Australian Productivity Commission calls for copyright shakeup

May 6th, 2016 at 2:00 pm by David Farrar

The SMH reports:

The Productivity Commission has recommended the free import of books, the free use of copyrighted material under new so-called “fair use” rules, a leglislated guarantee that consumers have the right to defeat internet geoblockers and much tighter restrictions on the granting and use of patents, under reforms it says could save consumers up to $1 billion a year.

Consumers should also have a legislated right to defeat internet geoblocks set by such companies as Amazon, it says.

Subtitled Copy(not)right, the draft report of the commission’s nine-month inquiry into intellectual property finds copyright terms are way in excess of what is needed, offering more than 100 years of protection for works that ought to be protected for 15 to 20 years.

The NZ Government should look seriously at this report when reviewing our copyright laws. If intellectual property laws are too tight, they damage the economy, just as they do if they are too loose also. Overall the laws are too tight.

Protecting intellectual property for over 100 years is silly. There won’t be one less invention or work because it was protected for say only 30 years instead of 100.

It backs proposals to introduce an open-ended and non-prescriptive right of “fair use” of copyrighted material that would allow many uses presently illegal in Australia, including the use of thumbnail images by search engines, the “quotation” of lyrics or song fragments in songs, the use of politicians’ jingles by their opponents in election advertisements, and the use of extracts from films in documentaries.

Fair use is essential to a country. Without it you couldn’t quote what anyone says.

The report says Australia’s patent rules are too lax, requiring claimed inventors to provide evidence of a “mere scintilla of invention” in order to lock up the use of their ideas. Patent fees should be higher and applicants should be required to explain why their ideas are not obvious, it says.

Many patents seem to be about blocking innovation rather than fostering it.

Consumers should have a legislated right to defeat geoblocks imposed by companies such as Netflix and Amazon in order to prevent Australians buying products sold overseas. The law that at present prevents Australian retailers importing books without the permission of local publishers should be repealed in the same way as the laws preventing the import of music without local publishers were repealed.

A great proposal. NZ should follow.

Patent trolls getting worse

April 19th, 2015 at 2:00 pm by David Farrar

The Herald reports:

The same week that Alex Haro and Chris Hulls raised $50 million for their mobile app, Life360, the business partners got a letter.

It said they had three days to pay licensing fees to a company they had never heard of because their app violated its patented technology.

Haro and Hulls traced the company, Advanced Ground Information Systems, to a coastal home in Jupiter, Florida, with a phone number that initially went to an anonymous voicemail.

They couldn’t find any employees on LinkedIn.

To Haro, it was “a punch in the gut,” he said.

On the other side of that letter was Malcolm “Cap” Beyer, Jr., a 76-year-old who had filed patents a decade ago on cellphone mapping.

He said his attorney told him that he had a strong case against the start-up, even though the general technology had been widely used for years.

Beyer insists the mobile app’s $50 million in fundraising had nothing to do with it.

In the end, a jury sided with Life360 on all counts – but not before Haro and Hulls shelled out nearly $1.5 million in legal fees.

Winning can still be losing. They will probably never get their costs back. This is what patent trolls rely on – that it is cheaper to pay them some money, than fight them in court.

The bill has become a top lobbying priority this year for the tech industry, which says it repeatedly fends off frivolous lawsuits because of poorly written software patents and laws that favour patent holders.

NZ has intelligently removed software from being patentable. It can be copyrighted, but not patented. Patents and intellectual property laws are very important, but if the laws are unbalanced, they can cause more harm than good.

“Patent trolls” generally refer to businesses that buy up patents, particularly in technical areas like computer chips, cloud computing and wireless routers, with the sole intention of filing lawsuits or demanding licensing fees from tech companies, particularly start-ups around the time of their public offering.

Not wanting to pay for a protracted legal fight, the defendants almost always settle even if they think they’d win.

Kramer calls it a vicious cycle – the more companies settle, the more lawsuits are filed.

“It’s like a legal version of a mob protection racket,” said Noah Theran, a spokesman for the Internet Association, a coalition of web-based companies.

Patents are meant to protect and foster innovation, but with patent trolls they actually stifle innovation.

Last year, the House passed the “Innovation Act” by House Judiciary Chairman Rep. Bob Goodlatte, R-Va.

The bill would toughen requirements when filing patent challenges in court, such as limiting the amount of documentation that can be demanded before a judge makes an initial ruling.

The bill also opens the door to a requirement that plaintiffs pay legal bills of the defendants if they lose.

Supporters said they suspect trial lawyers with close ties to then-Senate Majority Leader Harry Reid, D-Nev., helped scuttle the bill.

Reid is now minority leader with plans to retire next year.

Likely to replace him as the Senate’s top Democrat is Sen. Chuck Schumer, D-N.Y. – an advocate of patent reform.

President Barack Obama has said he supports patent reform.

So it might happen with Harry Reid out of the way.

Apple case shows need for patent reform

March 5th, 2015 at 12:00 pm by David Farrar

The Herald reports:

Apple has been ordered to pay nearly $US533 million by a federal jury that found the company’s iTunes music store uses software that infringes on patents held by a Texas company.

An attorney for plaintiff Smartflash LLC praised the verdict. Apple immediately announced plans to appeal and said the case shows the need for Congress to reform the US patent system.

The case involves three patents that Smartflash holds for software used in storing data files and managing access through an online payment system. The outcome will likely add fuel to a broader debate over the federal patent system and complaints that it’s easily abused by companies that make most of their revenue through patent lawsuits.

“Smartflash makes no products, has no employees, creates no jobs, has no US presence and is exploiting our patent system to seek royalties for technology Apple invented,” Apple said in a printed statement.

The statement added: “We rely on the patent system to protect real innovation and this case is one more example of why we feel so strongly Congress should enact meaningful patent reform.”

I agree with Apple.The US should follow NZ and not allow patents for software. You have scores of companies that file patents on as much software as possible, just so they can then sue someone who comes along with a similar idea. As in this case, they never produce anything with their patents – they just use them for lawsuits.

It is likely the decision will be overturned on appeal, but it is a shame so much money is wasted on endless patent lawsuits between IT companies.

Cato praises NZ patent law

September 25th, 2014 at 12:00 pm by David Farrar

Eli Dourado at Cato writes:

Libertarians intuitively understand the case for patents: just as other property rights internalize the social benefits of improvements to land, automobile maintenance, or business investment, patents incentivize the creation of new inventions, which might otherwise be undersupplied.

So far, so good. But it is important to recognize that the laws that govern property, intellectual or otherwise, do not arise out of thin air. Rather, our political institutions, with all their virtues and foibles, determine the contours of property—the exact bundle of rights that property holders possess, their extent, and their limitations.

Intellectual property rights are very important, but they are a balance between rewarding innovation and allowing further innovation.

In defining the limits of patent rights, our political institutions have gotten an analogous question badly wrong. A single, politically captured circuit court with exclusive jurisdiction over patent appeals has consistently expanded the scope of patentable subject matter. This expansion has resulted in an explosion of both patents and patent litigation, with destructive consequences. …

In patent politics, the romance has been gone for at least three decades. Here’s why. In most areas of law, the loser in a federal trial appeals to the circuit court corresponding to the federal judicial district in which the trial was held. But in 1982, at the urging of the patent bar, Congress consolidated appellate review of all patent cases in a newly created Court of Appeals for the Federal Circuit.

