New Zealand Outlaws Software Patents

NZ post info

In late August, New Zealand passed a landmark bill prohibiting new software patents.  Originally introduced in 2008, Bill 235-2 went through multiple revisions before the Parliament finally passed it in a 117-4 vote.  The bill declares that software is not a “patentable invention”, arguing, “there is no ‘inventive step’ in software development, as ‘new’ software invariably builds on existing software”.  It also notes the growing popularity of open source software and its incongruity with the practice of patenting software.  However, Bill 235-2 does carve out an exception for embedded software, which is the kind required to run consumer electronics such as thermostats, telephones, and washing machines.  While the reason for allowing the patenting of embedded software is not explained in the bill, it might be because this type of software is inextricably integrated with the hardware component with which it is sold.

Given New Zealand’s active flourishing startup community, this passage of this bill does not come as a surprise.   New Zealand has a well-established ecosystem of incubators, accelerator programs, and investors.  Startup activity is primarily situated in Auckland and Wellington, with the latter often being referred to as “Silicon Welly”.  New businesses face few bureaucratic hurdles, and the low cost of living makes it particularly attractive to entrepreneurs.  The ban on software patents promises further savings and is likely to encourage startup activity.  Indeed, Commerce Minister Craig Foss hailed the bill as a “significant step towards driving innovation in New Zealand”.

In New Zealand, the response to the passage of this bill has been overwhelmingly positive.  Earlier this year, a poll conducted by the Institute of IT professionals showed that 94% of IT professionals in New Zealand supported the ban on software patents.  The country’s largest software exporters Orion Health and Jade Corporation also welcomed the ban.

New Zealand is far from being a pioneer in prohibiting software patents; the Philippines and South Africa also do not allow the patenting of software.  Nevertheless, the New Zealand amendment is impressive for sparking a global debate and invigorating the free and open-source software movement.  Soon after, op-ed pieces in the United States encouraged a similar ban.  Like in New Zealand, the US also has a strong grassroots movement lobbying for a ban on software patents.  A petition on whitehouse.gov, the U.S.’s official government website for the White House which aims for better citizen participation through social media, has over fourteen thousand signatures.  In a rather unsatisfactory response to the petition, the White House emphasizes the administration’s commitment to improving patent quality and points to the America Invents Act as an example.

In many ways, New Zealand is the perfect test bed for implementing such a drastic change in patent law.  Its culture of innovation and healthy software industry closely resemble those of larger economies like the US and Canada.  Since New Zealand still permits the protection of software via copyright, it will be interesting to see if the Intellectual Property Office experiences a spike in applications for copyright protection.  We will be keeping close watch on developments in New Zealand, since they might very well set the tone for patent law reform around the world.

 

Photo Credit: “All Blacks Parade”, Shafraz Nasser, Wikimedia Commons

 

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About: Amisha Manek

Amisha Manek is a first year law student at UCLA School of Law, with an interest in patent law and telecommunications law. Prior to joining law school, she worked as a consultant with the Telecommunications, Media and Entertainment practice at Capgemini North America. Amisha has a graduate degree in Electrical and Computer Engineering from Georgia Tech.

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