Trade deal threatens New Zealand software patent ban

Trade deal threatens New Zealand software patent ban

Summary: US demands in Trans-Pacific Partnership negotiations include patent protection for software and even of "mathematical methods".


Trade ministers from nations around the Pacific are pushing to finalise the Trans-Pacific Partnership (TPP) trade agreement next month, but New Zealand has something on the negotiating table others do not: a brand new law effectively banning software patents.

With the US taking a hard line on intellectual property issues, that could set New Zealand negotiators on a collision course with their US counterparts.

A November leak of the draft intellectual property chapter of the TPP reveals the US is pushing a host of strict provisions covering copyright, trademarks and patents, including requiring patentability for software and even potentially mathematical methods.

US President Barack Obama has also made delivering a comprehensive TPP deal a cornerstone trade policy of his administration.

But New Zealand’s Patents Act was passed just this August with multi-party support in a vote of 117 to four. That could put the New Zealand government in a pickle.

Apart from the political damage backtracking now would cause, on current numbers in Parliament, the government would need support from at least one other party to pass any enabling legislation, such as an amendment to the Patents Act.

Opposition MP and Labour Party associate spokesperson on communications and IT Clare Curran says there are three possible scenarios:

The US could get its way on IP trade-offs and the New Zealand patent law would have to be reversed.

Along with that would come many other IP protections, such as the criminalization of personal copyright infringement, and a spike in the costs New Zealanders pay for legally accessing content online, including local content.

That, she says, would be embarrassing for New Zealand and would ignite a firestorm in the local technology industry and among online activists.

Another possibility is the New Zealand patent law, the newest among the negotiating countries, could be upheld as the standard across the TPP.

That might look good for New Zealand but could also be used as a political cover for other IP trade-offs which may have long-term impacts on New Zealand economy.

Thirdly, New Zealand and other countries could stand up to the US on the IP chapter and a stalemate could ensue.

Paul Matthews, chief executive of the New Zealand Institute of IT Professionals, says he has some confidence in the New Zealand negotiating team which to date has led opposition to US demands on IP.

He says the leaked chapter made it clear it was a case of the US versus the world.

While that might be the case, the pressure from the US is intense and a new government in Australia appears to be softening that country’s stance in some areas.

Matthews says, with the final round looming and no clarity about the outcome, concerns remain.

The institute understands there will be “give and take”, he says, but is has always been concerned the “take” will be for agricultural market access while the “give” would be in IP concessions that would damage innovation and the IT sector.

However, given the overwhelming support the new law received in August, Matthews says he would be very surprised if those that supported the law then were to backtrack now.

The TPP also goes farther than any free trade agreement of the past, he says. Even calling it a free trade agreement is something of a misnomer. The negotiation process also bypasses the World Trade Organisation.

The US is trying to achieve concessions through the TPP it was unable to win in the earlier Anti-Counterfeiting Trade Agreement (ACTA), he says. In the end, ACTA was heavily watered down.

Curran and Matthews agree that trade-offs are inevitable, but Curran says not enough work has been done by the government to quantify the cost of concessions on intellectual property.

She forwarded ZDNet some calculations made by a local technology company as an example of the sorts of costs that could flow should many of the draft IP chapter provisions make it into the final TPP agreement.

“Lorde's songs retail on Apple's iTunes to New Zealanders for $2.39. In the US the same song retails for $1.47, 99c cheaper. That means New Zealanders are paying a premium of 62% on an IP protected product.

“As circumventing these protections becomes a criminal activity, and extending the protections the norm, we can expect to be paying more than 62% extra for all IP related goods.

“That's computers, software, music, medicines, medical processes, seeds, fertilizers and so on. I hope there are enough economists in the Labour party to do some maths on that.”

Ironically, the pressure on New Zealand to ditch its software patent ban comes as debate over their value grows in the US and legislators there pass a law to rein in so-called "patent trolls".

Countries negotiating the TPP include Australia, Singapore, Malaysia, Brunei, Chile, Canada, Peru, Singapore, Vietnam, Japan and Mexico in addition to the US, Australia and New Zealand.

Topics: Patents, Software Development, New Zealand, Australia

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.


Log in or register to join the discussion
  • US opponents of software patents...

    ...will know who to blame and who to talk to. On foreign policy, the buck stops with the President and on legislation, it stops with the Congress. Congress wrote the law that the courts are currently misinterpreting; Congress can fix it. The President appointed the US diplomats who are working so hard to internationalize software patents and they serve at his pleasure.

    Efforts to internationalize bad law are simply unacceptable, but in the end, the politicians work for the citizens and it's the job of citizens to make sure they serve the public interest.
    John L. Ries
  • No Nation..

    No nation with any hopes of nurturing and establishing a home-grown tech industry can possibly approve of software patents. The only thing software patents do is allow a few large powerhouse companies (and the nations in which they reside) to establish an effective monopoly on innovation by granting them exclusive rights to use and license the essential, low level methods and algorithms without which new products cannot be developed. And if copyright law is any guide to where IP law in general is headed, then we can soon look forward to perpetual patents that, essentially, never expire, because laws keep being re-written to extend their shelf life. It's a sad system or rent-seeking and a monopolistic, anti-competitive swindle.

    Stand your ground, New Zealand!
    • My way or I take my ball and ....

      Seems to be the trend with US policy: never wrong.
      Would luv to see the NZ become standard..
  • Stay strong NZ

    do not enable patent trolling.
  • is the deal looking likely to pass?

    so far it's very skewed to benefit the US, and other countries don't seem very happy with it. if I were a non-US country I wouldn't sign it as is.
    • If I were President of the US...

      ...I wouldn't sign it, and if I were a US Senator, I'd vote against ratification.
      John L. Ries
  • Give them the finger!

    Give them the finger!
    Kevin Cobley
  • Say 'NO' to software patents.

    Software patents, or rather, computational idea patents, serve to restrict how you may use your devices
    Patents are a monopoly on using ideas. The usage of ideas should not be restricted. Software patents slow down the development of software because 'infringement' makes developers scared. Use one of Apple's ideas? Get a lawyer ready and get ready to be sued. Use Microsoft's ideas? Get a lawyer ready and get ready to be sued. Use Google's ideas? Get a lawyer ready and get ready to be sued.
    Software patents serve Big Corporations, and ONLY Big Corporations. If we are to get rid of this exploitation of the masses by Big Corporations, getting rid of software patents is a key step.
    Software innovation? Bullshit unless it really results in a big paradigm shift, and Apple's 'innovation' (along with Google,Microsoft,Samsung and players in the 'patent' wars) do not count.
    Pro-Free(Libre) Software
    • Agree!

      I 100% agree.

      Copyright computer code? Sure. I have no problem preventing people from copying and pasting one programmer's hard work into another piece of software.

      Patent a "vague, general way of doing something with math/logic?" No way. That gives Patent holders far too much monopolistic exclusivity and stifles innovation.
    • Wrong buddy

      The biggest beneficiaries of patent trolling have the small 1-2 person companies suing big companies. Does Eolas, i4i, NTP, Uniloc et al rig a bell? These companies produce nothing yet go after companies producing stuff. At least MS/ Apple/ Google are using the patents in their products. The trolls are just in the business of filing vague patents & extorting money from these big companies. In my opinion, these cos spent so much money buying or producing or even filing patents, they would have gladly thrown the same money into marketing. Apple/ MS/ IBM etc have been sued so often in the 90s over patents that these cos went with a vengeance on creating or buying patents. Microsoft alone has paid billions of dollars to these patent trolls. Now, when the big cos have the patents, suddenly no patents? Wow.