And get this – the Federal Circuit Court basically is a law to itself, and ignores the Supreme Court.

Observers on all sides widely recognize that the Federal Circuit routinely undermines Supreme Court precedent. …

Supreme Court justices also recognize the Federal Circuit’s insubordination. In oral arguments inCarlsbad Technology v. HIF Bio (2009), Chief Justice John Roberts joked openly about it:

Mr. Rhodes: I can’t suggest what the Court might finally decide other than to say that—that, again, the circuit courts of appeal have uniformly applied this. They seem to be—

Chief Justice Roberts: Well, they don’t have a choice, right? They can’t say, I don’t like the Supreme Court rule so I’m not going to apply it, other than the Federal Circuit.

So what can be done?

Another helpful reform would be for Congress to limit the scope of patentable subject matter via statute. New Zealand has done just that, declaring that software is “not an invention” to get around WTO obligations to respect intellectual property. Congress should do the same with respect to both software and business methods.

Nice to see our law held up as a model.

Patent wars ending?

May 18th, 2014 at 3:00 pm by David Farrar

Stuff reports:

Apple and Google’s Motorola Mobility unit have agreed to settle all patent litigation between them over smartphones, ending one of the highest-profile lawsuits in technology.

In a joint statement on Friday, the companies said the settlement does not include a cross license to their respective patents.

“Apple and Google have also agreed to work together in some areas of patent reform,” the statement said.

This is a very welcome step. In certain areas patents have gone from protecting innovation to harming innovation.

US Supreme Court and patents

April 3rd, 2014 at 2:00 pm by David Farrar

Stuff reports:

The US Supreme Court has grappled with the standards for software patents, considering the issue for the first time in decades in a case that has divided the computer industry. …

The case concerns claims that CLS Bank International, a New York-based provider of settlement services, infringed patents owned by Melbourne-based Alice Corp. The patents cover a computerised system for using an intermediary to limit the risk that one party to a derivative trade will renege on its obligations.

CLS says Alice’s patents run afoul of Supreme Court decisions that say abstract ideas aren’t entitled to legal protection. Alice, which is partially owned by National Australia Bank, said the abstract-idea exception to patent eligibility is a narrow one.

Justice Ruth Bader Ginsburg suggested that Alice’s argument was doomed by a 2010 Supreme Court decision that limited patents on business methods by rejecting a proposed patent on a system for hedging energy trades. She asked Alice’s lawyer, Carter Phillips, how his client’s idea was any “less abstract than hedging.”

Other justices were similarly sceptical. Justice Anthony Kennedy said a group of college engineering students could probably write the computer code for Alice’s idea over a weekend.

“My guess is that that would be fairly easy to program,” he said.

You can’t always tell how a decision will go by the questioning, but it sounds like the Court is skeptical over overly broad patents that block innovation, That would be a good thing.

The Obama administration is urging the court to issue a broader ruling that would put new limits on the availability of software patents. Solicitor General Donald Verrilli told the court that software was eligible for patenting only if it “improved the functioning of the computer technology” or “is used to improve another technology.”

Software can generally no longer be patented in NZ, unless it is basically embedded in a machine.

US Supreme Court to rule on software patents

December 8th, 2013 at 10:00 am by David Farrar

The issue of whether software should be patentable has been settled in New Zealand, and may soon be settled in the US. The Washington Post reports:

In a trio of Supreme Court decisions between 1972 and 1981, the court held that mathematical algorithms were not eligible for patent protection. Since computer software is little more than mathematical algorithms encoded in machine-readable form, most of the software industry assumed this meant you couldn’t patent software. But then, in the 1990s, a patent-friendly appeals court handed down a series of decisionsthat opened the door to patents on software. That triggered a wave of patenting that has drowned the technology industry in litigation.

In principle, the Supreme Court’s old precedents ruling out patents on mathematical algorithms are still good law. And today, the Supreme Court announced that it would hear an appeal that, for the first time in 30 years, will directly address the patentability of software.

The court that has to date decided the law is the little known United States Court of Appeals for the Federal Circuit. It was only created in 1982. Unlike the other appeal courts, its rulings are binding on the entire United States, not just one circuit. Only the Supreme Court can over-rule it.

Now the Supreme Court will have an opportunity to weigh in on the case. And while the high court could issue a narrow ruling based on the details of the patents in this case, it could also take the opportunity to fix the software patent mess more broadly. All it would need to do is to reiterate its earlier position that patents claiming mathematical processes — a.k.a. computer software — isn’t eligible for patent protection unless it’s tied to a specific machine or physical process.

Which is basically now the law in New Zealand.

The high court will be reluctant to do this because it would be disruptive. Reiterating that mathematical algorithms can’t be patented would call into question thousands of patents held by major software companies. And these companies could complain, with some justification, that the Supreme Court’s failure to rule on the issue for more than 30 years was a tacit acceptance of rulings by the Federal Circuit.

Still, the federal circuit cannot overrule Supreme Court precedents. And the federal circuit’s experiment with software patents has been a disaster. As the patent scholar James Bessen has argued, the patent troll crisis is really a software patent crisis. Software patents are far more likely to be involved in litigation than other types of patent. The result: According to Bessen’s calculations, troll-related litigation cost the U.S. economy $29 billion in 2011 alone. Reiterating that “pure” software can’t be patented wouldn’t just be good law — it would also save the nation billions of dollars in litigation costs.

The case will be watched very closely.

Patent trolls

July 26th, 2013 at 12:00 pm by David Farrar

Stuff reports:

A growing number of technology startups are being threatened with lawsuits over broad patents they allegedly, and inadvertently, infringed.

The founders of three small startups went to Washington DC  this week to lobby members of the United States Congress to change the patent system.

“This is the single worst thing to happen to me since I started the company,” says one of the CEOs, the founder of a five-person e-commerce startup that was targeted by a firm he calls a patent troll. He is so concerned about retaliation from that firm that he asked that his name not be used for this story.

He says that being targeted by a patent lawsuit is worse than times he’s lost clients or run out of money. It’s even worse than having to do without a salary for the last year. He admits he’s fortunate that his wife has a steady job that allows them to support their children. But the possibility that a patent lawsuit he regards as frivolous could destroy his company keeps him up at night.

The firm has raised about a million dollars from investors. The CEO says that after paying his employees’ salaries, his top expense is legal bills. And the vast majority of those legal costs relate to a single patent lawsuit.

The entrepreneur says he didn’t copy the plaintiff’s technology; indeed he’d never heard of the firm until it started making legal threats. He describes the patents he is accused of infringing as extraordinarily broad. The complaint claims the firm infringed one of the plaintiff’s patents by using a wireless device, a database and a website to synchronize data and perform common e-commerce functions-things that hundreds of web startups do. “Anyone is at risk for that,” he says. “And it never gets more specific.”

