Software patents: We need your help|
by Paul Matthews, IITP CEO
As many of you will be aware, last week Commerce Minister Craig Foss announced a long-overdue progression of the Patents Bill, including changes around the provision removing patentability of software.
The announcement contained both good news and bad. The good news is, on the face of it the Bill continues to exclude software from patentability. That's great news for our software industry. The bad news however, is that the newly proposed wording is ambiguous and we believe will lead to considerable confusion and expense to the tech sector - and possibly even the exact opposite outcome as that intended.
But there is a solution and we really need your help getting it across the line.
What's wrong with software patents?
Software patents are a complex issue. At a superficial level, logic dictates that people and companies should be able to protect their work and that's certainly a concept the Institute supports.
However in reality, the patent system simply doesn't work for software. In fact worse than that, it represents considerable risk and expense to software development.
We believe it's near impossible for software to be developed without breaching some of the hundreds of thousands of software patents awarded around the world, often for "obvious" work. Hence 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.
The continual granting of low quality patents 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 and a number of kiwi software companies have been the victim of this.
Make no mistake, the intellectual property contained in software should be protected. However Copyright provides significant protection in the same way as it protects other creative endeavours such as books and movies. The very nature of software should preclude it from patentability in our view. Imagine if someone were able to patent "horror movie genre" then set about suing anyone else who independently came up with the idea of a horror movie. That's what we're seeing in the software world.
If you're not convinced, just google "software patents" or take a look at the 2010 letter we wrote to Minister Power outlining some of the issues in brief. In a nutshell, software patents hamper innovation rather than promoting it.
New Zealand's Patents Bill
In New Zealand the new Patents Bill has been undergoing consultation for many years and will shortly replace the Patents Act from 1953. A draft of the new Bill was released in 2010 and much to the delight of the majority of New Zealand's software industry, included a clause clearly making software unpatentable.
And that's when the lobbying began.
Since 2010 a small group of lobbyists and patent lawyers have been applying continual and persistent pressure to reverse this stand. Why you ask? In short, there's major money on the line. Some multinationals have invested heavily in software patent portfolios - millions, and in some cases billions, of dollars. You can understand them wanting to protect their investment, regardless of whether that's a good thing for kiwi developers and the industry overall.
And, of course, patent lawyers are always going to advocate for patents. They make their money from… well… patents. Turkeys aren't that keen on Christmas either.
The good news is the Government has resisted the worst of the lobbying and has retained an exclusion for software. The bad news is the wording is ambiguous and opens major loopholes that have been used overseas to allow software patents after all, contrary to the intentions of the law.
The Minister's Supplementary Order Paper (SOP)
Fast-forward to today from two years ago when the draft Patents Bill was released and despite promises from Government that the Bill would be going ahead as is, Commerce Minister Craig Foss announced last week that he would be overruling the Select Committee wording and inserting alternative wording via a Supplementary Order Paper (SOP).
This isn't an altogether uncommon occurrence. Any Member of Parliament can issue a SOP which indicates an amendment they intend to put during the Committee of the whole when the Bill is debated following the second reading.
In our view, the SOP alters significantly the wording and effect of the software exclusion. We believe this change will mean that, in time, software patents will be back in. Whether you like software patents or not, the outcome is even worse than clearly allowing or removing them because it's ambiguous; the meaning will eventually be determined by the courts rather than written law and really could go either way.
And, of course, all that legal arguing will be at the expense of technologists on both sides of the debate. The cost will be high regardless of outcome.
The new wording
The SOP proposes the software patent exclusion is replaced by two clauses, the first, clause 10(A)(1) states:
(1) A computer program is not an invention for the purposes of this Act.
This is a reasonable change from the original wording and is necessary to ensure a certain level of standardisation of wording while maintaining compatibility with our international obligations.
However the real problem is in the second clause, 10A(2), which states:
(2) Subsection (1) prevents anything from being an invention for the purposes of this Act only to the extent that a patent or an application relates to a computer program as such.
The intention of this clause is to remove patentability of software while not removing the patentability of other inventions that exist in the physical world but just happen to have a small portion implemented via software, i.e. Embedded Systems.
