Tindall, Morgan-backed software company resigns from NZICT amid Patents Bill spat

KeallHauled

Chris Keall

SMX CEO Jesse Ball (left) and CTO Thom Hooker
NZICT Group CEO Candace Kinser

Auckland-based sofware company SMX has resigned from industry lobby group NZICT, citing opposition to the lobby group's stance on the Patents Bill - which it sees as a reflection of NZICT being dominated by off-shore companies.

SMX makes email filtering software, and numbers Sir Stephen Tindall and Sam Morgan among its investors. Mr Morgan came onboard to bankroll a push into the Japanese market. It has also enjoyed success with giant Indian outsourcer Tata.

Yesterday, NZICT strongly backed a government back-track that saw software included under the Patents Bill. NZICT members include the likes of Microsoft, Cisco, IBM, Dell and HP, plus local high-flyers like Datacom and Gentrack and Fronde.

Most multi-national tech companies have pushed for software to be covered by the legislation, while local outfits have tended to see it as an impractical, expensive measure that hinders innovation by smaller players.

In the open letter to NZICT CEO Candace Kinser, SMX co-founder and chief technology officer Thom Hooker says in his company's efforts to satisfy investors on patent issues "the only winners were the IP [intellectual property] lawyers.

"It's great to see another Kiwi-owned company taking a stand," NZ Open Source Society president David Lane told NBR.

"It helps to underline the fact that this isn't an 'open source community vs. the rest of the world' situation. This is really a showdown between software developers vs. US multinational corporations and IP lawyer pals."

Candace Kinser responds
"Our release and comments in your recent article clearly address many of the stated concerns put forth by Mr Hooker," Ms Kinser told NBR this afternoon.

"For what its worth, today I have received a number of emails and phone calls from our members (and some who aren't) who are as small or smaller than SMX thanking us for our stance.

"We don't support pushing NZ out to sea as a solitary vessel to try and navigate global patent waters alone. We do support giving software and tech companies the choice to patent or not, as they see fit for their business needs.  This Bill is in support of both of these ideals."

She added, "It is disappointing that Mr Hooker has chosen not to contact me or the Board - that I am aware of - seeing that this debate has been going on for a long while, and has chosen to address his concerns through a third party being the media. NZICTs statement should be of no surprise whatsoever, as our position has not waivered and we always welcome dialogue with our members."
 


RAW DATA: SMX OPEN LETTER

Dear Candace

SMX is one of your members and we find NZICT's recent engagement with the NZ government to convince them to change their position on software patents repugnant. As a result we are canceling our NZICT membership, effective immediately.

We feel that NZICT does not represent NZ software companies' interests, as its tier 1 membership, board and funding is derived from large off-shore companies or their local partners. These off-shore software companies have a huge amount invested in the software patent gravy train and in stifling local competition.

SMX believes that innovations in software can and do occur without the need for patents and that patents only serve to further entrench the large international software vendors' position in the market. Patents also stifle innovation, something New Zealanders are told we're good at yet NZICT would prefer to see software developers handicapped in the race to innovate? SMX has had a lot of success overseas without lodging a single patent, but how many future New Zealand startups will not succeed because of the (perceived) software patent problem?

SMX has grown beyond the startup phase but we spent a lot of time and money during fund raising rounds to satisfy our investors around software patent issues. These investigations ultimately led nowhere and invariably the only winners in this process were the IP lawyers. How many other New Zealand startups are faced with the same costly patent investigations and how many innovations will now not happen because of the extension of this bill?

As to your release today stating that " the clause would have been unique in the world", what is wrong with that? Surely NZICT recognise that New Zealand was leading the world in an innovative way of dealing with the software patent issue? This innovation has now been shutdown by the likes of NZICT and your members are only representing their own interests in this debate and not what is best for New Zealand software developers. To draw a parallel from history, what if New Zealand had not taken a position that was "unique in the world" at the time by allowing women to vote in the late 19th century?

SMX is a big supporter and user of open source software. Where would the Internet be if UCB had patented BIND, for example, the primary DNS resolver family used on the Internet to this day? Or email as described in RFC822? Software should not be eligible for patent because it strangles innovation and only works to entrench the existing patent oligarchs and SMX would like nothing to do with an organisation so diametrically opposed to our beliefs.

SMX calls on other NZICT members who have the same concerns as SMX to cancel their NZICT membership as well.

Thom Hooker
CTO & Co-founder
SMX


17 · Got a question about this story? Leave it in Comments & Questions below.

This article is tagged with the following keywords. Find out more about MyNBR Tags

Post Comment

17 Comments & Questions

Commenter icon key: Subscriber Verified

Bravo, gentlemen.

Reply
Share
  • 0
  • 0

SMX sound like idiots. Do they regularly sign up to things, pay loads of money and then stick their heads in the sand?

Reply
Share
  • 0
  • 0

Posting anonymously to abuse someone taking a stand on principle shows a distinct lack of principle in the poster.

Reply
Share
  • 0
  • 0

Posting comments directly to media shows a distinct lack of maturity on the part of SMX.

Everyone has known NZICT's position on this for a long time - same as big corporates. SMX must be living with the mushrooms if they didn't see this coming. A public flogging of NZICT does SMX no favours in the professionalism stakes.

Just sayin...

Reply
Share
  • 0
  • 0

Actually, seems to me, Steve, that the problem here is that the NZICT didn't actually consult their members. Given that they purport to represent the interests of their members, it's hard to understand how they justify taking a position without explicitly consulting their members... That's not representation... it's unethical. SMXs is perfectly justified - how is it unprofessional?

Reply
Share
  • 0
  • 0

Um, excuse me, but have you been living under a rock for the past 3 years?? Have you not seen all the media on Microsoft, NZICT, etc around their support of patents???