We had this occur in NZ many years ago. DET, a Canadian firm, wrote to scores of NZ companies demanding they pay them licensing fees as they had a broad NZ patent for e-commerce systems that are multi-transactional and multi-language and multi-currency. Yes, it was that broad.

We got it disqualified on a technicality – they had mixed some dates up. But if not for that, then it could have been an even bigger threat to NZ companies online.

Thank goodness the NZ Government and Parliament has agreed to exclude software from being patentable. Software should be protected by copyright over code, but patents are far too broad a tool for protection with software as inevitably all software builds on what is already out there.

A good move from the Govt on patents

May 9th, 2013 at 1:25 pm by David Farrar

Craig Foss has announced:

Commerce Minister Craig Foss has today released a supplementary order paper (SOP) to clarify issues around the patentability of computer programmes in the Patents Bill.

“Following consultation with the NZ software and IT sector, I am pleased to be further progressing the Patents Bill with this SOP. These changes ensure the Bill is consistent with the intention of the Commerce Select Committee recommendation that computer programs should not be patentable,” says Mr Foss.

Today’s change is to codify a test set out in UK case law to provide clarification around the “as such” wording used in SOP 120 (tabled 28 August 2012).

“I would like to thank the NZ software and IT sector for their engagement over the last few months. I’m confident we’ve reached a solution where we can continue to protect genuine inventions and encourage Kiwi businesses to export and grow.

The SOP is here. A key extra clause is:

A claim in a patent or an application relates to a computer program as such if the actual contribution made by the alleged invention lies solely in it being a computer program.

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,

To also achieve greater clarity, the SOP provides an explicit example of what is not patentable in terms of software, namely that a chip for a washing machine is, but an online filing software system is not (the code is copyrighted though).

The Institute of IT Professionals has welcomed the announcement:

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. …

“The Institute thanks Minister Foss for responding to industry concerns, clarifying the Patents Bill’s intention to remove patentability of software and for taking extra steps to ensure the law around software patents is clear and unambiguous,” Matthews said. “Software will not be patentable in New Zealand and a major barrier to software innovation has been removed”.

“We also acknowledge the work of United Future’s Peter Dunne, Labour’s Clare Curran and other political parties who have listened to the industry’s concerns and contributed towards a solution,” Matthews said. “It’s great that all parties support software-led innovation in New Zealand.”

I’d agree with the IITP that MPs from several parties helped contribute to getting a law that will be clear and good for New Zealand. The recommendation to do so was a unanimous one by a select committee.

Ian McCrae, chief executive of New Zealand’s largest software exporter Orion Health agreed, saying today “We welcome this announcement. Under the current regime, obvious things are getting patented. You might see a logical enhancement to your software, but you can’t do it because someone else has a patent. In general, software patents are counter-productive, often used obstructively and get in the way of innovation. We are a software company and as such, our best protection is to innovate and innovate fast.”

John Ascroft, Chief Innovation Officer of Jade Corporation said “We believe the patent process is onerous, not suited to the software industry, and challenges our investment in innovation.”

Orion and Jade together account for around 50% of software exports from New Zealand.

The decision is also welcomed by InternetNZ:

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. …

The question of software patents has been an important issue for InternetNZ for several years. InternetNZ has previously made submissions on the issue, noting that software is inextricably linked to the good functioning of the Internet. Patenting software would not only make the continued development of the Internet more difficult, it would reduce innovation and could well stymie interoperability of various software platforms.

InternetNZ spokesperson Susan Chalmers says InternetNZ is happy to see the issue now resolved and looks forward to the passage and implementation of the Patents Bill, a long-awaited and much needed update to a large component of New Zealand’s intellectual property regime.

So it is a good outcome all around. Congratulations to Craig Foss for constructively working with industry groups to get this issue resolved, and kudos to other MPs such as Peter Dunne and Clare Curran who supported getting a good law.

I’m personally very pleased that National has taken a balanced approach on intellectual property issues. While of course there are areas of disagreement, the current Government has consistently moved things in the right direction. To name a few:

  • Repealed the previous three strikes guilt upon accusation copyright law
  • Suspended the provision for termination of Internet accounts for repeat copyright infringement
  • Set the copyright infringement filing fee at $25, $5 higher than recommended by officials
  • Kept the fee at $25 when reviewed, despite massive opposition from the MPAA
  • Have consistently rejected the US proposed IP chapter for the TPP
  • Amended the law to exclude software from being patentable

Now as I said, there are still a few areas I’d like further change. but overall the direction in the last few years has been a positive one.

More on patent trolls

March 20th, 2013 at 1:00 pm by David Farrar

Peter Cresswell responds to my earlier blog on patent trolls:

He says:

Thomas Edison was a “patent troll.”

So was Nikola Tesla.

So was almost every great inventor in the last 200 years*.

So is any inventor who licenses their invention rather than produce it themselves.  Unlike the ignoramuses who attack them, these people aren’t trolls. They’re benefactors:

Not every person who patents something they don’t produce is a patent troll. But patent trolls don’t actually come up with inventive ideas. Their inventive idea is to just file a patent over anything they can think of, even if it is not a true invention. Once they get the patent, they’ll find victims who will pay them a fee rather than go to court to get the patent over-turned.

PC quotes a Judge:

Judge Michel,  former head of the CAFC, the US court that hears all patent appeals, points out that the number of patent suits filed each year has remained constant at less than three thousand.  Only about 100 of these suits ever go to trial.  In a technology based economy with over 300 million people and 1 million active patents this is trivial.

Of course they don’t go to trial. If you want to try and fight a patent claim you need US$1 to US$2.5 million generally. What small business can afford that?

The proposed law change mooted in the US doesn’t ban patent trolls. It just changes the economic incentives so that the trolls have to post a bond to cover the defendant’s costs in case they lose. So you can’t just set up a $500 shell company and threaten patent lawsuits. The problem for the defendent is that even if they win, they will never recover the cost of defending the lawsuit. So of course they settle.

Death to Patent Trolls

March 19th, 2013 at 12:00 pm by David Farrar

Jordan Weissmann writes at The Atlantic:

It’s hard to think of any business more inherently obnoxious than a patent troll. These are the tech-world parasites that buy up troves of intellectual property, not so that they can make a product, but so that they can turn around and sue successful companies for patent infringement with the aim of nabbing a quick and profitable settlement. They’ve infested the courts over the last decade, and by one count are now responsible for more than half of all U.S. patent cases, potentially costing American businesses some $29 billion a year.

So kudos to Oregon congressman Peter DeFazio, who Thursday morning introduced a bill aimed squarely at putting the trolls out of commission. His smart and simple legislation, called the SHIELD Act, would force trolls that lose in court to reimburse the companies they sue for their legal fees, which can amount to millions of dollars. That might not sound particularly bold. But it’s a carefully calibrated step that could go a long way to containing the the troll problem by driving up the cost — and risk — of bringing flimsy patent cases. 

I like it.