However our advice and belief is that this wording is unnecessarily ambiguous and very dangerous from a litigation perspective. Along with the ambiguity, it's debatable whether it will even achieve the objective of ensuring inventions containing embedded systems are patentable.
What's it all about? Further Technical Effect
In Europe software is indeed patentable in many circumstances with an estimated 30,000 software patents in existence, even though Article 52 of the European Patent Convention specifically states that "programs for computers" are excluded from patentability. Confused?
This is all due to how the European courts (and indeed, the Boards of Appeal of the European Patent Office) have decided patentability should be determined. Every country defines this slightly differently, and you shouldn't believe anyone that tells you that New Zealand will be the only country not allowing software patents. Most of Asia doesn't allow them for a start.
In Europe they've determined that "computer programs as such" means that software is indeed patentable if it creates a further technical effect than the normal physical interaction between the program and the computer - ie does more than just displays something on a screen in response to input.
What all this really means is that software is patentable in Europe, however patents must be written in a certain way to meet the test.
Having discussed the matter with Ministry officials this week, it's become apparent that the Government believes the "computer programs as such" language will hold stronger than in Europe given the fact that there is no "further technical effect" provision in New Zealand case law.
And the Government's thinking appears to be that that's what differentiates the European "as such" from the New Zealand "as such" - we don't have the further technical effect test.
We're not so sure. But even if that was the case, surely that's just a matter of time before our courts do the same based on European jurisprudence? The technical effect concept was invented by the courts in response to the ambiguous and confusing "as such" wording.
Alignment with international legislation
Part of the rationale of the change is to align New Zealand's Patent legislation with that of other countries, but unfortunately this wording doesn't do that. Let me explain.
The Government's intention is to implement a joint patent examination regime with Australia, which certainly makes sense on many levels. However the "as such" terminology being proposed is completely at odds with current Australian legislation - they don't include any mention of software in their patent laws, let alone "as such". Incidentally, we don't think that's a good thing.
But it gets worse. The patent lawyers themselves have said this wording is a terrible idea. In a written submission to the Minister in 2010, the Institute of Patent & Trade Mark Attorneys of Australia stated:
We would be concerned that if New Zealand adopted wording comparable to that of the [European Patent Office], that there is no such body of precedents in New Zealand that would guide an understanding of use of the terminology "as such" and the "technical effect" requirement. In our view, adopting the EPC approach would create a significant degree of uncertainty as to how the section is to apply and which, in any event, is inherent in the EPO approach.
The also go on to say that use of "as such" would cause significant unpredictability.
The Government should be applauded for attempting to stay within the spirit of removal or at very least the restriction of software patents.
However unfortunately by attempting to fix one issue they've created another pretty major one. In our view, the "as such" wording will lead to significant ambiguity (as it has everywhere else) and as suggested by the patent attorneys themselves, entirely unpredictable outcomes for our software industry.
And we don't think that's good enough.
However there is a solution. What's been proposed is that clause 10A(2) should be changed to:
10A(2): Subsection (1) does not prevent an invention that makes use of an embedded computer program from being patentable.
This solves the issue the Government is trying to solve (namely not restricting patentability of non-software inventions that might happen to include some software in their implementation), but in a way that is clear, concise, and specifically addresses the point in an unambiguous way.
It removes the uncertainty prevalent in the current SOP wording, which everyone - whether they support software patents or not - should be worried about.
You can help
We've already made contact with Minister Foss' office and will be delivering this recommended modification in writing on Monday, in conjunction with a group of other major ICT representative bodies including NZRise, InternetNZ, and NZOSS and supported by New Zealand's largest software exporters.
We'll also be including a list of individuals and companies that support this change and that's where you come in.
Our industry is speaking as one. Over just a few days, almost 1,000 kiwi software developers have already put their name to the call to clarify this clause and replace 10A(2) with the wording above and it would be great if you'd do the same.
It'll only take a second and you can leave a comment too - just head on over to http://www.softwarepatents.org.nz/ and add your name to the list.
We can make a difference on this one, but only with the software industry supporting it. So head on over, add your name, and send this to your colleagues and others to add their voices too. Click here for more ways you can help.
This one's really important, folks.
Paul Matthews is CEO of the Institute of IT Professionals NZ.
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Contributed content is the opinion of the author only, and not necessarily the view of IITP.