Patent reform: Will New Zealand lead the way?

As patent-infringement lawsuits tie up courts and tech companies around the world, complaints — and calls for reforms — are growing louder.

This week, New Zealand took a potentially groundbreaking stance, banning certain software patents.

“A computer program is not an invention,” the legislation, which was approved by New Zealand’s Parliament after a 5-year debate, says. Commerce Minister Craig Foss hailed the vote, calling it a “significant step towards driving innovation in New Zealand,” according to a report by ZDNet. Parliament member Clare Curran agreed: “It’s near impossible for software to be developed without breaching some of the hundreds of thousands of patents granted around the world for obvious work,” Ars Technica reported.

However, the New Zealand law contains nuances and loopholes that may declaw its effects. Existing software patents will stand, and new ones may still be granted if they directly lead to hardware improvements. In a blog post, intellectual property analyst Florian Mueller calls the law unclear, and cautions it is not a cut-and-dry abolition on software patents. It’s also unclear if the law will stand up before that country’s supreme court, where it it likely headed.

Still, it’s a dramatic move, and one that may spur other governments toward reforming their patent laws.

In the U.S., much of the grumbling and calls for reform have focused on so-called patent trolls, or “non-practicing entities” — companies that exist solely to enforce patents they hold.

Apple is the No. 1 target of patent-troll lawsuits, according to a report by All Things D. A new study by PatentFreedom, a patent lawsuit mitigation company, found the Cupertino tech giant was hit with 171 lawsuits from NPE’s over the past five years. That’s the most among any tech company, outpacing Hewlett-Packard (137 lawsuits), Samsung (133) and Silicon Valley rival Google (103).

A new report by the Government Accountability Office found that patent lawsuits in the U.S.  have soared by 31 percent since 2010. But in assigning blame, the report also notes that the tech industry perhaps should be looking within, as just 20 percent of patent lawsuits came from trolls. Rather, according to the Los Angeles Times, the report found “companies that make products brought most of the lawsuits.” Rather than tighten regulations on patent trolls, the report suggested the government should instead focus potential reforms on overly broad or vague patents.

The GAO report does agree that software patents are the most problematic, accounting for 89 percent of patent litigation.

In Washington, change is almost certainly coming. “Litigation over software patents has became a drag, not a boon, to technological innovation,” said a report by the conservative Manhattan Insitute earlier this month. The Obama administration is also backing patent reform, and with rare bipartisan support, Congress is expected to pass a bill this fall. Stay tuned, this issue is far from over.


Photo: New Zealand trolls in their natural habitat. From “The Hobbit: An Unexpected Journey,” by New Line Cinema and MGM



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