Wellington
By guest blogger Doug Calhoun
Thirty years after the Muldoongovernment first looked at patent law reform, a new patent law is on track to come into force by theend of 2013. This guest blogger has been involved in working with and on the current act since1974. And my reaction to the second reading debate?
“This is the way the world ends:
This is the way the world ends:
Not witha bang but a whimper.”“The Hollow Men”
-TS Elliott
The bill runs to 165 pages with over 300 sections. It emphasises the goal of its authors to makeit as difficult as possible to obtain a patent and as easy as possible for anyone to invalidate one. But the
A Bit of History
The Patents Bill was introduced in 2008 by the then Labour government. The original bill did nothave any software exclusion. In the policy development process, the MED officials had issued policypapers, considered submissions and recommended that there be no software exclusion. The practice ofthe Intellectual Property Office (following a decision of the Commissioner of Patents) was that ifan invention involved software as a means to an end and it was novel and inventive then it could bepatented; but if the software was an end in itself it could not be. This had been the practicesince 1994. It was founded on old UK decisions that you could not get a patent for a meremathematical formula – and software code itself is a form of mathematical formula.
In the select committee hearings most of the submissions on software patents came from softwaredevelopers who were vehemently opposed to them. And the squeaky wheels got the grease. Thecommittee introduced an amendment saying:
“A computer program is not a patentable invention”.
The committee reported in March 2010 and the bill sat on the Order Paper for nearly two and ahalf years until this month. The government then introduced a proposed amendment that qualified theexclusion. The exclusion would, “prevent anything from being an invention for the purposes ofthis Act only to the extent that a patent or an application relates to a computer program assuch.”
The effect of the exclusion is that there is no real change in the law. Software as an end initself is still not patent eligible; software as a means to an end still is patent eligible. Thatis the beginning and end of the effect of the words, “as such”.
But in politics reason is the first casualty.
The Second Reading Debate
The commerce minister, Craig Foss, statedthat the intention of the select committee:
“was that granting of a patent should be prevented only where the novelty andinventive step lie in a computer program. In order to make the committee’s intention clear, and toavoid any doubt as to what is intended, I propose that the computer program provision be amended soas to provide that only computer programs as such are ineligible for patent protection.”
The opposition was adamant that the change had completely cut across and changed what the selectcommittee had recommended. And the consequences were said to be putting the software developmentindustry at risk.
Clare Curran was the lead Labour spokesperson. One example she gave of an industry at risk wasthe games development one:
“The chair of the New Zealand Game Developers Association said: ‘We’ve learnthow to make money from business models like digital distribution, freemium, virtual goods andcrowdfunding. Exporting and acting global from day one have been key to the industry’s growth.’ Ninety-seven percent of Kiwi games were digital downloads, with low distribution costs and highmargins. Ninety-nine percent of sales revenue came from exports, with the USA and Europe being thelargest markets.”
The trouble with that example is that the New Zealand patent law is only applicable in NewZealand. So (on her quoted figures) only one percent of the games developers’ sales revenueswould be at risk from infringing someone else’s New Zealand patents. Any sales made in the USA orEurope are still going to be subject to the patent laws there.
Trevor Mallard joined the fray:
“What has become clear over the last few days is that this Government has beencaptured. This Minister has been captured by offshore people who are involved in the softwareindustry.”
What Trevor Mallard did not mention was that he was a member of a Labour cabinet that agreed to acabinet paper (
that included the paragraph:
“50. There are, then, no strong arguments for specifically excluding businessmethods and software from patent protection. In light of this, I consider that business methods andsoftware should continue to be patentable as long as they meet the requirements forpatentability.”
It could equally be argued that the select committee had been “captured” by the softwaredevelopment lobby. And it should be remembered that the select committee was chaired by LianneDalziel, also a member of the same Labour cabinet that could see no strong arguments for excludingsoftware from patent protection.
No Software Patents Petition
The opponents of software patents arequick on their feet. They set up a
website
:andcollected over a thousand digital signatures asking that the “as such” wording proposed by thegovernment be replaced so that it says that the exclusion:
“does not prevent an invention that makes use of an embedded computer program frombeing patentable.”
The origin of that wording is in the select committee report where the committee expressed somereservations about the effect of the ban. While embedded computer programs are an example ofinventions relating to software as a means to an end, they do not represent all such inventions –and the exclusion would not be of much assistance in making the more general distinction.
Clare Curran tabled the no software patents petition during the course of the debate. She alsointroduced a Supplementary Order Paper seeking to amend the government amendment exactly as proposedin the petition. And then her colleague, Mr Mallard, accused the government of being captured by aninterest group – not the first pot to call a kettle black.
Those who signed the petition might well consider the complexity of making the distinctionbetween software as an end in itself and software as a means to an end in
The No Software Patents contains a space for comments as well as for signing. There are severalrecurring themes in the comments. Many petitioners are under the mistaken impression that theoriginal Patents Bill was introducing software patents for the first time:
“The potential introduction of software patents in New Zealand critically threatensour ability to innovate in the information technology field.”“It greatly disturbs me to think we may bring in software patents to appease the Americans withthe TPPA.”
Others are under the mistaken impression that inventions related to computer code as an end initself would be patentable:
“Computer software programs are essentially mathematical algorithms, i.e. methodsto solve problems. If software were to be patented, then any thought process can be patented - anabsurd situation.”“Computer software is nothing more than design decisions mixed withalgorithms.”
Many expressed concerns about the complexity and costs of enforcing patents in internationalmarkets. While these concerns are real, any change in New Zealand patent law is not going to havethe slightest effect on the laws of other countries or the players that seek to take advantage ofthem there.
I am left with the same feelings as Ken Perrot in this
The Labour opposition has sided with an ideological ghetto that has not taken the time or effortto try to understand both sides of the debate on the worth of patents.
Patents and Innovation
Jonathon Young was the only speaker who talkedabout the positive role of patents:
“Recently it was announced that the Advanced Technology Institute is going to beset up and established. It will be named after Sir Paul Callaghan, one of our great scientists. Hesaid that science could make New Zealand a better place, and that is such a true thing. We arefocused on boosting growth and creating jobs, and you do not do that just by talking about it. Youhave to innovate, you have to invest, and you have to then commercialise those inventions and thoseproducts in order to get the financial gain from them.”
One of the man objectives of the Patents Bill is to ensure that quality patents are granted. Aquality patent is one that claims an invention that is novel, inventive and of a scope that isfairly based on what is described. I know of no patent attorneys who do not strive to get qualitypatents for their clients. But the policy development and debate have been single minedly focusedon how to make it more difficult to get a patent in New Zealand and how to make it easier to blockpatents from being granted and to overturn granted patents. What if the balance has been tipped sofar against patents that very few innovators can be bothered, or afford, to get patents? The PaulCallaghan Institute mentioned by Mr Young will have to overcome the higher barriers being set bythis law in order to fulfil its roll of transferring its inventions to the firms that willcommercialise them.
What this country needs is a change in culture that embraces technology transfer – both inwardsand outwards – as a path to improving innovation and thereby increasing productivity. And we needto acknowledge that patents are the currency of that technology transfer.