Reply
Share
  • 0
  • 0

Bravo Tom Hooker.

This is just setting us up for the IP war that the US will wage against the rest of the world as they say "we invented that, give us money".

R&D in the US tech sector has been cut dramatically in favour of patent wars and lawyers are they only ones who gain.

Look at Samsung vs Apple. Look at Google's massive IP spend up.

Lawyers are the most unproductive leeches in society yet hold most of the power... off with their heads i say!!

Reply
Share
  • 0
  • 0

Totally agree with SMX. This is completely against New Zealand's best interests.
There are many examples of USA software patents which inhibit innovation
- Software that "pushes" email to a device rather than "pulls" it
- Software that uses a pinch gesture to resize
- Software that creates a magnifying glass around where you touch the screen
- Software that creates a pull-down menu when you move your finger downwards on the screen from the top
- A swipe gesture to lock and unlock a screen

The rest of the world (outside USA) does not recognise these absurd patents and neither should we.

Reply
Share
  • 0
  • 0

And look how useful each of those inventions are! Would they have been inventied without the incentive to invent given by patents? Maybe not.

Doesn't anybody find it ironic that we are most concerned about patents stifling innovation, while at the same time complaining about domination by a country that has forever allowed software patents, and has risen to a position of diominatiojn BECAUSE of their patent system?

Software patents seems not to have stifled software innovation in the USA in the least, and in fact has encouraged software innovation to flourish.
Europe on the other hand...

Reply
Share
  • 0
  • 0

Any other NZICT members with similar concerns?

Reply
Share
  • 0
  • 0

The rest of the world?? We have always recognised software patents and this change will bring us into line with Australia and Europe, not the US. There is some really uninformed comment going on. As far as I know no-one has EVER been sued for infringing one in New Zealand. Almost no software is patentable anyway. There seems to be a perception that suddenly all software will be patented. That's just not true. Can anyone give one real example of a software patent impacting their normal activites in New Zealand? Also, there seems to be a lot of playing the man, not the ball, going on in this debate.

Reply
Share
  • 0
  • 0

How would you like to be asked by a potential investor or purchaser whether your software package violates any patents?

It's basically impossible to prove it doesn't.

Reply
Share
  • 0
  • 0

Actually it is readily possible to prove it for a particular country. Just search that country's patent database....

SMX's comments make their lack of knowledge of the patent system, software patents and what actually gets claimed by patent attorneys glaringly obvious.

If they had a shred of understanding, they would realise that it is the "pure" concept of software (as such, per se, or by itself) that is not patentable under the amended law- i.e. software as an abstract idea.

However, other inventions, such as hardware systems with associated control software, are still patentable, despite the fact that they utilise software as part of the invention. Which is as it should be.

It simply would not do to not allow patenting of any invention that requires software to operate - because lets face it, most stuff needs software to work nowadays.

Using the terms "as such" puts NZ on par with Europe, where the requirement for getting past the "as such" limitation requires a "technical effect". There is no doubt that there is still some ambiguity, but then there always is with law, which is why you have lawyers in the first place.

Reply
Share
  • 0
  • 0

Anonymous, here's a specific example of a trivial patent (nearly) in NZ... http://computerworld.co.nz/news.nsf/UNID/F68C4D35A4AE5DD5CC257038000F4A24

Hate to have to correct you, but *any* software is patentable in NZ unless someone specifically objects to an application. IPONZ simply doesn't have the skills required to assess prior art or obviousness in patent applications, so it's almost guaranteed (given that few if any software developers enjoy reading patent applications, and because it costs thousands to arrange a formal objection) that a lot of trivial software will be awarded patents here. Other jurisdictions are similarly lame.

Before you say: "but we just need to improve the standards of software patents" think about the incentives. If you're a competent software developer, current and skill in the art, the LAST thing you'll be wasting your time doing (no matter how much it pays) is assessing patent applications. Writing software is so much more rewarding. This fact of life is true regardless of where you are in the world. The software patent system is fundamentally broken... It *cannot* be fixed. Scrap it.

Reply
Share
  • 0
  • 0

Correction to my last comment: IPONZ doesn't have the skill to assess *software* patents. I'm not qualified to talk about other sorts of patents.

Reply
Share
  • 0
  • 0

Heh, it amuses me that someone dislikes me so much that she's disliked my correction to my previous comment.

Reply
Share
  • 0
  • 0

Under NZ law as it stands currently, an IPONZ examiner can only examine for novelty, and not inventiveness (the opposite of obviousness). But patents can be reviked in couret on the grounds that they are obvious.

Under the new NZ Patents act, our examiners can join the rest of the world in rejecting obvious inventions. patent applications for inventive inventions will be granted only.

If inventions are inventive, why should they not be entitled to protection, after the developer has put time and effort into creation and development of the invention, and has by definition created something that has benefits and advantages over what came before it, and directly contributed to the furtherment of society.

Reply
Share
  • 0
  • 0

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.6806 -0.0050 -0.73%
AUD 0.9006 -0.0027 -0.30%
EUR 0.5781 -0.0041 -0.70%
GBP 0.5157 -0.0035 -0.67%
HKD 5.3229 -0.0306 -0.57%
JPY 76.2440 -1.2190 -1.57%

Commods

Commodity Price Change Time
Gold Index 1277.8 -0.310 2017-11-16T00:
Oil Brent 61.3 -0.480 2017-11-16T00:
Oil Nymex 55.1 -0.160 2017-11-16T00:
Silver Index 17.1 0.100 2017-11-16T00:

Indices

Symbol Open High Last %
NASDAQ 6794.7 6797.8 6793.3 -0.15%
DJI 23433.8 23433.8 23458.4 -0.43%