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OPINION: TPP - Groser trades away tech to save agriculture

A pending international trade treaty could override a recent New Zealand law change that excluded software from patent protection.

LATEST: No need to worry about TPP - Groser

There are also hints from Trade Minister Tim Groser that he could be willing to make tech sector trade-offs if that's what it takes to protect our agricultural exports (see "Too much focus on agriculture" below).

All the political parties supported the controversial change. But the Trans Pacific Partnership Agreement (TPPA) could see the US pro-patent view override our local law makers.

Last month, I met Mr Groser and the government’s chief trade negotiator to get the inside word on what was happening with the TPPA, particularly in relation to technology and intellectual property (IP).

Mr Groser’s openness and candour was excellent and I can’t speak highly enough about the minister’s willingness to engage and discuss these issues.

However, I left the meeting more than a little concerned about the impact TPPA might still have on New Zealand’s IP laws.

Then ...
I think it’s worth talking about New Zealand’s position going into negotiations to start with. New Zealand’s confidential position paper was leaked online. It said, in part: Analysis of the costs and benefits of IP protection shows there is a tendency toward overprotection of IP in all our societies, particularly in the areas of copyright and patents. 

The analysis also shows the optimal rate of protection differs between countries and that it can differ across time as countries move through different stages of economic development.

The problems of overprotection are particularly acute for technology importing countries, including developing countries.

The analysis shows that for these countries, IP rights that are too strong will detract from innovation rather than promote it.

We were very proud to see this from our government and it sums things up nicely, including why it’s fundamentally important to the growth of technology in a relatively “young” country like New Zealand that we don’t end up with an overly heavy-handed IP enforcement regime as we grow and develop. Nobody’s saying IP shouldn’t be protected by the way – it absolutely should.

However, software patents and other IP mechanisms are designed to enforce a “status quo” approach where those countries in a “development” phase (such as New Zealand) are in a far less advantageous position as those in a “mature” market phase, such as the US, and it’s great to see that recognised by our government early in negotiations.

... and now
Discussing this with the minister, it was clear New Zealand’s position hadn’t changed much. Both he and the negotiating team clearly understand the issues and the concerns of many in our sector (and the public) and it’s obvious from other released correspondence that they have been pushing this point hard in TPPA negotiations.

However, it’s equally as clear that the US is pushing hard the other way and its efforts are intensifying.

Back in February the text of the US-written chapter dealing with intellectual property was leaked and made for sobering reading. As an example, Article 8 of this document deals with patents and, as written in that draft, specifically prevents a country from determining for themselves the types of patents they will recognise.

NZ law could be overridden
New Zealand recently completed a review of the outdated Patents Act and, among other things, the new bill, supported by both sides of the House, contains the following exclusions in Clause 15:

(2) An invention of a method of treatment of human beings by surgery or therapy is not a patentable invention.

(3) An invention of a method of diagnosis practised on human beings is not a patentable invention.

(3A) A computer program is not a patentable invention.

All three of these exclusions would be specifically disallowed in this draft of the TPPA, regardless of the fact that New Zealand’s commerce committee, made up of all parties in Parliament, unanimously supported them.

You read that right: the proposed Article 15 of TPPA would specifically prevent New Zealand enacting law that was unanimously agreed by all parties in Parliament.

In essence, if this clause doesn’t change and we sign up to TPPA, New Zealand law written through a transparent select committee process will be overridden by a foreign country’s view of patents.

While it has been denied, I find it hard to believe the reason the Patents Bill hasn’t been passed into law yet is not because it’s awaiting the outcome of TPPA negotiations. Time for a Tui ad I reckon.

Trade as a concept is mightily important and by and large free trade agreements are good things. But this recent trend of trying to negotiate IP-related issues through trade agreements rather than through the traditional international vehicles has to stop.


Too much focus on agriculture 
Meeting with Trade Minister Tim Groser last month (see main text, above), I couldn’t help but get the impression that agriculture concessions were the primary area of concern to government, not technology. 

Obviously agriculture is important for New Zealand but at what cost to the rest of the country?

Agriculture is fundamentally important to New Zealand’s economy and we don’t want to be pitting one industry against another.

However, the fact still remains, technology is on a strong growth trajectory and if supported, will lead New Zealand’s economic recovery.

Companies in software, information technology (IT) services and high-tech manufacturing are now generating as much export revenue as meat (also around $5 billion) and not as far as you think behind the dairy industry traditionally thought of as our mainstay (around $11 billion).

The number employed in the tech sector and high tech manufacturing has grown from 24,000 in 2010 to 30,000 this year. (For more, see www.nbr.co.nz/tin100).

