PAUL MATTHEWS: Time to walk away from the TPP?

Paul Matthews

I wrote an NBR opinion piece in December last year outlining some of the concerns with the Trans-Pacific Partnership Agreement negotiations and, more specifically, significant and troubling pressure from the United States on our government to overturn New Zealand’s IP laws (read Groser trades away tech to save agriculture).

As a quick recap, the US government has spent recent times applying significant and sustained pressure on countries like New Zealand to adopt US-style IP laws and penalties.

If they get their way? Think internet disconnections because your kid listened to music online, tech companies succeeding based on the strength of their lawyers rather than their innovations and Dotcom-style raids being the norm for what have always been considered civil matters here.

However, what bothers many in the IT community more is the pressure the US is applying around software patents. Our government has spent the last few years reviewing the Patents Act of 1953.

With the support of what certainly appears to be the vast majority of IT professionals and the country’s largest software houses such as Orion Health and Jade Corporation, the Commerce Select Committee – made up of both sides of the House – unanimously agreed to remove patentability of software.

Many in the IT community see software patents as a bad thing, stifling innovation rather than supporting it and protecting mature technology markets (such as that of the US) at the expense of rapidly developing technology export markets such as New Zealand.

Technologists also see copyright as a far more appropriate means of protecting software and were, by and large, greatly relieved when our legislators agreed.

US stepped up pressure
That was, until the US stepped up the pressure some more.

Rather than respecting the sovereignty of New Zealand to make its own law around intellectual property, the US appears to be pushing very hard, for example, to kill the new Patents Bill, despite it coming about at the end of a very democratic and transparent select committee process.

And what is even more worrying is our government appears to have, until now at least, kept the door open for the Americans to do just that.

Despite assurances previously that the bill was going to be enshrined in law promptly, and the fact that the select committee reported back more than two years ago in March 2010, the Patents Bill has now been pushed right down the order paper, now sitting at #53 out of 59 Bills before Parliament.

There might be some progress on this front, however.

During a presentation to the Institute of IT Professionals this week, ICT Minister Amy Adams told the packed audience that this was about to change and the bill wouldn’t be languishing for much longer – with the government understanding that the delay was causing the industry some angst.

Stay tuned on this one.

The Trans Pacific Partnership is a trade agreement being negotiated by New Zealand and eight other countries, included the United States. This is expected to increase by two with the likely addition of Canada and Mexico.

There are almost definitely some good things in the agreement, but the cost to New Zealand’s tech and online community could be high if it turns out as bad as it currently looks.

The more cynical among us might be forgiven for suspecting a link between the TPPA negotiations – with the US pushing hard for patentability of software, medical procedures and medical diagnosis – and the stalling of the Patents Bill, which in its current form would specifically exclude these categories from patentability.

Time will tell on that one, although the minister’s comments were reassuring.

Previous attempts
The TPPA is not the first time we have seen massive pressure around intellectual property from the US.

The last attempt was through an agreement called ACTA, or Anti-Counterfeiting Trade Agreement. The most extreme clauses of that agreement were watered down in the final draft.

However, we’re now seeing their attempted and somewhat unwelcome return in TPPA.

There was also SOPA and PIPA in the US, but I won’t go into them.

And here I was thinking it was geeks who loved their acronyms – it certainly seems trade negotiators and lawmakers do, too!

Secrecy around both agreements
One of the common themes across both trade negotiations is the unprecedented level of secrecy and the big push to exclude the public.

The Office of the US Trade Representative is even said to be pushing to stop the previous ACTA agreement from going before the US Congress for ratification, ratifying by executive order instead.

Many in Congress are understandably concerned about the undemocratic nature of an agreement negotiated in secret being implemented without even the most basic protection – Congressional approval.

Although it is becoming clear why some seem to be working so hard to keep these agreements from the public.

Protests and controversy
ACTA was signed in October 2011 but has had a very rocky road since negotiations concluded. In fact, last week it might well have had a fatal blow.

Even with a watered-down IP section, it was met with outrage and mass protests across Europe and the rest of the world.

Last week the European Parliament effectively ditched it – choosing not to ratify by a somewhat unprecedented 478 votes against and just 39 for.

I suspect 39 political careers just came to a premature end.

It is hard to imagine it being ratified by other countries after such a resounding rejection from Europe and, indeed, Australia is already making noises about not ratifying either.

Impact on the current TPPA negotiations
This huge defeat for a watered down ACTA has to give the TPPA negotiators, and the politicians directing them, reason to pause.

