US attacks computer patents

TOM PULLAR-STRECKER
Last updated 12:11 11/04/2012

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The US Government has taken aim at a planned overhaul of New Zealand patent law that would prevent the patenting of computer software.

It has also taken a swipe at the fees that movie studios and recording companies must pay to haul internet pirates in front of the NZ Copyright Tribunal under the controversial three-strikes ''SkyNet'' copyright regime that came into effect last year.

The Office of the United States Trade Representative (USTR) said in an annual report on ''foreign trade barriers'' that New Zealand generally provided for strong intellectual property rights. It said the NZ Patents Bill, which has been awaiting its second reading in Parliament for more than a year, would improve the system.

However, it said the US had concerns about the clause excluding software, which ''departs from patent eligibility standards in other developed economies''.

The Government's original decision to disallow software patents was welcomed by broad swathes of the information technology industry, including advocates of open source software and the country's largest software exporter, Orion Health, but was fiercely opposed by some multinationals, including Microsoft.

The USTR said the separate Copyright Amendment Act had created a framework to deter illegal file sharing, but ''although many rights holders were initially optimistic'', they had since expressed concerns about the $25 fee that internet providers could charge them for each infringement notice issued under the regime.

''The cost has deterred some rights holders from using the system,'' it said in its report.

Computer Society chief executive Paul Matthews said he feared the Patents Bill had been put on ice by the Government because concessions might be made to the US on the issue of software patents during trade negotiations over the Trans-Pacific Partnership.

He had ''no solid evidence'' that was the case, but there appeared to be no other realistic explanation for the delay, he said.

Software patents were not a ''black and white issue'', but the ''cons outweighed the pros'', as instead of protecting ideas and encouraging innovation, they tended to be used to stymie competition and stifle innovation.

Software patents were opposed ''by the vast majority of the IT industry'' and the delay to the Patents Bill was causing quite a lot of angst, he said.

''If we had software patents back in the days when computers and technology were emerging, then the whole sector wouldn't exist. Since the Patents Bill changes were announced we have been approached by a number of overseas technology companies looking to relocate to New Zealand.

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"The thing that has really put us on the radar is this signal that New Zealand is open for business and supports innovation.''

- BusinessDay.co.nz

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