Well played, Kiwis

Will other nations follow suit on New Zealand’s software patent ban?

Lucy Carey

To a chorus of glee from developers around the world, New Zealand makes the landmark decision to ban software patenting, on the grounds that software is not an invention.

Although Peter Jackson’s monster packed romps through New Zealand’s verdant forests and spectacular mountain ranges had tourist board chiefs rubbing their hands with glee, over in the tech sector, decision makers have an entirely different attitude to trolls.

After five years of feverish debate, lobbying, and a fair amount of dithering, New Zealand has effectively killed off patent trolling with a landmark halt on software patenting.

The new ‘Patents Bill’- which was first conceived back in 2008- definitively states that pure software (that is to say, anything which is unattached to a dedicated piece of new hardware) is “not an invention,” and thus cannot be granted a patent within New Zealand. Existing software patents will continue to stand, but for the meantime, the stage has been set for a litigation-free development process.

Without the need to acquire and then vociferously defend patents, a considerable amount of capital is also freed up to channel into research and development.

Institute of IT Professionals (IITP) chief executive Paul Matthews congratulated the New Zealand government on their near-unanimous passing of the bill, and commented that it was a unique day, “where old law met modern technology and came out on the side of New Zealand’s software innovators”.

Since the early 1960s, the matter of whether software- essentially an assemblage of mathematical formulae, abstract ideas, and freewheeling mental gymnastics- can really be subject to patenting has been a hot topic.

A potential ban on software patents has been floated around by other governments too, but this is the first time any concrete ruling has been upheld. Essentially what it boils down to is the nature of the local market and the actors within it.

With technical prowess and R&D helping to drive development in South Asian BRIC economies, the Indian Parliament came down in favour of maintaining an open source based protocol.  Similarly, New Zealand’s technology sector is small but growing in importance. At this stage, it makes much more sense to create an environment for new and burgeoning companies to be free to experiment and grow.

Whilst many developers in the US would argue heavily for abandoning the cumbersome patent process (with so many companies battling it out for alpha dog status in the increasingly crowded smartphone and tablet market), software patents represent a crucial way of controlling competition or as inoculation against multi-million pound lawsuits. Essentially its a cold war scenario, and to disengage could be tantamount to annihilation.

So-called ‘patent trolls’ hoard intellectual property from defunct companies solely for the purpose of making revenue from patent rights- a practice which led to over half of all patent violation lawsuits filed in 2012, according to the Wall Street Journal.

Titans like Google and Microsoft are purported to stockpile patents for the express purpose of avoiding litigation, rather than protecting any new developments, and in 2011, both companies spent more on buying up patents than any research and design.

Google’s recent Open Patent Non-Assertion (OPN) Pledge has been tentatively hailed as a positive step in the right direction,  but thus far what they have released has been a miniscule sliver of their total cache, and amounts to a token effort at best- more PR than decisive precedent setting.

With this ongoing stalemate, the prospects of any kind of scaling down on software licensing in the next few years seem pretty slim. On the flip-side, whilst New Zealand can’t yet lay claim to any tech companies on the scale of Dell or Oracle with this precedent setting move, a significant obstacle has been cleared for emerging native talent to have a fair crack at becoming one in the future – with nary a monster in sight.

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