New Zealand bans software patents

Posted by Emma Woollacott

New Zealand is passing a law which makes most software unpatentable. The only exception, added yesterday in an amendment, is to allow patents on inventions that contain embedded software.

"My decision follows a meeting with the chair of the Commerce Committee where it was agreed that a further amendment to the bill is neither necessary nor desirable," said commerce minister Simon Power.

The New Zealand Computer Society has welcomed the move, saying that software patents significantly stifle innovation. Copyright protection, it says, is more than adequate to protect intellectual property.

"Many software companies in New Zealand, creating outstanding and innovative software, live a constant risk that their entire business will be wound up overnight due to litigious action by a patent holder," says chairman Paul Matthews.

"This has led to many a 'patent troll' company, primarily in the US. These are non-software companies who exist only to buy up old patents with the sole intention of suing innovative software companies for apparent breach of these patents. The effects of this have been chilling."

But the New Zealand ICT industry group NZICT, which opposed the bill,  has warned that it could hamper innovation.

"“Software patents, while acknowledged as a less than perfect solution in some areas, are nonetheless integral to an individual or company’s right for commercial protection and essential for competing globally," says chief executive Brett O’Riley.

"We believe that it is very important that companies retain the option to protect their innovations under patent law, if that is their choice."

The NZICT also believes the decision will have implications for trade. "As a small nation competing on a global stage, we cannot afford to set a precedent that will limit our ability to develop digital exports," O'Riley said.