In the face of this type of growth and value to New Zealand it would certainly be somewhat disappointing if the sector was hung out to dry in TPPA talks by a government chasing benefits elsewhere.

Paul Matthews is chief executive of NZCS, the professional body of the ICT sector.  

More by Paul Matthews

Comments and questions
61

Paul, thanks for exposing this. I have to disagree with you on one point: relatively "mature" economies like that of the US do NOT benefit from strong "IP", especially in the area of software patents. The half a $trillion of wasted capital expended on software patents last year in the US is money they cannot afford to lose. And it is contributing heavily to the US' forfeit of its "innovation" reputation. There is NO benefit to software patents in the US or anywhere else. They are simply a cost to business - friction in the system that creates an unlimited liability for anyone commercially writing software. Their practical application is diametrically opposed to their supposed theoretical purpose: to encourage innovation and commercialisation of inventions for the greater good.

To provide a source for my $500billion figure - from Germany's Heise Online: http://www.h-online.com/open/news/item/Study-Patent-trolls-cost-a-half-a-trillion-dollars-in-lost-wealth-1379223.html

Good to see the debate on TPP- IP is certainly one of the more difficult issues. Just to note the following:
1 There is no A at the end of TPP at this point. - nothing has been finalised, the US proposals are simply that, proposals. As Paul admits the Govt is aware of the challenges these aspects of these proposals pose for NZ and other TPP participants
2 NZ law will not be overridden by TPP. International treaties are not self executing - NZ laws have to be changed before any provisions come into effect. This means there will be a parliamentary process including submissions to select committee etc
3 At the end of the day the Govt will need to work out whether the final TPP meets our national interests - Paul's comments are useful inputs into that process

[This is an authenticated comment - CK]

The "A" is added quite deliberately. Ending the name on the word "Partnership" implies equality among the players. It would appear there is not.

Stephen, I'm pleased you've joined the fray. Can you please explain to me whose interests the NZ US Council represent? The US' in NZ or NZ's in the US? There's also a US NZ Council, is there not? I've found this quite confusing in the past.

If this was a true partnership, the negotiations wouldn't be held in secret. To me, the secrecy around the proceedings is the worst aspect of this entire debacle, as it was with ACTA before it. How can any democratic participants accept that?

I call on Tim Groser and the NZ negotiators to step away from the table entirely until all the positions are publicly available. This will not, in any way, "show the cards of the negotiators" as some participants have lamely stated to explain why the secrecy surrounding the TPPA is somehow acceptable.

The NZ US Council- www.nzuscouncil.com represents NZ interests in the NZ/US relationship. The US NZ Council - www.usnzcouncil.org - represents US interests in the relationship. We are separate organisations but work closely together.

Adding the A implies that there is agreement already among the TPP partners - that is not the case, it is a negotiation, nothing has yet been agreed.

The view of the NZ US Council is that holding TPP negotiations in public is unrealistic. There are highly sensitive matters of national economic and commercial interest involved. Within these constraints NZ negotiators have been extremely open to input from stakeholders and as I mentioned the final result will be subject to parliamentary process.

Unfortunately, Sephen, I disagree with the statement that secretive negotiations are at all acceptable regardless of the perceived "sensitivity" of what is being negotiated.

The progress of these negotiations has profound ramifications for the citizens of all the participating countries. That these negotiations be held before public scrutiny is fundamental principle of democracy. It's particularly ironic that the US should be pushing this anti-democratic line.

The only interests that should ever be "sensitive" and subject to secrecy in international negotiations are matters of true national security: disarmament treaties, for example.
"Commercial sensitivity" is a nonsense argument for allowing various big industries to lobby in secret without a concomitant position of power for the citizen collective. We all know that big business has the ear of politicians, of every stripe, and what we have seen with ACTA and the leaks from the TPP negotiations is that the considerations of anyone who's not a favoured part of the discussion are dismissed or ignored. NZ has made it absolutely clear that we do not consider changes to IP law to be in our interests, but we still hear that Grosser et al are refusing to make them a bottom-line item of NZ's position. Likewise refusing to make Pharmac a non-negotiable item, ruled out thoroughly and completely. There is *nothing* about Big Pharma or Big Media that justifies negotiating away in secret the economic considerations of NZ's citizens. Absolutely nothing. John Key and Tim Grosser work for all of us, not for the few farmers and the US business lobbies. They would do well to remember as much as they prepare to sell us down the river.

Keeping secret for national economic interest implies we get a better deal by keeping secret from other nations. But I don't think we are keeping secret from our other nation competitors in this. The secrecy is likely only from the people because NZers may not like the deal who would resist it strongly enough to interfere.

