Universal support for exclusion of software patents

Yesterday the Government announced a final amendment to the Patents Bill intended to clarify that software is not patentable. This now looks set to be supported by all political parties, meaning that Parliament will unanimously vote to ban software patents.

I have written about the new amendment on the Institute of IT Professionals website. Here’s some other, so-far universally positive, reactions.

Commerce Minister Craig Foss, announcing the amendment:

These changes ensure the Bill is consistent with the intention of the Commerce Select Committee recommendation that computer programs should not be patentable.

Labour IT spokeswoman Clare Curran:

This is a victory for our industry, which is worth around 11% of our GDP.

Institute of IT Professionals (NZ’s largest IT representative body):

The Institute of IT Professionals, New Zealand’s largest IT representative body, strongly supports the Government’s announcement today clarifying that software will not be patentable in New Zealand, removing a major barrier to software-led innovation.

Ian McCrae, CEO of Orion Health – New Zealand’s largest software exporter:

We welcome this announcement… In general, software patents are counter-productive, often used obstructively and get in the way of innovation.

John Ascroft, CIO of leading NZ software company Jade Corporation:

We believe the patent process is onerous, not suited to the software industry, and challenges our investment in innovation.

InternetNZ policy lead Susan Chalmers:

InternetNZ (Internet New Zealand Inc) welcomes today’s tabling of a Supplementary Order Paper (SOP) that makes it clear that computer software is not patentable in New Zealand.

Digital technology business group NZRise:

NZRise are delighted that, after years of representations by the NZ digital community, the Government has agreed not to allow patents on software in New Zealand.

New Zealand Open Source Society:

Commerce Minister Craig Foss’ SOP237 – announced today – demonstrates the government’s commitment to ending software patents in NZ… the vast majority of New Zealand software professionals support blocking software patents and will breath a sigh of relief that the spectre of US-style software patent litigation is now unlikely to affect us here.

Blogger David Farrar:

There had been considerable concern that the previous proposed wording with the “as such” clause could lead to a lack of clarity in the law, and that it might not achieve its intention that software is not patentable. This extra clause provides that clarity and is excellent news from the Government and Minister.

Forbes blogger Reuven Cohen:

In doing this, New Zealand is essentially taking the position that existing laws provides enough protection to software as it is; patents only serve to stifle innovation because of the ever-looming threat of being sued by so-called patent troll companies.

Glyn Moody covers the story at TechDirt:

… let’s hope it means that the latest wording won’t need changing again, and that the updated bill banning software patents finally gets passed.

It has also popped up on Slashdot.

Has Craig Foss come good on software patents?

Following much self-inflicted confusion caused by his last-minute “as such” amendment to the Patents Bill, there are now signs that Commerce Minister Craig Foss may finally heed the calls of New Zealand software developers and ban software patents.

In comments to the NZ Herald last week, Foss said this:

The “as such” limitation ensures that computer programs cannot be patented.

Likewise, in a letter dated yesterday, Foss said:

… I would like to further reassure you that the “as such” wording will not lead to computer programs continuing to be patentable in New Zealand.

… the “as such” wording …. will mean that computer programs will no longer be patentable in New Zealand.

So there we have it: clear, emphatic assurances from the Minister in charge of the Patents Bill that following passage of the new law (as amended by Mr Foss), computer programs will no longer be patentable in New Zealand. Which is great, right? After all, isn’t this what New Zealand software developers have overwhelmingly demanded?

Well yes, but the problem is that Minister Foss’s latest assurances contradict his earlier comments that his “as such” amendment would create a legal “grey area and allow “hundreds of software patents” to continue to be granted in New Zealand. It also confirms that Minister Foss is squarely at odds with leading IP lawyers who have said that his “as such” amendment will allow software patents.

It will surely also leave members of pro-software patent multinational group NZICT scratching their heads. Following Minister Foss’s “as such” amendment to the Patents Bill last year, NZICT CEO Candace Kinser told her members this:

You may have seen the press release that NZICT generated two days ago voicing support of Hon Craig Foss’ announcements to progress the stalled Patent Bill amendments. Included in this announcement was the decision to allow computer programs as patentable.

