Friday, June 10, 2011

New Zealand software innovators overwhelmingly support software patent exclusion

Matt Adams posted yesterday an opinion  about the software patent exclusion:

Opinion: Innovators reject software patent exclusion

Matt posted this on a closed Linked in group, so I thought I'd open the debate to public by posting my response here:


Your statement is rather misleading. A correct statement is:

New Zealand software innovators overwhelmingly support the draft legislation to exclude software from being a patentable invention.

We understand that a software patent system is only damaging to our ability to innovate. A patent is not a property right, it is a monopoly right managed by a government. History has proven that monopoly rights primarily responsible for:

  • Reduction of innovation
  • Increase in pricing
  • Reduction in supply of product or service that also leads to
  • Reduction of job availability that also leads to
  • Abuse of worker's rights

There is no evidence to suggest that monopoly rights (or patents for that matter), specifically in the software industry, lead to any kind of increase in investment into research and development. As a matter of fact, the opposite is true.

The list of companies you give can hardly be included as the representation of the software industry. I am sure they all are doing great work as far as software development goes and they do develop good software, however lets examine the the company interests here:

Airways Corporation

Airways is a State-owned Enterprise (SOE), a fully-owned subsidiary of the NZ Government. It is in the interest of any government body to support government control of business. Ditto – granting monopoly rights.

Air New Zealand

Not a software development company – they fly planes! Again, largely government owned.

Plant and Food Research Limited and Geological and Nuclear Science Limited

Again, both CRI, government organizations, who's focus is not software but, as their name suggests, Plant and Food Research and Geological and Nuclear Science research.

Hardly representatives of software industry who are primarily affected by the legislation.

Auckland UniServices

A vehicle to turn (largely) government funded university research into commercial (patented!) products

Fisher & Paykel Appliances

A hardware manufacturer, whose submission focuses firmly on embedded software. I believe the legislation as drafted specifically excludes software that runs inside embedded hardware from being a non-patentable. Also, the hardware widget itself is patentable.

The so-called industry bodies you quote do not represent New Zealand software companies, instead are largely funded by international organizations, some of whom have been known to abuse their monopoly power. Is it them that you propose our government should be granting monopoly rights?

Matt, the organizations you mention were invited to participate in the public debate on this matter, here is the video:

They have either declined or withdrawn their participation in the last minute. This felt like either cowardly behavior to me or an admission of support for our views.

I do welcome your courage to start this public conversation. However, opening with the debate with a misleading statement – come on!


  1. Good on you, Igor. The squeal of these poor "IP" legal beagles is pathetic horse-has-bolted attempt to keep their gravy train of patent-litigation flowing.

    I say: if any legislation makes lawyers cry out in indignation due to loss of business, it's almost 100% likely to be good for society. In fact, that can almost be seen as a litmus test for good legislation.

  2. I'm cynical of Matt's advice, as it is hardly impartial. I've personally spent a large sum of money on Matt's services in the past, which resulted in little more than the opportunity to spend even more money on patent attorneys, before I called a stop to the nonsense and saying "Never Again".

    My challenge to Matt: disclose how much money New Zealand clients have spent on your services, and quantify the economic benefit to them showing a significant return on their investment. My suspicion is that such an analysis will show that the patent industry looks a lot like a racket, benefiting large overseas corporations while stifling local innovation.

  3. Sorry - that previous comment should be restricted to "services related to software patents" and "the software patent industry".

  4. My firm belief is that patents are harmful to software industry as a whole. But they are harmful to small New Zealand software businesses even more.

    We live in the age where information and ideas are freely available to anyone in the world. In my 20 year experience in the software industry I have not come across a single unique idea. There is always more than one person that arrives independently to the same conclusion at about the same time. Some of those people take action and innovate and others don't. Some do batter job at implementing their ideas than others. It is impossible however to establish who was first to arrive to the idea, and even if you could, the person who was first may not be the one interested in following through with implementation.

    To grant one of them, who has the money at the time, the monopoly over that idea, is to stop all others from innovating and competing. This is bad for everyone.

    The software industry innovation as we know it happened despite of the patent system, not because of it. The patent system didn't help Google, Skype, Facebook, Firefox etc.. in fact a search-engine patent could have thwarted the spread of the internet, the social networking patent almost certainly would have meant that the only way you can communicate with people is face to face.

    Even Microsoft was successful despite of the patent system, not because of it. They may support that system now, fine, it is their right, but I can not see it having contributed to thier market success whatsoever. Arguably, they succeeded by re-implementing products that were already in the market offered by other players and did an outstanding job on marketing those products to the world.

    In addition to being harmful to the industry at large, patents also have the capability to prevent innovation from small business in following ways:

    - The requirements for patentable ideas from VCs lift the barriers to obtain funding even further, putting it out of reach for small businesses
    - Even if you obtained a patent, enforcement is prohibitively expensive for a small business, so the expense is completely useless
    - You can be effectively shut down by a larger overseas competitor on a ground of a patent infringement, and even if you can prove that you are in the right, you will not have enough means to do so.
    - You can get caught out in patent wars between larger companies who happen to be your business partners. This can severely harm your business without any gain to anyone whatsoever.

    In summary software patents are harmful and unnecessary.

  5. The big red herring that Matt Adams and other promote is the fact that software patents have been available in NZ for some time, and that, despite this, software innovation has continued.

    Yes, that's true. Mostly because all software developers I know either didn't know about them, or ignored software patents until recently.

    It's only with the advent of patent trolls, and the realisation that multinationals like Microsoft have been trying to pollute our patent pool in NZ with *very* poor quality patents (e.g. those which were denied overseas due to bountiful prior art) that we've taken notice of software patent at all.

    Ultimately, the overall abysmal quality of software patents (the world over, but especially here in NZ), and, as you say, Igor, the tendency for simultaneous innovation (and the difficulty in establishing the "obviousness" of a novel idea) mean that software patents are a fundamentally bad idea.

    In addition to being a huge liability to software developers, software patents are also unnecessary because, like books, music, paintings, and other expressions of ideas, software is already [more than] amply protected by copyright.