I have asked in numerous forums related to the TPPA what evidence the NZ government has to justify its optimism that the agreement, if finalised, will have a net benefit to the NZ. I have seen no research or economic analysis which indicates that there is any reason whatsoever for NZ to make any concessions in the negotiations.

Can Tim Groser or any other representatives of the Government provide any such evidence? If not, on what basis are they negotiating?

If anything, the precedents, particularly the "FTA" between the US and Australia, indicates that entering into such a trade agreement with the US has a demonstrable *negative* effect on the economies of the US' economic partners. Unless we have compelling evidence to the contrary, we should reject the US' participation in the TPPA negotiations and work with the original partners to finalise what, by all accounts, was a very sensible agreement (before the US stuck its oar in).

I think it's a red herring to say that Parliament will have to change the laws. By that point, the agreement is finalized and Parliament gets to take it or leave it. The NZ Govt has made it very clear that a "free trade agreement" with the USA is a high priority, and I can't see there being any IP law changes seen as too high a price to pay for achieving that. In other words, I don't see any situation on the cards in which the NZ Parliament would say "no, we're not signing up to this".

Negotiations to balance interests happens now, which is why we'd like transparency in the text. The veil of secrecy shields the government from informed public debate which might inform their negotiation. Instead, the public will only hear about it after the point at which their opinion can't shape the negotiation.

At that point, I'm worried it'll turn into a nitrogen vs silicon argument: farmers against high-tech. It'll be reduced to anointing a winner: do we screw tech users and tech exporters to gain better market access for our meat? By maintaining these furtive negotiations, we miss the opportunity to have an informed national conversation about the right mix of concessions to ensure that NZ Inc. prospers, diversifies, and grows.

Stephen - in response to your point 2 above. The reality is that the to enter into any agreement, it must be approved by Cabinet and be adopted as Government policy. An implementing law is then drafted and referred to Select Committee. At that stage, we really only have two options: approve it or can it. Sure, we can tweak at the edges but no fundamental changes can be made since that would require renegotiation with the other treaty "partners". That is logistically impossible and, given that adoption of the agreement is, at that stage, already Government policy, extremely unlikely anyway. Government and support parties will have the majority at Select Committee anyway.

While, on the face of it, it looks like we would have our usual democratic safeguards, the reality is quite different simply because it is almost impossible to renegotiate the agreement. This is why I and others consider that at some stage well *before* the agreement is finalised, the text must be opened up for public scrutiny. No-one has a monopoly on getting such an important agreement right.

"All the political parties supported the controversial change. But the Trans Pacific Partnership Agreement (TPPA) could see the US pro-patent view override our local law makers."

This is not true. The Green Party does not and has never supported the the TPPA or any other piece of legislation that has seceded sovereignty to foreign owned companies.

JJW - I think you might have misunderstood that statement. All the parties supported the (apparently controversial to some) change to the NZ Patent legislation that some areas be excluded from patentability (e.g. software). I don't think that there's widespread support for TPPA (at least I hope not!), because no one "officially" knows what it entails.

Ahhhhh. That makes more sense.

I think laws are being hurried in relation to US TPP requests. The Food Bill has search and seize without warrant provision, which seems to forwarn of GMO introduction. Even Nick Smith was unaware just before the election of a Ministry intention to look at the GMO laws' economic affects. Then if Wikileaks can be trusted the US Ambassador is working hard to allow entry for GMO crops to NZ. A long interview between Dr Don Huber and Dr Mercola on Youtube gives many problems of GMO food and feed on fertility and loss of natural bacteria which protect from botulism types. And the Institue of Science in Society in UK gives how the Roundup ready crops are overrun with superweeds. Also watch Percy Schmeiser on Youtube.

"2 NZ law will not be overridden by TPP. International treaties are not self executing - NZ laws have to be changed before any provisions come into effect. This means there will be a parliamentary process including submissions to select committee etc"

Rick Shera already handled this but it's worth mentioning again.

International treaties are binding above and beyond national sovereignty, and that nuance of international relations has been severely underplayed amongst these rounds of super-secret clubhouse negotiations.

I realize you didn't exactly argue against that notion, but the wording here is crucial. It could be interpreted, in the public discussions, that NZ won't be bound by the treaty when in actuality local law *will* have to change to accommodate any treaty provisions.

Once the treaty is signed the matter is no longer left to Parliament, and therein lies the source of the outcry.

Paul,

Your article is right on! I work in the USA as a CIO and the big (tech) guys have managed to stifle innovation (other than theirs) through the oppressive IP laws here. Their threatened lawsuits against innovators (who are usually small) are usually effective. As a result there is minimal innovative software available. Very few organizations have implemented professional open source either, like we have in specific areas. Having been a CIO in both countries, I can say with confidence that I.T. in N.Z. is far more dynamic and innovative in delivering business benefits with technology. Hopefully the pols will do the right thing.