So NZICT was happy because they thought Foss had decided to allow software patents. Let’s contrast that with Foss’s recent public assurances about the new Patents Bill:

  • The “as such” limitation ensures that computer programs cannot be patented. – Minister Foss, 5 February 2013
  • … the “as such” wording will not lead to computer programs continuing to be patentable in New Zealand – Minister Foss, 12 February 2013
  • … computer programs will no longer be patentable in New Zealand  – Minister Foss, 12 February 2013

The Minister’s assurances are the polar opposite of what NZICT claimed last year. So it is clear that much confusion has arisen as a result of the Minister’s last-minute amendment to the Bill. But Minister Foss has now clearly stated (even “ensured”) that computer programs will not be patentable under the new Patents Bill. The onus is therefore on Minister Foss to clear up this situation once and for all, for the benefit of everyone.

Of course, the best way of doing so would be to drop his “as such” clause which sparked all this confusion in the first place. But if the Minister isn’t willing to do so (for whatever reasons), then the least the Minister can do is answer the following very simple questions, which I will add as “supplementaries” to my list of 10 questions for the Minister.

Supplementary to the Minister:

  1. Does the Minister stand by his statement in the New Zealand Herald on 5 February 2013 that “The ‘as such’ limitation ensures that computer programs cannot be patented“?
  2. Does the Minister stand by his statements in a letter dated 12 February 2013 that “the ‘as such’ wording will not lead to computer programs continuing to be patentable in New Zealand” and “computer programs will no longer be patentable in New Zealand“?
  3. Can the Minister confirm that those statements accurately reflect the intention of the Patents Bill as it relates to patents for computer programs?
  4. Does the Minister agree with the claim by the CEO of NZICT that the intention or effect of the Patents Bill is to “allow computer programs as patentable“.
  5. If the Government will not remove the ‘as such’ clause from the Patents Bill, then will the Minister at least include in the explanatory note the statement that he made to the New Zealand Herald on 5 February 2013, that “The ‘as such’ limitation ensures that computer programs cannot be patented.”; and if not, why not?

Software Patents: 10 questions for the Minister

The Patents Bill is now hovering near the top of the Order Paper, and looks set to be voted on in coming weeks. While most of the new law is a Good Thing™, unfortunately the Government continues to ignore the calls from New Zealand’s local IT industry to undo its last-minute botch-up of the Bill and exclude software patents. Here’s a list of questions for Commerce Minister Craig Foss, whose one-line change to the Bill has so upset the local IT industry.

To the Minister:

  1. Is the Minister aware that legal experts have said that his last-minute “as such” amendment to the Patents Bill (SOP 120) reverses the exclusion of software patents as unanimously recommended by the Commerce Committee, and will result in “no real change in the law“?
  2. Why has Minister changed the Patents Bill in a way that, by his own admission, creates a “grey area” that will allow “hundreds of software patents” to continue to be granted in New Zealand?
  3. What benefit does the Minister see in deliberately introducing a “grey area” into important legislation, in particular in the much-litigated field of software patents which are causing so much harm overseas?
  4. Given that New Zealand software developers have overwhelmingly rejected the Minister’s amendment to allow software patents, and given that the previous Minister had confirmed that the original software patent exclusion would not be altered, in whose interest was the current Minister acting by amending the Bill to allow software patents to continue?
  5. Does the Minister accept that his last-minute change to the Patents Bill to allow (in his own words) “hundreds of software patents” is inconsistent with the unanimous recommendation of the Commerce Committee to exclude software patents (a recommendation which the previous Minister had said would not be changed), and why did he not refer the matter back to the Committee for proper consideration?
  6. Is the Minister aware of the numerous reports and studies confirming that software patents harm innovation and are “sapping billions out of the economy and crushing technology startups“, and if so, why has he amended the Patents Bill to allow software patents to continue to be granted in New Zealand?
  7. Why is the Minister ignoring calls from New Zealand’s IT industry, including the Institute of IT Professionals, InternetNZ, NZRise, NZ Open Source Society, and over 1,200 signatories to an industry petition, to protect New Zealand from the threat of software patents by removing his “as such” amendment to the Patents Bill?
  8. Is the Minister aware that an October 2010 MED report advised that no software patent exclusion, anywhere in the world and in any form, had ever been found to breach the TRIPS agreement, and that “there is no obligation for TRIPs signatories to provide patent protection” for software inventions; and if so, why has the Minister claimed that the “as such” amendment is necessary to compliance with TRIPS?
  9. Can the Minister give any assurances whatsoever to New Zealand software developers and software users that they will not be threatened or harmed as a result of any software patent granted in New Zealand under the new Patents Bill; and if not, why?
  10. Can the Minister confirm that the Government will provide financial assistance to help New Zealand software developers or software users defend against any future lawsuits brought by the holder of a software patent granted under the new Patents Act?