Trolls have flourished over the last few years largely because it’s now easier and cheaper to bring a patent case than it is to defend against one. Much like personal injury lawyers who advertise on TV, the attorneys who represent trolls often work on contingency, meaning they only take a cut of what they win. Defense lawyers, on the other hand, ask for their pay up front, and usually bill by the hour. As a result, a single troll can file a barrage of lawsuits without putting much skin in the game, while the small companies they tend to target — about 55 percent of the businesses sued make less than $10 million a year — are forced to mount a costly defense that saps their finances with each passing day. 

We’re lucky that generally we’re too small to target, but we have had a few.

There’s also a more subtle way DeFazio’s bill throws a kink into the troll business model. At the start of each patent suit, the plaintiffs will have to show that they are either a university, the original inventor of the patent, or a company sincerely trying to turn it into a commercial product. If they can’t, they will be officially deemed a troll, and be required to post a bond to cover the defendant’s costs, should they lose a case. That will tie up their money, which in turn will make it more cost-intensive to bring lots of suits while simultaneously cutting their return on investment. 

Hopefully he can get it past Congress.

Somewhat misleading

February 18th, 2013 at 2:00 pm by David Farrar

The latest article by Pat Pilcher on software patents is somewhat misleading. I actually agree with Pat (and have quoted him before) that software patents should not be allowed. But the issue is about how the current law is depicted.

Pilcher wrote in the Herald:

At the end of the day, should software become patentable in New Zealand, the future winners will most probably only be large law firms and the multinationals who can afford them. In the US over the last 20 years, The estimated cost to the US economy of patent litigation has been an estimated half a trillion US dollars.

This is very misleading, as it strongly implies software is not patentable at the moment. It is. Apart from the normal tests for obviousness etc there are no restrictions at all on software patents.

The law is going to change, and it will ban at least some software patents. So in fact the change in the law will be the opposite direction to what Pilcher implies.

Now what the dispute is about, is the wording of the exemption. As has been described in the past, many worry the Government’s proposed wording which is based on European (and I think Australian) law will still allow some software to be patented. That is a legitimate concern and I prefer the wording backed by the Open Source Society and put forward as an amendment by Clare Curran.

But that doesn’t change the fact that even with the Government’s wording, the law is going to change from all software being patentable to most software not being patentable.

There is a good Wikipedia article on the pros and cons of software patents.

Pilcher on software patents

February 9th, 2013 at 4:00 pm by David Farrar

Pat Pilcher writes:

For technology to become a fully functioning cog in NZ’s economy, the way we treat intellectual property (e.g. the ideas and concepts behind the software, hardware and other innovation that underpins much of the tech sector) is critically important. In a nutshell, we’d better get our patent laws right or we may find local businesses involved in unwinnable patent fights against lawyered-up multinationals when they could be innovating, exporting and otherwise creating wealth for New Zealanders.

And the patent trolls.

The overarching aim is for the government to provide a balance between innovation and protecting public interests.

Achieving this is no easy feat, and already the bill is mired in controversy as Commerce Minister Craig Foss changed the wording of a clause within the bill which could have huge ramifications for New Zealand’s fledgling software industry.

His amendment has changed some crucial wording in the bill that some say has the government moving away from excluding software from being patented (as per select committee recommendations), to parts of the bill being sufficiently vague that software may indeed become patentable. Clause 10a of the supplementary order paper 120 was amended to read: “..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”

It might only be two words, but from a legal standpoint the addition of “as such” makes all the difference and could see kiwi companies being locked into protracted legal battles against multinationals whose lawyers are likely to emerge as the only real victors, whilst New Zealand could end up on the losing side.

I’m not sure how significant the two extra words are but personally prefer to err on the side of caution and leave them out.

Of equal concern, changes to the bill could see businesses that had invested in New Zealand pulling out. Geomechanica, a Canadian software company had planned to relocate to NZ because they felt that the original patent ban on software as proposed in the unmodified form of the bill would foster an innovation friendly environment. Sadly tweaks made to the patent bill could render a New Zealand business case untenable for them and others, depriving New Zealand of employment opportunities, potentially setting our digital economy back by decades.

According to AJ Guillon, co-founder of Geomechanica, “We have planned our products and marketing based on a relocation to New Zealand, exporting innovative software without the threat of domestic software patents. If the software patent bill passes with the “as such” wording, we cannot justify a relocation to a country with an ambiguous law on a matter that is so important to us.”

Seems like a good case for a clear law that is explicit that software can not be patented.

IT professionals on software patents

October 9th, 2012 at 9:00 am by David Farrar

Institute of IT Professionals CEO Paul Matthews writes:

 The latest example is last week’s Institute of IT Professionals poll where a resounding 94 percent of IT Professionals with a view favoured the Institute continuing to oppose software patents. Yes, 94 percent. And not a small poll either – over 1000 of our members responded.

That is a huge vote. It clearly shows that those at the coalface of IT, have a very united view on the issue of software patents.

So why do so many oppose software patents? One reason is that the last few years of software-patenting decisions means it’s now simply not possible to write software today without breaching patents. Many believe software patents represent the biggest threat to our profession since Turing kicked things off at Bletchley Park, as do the patent trolls; lawyers who increasingly make a living out of gaining patents on obvious things and suing successful technologists.

This is seen in the US a lot, with patent wars. In the IT realm, they have become about lawsuits, not innovation.

Another reason is the total unsuitability of the patent system to software. Imagine if Mary Shelley was able to patent the concept of a horror novel when she wrote Frankenstein, preventing all future horror novels that might compete with hers. It wouldn’t matter that Frankenstein was inspired by prior gothic novels such as The Castle of Otranto from 1764.

Like software, book genres and plot “inventions” are built on those that came before them. Allowing someone to take this prior work, box it up differently then gain monopoly rights preventing others from doing the same does nothing other than stifle innovation. Like with books, copyright does the job for software.

Think if you had patents over political policies. Political parties could sue each other for stealing their ideas!

During the second reading of the Patents Bill in Parliament Minister Foss stated “There has been no change to the select committee’s intention that computer programs should not be patentable” and repeated four times that under the SOP, a computer program will not be patentable. Four times.

So will the ‘as such’ wording mean that software can’t be patented in New Zealand as the minister apparently believes?

The patent lawyers certainly don’t seem to think so.

In commentary in the Law Society’s LawTalk magazine Barrister Clive Elliott writes that the proposed exclusion of computer programs “has been scrapped” by the minister’s SOP which “restores the status quo”.

A prominent IP lawyer Andrew Brown QC has written that the SOP “will effectively allow patentability of computer programs”. Attorney Doug Calhoun states that with the SOP there is “no real change in the law” and IT lawyer Guy Burgess states that the wording “fails to exclude software patents”.

In fact other than the minister’s advisers, we can’t find a single patent expert or lawyer who thinks the minister’s ‘as such’ wording will actually mean software is not patentable. We were also easily able to compile a sample of 150 seemingly pure software patents granted in Europe over the last 12 months under this wording and the number is likely far higher – some say as high as 30,000.

That is a good challenge. Is there a lawyer out there who thinks the “as such” wording will not lead to software continuing to be patented in NZ? Certainly many lawyers support the wording – but that seems to be because it will allow patents.

