After five years of debate and intense lobbying, New Zealand has passed a new Patents Bill which will effectively outlaw software patents within the country. After so many years of delays, the Parliament finally voted in favor of the bill by a massive margin of 117 in favor versus 4 against.
With the passing of this bill, New Zealand has become the first country to ban software patents explicitly. The idea of banning software patents is not individual to New Zealand at all, with several groups lobbying governments internationally to restrict software parents in a similar way. The chief executive of the Institute of Information Technology Professionals in New Zealand, Paul Matthews, called the ban “a victory for common sense”.
One of the issues the ban is aimed at is the huge amount of litigation which arises from software patents which are being held by so-called “patent trolls”. Simply put, a patent troll is an individual or company which acquires a patent on a piece of software and holds onto it without actually using it to create anything new. The patent troll then waits for software developers to come up with similar software which infringes on their patents and sues the developers for their own financial gain. Banning software patents would make these actions impossible, allowing greater innovations and advancements from a more liberated software market.
Experts estimate that within the US alone, patent trolls cause the software industry as much as $29 billion per year in pay outs and litigation fees. With the ban in place in New Zealand, it is still unclear whether other governments will follow the same example.