Silicon Valley’s demand for Obama’s second term: abolish software patents

Vivek Wadhwa, a technology entrepreneur and academic, writes in the Washington Post about what Silicon Valley tech firms – major Obama donors – want from President Barack Obama’s second term. Number 5 on the wish-list is a ban on software patents:

Legal battles over patents dominate the tech industry headlines. It’s not only Apple-versus-Samsung — smaller technology companies are frequently being trampled by patent trolls. As I’ve explained before, because of flaws in the patent system and government leaders’ misunderstandings, there is an arms race of sorts happening in the tech industry, which is sapping billions out of the economy and crushing technology startups. The larger technology companies have invested fortunes in their patent portfolios. But senior executives have said to me privately that they would rather disarm than waste the time and money they presently do on patent wars.

And with good reason. Evidence of the harm caused by software patents continues to mount, including a recent report from the Congressional Research Service that discusses the harm caused by the subversion of the patent system from a shield into a sword by “patent assertion entities”, a practice largely prompted by software patents:

First, patent litigation is expensive, and there is no quick or affordable way to get rid of a patent suit except to settle. Defendants frequently find settlement the most cost-effective option, even if they are certain that they are not infringing…

Second, where injunctive relief is available to PAEs, what commentators call the “patent holdup” problem arises as PAEs leverage the threat of an injunction in royalty negotiations to “capture far more than the intrinsic value of their invention.” Those wielding this power have described it as a “Damocles sword.” Patent holdup is said to be particularly acute in the IT sector because products incorporate dozens or even thousands of patented features or components, and the owner of any one of them can keep the entire product off the market…

Third, by contrast to their targets, PAEs have nothing to lose and much to gain by litigating aggressively. Unlike most other patentee-plaintiffs, PAEs pursuing infringement suits “do not risk disruption to their core business” because “patent enforcement is their core business.”

Even Jeff Bezos, head of Amazon which famously patented its 1-click buy-now technique, last month spoke on the need for reform (rather more decisively than last time):

Patents are supposed to encourage innovation and we’re starting to be in a world where they might start to stifle innovation.

There was some limited reform during President Obama’s first term, although even that was the result of a seven year struggle. The chances of substantial reform in the next 4 years must be slim.

 

Foss: Patents Bill could allow “hundreds of software patents”

Commerce Minister Craig Foss says that “hundreds of software patents” are likely to fall within the “grey area” he has introduced into the Patents Bill, according to a new letter from the Minister.

Last week, Minister Foss acknowledged that his “as such” amendment created a “grey area” that would make it impossible to clearly exclude software patents.

In a new letter dated yesterday, Minister Foss goes further, acknowledging that “hundreds of software patents” would likely fall within the grey area that his last-minute amendment to the Bill creates:

It is clear from decisions of the European Patent Office (EPO) that it is impossible to draw a “bright line” between computer programs “as such” (unpatentable) and other inventions which merely make use of computer programs (potentially patentable). Inevitably there is a “grey” area between the two. My officials advise me that the “hundreds of software patents” referred to in your letter are likely to fall within this “grey” area.

So hundreds of software patents are “likely” to fall within the same “grey area” that Minister Foss is introducing into the Patents Bill, by adopting the European “as such” language. But didn’t the Minister say he wanted to exclude software patents?

The Minister’s letter goes on to claim that these “hundreds of software patents” granted via the equivalent “as such” clause in Europe represent only a “tiny fraction” of the total patents granted in Europe – as if having proportionally more drug, manufacturing and other patents somehow means the harmful potential of software patents is lessened.

