New software patent law could spark tech boom

Orion Health founder Ian McCrae was part of the tech industry lobby that argued software patents were counter-productive and got in the way of innovation. Photo / Kenny Rodger

Last week was a milestone moment for New Zealand's fledgling software industry, with the passing into law of a new patents bill, which exempts software from patentability.

This mightn't sound like earth shattering news, but as with many things law related, the devil is in the detail, and as Labour's ICT spokesperson, Clare Curren said in Parliament last week, it was a "historic day for intellectual property in New Zealand,"

The Institute of IT Professionals chief executive, Paul Matthews, was also positive, saying the move could see offshore developers migrating to New Zealand's tech sector, seeing it as a safe haven from litigation.

"It is a really strong signal that we're serious about protecting innovators and about making NZ a really good place to run a tech company... We've already been approached by overseas, primarily US based companies, who're looking very seriously about relocating to NZ, and one of the key reasons being because of things like the patent law"

According to Mathews the new patent laws could also stimulate significant growth in the tech sector.

"Our industry is on the brink of a fairly large explosion... we've got the Xeros and Orion Health and others who are already doing some good things on the international stage and they're growing in terms of reputation and market share but we've also got a bunch of other companies that are a tier or two below that ware growing really quickly as well and are just starting to really get results on the international scene. If we can make sure we're creating an environment that will foster innovation and tech companies then we'll be on the brink of some pretty expansive growth."

Good things do however take time, and the Patents Bill was no exception, taking a full five years before it finally passed into law. The legislation was first drafted in 2008, with the Commerce Select Committee recommending a total ban on software patents in 2010. This stance was looking shaky with the introduction of a Supplementary Order Paper (SOP), which lead to an immediate and vocal outcry amidst fears that software could become patentable.

Numerous industry bodies representing the New Zealand IT industry including the Institute of IT Professionals, NZRise, internetNZ and the New Zealand Open Source Society were all highly vocal in their opposition alongside a who's who of New Zealand software companies.

Their concerns, reported here, centred on the fact that it would be next to impossible for kiwi developers to create software without infringing one of the many software patents already in existence, which would see them dragged into legal battles against bigger, better resourced and lawyered-up multinationals.

Dave Lane of New Zealand Open Source Society warns that even though the new law will free local developers from patent battles, developers will need to remain watchful.

"With something as arcane as patent law, those with strong incentives, a lot of resource, and few ethical concerns will test the legislation to see how far it will bend. So while we're ecstatic with the outcome of the Patents Bill, we recognise that the price of our new found liberation from the scourge of software patents is to remain vigilant."