NZ Software Patent Exclusion vs. TPPA

In the past New Zealand has shown great foresight and leadership in the world by staying true to its national ethos, even at the cost of breaking from international conventions. From recognising a woman's right to vote and denying US nuclear powered warships the right to transit, NZ has shown the willingness to make a principled stand, even if doing so was seen by many as risky. These decisions have proven to be some of our best moments, and have helped to shape our national pride and culture. New Zealand again has an opportunity to make a principled stand. It's not quite as obvious as women's suffrage or as emotionally resonant as NZ's anti nuclear stance, but its effect on our nation's future could be similarly profound.

The issue is software patents. In NZ software is currently patentable merely because the Patents Act 1953 predated the widespread existence of software, and therefore does not specifically exclude it. Unlike mechanical inventions, software which is essentially written instructions for a computer, is also protected by copyright, as books, music and other expressions of creativity are. The NZOSS membership, along with most kiwi software developers, believe that copyright is sufficient protection, and that software patents are both unnecessary and actually detrimental to the industry. One need only look as far as the legal spectacles created by software patent disputes between major corporations in the US and EU to see the wealth they squander - as much as half a trillion dollars wasted since 1990 according to one academic study.

In 2010, a Commerce Commission Select Committee (comprised of representatives from both Government and Opposition parties), following submissions from a large number of software developers during the review of the Patents Act, recommended unanimously to the then Minister of Commerce, Simon Power, that software be specifically excluded from patentability in the resulting updated Patents Act, a recommendation which he, and his successors, have publicly supported. We kiwi software developers saw this as a huge victory for common sense and for the future of NZ:

  • We have shown ourselves to be a nation of clever technologists and technology is both NZ's second largest export sector after dairy, and is one of the fastest growing.
  • Software is not affected by the physical limits - like pollution concerns and finite land availability - inherent in NZ's traditional dairy and agricultural led export economy.

The NZOSS and other NZ-based IT organisations have been contacted by overseas software companies who want to shift their entire operations to NZ, which they see as forward looking and "innovation friendly" just because of our proposed patent law changes.

Despite popular (at least among software developers) and multi-partisan government support, the Patent Bill with its software patent exclusion has not yet been passed into law. Although the government has made assurances to the contrary, many of us in the software industry wonder if the delay in passing the Patents Act into law due to the US' Intellectual Property chapter in the Trans-Pacific Partnership agreement (TPPA) being incompatible with a software patent exclusion. That concern based on leaked copies of the chapter - the TPPA negotiations are top-secret - the NZ public aren't meant to know what is being decided on our behalf until it's too late.

If you're not a software developer, you can be forgiven for not being aware of this issue. This change of law doesn't affect you directly. But the precedent it sets - allowing the US to effectively override our laws that are created according to a transparent democratic process (and, in this case, with cross-party support) - should cause every Kiwi to take offense.

If we refuse to compromise on the software patent exclusion in our Patents Bill, we will again be a leader internationally, in defiance of US foreign policy which seems to be: cajole trading partners to adopt restrictive Intellectual Property rights to suit corporate lobbyists. We can restore the balance between the rights of innovators to profit and the concept of "fair use" - the right to share, remix, and build on the work of others. If we toe the US' intensive Intellectual Property regulation line, we'll just be another compliant nation. By rejecting the idea of software patents, we will be sending a signal to the software developers of the world that we understand what motivates them - and what doesn't. It could well be the way we secure our future prosperity: making NZ "the place where talent wants to live."

If we accept the US' IP chapter in the TPPA, and explicitly allow software patents in NZ, we are embracing one of the worst aspects of US culture: endless and pointless litigation. It could cost us our ability to create exportable innovation...