So has the government buckled under pressure from the US and decided to backtrack on the unanimous decision of the select committee? Do they now support the patenting of software against the wishes of the vast majority of the kiwi software industry? 

If so, we wish they’d just come out and say so.

Or have they simply stuffed up by suggesting adopting wording into law that has been proven overseas to have the exact opposite effect of what they intend?

As LV Martin used to say, it’s the putting right that counts. Circumstances change and the implications of the European decision from 2010 is only really becoming clear now. If it’s a stuff-up it’s easy to fix, minister. Simply remove 10A(2) and we’ll all sing your praises from the rooftops.

I think the Government may underestimate how strongly most of the ICT community feel on this issue. The 94% vote should ring warning bells.

Technology Patents

October 5th, 2012 at 12:00 pm by David Farrar

Judge Richard Posner has blogged:

I am concerned that both patent and copyright protection, though particularly the former, may be excessive.

To evaluate optimal patent protection for an invention, one has to consider both the cost of inventing and the cost of copying; the higher the ratio of the former to the latter, the greater the optimal patent protection for the inventor. The ratio is very high for pharmaceutical drugs. The cost of inventing a new drug, a cost that includes the extensive testing required for the drug to be approved for sale, is in the hundreds of millions of dollars, yet for most drugs the cost of copying—or producing an identical substitute—is very low. And so the ratio of the first to the second cost is very high, making it hard for the inventor to recover his costs without patent protection (and for the additional reasons that the present value of the revenue from sale of the drug is depressed because of the length of time it takes to get approval, and that the effective patent term is truncated because the patent is granted, and the period patent protection begins to run, when the patent is granted rather than, years later, when the drug can begin to be sold).

Pharmaceutical drugs are the poster child for patent protection. Few other products have the characteristics that make patent protection indispensable to the pharmaceutical industry.

I think Judge Posner articulates well why patents are so necessary in areas such as pharmaceutical. Without them, we would have far fewer drugs and vaccines.

The problem of excessive patent protection is at present best illustrated by the software industry. This is a progressive, dynamic industry rife with invention. But the conditions that make patent protection essential in the pharmaceutical industry are absent. Nowadays most software innovation is incremental, created by teams of software engineers at modest cost, and also ephemeral—most software inventions are quickly superseded. Software innovation tends to be piecemeal—not entire devices, but components, so that a software device (a cellphone, a tablet, a laptop, etc.) may have tens of thousands, even hundreds of thousands, of separate components (bits of software code or bits of hardware), each one arguably patentable. The result is huge patent thickets, creating rich opportunities for trying to hamstring competitors by suing for infringement—and also for infringing, and then challenging the validity of the patent when the patentee sues you. 

Just as patents encourage innovation in the pharmaceutical industry, there is a growing belief they stifle innovation in the software space. Hence why NZ has, in theory, decided not to allow software patents.

The Government has proposed a legislative wording which is effectively:

A computer program is not an invention for the purposes of this Act … to the extent that a patent or an application relates to a computer program as such

Labour MP Clare Curran has proposed an amendment, supported by many NZ technology groups, being:

A computer program is not an invention for the purposes of this Act … ]but] does not prevent an invention that makes use of an embedded computer program from being patentable

Guy Burgess has blogged that an opinion by Andrew Brown QC has stated:

 the Government amendment, now incorporated into the Bill following the second reading, will effectively allow the patentability of computer programs except where these have no technical effect e.g. algorithms, schemes or plans

Andrew Brown is one of the leading intellectual property lawyers in NZ, if not the leading one, so his opinions carry considerable weight. His full analysis is here. It is worth noting that overall, he thinks the “as such provision” presents a workable set of criteria and signposts.

Personally I think the issue is not just a workable definition, but also whether you want software patentable at all. My view is that amendment by Clare Curran is superior as it clearly says software is not patentable, however protects inventions that have software embedded within them.

National no doubt has to vote in line with the Government decision. However United Future, ACT and the Maori Party do not. I hope they take the time to get to grips with this issue – which is an important one for many NZ technology firms, and that they back the Curran amendment. It is, in my opinion, closest to what the Select Committee unanimously recommended.

Guest Post #2 on Patents

September 7th, 2012 at 12:00 pm by David Farrar

Guy Burgess, whom I quoted yesterday, has also taken up my offer of a guest post, which is below:

Software patents – lets make it patently clear

Guy Burgess –

The software debate in New Zealand is, in theory, over. In 2010, the Commerce Select Committee (including National, Labour, Act, Maori and Green MPs) unanimously recommended that software patents be banned in New Zealand. The local software industry cheered, and then-Commerce Minister Simon Power confirmed that the Government had accepted the Select Committee’s recommendation.

However, last week Commerce Minister Craig Foss announced what he called a “minor amendment” to the Bill: while the slightly reworded software patent exclusion remains as clause 10A(1), new clause 10A(2) adds the seemingly innocuous – but legally loaded – proviso that the exclusion only applies to software, “as such”. The “as such” language is from European patent law, with the stated purpose being to bring the section more “into line” with Europe – which must be a good thing, right?

Well, not really, because unfortunately those two, harmless-sounding words (“as such”) have – perhaps surprisingly – proven very controversial in Europe, and have allowed software patents to continue to be granted despite the intention to exclude them. That’s why patents are still available in Europe covering things like:

  • electronic shopping carts;
  • a pop-out context menu;
  • long filenames;
  • trapping viruses;
  • digital signatures;
  • etc.

So instead of having a minor effect, the “as such” language has actually undermined the intended exclusion of software patents in Europe. It has also led to a chaotic situation. For example, the Institute of Patent & Trade Mark Attorneys of Australia said in their submission on our Patents Bill:

The approach in Europe has also led to considerable uncertainty and criticism amongst European industry, the European Patent Office and the Courts… the approach has been often criticised as being inconsistent and contradictory to the EPC itself… 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.

Adopting an approach comparable to the EPC and UK Patents Act is also likely to lead to unpredictability, as an interpretation of the “as such” clause by the European Patents Boards of Appeal has that computer programs are only patentable if they produce a “further technical effect” so as to render the claim allowable under article 52 of the EPC… The EPO approach has often been criticised in Europe as giving rise to unpredictability in that jurisdiction…

Bringing our laws into line with other jurisdictions is often a good thing, but not when the other jurisdiction’s laws have led to uncertainty, inconsistency, contradiction, and unpredictability!

Simply, the last-minute addition of the “as such” proviso undermines the unanimous, cross-party recommendation of the Select Committee.

The good news is that there is a logical and sensible solution to this. Since Tuesday, over 880 people have signed on to an IT industry petition calling on the Government to replace the problematic clause 10A(2) with a new one – see the petition site for details. This change:

  • preserves the intended exclusion of software patents, and is consistent with the Government’s statements;
  • ensures that inventions containing software, such as Fisher & Paykel smart appliances can still be patented (in fact it is consistent with Fisher & Paykel’s own suggested change to the Bill); and
  • avoids needlessly importing bad European law (“as such”) into New Zealand.

