Software Patents – Really that Bad?

There have recently been a couple of articles in the Herald on the proposal to allow software patents as part of the government’s overhaul of the Patents Act – see Pat Pilcher: “Software patents stoush rolls on”

I would like to comment briefly on a couple of observations he makes and present a slightly different view.

First, he says that even though the Commerce Select Committee and numerous industry experts recommended that software be excluded from patentability the government has essentially ignored them. Numerous industry experts also strongly argued against banning software patents outright i.e. a rather blunt blanket ban – regardless of the merit of the particular invention concerned. They also questioned the way the issue had been raised at the select committee stage, thereby taking many by surprise.

Mr Pilcher then goes time to say that “the experts” say it would “provide large lawyered-up multinationals with a means of tying smaller kiwi software developers up in court, effectively stunting our homegrown software industry”. Just who are these experts? What about a potentially relevant contrary view? Why should the software industry be treated any differently to any other industry? The homegrown software industry has to compete in a world in which software patents are a reality. If we create an open source Nirvana in New Zealand is that the way to make us competitive in international markets? I doubt it is. Further, this argument ignores the fact that many local software companies understand and use the patent system very successfully.

Mr Pilcher then quotes Clare Curran’s argument that New Zealand’s political processes are being manipulated by big business.  Even if we assume for argument’s sake that this is correct, what is the difference between this and the Commerce Select Committee being influenced by the open source movement and recommending changes to our law which would have put us out of step with virtually all of our major trading partners?

The argument then proceeds on the basis that the patent system works to the advantage of multinationals and that over the last 20 years the estimated cost to the US economy of patent litigation has been an estimated half a trillion US dollars. Again, even if we assume this is correct, relatively young companies such as Google, Facebook, Amazon and YouTube have prospered and grown in this environment. Equally, there has been significant innovation and growth in the Internet environment, notwithstanding the existence of software patents.

David Lane, the President of the NZ Open Source Society says that there will be very little incentive for start-ups to consider New Zealand. With respect, why should we be any different to start-ups in countries such as Australia, the US and the UK? It’s a tough world out there and we have to learn how to cut it both locally and internationally, not just in the software industry but across the board.

Mr Lane then goes on to assert that the benefits clearly outweigh the negatives. Perhaps so from the open source movement’s way of thinking, but like most issues there are pros and cons and I don’t think the situation is quite as clear cut or dire as Mr Lane believes.


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