Excluding Software Patents Will Stifle Innovation

“Excluding computer software from the Patents Bill is a mistake and will stifle innovation,” says Chapman Tripp Partner Matt Sumpter.
“I’m astonished that the Commerce Committee is recommending this change and hope that the Government will reconsider because the arguments against it are very strong,” he said.

Patents explain how inventions work; they incentivise and facilitate innovation

Patent protection doesn’t discriminate between inventors. Whether you’re big pharma, or a bloke in the shed, patent protection is a powerful incentive to innovate across every field of endeavour.

The New Zealand Patents Register is testimony to the fact that software developers big and small are committed to innovation. Local and international success stories in the technology sector are founded on patents. Patent rights allow inventive developers to back their ability and invest in high-tech R&D knowing their efforts could be rewarded by patent rights. Those rights provide a revenue stream enabling further and future investment down the track.

Patents explain how inventions work; and they facilitate more innovation

At the moment of innovation, inventors have a choice to make:

• they can keep their invention secret and protect it through trade secret law, or

• they can seek patent protection in the hope of enjoying a time-limited statutory monopoly over their new technology.

If and where the inventor seeks patent protection, the trade off for the limited monopoly is that the inventor must publish details of how the invention works. This “disclosure” enables other inventors to leverage that knowledge to develop inventions of their own.

Patents encourage R&D; and R&D boosts productivity:

Over recent years New Zealand has suffered from sustained and alarming Multi-Factor Productivity (MPF) decline. MFP measures the contribution to economic growth made by factors such as technology and organisational innovation.
The World Trade Organisation believes New Zealand’s fall in MFP is, in part, a function of low levels of R&D.

While patent law is not a panacea for productivity decline, dynamic intellectual property law discourages free-riding off inventiveness and encourages investment in R&D and discovery. Over time, strong patent protection will lift multi-factor productivity and enhance New Zealand’s prosperity and competitive advantage as a trading nation.

ENDS

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