Just as importantly, this requested change has been resoundingly embraced by New Zealand software developers and supporters. Those who have signed the petition include InternetNZ, the Institute of Information Technology Professionals, local IT industry group NZRise, the NZ Open Source Society, and hundreds of other New Zealand IT-sector organisations and individuals.

Of course, there are some who still oppose the exclusion of software patents altogether, such as NZICT (representing software patent holders). However, the debate is no longer about whether we should have software patents or not – that argument was settled (in principle) in this country over two years ago.

The question is one of implementation and clear law: do we implement the exclusion in a clear manner such as proposed by the petition – and supported by the industry most affected by software patents – or do we instead choose to follow the troublesome European approach?

Two important notes:

  1. The industry-supported amendment does not allow patenting of “embedded software” – under the amendment, all software is unpatentable. The amendment is simply to ensure that an otherwise-patentable invention (e.g. an inventive new washing machine by F&P) will not suddenly become unpatentable just because it contains embedded software.
  2. Some have expressed concerns that the term “embedded software” may be uncertain. I answer those concerns in my post here.

Thanks to Guy for this. This is an important issue. Bad patent law does harm innovation, and can impose significant costs on businesses. I recall when DET tried to invoice dozens of NZ companies on the basis of a patent for multi-currency website transaction software (something which is as common as apples today).

Guest Post #1 on Patents

September 7th, 2012 at 11:00 am by David Farrar

Mark Thomson has provided a guest post on the patents issue. I’ll also be blogging a guest post from Guy Burgess on it, so we are truly fair and balanced!

Should software be patentable? Well, let’s first be sure that we understand what people mean when they talk about patenting software. Because it’s really not clear to me that everyone who has an opinion on the subject is seeing this in exactly the same way.

We know software can be copyrighted, and there are usually very good reasons to protect it that way. However I can’t say that I’ve ever personally seen a patent that defines a specific piece of software and I doubt that there are many situations in which that would be a good way to protect the relevant intellectual property.

Utility patents are concerned with invention – the creation of a new way of solving a problem that is not obvious to people who are skilled in the field. However, for inventions that are intended to be implemented as software, a genuine inventive step – i.e. the novel idea that is not obvious to other skilled practitioners – is usually defined at a much higher level of abstraction than the code itself.

To illustrate, here are a couple of patents I’ve been involved with myself –

I don’t expect these to make sense to many people (sadly, that often includes patent examiners!). However both of them involve significant, original insights into how to solve some very challenging, and (according to me :)) important, technical problems. These inventions resulted from extensive commercial R&D investment of precisely the kind that I believe patents are intended to foster. I can tell you that the world would almost certainly never know about them if they hadn’t been patented.

Note that there’s nothing in the specification of these patents that refers explicitly to software, and certainly no specific code is defined. Yet it is *completely* obvious to anyone who understands these patents that the only sensible way to implement them is in the form of software. But the details of what that software might look like is completely incidental to the essence of the inventions. And since the process of translating the invention as it’s described into a specific software implementation would not itself pass the ‘non-obvious’ test (that’s just what software engineers do), that process and any software that results from it could not possibly be part of any claims within the patent (but copyright protects the code itself anyway).

And then we have Clause 10A:

(1) A computer program is not an invention for the purposes of this Act.
(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.

I’m happy to be corrected on this by anyone directly connected with the Committee, but taken at face value my impression is that the intent of this statement is simply to exclude patents in which the software – i.e. the code itself – is (or at least purports to be) the actual essence of the invention – that would certainly make sense to me and be consistent with my own experience of how patents work in the real world. I’m guessing that the proposed wording “a computer program as such” is intended to get at precisely this point. A paraphrase would therefore be “a patent may not include as one or more of its claims a specific piece of computer software, in either source or object code form”.

In my view, this is a very reasonable position for the Government to take. But note that it would not in any way prevent patents being granted for inventions that are implemented purely as software, as long as they involve substantive inventive claims that are genuinely novel, useful and not obvious to those skilled in the field.

I’ll let others debate how well “as such” actually conveys this idea. But let’s set that issue aside for now. What about the ’embedded computer program’ idea? The folks at maintain that this is what the Government actually meant to say, and to support this they’ve referenced a press release from Craig Foss dated 28/8/12 ( Here is what he said –

“Under the amendment, computer programs as such would not be eligible for patent protection. However, inventions that make use of embedded computer programs will be patentable.”

It’s pretty clear that no.softwarepatents are interpeting the second sentence as defining a (comparatively narrower) exception to the (more widely applicable) restrictions prescribed in the first. But that may not really be exactly what Foss thinks he said (assuming he understands the concepts at all). The wording that the Committee have actually chosen to put in the Amendment, together with my own experience I outlined before leads me to think that a more natural way to understand the second sentence may be as a clarifying contrast to the second. So what Foss really means by “embedded computer programs” would be “inventions embodied (implemented) using software”. Note that the term ’embodiment’ is very common in patent language. So it wouldn’t be a complete surprise if that somehow morphed in someone’s mind into “embedded”. Again to paraphrase, the overall meaning would be “you can’t patent software itself (regardless of the kind of software), but (clarifying contrast…) you can patent any invention implemented using software as long as the claims of the invention meet the usual criteria of utility, novelty and non-obviousness”.

So this interpretation does not attempt to differentiate between two different kinds of software – i.e. embedded and something else, which seems to be no.softwarepatents’ perspective. Because no.softwarepatents interpret embedded software as a different type of software, Guy Burgess’s article is mostly focused on whether that term is sufficently well-defined within the industry. Ok, but remember this is only relevant if that’s really what Foss and the Committee had in mind. And remember, Foss is an MP, who used to be an investment banker (though of course we don’t know who actually wrote the release). He’s not from ‘the software industry’.

As to whether the term itself does in fact have a well-defined meaning, well yes and no. Historically (and forgive me if I’m stating the obvious), it’s been used mainly to reflect the distinction between:
 – on one hand a more or less ‘traditional’ view of a computer as “a thing in itself”, e.g. something that sits on your desk, often with a screen and keyboard etc and which you use to ‘run computer programs’, and
 – on the other hand something principally viewed as “other than” a computer, but which nonetheless has computing elements within it – washing machines, petrol pumps, engine control systems, medical instruments…
The examples given by both Burgess and indicate that they have in mind essentially the same understanding.

A very large amount of the software development done worldwide falls within the broad scope of ’embedded software’ as I’ve described it. So it’s no surprise at all that there are lots of papers published on the subject and lots of jobs advertised for embedded software engineers and that people understand broadly that these roles involve particular kinds of platforms, skills and techniques (e.g. certain kinds of processors, programming languages, memory constraints, development methodologies etc…).