John culturally here in NZ we dont tend to have huge damages awarded in court and far less litigation generally. I wonder if that is the more material difference between the US and NZ in a "petrie" analysis of software development.

It is wrong to state that there has been “a recent New Zealand law change that excluded software from patent protection”. Computer software is patentable in New Zealand and has been for over a decade, during which, as Paul Matthews notes, the technology sector in New Zealand has been on a strong growth trajectory.

The select committee which reviewed the Patents Bill recommended that computer programs be excluded from patentability. However, the Patents Bill has not received its second reading and the select committee’s recommendations have not been debated in Parliament.

It's my understanding, Anonymous, that the bill has received its second reading - it's only awaiting its third and final reading, at which point it will be passed into law.

You'll note that all the parties' IT spokespeople who showed up at NetVision 2011 (the video of the event seems to have disappeared from the net - perhaps someone else can provide a link if they can track it down?) supported the software exclusion explicitly when asked. It's a rare case of total cross-party support.

It's also worth pointing out that the Select Committee recommendation on the software patent exclusion was unanimous, and that the committee was made up of members of all the major parties. I don't expect you'll see much debate on it in parliament, unless it's in aid of an underhanded TPPA alignment, in which case woe betide the MP who takes that position. Just remember how Judith Tizard was justly demonised for her last minute change to the copyright legislation. We still refer to that sort of disingenuous deceit by politicians as "pulling a Tizard". Shameful.

I think only a patent lawyer (and a self-serving one at that) would want to see the old position on software patents maintained.

Hi Dave

The Patents Bill only received its first reading in the last Parliament.

My recollection from NetVision is that the politicians present said they all supported the passing of the Patents Bill. This isn't the same as supporting a clause in the Bill excluding computer software from patentability.

The Patents Bill is due for its third reading. It is currently #53 on the Parliamentary order paper. This time last year it was at #51. It's slipping. Here's the link to the relevant NetVision video: http://2009.r2.co.nz/20111018/q-8.mp4

' Nobody’s saying IP shouldn’t be protected by the way – it absolutely should.'

What rot. I for one am saying 'intellectual property' (as presently understood) should not be protected as it is not a valid form or subject of property rights.

Property rights are a means of diffusing and resolving conflicts over scarce resources. In a free society, the scope and boundaries of property rights are developed by the free interaction of people through custom and social acceptance.

Patents and copyrights in particular were never developed or adopted under our customary law heritage, instead they exist solely as royal grants of special rights that would otherwise not exist. These rights do not arise from the process of diffusing conflicts and creating civilised customs for peace in a free society.

The common law (customary law) has developed some remedies for protecting names/trademarks (the torts of defamation and passing off), and recognises contractual and fiduciary duties of secrecy, but these do not amount to recognition of ideas or their expressions as forms of property.

Actually, Anonymous, it'd be worth viewing the footage. The party spokespeople were explicitly asked by an audience member about the software patent exclusion, and all indicated support for it.

I wonder how much revenue AJ Park stands to lose when this new legislation goes through... :) It'd be a shame if lawyers had to lose a bit of revenue for the entire software industry to eliminate a huge business liability.

Hi

I was the other attendee at this meeting (indeed, I organised it :-)) and I can vouch for the accuracy of Paul's account and conclusions. I would also add my voice of congratulations and thanks to Tim Groser and officials for being very open and honest and for having taken the time to understand and support our positions.

"Can Tim Groser or any other representatives of the Government provide any such evidence? If not, on what basis are they negotiating? "

Actually, they are rightly asking the US to provide that evidence. The NZG has already pointed out the economic flaws in the US proposals and have asked the USTR to provide an economic framework to test the rational behind their proposals. The USTR has not been forthcoming, probably because there is no economic rational behind their thinking, only lobbying dollars.

It would be valid for the NZ US Council, as cheerleaders for the TPP and the US position, to fill those gaps. Over to you Stephen :-)

Having spoken to folks in the Beef and Lamb council it is also clear that NZ struggles to fulfill its current quotas for the USA, so not much for the nitrogen industry in this either.

What this treaty boils down to is global politics. Do we want to have an agreement with the USA and other Pacific rim partners to strengthen Geo-political ties? This might be perfectly rational but it certainly comes with an economic and social cost. We need to have that trade-off well understood and communicated.