The message is clear. The sort of innovation-crushing and freedom limiting clauses that seem to be characterising these agreements simply aren’t going to fly with the public.

From a political standpoint, politicians the world over must now realise they foist these types of agreements on the public at their peril.

Elections are won and lost on the margins, and enough people of all political leanings feel sufficiently strongly about this to make a very real difference to electoral outcomes worldwide.

Local campaign to raise awareness
Last week a diverse range of organisations led by Internet New Zealand and including major ICT groups such as the Institute of IT Professionals (formerly the NZ Computer Society), TUANZ and Kiwi tech company group NZRise, through to household names such as Trade Me and Consumer, launched the Fair Deal campaign to raise awareness of many of these issues.

The concerns are vast and broad. Even the country’s mild-mannered librarians have spoken up, with the Library and Information Association of NZ joining the campaign, as have the Foundation of the Blind, who are deeply concerned about the impact TPPA might have on their members’ ability to use screen readers legally, potentially cutting off blind people’s access to many eBooks.

Fair Deal isn’t about trying to kill TPPA (although there may be no other option), it is about ensuring that if there is going to be an agreement, it doesn’t sell the tech sector and this massive economic growth potential down the river – along with internet users and others.

And it is about raising public awareness of the consequences of doing just that – consequences that far outweigh any perceived gain in the view of those taking part.

Is there a way forward for TPPA?
Maybe. But if that way forward involves stifling Kiwi innovation and crippling changes to IP law then we all lose, even with a few token agriculture concessions.

If the Americans won’t budge on the IP chapter, it is time for our government to just walk away from TPPA and let our sector get on with innovating.

Paul Matthews is chief executive of the Institute of IT Professionals NZ.

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29 Comments & Questions

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Excellent work, Paul. I'm 100% in support as you say most IT professionals are.

When advocates for software patents cannot point to a singe innovation that would not have happened without them it is crystal clear that the claimed benefits are zero but the costs are horrendous.


And just look at the US performance with Kim Dotcom!


Australia has, for many years, cuddled up to the US in the hope of getting trade concessions, including such things as wheat and steel. But have the Aussies ever won any major concessions? Evidently not.
They sucked up to Uncle Sam when our nuclaer policy came into force, in the hope of trade concessions. They continued ANZUS without the 'NZ' bit.
Now, the US is seeing what's happening across the Pacific with the high levels of funding that Pacific nations are receiving from China, and all of a sudden the Americans are "all over" Pacific nations to try and beat the Chinese.
Remember that around 50 US "diplomats" attended the Pacific Island Forum in New Zealand last September!
Had they really bothered in the past?
The only side that ever wins in US trade deals are the Americans.


written on a pc?


Disrespect for America might be popular but it doesnt make it less stupid. Scorn is unprofitable.


Walk away from the US is a great idea.... the less we have to do with this bankrupt(both morally and financially) nation the better


Why have comment functionality if you are going to censor free speech?


The IP protection which NZ gives to things like computer software should be in line with that given by most of our major trading partners (Australia, Europe, Asia, etc.). It doesn’t make sense for NZ to be at an extreme end of the spectrum in either giving no protection or giving unlimited protection.

Software which is patentable in most countries should be patentable here. Software which is not patentable in most countries should not be patentable here.


There are no common principles regarding software patents, far less consistent application of them. All software is built on the shoulders of what has gone before. Software patents create an impossible burden for any new entrant as a commercial product must contain such a wide range of functionality that the potential for patent infringements across a myriad of jurisdictions is utterly vast and unmanageable.

There is no uncertainty regarding copyright. You know when you are copying something. But violating a software patent anywhere in the world is simply unknowable - let alone whether it is enforced and/or enforceable. Software patents are a festering sore on the software industry.


Most efficient property protection systems involve a central register and clear rules around competing priorities. Why should software be different?


Aside from being an unacceptable burden on software developers, who already have too much complexity to contend with, there is a fundamental reason why software patents are a bad idea: the people who assess them can't tell the difference between good ones and bad ones. They grant them all unless someone else actively contests them. Today, the vast majority of software patents should not have been granted. This problem cannot be fixed: if a patent assessor knows enough to tell the difference, you can bet your life they won't be assessing patents: they'll be doing something far more satisfying (and profitable) - writing software.


bad logic mate.


Perhaps you can provide something more substantial to back up your claim, Anonymous.


Because it is not a simple unique entity as I explained. It is a complex system composed of a very large number of components and concepts very much dependent on ideas, methods and solutions previously developed and often quite recently.