But even if this really was what Craig Foss was referring to, I still couldn’t agree at all that this would make the term ’embedded software’ useful in the current legislative context, for two reasons… First, as technology platforms are evolving, these boundaries are blurring rapidly. Software in a cellphone was certainly viewed as embedded code a few years ago (such as the voice compression software I was writing for cellphones 12-14 years ago). But what about the latest smartphones? These are used to ‘run computer programs’. Some of these ‘programs’ inter-operate with (e.g. control) embedded components and other embedded devices. But plug some smartphones into a dock with screen and keyboard and you have something that acts just like a ‘computer’ (on more or less this point, see Eric Schmidt at 21:59 in this video recorded yesterday –

But the problem is even more complicated than that. Take the example patents I referred to earlier… either one of them could equally well be deployed in an embedded device, or as part of an application on desktop computer, or within a server farm. And these are far from being strange exceptions. The patents themselves simply don’t tell you anything about the kind of environment/device/platform in which they should be used. So if the legislation were to use the “embedded computer program” terminology in the sense that Burgess and co. want, what would that legislation tell a patent examiner or a judge that they should do with patents like these? So really I just don’t see that this language makes sense here.

Hoping to better understand where people are coming from, I went and dug a little deeper into the website, and I found this…, where they say the following, regarding the Commerce Commission Select Committee’s deliberations on the Patents Bill –

The Select Committee agreed, recommending unanimously that the new Patents Bill explicitly exclude software. Their report said:

 ‘We recommend amending [the Bill] to include computer programs among inventions that may not be patented… A number of submitters argued that there is no “inventive step” in software development, as “new” software invariably builds on existing software. They felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques. In general we accept this position.’

The Select Committee did, however, make one important caveat: that inventions containing embedded software should still be patentable:

 ‘We received advice that our recommendation to include computer programs among the inventions that may not be patented would be unlikely to prevent the granting of patents for inventions involving embedded software. We recommend that the Intellectual Property Office of New Zealand develop guidelines for inventions containing embedded software.’

Again we see the ’embedded software’ language, but once more I’m less than convinced from the context that the Committee are knowingly using that term in the sense that it’s understood in the industry. And there are some curious ideas here…

– “A number of submitters argued that there is no “inventive step” in software development, as “new” software invariably builds on existing software.”

First, the fact that one system builds on another tells you absolutely nothing about whether there is an inventive step involved. Patent law requires an inventive step. There is no need to distinguish between software and hardware if this were genuinely the concern.

Furthermore, the statement seems not to recognise that there are multiple levels of abstraction involved in defining and developing complex software systems. The idea that there is “no inventive step” *can* be true at the level of pure implementation but *completely* false at a higher level representation of system design. And this is true regardless of whether we are talking about embedded or non-embedded software.

– “They felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques.”

At least part of this is just wrong – if patents are being granted for trivial or existing techniques, it’s not because the law allows it and it’s not because they are composed of software. It’s because the tests of novelty, utility and non-obviousness are not being applied correctly. As to whether they stifle innovation and competition, there are probably cases where this is true. But there are also cases where the publication and licensing of patents that have software embodiments foster innovation and competition, and others where the developers of software based IP freely choose by themselves not to patent their work, often precisely in order to better foster innovation and competition.

 – “We received advice that our recommendation to include computer programs among the inventions that may not be patented would be unlikely to prevent the granting of patents for inventions involving embedded software”
It’s kind of difficult to tell what this means. If you decide to exclude software, you won’t actually be excluding some software? What’s the justification for this claim? Did anybody ask?

Thanks to Mark for a very useful post.

The Patents Bill

September 6th, 2012 at 11:00 am by David Farrar

There’s been a fair bit of discussion in some quarters over a two word change to the Patents Bill.

The intent of the bill has been that software not be patentable. This is the case in Europe, and there is a lot of evidence that software patents have been stifling innovation, not fostering it. Actual software code can be copyrighted, but under the proposed law change, software will not longer be patentable. This is welcome by most of the local ICT industry. It stops patent trolls and the like.

However some NZ companies such as Fisher & Paykel Appliances said that software embedded in an appliance should still be patentable. The select committee and the Government agreed to this.

The problem has been how to define it. The bill was going to refer to “embedded software” as being exempt but now the Government has said the definition will be:

A computer program is not 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.

I’ve not been able to get a clear feel as to how significant this change is, adding on the words “as such”. Several IP lawyers have said it is good, while the Open Source Society has said it is bad, and they have a petition against the change.

I tend to be in favour of clear law, and think that is what the Government wants. However lawyer and software developed Guy Burgess makes a good case that the new definition is less clear than referrring to embedded software. He blogs:

There is no definition of “embedded computer program” in the Bill, nor does the industry-supported amendment include one. So because it’s undefined in the Bill, that creates “uncertainty”, right?

Wrong. Guess what else is not defined in the Bill, nor by any other law in New Zealand, nor by any Court in New Zealand: “computer program”. So how can there be objection to the lack of a definition for “embedded computer program”, when “computer program” itself is not defined? There can’t – and the same applies to many other terms in the Patents Bill.

The fact is, it is perfectly normal for undefined or hard-to-define terms to be used in laws. 

So Burgess argues it is not a big issue to keep the term “embedded computer program”. He notes it is commonly used:

But it’s not just Fisher & Paykel Appliances who have no difficulty with the term embedded software. A quick search on shows there are currently 48 jobs using the phrase “embedded software”, including Embedded Software Engineers, Embedded Software Developers, and so on. So while lawyers, for example, may claim the term is uncertain, the evidence is that the software industry itself has no difficulties with it.

There are many other resources confirming the commonplace use of the term in the IT industry. For example, there are over 42,000 articles on Google Scholar discussing “embedded software”, including from authoritative bodies such as the IEEE andAssociation for Computing Machinery. And of course there have been numerous patentsinvolving “embedded software” already granted.

So how about the alternative proposed by the Government:

Any possible questions about the industry-accepted term “embedded software” pale into insignificance compared to the European-style “as such” exclusion recently introduced into the Bill (i.e. the clause 10A(2) that the petition seeks to replace). If you ever wanted an example of notoriously uncertain, problematic language, it is the European “as such” terminology.

But don’t take my word for it – here’s what the Institute of Patent & Trade Mark Attorneys of Australia said in their 2010 submission to the NZ Minister (and which was expressly endorsed by the Australian Federation of Intellectual Property Attorneys):

[The EPC approach] will still introduce uncertainty and confusion as to the patentability of computer related inventions… The approach in Europe has also led to considerable uncertainty and criticismamongst European industry, the European Patent Office and the Courts… the approach has been often criticised as being inconsistent andcontradictory to the EPC itself… 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.

Burgess concludes:

The exclusion of patents for computer programs remains, but with an express carve-out to ensure patentabilty of inventions containing embedded software – not the embedded software itself. Consequently there is no need to determine whether software is embedded or not to determine whether it is patentable. No “uncertainty” arises: under the industry-supported amendment, no software would be patentable. It’s pretty simple. And it’s entirely consistent with the Select Committee’s unanimous recommendation.

On the other hand, the European-style exclusion (which as the Australian patent attorneys say is uncertain, confusing, inconsistent, contradictory, unpredictable, and costly) is entirely contrary to the Select Committee’s unanimous recommendation.

Burgess makes a good case. I’m not 100% convinced that the proposed change is as dramatic as some claim, and think having the European style exemption is still a big improvement on our current law. But neither am I convinced that the proposed change brings benefits, over the select committee wording, and may be detrimental to our local software industry.

I welcome any op eds from interested parties on this issue.