The NetVision election debate videos are at http://www.youtube.com/internetnz

Vikram Kumar, InternetNZ

Don, I'm very happy to be the cheerleader for TPP (not TPPA - there is no A as I keep on saying) but a cursory glance at our members list on our website would reveal that we represent NZ interests not US interests. I'm glad you also confirm that officials have been receptive to your sector's views as they should be.

Despite Stephen Jacobi's optimism, I have no faith that TPP will represent NZ's interests. With a background of the MPAA-sponsored s92a copyright law, ACTA and the draconian USTR IP position, combined with a lack of transparency, I see no grounds to expect that TPP will be of any benefit to New Zealand's nascent IT industry. To trade off the potential of NZ's digital economy to boost dairy farming would be tragedy, to say nothing of the impact on ordinary citizens of the lobbynomics-derived USTR position.

You, Anonymous, are right on the money. Couldn't have said it better.

@Stephen Jacobi

Your association does not reprensent in any case independent software developers.

TPP is a transparency monster, similar to the ACTA agreement, where patent holders are in the driving seat.

If this passes it will be the end of New Zealand's software Industry.

New Zealand business is tool small and under funded to compete with innovation destroying Patent Troll companies in the states.

If you hold shares in a New Zealand software company best to sell them now.

If you own a New Zealand software company best to move it too another country - Thailand perhaps like Massive Software did over a decade ago.

Although it has been pointed out several times already, I would like to add my voice to the theoretically accurate, but in actuality misleading statements by the NZ US Council:

"NZ law will not be overridden by TPP. International treaties are not self executing - NZ laws have to be changed before any provisions come into effect. This means there will be a parliamentary process including submissions to select committee etc

At the end of the day the Govt will need to work out whether the final TPP meets our national interests"

It simply doesn't work this way. And I speak from having seen several FTAs go through Cabinet.

If someone can point to one example of Cabinet approving an FTA, with a majority in the House, and the House rejecting the FTA, I'll eat a whole chapter of the current TPPA negotiating text.

It would be a HUGE political embarrassment for Key to agree to a TPPA Text and then have it not pass into law (with all the subsequent loss of sovereignty). I fear that not losing face with the USA at a late stage will trump the previous aligned views of our own legislature.

Donald - may I pass you a napkin ? You'll need it because it is absolutely the case that Parliament has passed implementing legislation for the FTAs New Zealand has signed. Yes Governments in this country do have majorities which enables them generally to pass legislation but the Opposition and public get the opportunity to offer input and critique. Last time I looked this is the way democracy works in this country - but don't believe me, see http://www.mfat.govt.nz/Treaties-and-International-Law/03-Treaty-making-process/index.php for a fuller explanation.

Hi Stephen

Not sure what your problem with Donald's comment is. But insulting him is probably a sub-optimal approach to gaining support for your arguments.

He is relating to a period of his life working at DPMC and Treasury. So I think we can take what he says as having some validity.

Cheers
Don

Stephen - You are correct, however in practice it is very rare for an agreement by the executive to then fail to be implemented - even if unpopular. Also the courts will usually take note of treaties the executive branch of government sign and use them to colour their reading of the law (although the treaties themselves are not legally enforceable in a NZ court existing legislation will often be read so as to best comply with international obligations).

It is inaccurate to suggest a signed treaty has no force or influence in NZ until it is ratified. It is also inaccurate to say it has full force. The fact of the matter is, if signed, it will have some force and will influence policy and legislation.

This is why more significant treaties that *potentially* have great impact need public debate and arguably should be tabled in Parliament before being signed. (aka, DRIPS)

NZ US Council is distorting the process a bit here. The public may have "input" but this only occurs after the treaty is already signed, where their input is meaningless. The treaty can be signed without the public or opposition having seen one single line of the text.

Once signed, the government has only two choices: an embarrassing failure to implement, or ram through the law changes to meet the obligations they signed up to. None of that sounds at all like the same democratic process any other legislation goes through.

Oh, but the words of the process are the same, right? That's all which matters?

NZ US Council should be ashamed to undermine our democracy in this way.

@Stephen Jacobi

If you want to whip out the "last time I checked" card when it comes to how IP laws are passed in this country. Check a little harder. The last law (3 Strikes) was forced thru under urgency tacked onto a disaster relief bill.

Stephen - presumably you are passing Donald a napkin so he can continue to use it as a blindfold, such is the level of (non) disclosure that we have with TPP(A) ;-)

The MFAT process you point to only reinforces my view that, having signed any treaty, our choices are completely confined to acceptance (with or without minor tweaks), or rejection. Rejection is highly unlikely. So, the entry into of the treaty effectively means a change to our law is a fait accompli and makes a mockery of the Parliamentary and Select Committee processes. "Last time I looked this is [NOT] the way democracy works in this country".

