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How New Zealand banned software patents without violating international law

August 28, 2013
August 28, 2013

What do you do when you’re a small country with a technology industry convinced that innovation requires the banning of software patents, but you’ve signed an international treaty that in theory obliges you to make software patentable? If you’re New Zealand, you simply declare, in a historic and long-debated bit of just-passed legislation, that software isn’t an invention in the first place.

As a result, New Zealand’s new Patents Bill, passed today, guarantees that patents of pure software—that is, software uncoupled from some dedicated new piece of hardware—cannot be granted in New Zealand.

New Zealand’s seemingly zany declaration is not without precedent. In 1998, the head of the UK Patent Office commented that European law says that a piece of pure software is not technically an invention, or even a piece of “technology,” and it would have to be one or the other (or have an “industrial” application) in order to run afoul of the part of international law known as the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

New Zealand’s action creates yet another precedent for other countries to ban—or creatively disallow—software patents, should they so choose. Whether or not they will probably depends on their indigenous software industries. In New Zealand, a poll of the members of the Institute of IT Professionals revealed that 94% were in favor of banning software patents. In India, courts have upheld that country’s ban on software patents.

In the US, software patents have been declared harmful to competition and innovation by both Google and Nobel Prize-winning economists, yet American technology companies continue to spend billions amassing them “like they are tactical nukes.” With patents in hand, and a guarantee of mutual assured (legal) destruction in their back pockets, US tech giants may have less incentive to push for their ban than technology companies in small countries and emerging markets. Although perhaps not: currently in the US, Apple is the most frequently cited defendant in lawsuits filed by “non-practicing entities,” a.k.a. patent trolls.

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