Orion Health backs moves to block patents

Negatives outweigh positives, says one of New Zealand's biggest software developers

Ian McCrae, CEO of Orion Health, which claims to be New Zealand’s largest application vendor, supports a Commerce Select Committee proposal to rule out software patents in New Zealand.

The negatives of a patent system outweigh the positives, he says.

“Obvious things are getting patented. You might see a logical enhancement to your software, but you can’t do it because someone else has a patent. It gets in the way of innovation.”

If an inventor has a really original and outstanding idea, then a patent might be merited, he says. But, in general, software patents are counter-productive and are often used obstructively.

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“There are patent trolls, people who buy up companies just to get their patents and then pursue other people aggressively for supposedly infringing them. There are small companies filing patents for the sake of pursuing others, not to commercialise the innovation.”

Just increasing staff numbers at the Intellectual Property Organisation of NZ to look more deeply into what may be trivial patents, as suggested by Intergen’s Chris Auld, will not fix the problem, he believes.

McCrae does not believe a patent offers an innovative software company like his any practical protection in any case.

“We would have to change the nature of our business and become a patents company,” he says. “We are a software company. Our best protection is to innovate and innovate fast.”

He says a patent may gain some short or medium-term windfalls, but companies can’t patent their way to success.

“I admire the open-source guys. They put a lot of effort into this and it looks like they have won,” he says.

Others in the software industry come down on Auld’s rather than McCrae’s side, however.

Brett O’Riley, CEO of industry body the NZICT Group says his phone ran “red-hot” after the select committee’s report.

While recognising that many things about software patents don’t work, many software developers who are NZICT members still see a patent for their original work as a fundamental property right, O’Riley says.

There are plenty of software companies that choose not to patent, he says, such as those in the open-source camp; but both options should be available.

“Both open-source and proprietary models are valid and a developer should be free to choose one or the other,” he says.

Like Auld, O’Riley sees the protection of a patent as an important element in obtaining funding for further development.

“One of the first questions a potential funder will ask is what protection there is around your intellectual property,” he says.

IP protection is particularly important when it comes to taking a product to overseas markets, says O’Riley. An overseas move is virtually a necessity given the small size of the local market.

“If you don’t have a patent on your product it is a pretty significant constraint.

“Like it or not, that is the way business is conducted globally,” he says. Successful New Zealand technology exporters have made extensive use of patents.

O’Riley welcomes a “healthy debate” between pro and anti-patent lobbies, but for the select committee to rule out patents at this stage is “a pretty draconian step”, he says.

Orion Health is not a member of the NZICT Group.

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