I'm happy to be convnvced that TPP(A) is net beneficial to NZ but I need to see the evidence, particularly given the proposals for US SOPA style IP laws.

Don

Donald offered to eat a whole chapter of the TTPA negotiating text, I offered him a napkin. He accused me of making misleading statements, I pointed to a reference backing up what I said. I'm more than happy to debate the merits of TPP, I am just a little weary of arguments around TPP being a challenge to democracy. The charge doesn't stand up to scruntiny.

I find it astonishing that Stephen Jacobi considers TPP "democratic". If the treaty text is only presented to the NZ public as a "fait accompli" that is hardly democratic. Given the capture of USTR by IP maximalists, the TPP is policy laundering akin to ACTA.

We are reliant on the skills of NZ's MPs and officials but the lack of awareness of the issues demonstrated by MPs during the journey of the recent Copyright Amendment Act bode poorly.

Stephen - how can you (we) debate the merits of TPP(A) if you (we) haven't seen the text?

Rick - that's a fair question. As I understand it, there is no agreed text at this point - there are certainly fragments of text some of it more advanced in terms of attracting consensus amongst the negotiators. But nothing is agreed until everything is agreed and we will see the text once the negotiation is complete. For the time being I think we know enough about the general direction of the negotiation to be able to debate the merits of TPP as we are doing right now.

I still cannot see an acceptable rationale for arguing for the secrecy of the treaty document in whatever form it takes through the negotiations. The only thing in these negotiations that is in any way sensitive is the concessions the various negotiating parties are willing to make. Of course, that is not conveyed in the draft texts, so that pretense for secrecy is a bust.

It seems fairly clear (to the extent that any part of this process is), that the US knows that the text of its chapters will be unpalatable to the people of NZ (and the other TPPA countries), thus their insistence on secrecy. The US needs to be put in its place - after all, aren't they the ones insisting on bringing democracy to the world (whether it wants it or not?). It's the ethical responsibility of our negotiators (and you, if you're involved in the discussion) to do so, and to deride them for their hypocrisy if they refuse.

I'm utterly disgusted at the suggestion that we, as NZ citizens (and business owners, and taxpayers), should be be content to let our government commit to any sort of agreement on our behalf without us being able to assess the terms of the agreement first. That's both daft and autocratic.

Reading your various comments, I fail to see how or why the NZ US Council and the US NZ Council could possibly be seen as two distinct organisations. I'm not sure what NZ interests you think you're representing, but you sure as hell aren't doing it in the name of the NZ people.

As per the rest of the commenters, i'm incredulous and disgusted at the suggestion that we should blindly trust that the TPPA will benefit NZ.

Frankly, you may be tired of suggestions that the process is undemocratic, but I'm tired of lobbyists such as yourself trying to erode our democracy.

I don’t think that the possibility of New Zealand banning software patents can have much value to NZ as a bargaining chip in the TPP negotiations other than in annoying the United States. As the author notes, the local software industry is doing extremely well in an environment in which software is patentable. It might be different if software patents were not currently allowed here.

To the Anonymous who said "the local software industry is doing extremely well in an environment in which software is patentable"... That's what the US software industry might've said... right up to the instant that the patent trolls started methodically crushing them under the weight of dubious patent infringement lawsuits, and killing their businesses. The US, according to a previous commenter, no longer has an innovative software industry. Ironically patents - which exist for no other reason than to encourage innovators - have become the cement ugg boots of innovation in the US. If we get rid of them now, we can head off such a depressing fate. Moreover, the really interesting companies fed up with the US shift their talent to NZ (and we know it's already started - and that's just on the *possibility* that software patents will end here).

So, Anonymous, I encourage you to reconsider your position.

I have to say I'm not impressed by Stephen Jacobi's attempted sleight of hand with cause and effect.

If I throw you off the edge of a cliff, to use a hypothetical, you can debate gravity until you're blue in the face, but hitting the ground is all but inevitable once you've started falling.

Saying "the government still gets to debate it, and the people still get to discuss it!" is disingenuous to the extreme when, by the time the treaty is in effect, we've already fallen over the edge.

Not that I'm surprised, as flirting with Newspeak so that 2 and 2 make 5 seems to be the best set of lies that the oligarchs and their mouthpieces can come up with these days.

It's almost like there's a contest to see who can tell the most egregious lie and still laugh as the laws are passed anyway.

