to-avoid-infringing-software-patents.shtml
Simply because it’s impossible to check every line of code to see if it infringes someone else’s copy-monopoly.
And for what? I have been writing software for over 30 years – most of the stuff that you write is “obvious next step”… and the fact that you’re not the first to arrive at that step doesn’t for a second mean that you copied it.
And even if you did… so what? It doesn’t hurt the culture of software at all – that’s one of the reasons the web is so vibrant – right-click; view-source. People learn from each other. It’s how it works.
Allowing corporations to “own” the letters of the alphabet (because that’s what this amounts to) is morally repugnant. It’s a recipe for a 1/2 trillion dollar legal bill, power accumulating at the top, and innovative sclerosis.
–
By the way, the “load of rubbish” lady is a right-wing crank. Check her blog out. Warped.
“By the way, the “load of rubbish” lady is a right-wing crank. Check her blog out. Warped.”
Nick Taylor wrote
> mathematically impossible to avoid infringing on software patents
Yes … this is what Bessen et al call the Notice Problem, because the boundaries are (often deliberately) obscure, it fails one of the key test of a property system (certainty of subject). In fact the recent Akamai v Limelight the court pointed out that infringement can be split in parts (though curiously the liability must still be a single actor). Given that even the judiciary tacitly admit the problem
http://arstechnica.com/tech-policy/2012/05/top-judge-ditching-software-patents-a-bad-solution/
http://arstechnica.com/tech-policy/2012/07/judge-blasts-colleagues-for-defying-scotus-allowing-financial-patent/
http://www.theatlantic.com/business/archive/2012/07/why-there-are-too-many-patents-in-america/259725/
what should NZ do? It is too small to have the patent volume to create caselaw. UK is tied to the EPO which seems to be blithly ignoring Article 52 of the EPT, and Australia seems to forgotten the rules of rugby in favor of gridiron (http://keionline.org/node/1516). The least unfavorable option is to use 10A to give the Freedom to Operate for Kiwis within the EEZ by legislative fiat and hope the rest of the world doesn’t go to softpat armageddon in the meantime.
The world can operate by different football codes, the EU have soccer, the US gridiron, and NZ ICT firms can stick to rugby where a fast-moving back line beats knocking/block-heads any day. Just so long as NZ parliament follows the law-making procedures (via Select Committee) and not attempt to change the goalposts.
@Nick. I would suggest that you haven’t been that innovative if you merely “arrive at the next step”. that’s a different kettle of fish from true innovation.
Sticks and stones. “Snore….”.
I might have been a bit quick off the blocks with “Load of rubbish” but it’s the quickest thing that comes to the tongue than “oh Fer.. “.
“Tourettes”, you see. It’s a **8888. Oh fer.
And ever eaten from a foodbank Alien? I have.
[...] 1/2 a trillion dollars lost fighting patent trolls?. I could well believe it… and here in New Zealand, our corporate puppet government have created a back-door for software patents. [...]
What I see every day in my work, is huge companies acquiring the innovative start-ups on the basis of their IP (rather than simply buying the IP), and then performing their pre-planned “exit strategy” within a couple of years after grabbing/developing the IP themselves, usually making a profit on the sale of the original business as well. All this amounts to is facilitating another kind of obscene wealth acquisition by the big boys.
Robbed by an Ogre again?
“And ever eaten from a foodbank Alien? I have.”
“Robbed by an Ogre again?”
I’m not a predator type Al1en.
Eating Human would be like eating Dolphin, just not as intelligent.
In your second reading speech you interjected (when David Cunliffe was speaking) to say “the patent attorneys support it.” David Cunliffe then stated, “and, of course, the Institute of Patent Attorneys, as my colleague Clare Curran reminds me, supports that amendment.”
On the MoBIE/MED website at the link:
http://www.med.govt.nz/business/intellectual-property/patents/draft-guidelines-patents-involving-computer-programs/submissions
you can download the submission that the Institute made on draft IPONZ guidelines attempting to implement the select committee’s clause 15 (3A). Paragraph 12 of that submission says:
“There is perhaps still an opportunity to insert an additional clause in the Patents Bill to clarify the meaning of clause 15(3A) (as in, for example, Europe where the blanket exclusion is read together with a separate clause containing the qualifying expression ‘as such’ that clearly limits the scope of the exclusion). For the purposes of commenting on the Guideline we will assume that the exclusion will be treated in a similar way to the restriction in Europe and the UK.”
That, to me, reads as an endorsement of the government’s suggested change – “a separate clause containing the qualifying expression ‘as such’ that clearly limits the scope of the exclusion”.
Perhaps you and Mr Cunliffe should do your homework before you make statements in the house about who supports your cause.
@Doug:
It was the Australian Institute of Patent & Trade Mark Attorneys who support getting rid of “as such”. They wrote a detailed submission about how problematic it was.
And this is why we need change to patents:
Patents are now so broad and litigation so ubiquitous that innovation, which patents are supposed to encourage, is being actively prevented.
DTB Spot on.
Patents do not protect those with little financial resource. It takes very big bux to fight the corporate pirates who have surveillance of newly registered patents and use the ideas flagrantly. You have to fight them which becomes impossible without heavy pockets and a lot of luck and influence.
Patent Attorney was to go ahead and produce my last development, market with good records [verified and witnessed] at all stages to protect from being sued for your own invention / development.