Allowing software patents is like allowing patents on words and notes in a song - which would destroy music just as software patents will destroy software development.


Sounds like youre just really saying 'because its too hard for us'. Short term thinking. Take a total cost of ownership approach and include enforcement issues. Basically copyright will bog up with software issues too if you switch of protection for capital via patents.
Empathy but not agreement..


Nonsense. Software has been protected by copyright for six decades without "bogging up". You have no idea what you are talking about.

I'm not saying it is too hard. I'm saying it is impossible - and it is. Have you ever even read a patent and tried to figure out what it covered when it is written in legalese designed to be as vague and inclusive as humanly possible? Then multiply that by thousands of patents in scores of jurisdictions and as many languages. Insanity.


Alan, you're spot on. I get the impression that these pro-software patent commenters would do well to write some more software themselves (and vet it for patent infringements) before telling us what is or isn't realistic for software developers.


Good public call Paul, great to have someone making the hard call around the negotiations. The TPP is primarily being negotiated for the benefit of American companies, and not for New Zealand.

Copyright is enough for most protection. Patents tend to inhibit innovation and cross-fertilisation due to the excessive costs required to license them. I could accept more widespread use of patents in technology, if there impartial means of licensing them so that they are not used to create barriers of entry to a market.

@TIm Crane - the problem being that the US Patent Office has admitted absolutely daft patents over the years, and by your logic, we should automatically accept them here. Absolutely not!


Yeah but arnt we just bludging off the yanks by refusing to honour their patents?
Not a great basis for our own IT industry I would have thought.


That's a weird way of looking at it.

Very few are saying that there shouldn't be intellectual property rights for software. Just that patents are a stupid way of dealing with it. The system is broken for software, just like it would be broken for plot ideas in books, movies, music, etc, etc (imagine if "horror movie genre" had been patented back in the day).

Copyright protects those industries and is the most suitable protection for software.


No. The number of software patents with merit is minimal and to my knowledge is limited to encryption and compression algorithms. The number of software patents without merit on the other hand is massive.

In the real world, of course, you have to comply with the different laws in each country you sell to. The impracticality of software patents is that you simply have to start selling and see if anything pops out of the woodwork.


Of course the US is going to pursue the interests of its own businesses. We would expect our government to do the same for us - which it is on agriculture, by pursuing the interests of our dairy monopoloy, called Fonterra.


Of course, let's remember, they're only pursuing the interests of a very small elite of companies in the US - the corporations who have the finances to lobby. Between the big corporates and patent trolls, the innovative little software developers in the US are roadkill.


For my money I respect the fact that many economies are far more efficient thanks to efforts of huge US companies like Microsoft etc. I find their critics a bit broke when it comes to projecting the nature of future without the kinds of security of investment that brought about these advances.
Ditch patents ==>> lower investment...
Of course youll say no because clearly not all investment will be undermined but arguably with less protection the real big money will not be available to bring about mass advances such as brought by MS, Apple.
If that argument holds then setting up some wee small IP biz utopia in NZ will just p*ss of the big IP money and they will make moves to restrict our environment in ways that will cost more than those small businesses can make us.
Gut feel is the US demands under the TPPA are too much but not comfortable about losing patents.


Nobody is saying that Microsoft et al haven't made a big contribution to efficiency. However I think this quote from Bill Gates himself might make you consider things in a different light:

"If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today." - Bill Gates, 16 May 1991

Mr Gates is, of course, entirely correct. Patents didn't exist in the same form when Microsoft, Apple and others built their value at the start of the technology revolution.

They made their money by innovating, and that's all those that are starting out today are asking for the right to do: have the opportunity of building the next Microsoft or Apple through innovation.

Software patents destroy more value than they create.


people are innovating everywhere mate but that doesnt mean they make it huge enough to bring the benefit of their innovation to a mass market.
without patents would investors and bankers have given microsoft the money to get big enough to make their contribution?


With respect, I think you're missing the point of that quote. The fact is, there *weren't* software patents when Microsoft etc got big. Patents came later.

Bill was saying that if there *had* been patents at the time, none of that contribution would have been made as the industry would have ground to a standstill. Microsoft would have no doubt faced the issues software devs face now and would probably have been wiped out by a patent troll.

At very least they'd have spent those early growth years fighting legal battles rather than writing software.




I'm amused by the efforts of those anonymous dislikers - seems like their agenda is pretty clear. Anybody talking sense from first person experience is disliked... Everyone spouting pro-US BS is ok, though :).


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