Posner on Patents

July 7th, 2012 at 10:32 am by David Farrar

Stuff reports:

The US judge who tossed out one of the biggest court cases in Apple’s smartphone technology battle is questioning whether patents should cover software or most other industries at all.

Richard Posner, a prolific jurist who sits on the 7th US Circuit Court of Appeals in Chicago, told Reuters this week that the technology industry’s high profits and volatility made patent litigation attractive for companies looking to wound competitors.

“It’s a constant struggle for survival,” he said in his courthouse chambers, which have a sparkling view of Monroe Harbor on Lake Michigan. “As in any jungle, the animals will use all the means at their disposal, all their teeth and claws that are permitted by the ecosystem.”

Posner, 73, was appointed as a federal appeals court judge by President Ronald Reagan in 1981 and has written dozens of books, including one about economics and intellectual property law.

Posner is arguably the most cited legal scholar on the 20th century.

Patents for software now seem to be used mainly to block innovation, rather than to protect it.

The patents plague

April 16th, 2012 at 4:00 pm by David Farrar

AFP report at the NZ Herald:

The internet Age is becoming as known for patent litigation as it is for online innovation. …

The break in the unofficial truce was inspired in part by “patent trolls,” entities that buy or file patents with the sole intent of some day suing entrepreneurs who use the ideas.

Ranks of patent trolls are growing, as is the number of large companies turning to patent litigation not just to cash-in but to gain or protect market terrain, according to Chien. …

AOL this week announced plans to sell more than 800 patents to Microsoft in a US$1.056 billion deal giving the faded Internet star a needed cash injection.

Microsoft general counsel Brad Smith said that the software giant is getting “a valuable portfolio that we have been following for years.”

Facebook in March confirmed that it bought 750 software and networking patents from IBM to beef up its arsenal on an increasingly lawsuit-strewn technology battlefield.

Early this year, Google bought 188 patents and 29 patent applications related to mobile phones from IBM but did not disclose how much it paid.

Last year, IBM sold Google 2,000 or so patents ranging from mobile software to computer hardware and processors.

I’m one of those who think copyright over code is the better way to protect software intellectual property than patents, as seen by these ridiculous and expensive patent wars.

James Murray on the TPP

January 25th, 2012 at 3:00 pm by David Farrar

James Murray, TV3’s online editor, has done a very well researched and comprehensive blog post on the proposed TPP free trade agreement.

I am a huge supporter of free trade and my ideal free trade agreements simply consist of saying “You can sell our residents us anything you want that is legal and safe and we can sell your residents  anything we want that is legal and safe”. Of course then up to individual consumers what they choose to buy and import.

But free trade agreements are rarely that simple. They have a mixture of good and bad stuff in them. Overall the ones we have signed have been massively beneficial for New Zealand such as CER and the China FTA. But that does not mean all future ones will be. Murray points out some areas of concern in the TPP:

Hughes points out that proposed changes to copyright law could see the international copyright term (the author’s life plus 50 years) extended for another twenty years.

This would mean that no new works would enter the public domain in any of the countries signed to the TPP until 2033.

To steal a quote from the analysis linked to above – lengthening copyright terms would “impose severe costs on the American public without providing any public benefit. It would supply a windfall to the heirs and assignees of dead authors and deprive living authors of the ability to build on the cultural legacy of the past”.

What would this mean for publishing in New Zealand?

Books by James K. Baxter, Dame Ngaio Marsh and Ronald Morrieson, all soon to come into the public domain, would stay in copyright.

The US in 1998 increased the term of copyright from 75 years to 95 years, partly at the lobbying by Disney to stop early Mickey Mouse works entering the public domain. This was in my opinion not needed, as Mickey Mouse would still be a trademark owned by Disney and not able to be used by others.

Critics of the TPP point out that the agreement spelled out in the leaked document would lead to a situation where pharmaceutical companies would be able to extend patents on medicines more easily and also delay generic drugs from hitting the market.

It is a balancing act about when you allow patented drugs to become generically available. Too early and you freeze up investment to invent new better drugs. Too long a period, and you have people paying a lot more money for the drugs. I’m not convinced the current balance is wrong and needs changing.
Ever picked up a camera or mobile phone from a Parallel Import shop for less than an approved supplier?

According to the analysis provided by this could become a thing of the past as a consequence of Article 4.2 of the leaked document would be an international legal requirement “to provide copyright owners an exclusive right to block parallel trade”.

National allowed parallel imports in the late 90s, despite opposition from Labour. Luckily they never changed the law, so we still have it. It would be a bad thing to lose it.
Now it should be said that as far as I know NZ negotiators are fighting against all these provisions. That is a good thing. However for there to be an agreement eventually compromises will be necessary, and the Government will weigh up what they concede against the benefits of any concessions from the US on dairy, beef and lamb access.
Whether or not the TPP is a good or a bad thing for NZ, will come down to the details of what is in it. As James Murray has pointed out, the US is pushing for some stuff which would not be good for New Zealand. I hope the Government stays firm on these.

Curran on ACTA and Patents

April 19th, 2010 at 11:47 am by David Farrar

Clare Curran blogs:

This is one of those times when the Opposition says the government’s done a good job.

Which I think it did last week in chairing the secret talks on ACTA (Anti-Counterfeiting Trade Agreement) and gently pushing for transparency. I think they’ve listened to the people who are raising serious concerns about the secret trade talks and the rights of citizens.

After more than a year of sustained pressure, the countries negotiating the Anti-Counterfeiting Trade Agreement (ACTA) decided that the time is right to release the draft text of their work.

Kudos to the Government for their part in this decision. Not only did they obviously push for transparency, but chaired the session that finally got agreement from everyone to do this.

MFAT also hosted a reception last Tuesday where local stakeholders could meet the negotiators and discuss issues. This was a welcome initiative, and I found it quite useful. Was impressed when a couple of officials told me that they actually agreed with most of the points in the Wellington Declaration. Also had interesting chats with some of the EU negotiators over their copyright laws, and our S92A.

Clare also blogs on the software patents issue:

Giving the government more credit. Twice in once day. Phew.

Now don’t let your eyes glaze over just because I’m talking about patents! I’m giving the government credit so listen up.

The Patents Bill, which is about to come back before the House for its second reading was originally crafted in 1953 it was long overdue for a redraft.

One of the most interesting changes to the Bill is  a proposal to exclude computer software from being patentable, on the basis of it being, like books or movies or music, based on a concept and receiving protection under copyright. …

And Simon Power recently announced the Government would back the Select Committee’s recommendation, which I think is the right call. This is already the case in Europe.

Many software patents have been used to stifle competition or extort money from firms. A few years back a Canadian firm, DET, sent invoices to hundreds of NZ small businesses demanding royalties as they had a patent for mulit-currency e-commerce systems. The patent was eventually disqualified, but it took considerable effort.

The NZ Computer Society has backed the proposed law change, and a poll of their members found 80% support for that stand. Their letter to the Simon Power sets out the arguments well.

Good to see an Opposition Spokesperson taking the time to say “Hey we actually think the Government made the right calls here”.