The position that NZ wants less strong IP protections because it is "developing," in other words that, since it is a net importer of IP, it would like to devalue those imports and effectively make them cheaper, is hardly going to convince an IP-rich country, such as the US, to assent. From the point of view of US IP producers, NZ is a small country with its own set of laws, and it is, for them, questionable whether they want to do business with NZ and expose their IP to somewhat unfamiliar NZ laws. NZ should want them to expose their IP, because technology leads to productivity. Just for example, consumers can benefit by improved availability of US media online. Access to IP is the benefit of NZ agreeing to stronger IP laws or to IP laws that better align with US IP laws, thereby making it more economically attractive to IP producers to do business in NZ. The costs, as the article and commentators point out, are in not getting exactly the IP laws that NZ wants and in agreeing to stronger IP protections than NZ wants. Like any negotiation, hopefully this one finds middle ground.

NZ's focus on protections for the agricultural industry is probably a natural response to the situation. NZ is relatively rich in agricultural IP and weaker in, say, media IP. Consequently, both sides can win something by NZ gaining agricultural protections and the US gaining protections for other industries. That said, I find this to be favoritism towards one industry in NZ. Strategically, NZ is at the end of the world, but technology and media is actually an industry for which this hardly matters. One can write software in NZ and it is virtually costless to export, unlike physical goods. Consequently, it should be NZ's strategy to promote industries which are robust to its geographic disadvantage. In this way NZ should have an interest in protecting its technology industries perhaps more than its traditionally strong industries such as agriculture.

It's interesting to see last month's NZCS Newsline article re-published in the NBR and to read the discussion that has ensued.

For an alternative analysis of the situation, including a summary of the most recent round of submissions to the Ministry of Economic Development, readers may wish to refer to my blog post about about software patents and the proposed exclusion of computer programs in clause 15(3A) of the Patents Bill.

Waldo

Here is a link to the blog post:
http://blogs.msdn.com/b/nzgovtech/archive/2011/04/18/building-a-wealthier-nation-through-innovation.aspx

Thanks for that, Waldo. I would encourage the interested reader to also review the comments following his blog post, as they point out - in substantial detail - many of the fundamental problems with Waldo's position.

Among other things, Waldo simply repeats the corporate line which Microsoft's lobbyists managed to foist on the US policy makers, and which turned the TPPA into such a hostile "agreement".

If anything, Waldo represents the NZ beachhead of exactly the US-corporate-centric mentality that most of us are railing against in the previous comments.

Thanks Dave.

I agree that the comments on my blog post would be useful for people to read, and the results of the submissions that were made to the Ministry of Economic Development are also relevant of course.

As you know, the clear majority of those submissions were opposed to clause 15(3A).

Despite all the discussion, there is still no clarity on what clause 15(3A) would actually mean if it became law, and no evidence of the supposed harm that the current law has caused in NZ.

Just to clarify, the submissions discussed on Waldo's site, which were primarily from patent lawyers trying to protect their patch, were in response to a request for feedback on the guidelines on how the law change would work.

The consultation SPECIFICALLY stated that it was not to re-litigate whether software should be patentable (which had already been determined through the transparent Select Committee process) and as a consequence most on-topic submissions didn't deal with that.

Nevertheless, a coordinated campaign spearheaded by a very small group of US-based corporates and their patent lawyers (for example Waldo above, a corporate lawyer) made a series of submissions opposing software patents. Then claimed most submissions opposed them.

Can't blame them for trying of course. Albeit a little sneaky.

However let's get real. When the matter was consulted through the transparent and open Select Committee process the vast majority of submissions opposed software patents. The Select Committee explored the issue in depth and UNANIMOUSLY chose to recommend removal of software patents, a position supported by the Minister and most in the IT industry.

However all of that is somewhat irrelevant now, albeit Waldo has again done a good job of trying to re-frame the debate.

Unless I'm reading it wrong the point is that all political parties in parliament UNANIMOUSLY agreed on something (rightly or wrongly) and now it's possible this position is for sale to the US in exchange for agriculture gains.

Whether you like software patents or not, if that turns out to be the case it's an absolutely disgusting outcome.

Thanks for your response, Software developer, you've saved me the trouble (and probably done it better than I would've). Only two points I'd make:

In the section about "US-based corporates", I'm guessing you meant "submissions opposing software patents", you probably meant "submissions opposing the software patent exclusion"...

Also, in that paragraph, you suggest that Waldo is a corporate patent lawyer... I thought that too. He has, however instructed me that he's not actually a lawyer. He just plays the role of one on behalf of Microsoft NZ.