Again this begs many questions:

  • Why is Minister Foss changing the Patents Bill in a way that, by his own admission, creates a “grey area” that could allow “hundreds of software patents” to continue to be granted in New Zealand?
  • What benefit to New Zealand does Minister Foss see in deliberately introducing a “grey area” around software patents into the Patents Bill?
  • Why does Minister Foss want to allow any software patents to be potentially granted in New Zealand anyway?
  • Can Minister Foss give any assurances whatsoever to New Zealand software developers that they will not be harmed by any software patents granted as a result of his last-minute “as such” change to the Patents Bill?
  • Allowing “hundreds of software patents” is certainly contrary to the unanimous recommendation of the Commerce Committee to exclude software patents. So why is Minister Foss unilaterally overruling the Committee’s unanimous recommendation?

The Minister also claims that the analysis of leading IP expert Andrew Brown QC “does not reflect the actual situation”, but gives no reasons for such a summary dismissal.

These are important questions. New Zealand’s IT industry has resoundingly rejected software patents, yet the Minister is content for his new Bill to allow them by the hundred. Why?

Minister finally admits Patents Bill “as such” is unclear

Commerce Minister Craig Foss has admitted that his purportedly clear “as such” amendment to the software patent exclusion in the Patents Bill actually isn’t so clear after all. In a letter to me dated 16 October, Minister Foss now admits:

  • His “as such” amendment introduces a “grey area” to the software patent exclusion;
  • His amendment makes it impossible to achieve a “bright line” exclusion of software patents;
  • It is not certain whose jurisprudence our law will follow; and
  • The country whose approach we will “likely” follow still allows software patents.

Here are the Minister’s words:

It is clear from decisions of the European Patent Office (EPO) that it is impossible to draw a “bright line” between computer programs “as such” (unpatentable) and other inventions which merely make use of computer programs (potentially patentable). Inevitably there is a “grey” area between the two. This may well result in the grant of patents which some may regard as software patents.

So the Minister is still supporting the “as such” change that he now admits will inevitably create a “grey area” that “may well” result in what are regarded as software patents continuing to be granted in New Zealand. Oh dear #1. The Minister is now simply contradicting his earlier assurances. He is also admitting that the change actually prevents a clear (“bright line”) exclusion of software patents. Why, then, does he continue to support it?

More worryingly, Minister Foss’s letter also states:

There is a significant amount of case law from the United Kingdom courts regarding what is and what is not a computer program “as such”. While the New Zealand courts are not bound by United Kingdom case law, they are likely to look to it for guidance. This provides a degree of assurance about how the “as such” wording is likely to be interpreted.

Oh dear #2. We have the chance to write a Bill that does have a specific and clear effect, but instead the Minister admits that his amendment will only have a “likely” effect, and one that is “likely” to fail to fully exclude all software patents. In other words, it is uncertain: the Minister is admitting he is leaving it to chance. No sensible lawyer drafts contracts to have only a “likely” effect, and no sensible Minister should propose legislation that he admits might turn out differently from what is (supposedly) intended. Minister, you’ve got the chance to expressly state what the law will do – why are you leaving it to chance?

The Minister continues:

It is clear from this case law that most computer programs cannot be patented in the United Kingdom.

Oh dear #3. By acknowledging (perhaps optimistically) that the UK excludes “most” computer programs (though the amount is debatable), he has admitted that the UK still does allow some software patents. If his intention is to exclude all software patents, then why is he still supporting a change that is “likely” (in his view) to fail to achieve that result? And, if the intention is to make all software non-patentable, then why is he concerned about being able to access a “significant amount of case law” about which software is and isn’t patentable?

Another question is why is the Minister sheepishly adopting European language that has proven so problematic, and which even WIPO has said is “ambiguous”? The Minister’s letter holds up TRIPS as the reason for adopting Europe’s problematic “as such” wording:

The “as such” wording is also consistent with the WTO TRIPS Agreement.

But hang on: here’s what the Minister said in another letter of 11 October:

There is also no requirement in the TRIPS Agreement that Members must grant patents over computer programs. Members have the flexibility to decline to grant such patents.

So why then is the Minister holding up TRIPS as an excuse for adopting law that by his own admission fails to exclude all software patents?

There are many unanswered questions. Minister Foss is simply tying himself up in knots trying (but failing) to defend the irrational, unwanted, and unneeded “as such” amendment to the Patents Bill.