I'm sure you'll correct me if I've got it wrong, Waldo :)

Free Trade Deals are completed on overall trade not on individual sectors, often one traded away for another. It is interesting to look back on the US/Australia trade figures and see that there is a growing disparity beteen the nations. in 2005 there was a USD $8.246 million difference in US favour in 2011 a US$ 14.088 and growing (http://www.census.gov/foreign-trade/balance/c6021.html ). NZ is also importing more from the US in the last few years (http://www.census.gov/foreign-trade/balance/c6141.html ) Somehow I don't think this wil change and we will have much of our sovereignty traded away as with our freedom to pass laws. This year will be a year where all the legislation will line up to fit in with the TPP (A) secret agreements. Then there is also the issue of the signing of the bit where any new law changes might cause Govt to be sued.

Hey Dave and Software Developer, thanks for your responses but you did not answer the fundamental questions I put forward about clause 15(3A).

Dave, I am not a patent attorney but I am a lawyer. They are not the same thing. :)

For the record on who made submissions on the guidelines, here is a list:

John Rankin, Affinity Ltd
P L Berry & Associates
Directorate General Trade, European Union
John Hine
Auckland Uniservices
NZ Institute of Plant and Food Research
Fisher & Paykel Appliances
Business Software Alliance
GNS Science
NZICT Group
Airways New Zealand
Doug Calhoun
A J Park
Business New Zealand
Christian Beauprez
Henry Hughes Ltd
Mark Summerfield
Microsoft New Zealand Ltd
James & Wells
Christopher Young
EverEdge IP
Technology Interest Group
New Zealand Institute of Patent Attorneys
Bram van Melle
Acacia Law
Internet New Zealand
Baldwins
Intel Corporation
Institute of Patent and Trademark Attorneys, Australia
Ellis Terry
International Federation of Intellectual Property Attorneys (FICPI)
New Zealand Law Society
Intergen
Thermal Chemistry
Qualcomm
Air New Zealand

There is an independent summary of the above submissions here:
http://blog.patentology.com.au/2011/06/stakeholders-say-no-to-nz-computer.html

Cheers
Waldo

Waldo, first of all, apologies for misrepresenting you. So you are a lawyer, but no patent attorney - noted.

Regarding your next point, I can't remember what the original question on issued on 15(3A) was, as it's not relevant. What I can say is that all of the poor sooks you cite who wrote statements calling for the reversal of the decision to exclude software from patentability, were simply caught napping during the Select Committee process. Everyone else knew it was the time to make the case for excluding software. Sadly for you guys, neither the NZICT group (I've spoken to Brett about this personally, so I know) and MS NZ (and partners and patent attorneys) made a statement, because they thought the politicians had "issued them with assurances"... which, sadly, was deeply misguided.

So now's the time to man up, and start planning for how MS will react in a market that isn't corrupted by US corporate stupidity.

Funny that Fisher & Paykel Appliances made a submission when their Finance arm is currently being sued for $6m for IP theft.

Software is important to our future. The complexities around intellectual property seem to distract some parties from the need for sound governance infrastructure.
For instance our Torrens system for administering land rights has been a great success and arguably facilitated an enormous amount of investment throughout the western world.
To undermine IP protection is a bit cowardly.
It is resisting the resolution of a challenging problem. This is in itself counter productive..
I would suggest a better long term solution would be rigorous IP protection with an easier to understand and cheaper to use system.
I would of thought the shift from the Deeds system to the Torrens system around land administration could be used as inspiration fairly easy enough to facilitate a suitable modification to IP administration.

Cowardly? The US has cannibalised their domestic software industry. It's now completely dominated by a few megacorps, who use software patents (and almost universally poor quality ones) to stamp out the small innovative start-ups that are keen to take root there. We've had some of them contact us about moving to NZ to take advantage of our progressive software patent-free environment.

Paul, you should be ashamed of yourself for trying to use an emotive denigration like "cowardly" to reflect a very carefully considered, deliberate position held *by the people who actually write software* in NZ. Most of our US-based colleagues envy us for the possibility of shedding the scourge of software patents.

To me it seems NZ would be daft *not* to drop software patents. After all, we don't allow patents for books or music or other forms of expression. The only reason we allow software patents now is because it wasn't specifically excluded by patent legislation that was, if I'm not mistaken, developed before software even existed as a concept, and as such could not have anticipated the way it would have been abused by patent applicants (in the US especially) subsequently.

Proposed Solution

Offer to compensate US for any PROVEABLE situation where software patents detrimental. Compensation on an intial period of estoppel against parallel import.

Analogous to copyright collection clearance. However burden of proof should be on US. Eg if an iPhone is released in both AU and NZ, then allow a "grace" period of say 1-3 months where iPhone can be purchased only from Australia. This will have a HIGHER premium (for software patent) and thus early adoptors can pay the TTP surcharge. After that, then the software can be treated under COPYRIGHT provisions and not patent.

drllau