SOFTWARE PROTECTION IN NZ: IMPORTANT WHICHEVER TEAM YOU PLAY FOR

In a recent decision Jacobson v Katzer (2008-1001), the US Appeals court ruled that someone who used “open-source” software outside the conditions of the open source license can be sued for copyright infringement. A District Court previously ruled that the breach only gave rise to a contractual cause of action. This decision is particularly important as federal copyright law remedies are more extensive than those available under contract law.

Open-source software is software whose source code is made freely available to the public, within the boundaries of the open source license that accompanies the software. Users may use, modify or improve the software and redistribute it to others, provided they adhere to the conditions of the license. An example of a license commonly employed by open source producers is the "Artistic License", which requires that any changes to the original software code be communicated to the public, and also gives the software originator the opportunity to incorporate any improvements or modifications into the original software.

This ruling sets a precedent for open-source software users in the USA and may be indicative of future rulings in other jurisdictions. New Zealand courts have yet to set a precedent regarding copyright infringement of open-source software.

Software is protected under New Zealand's copyright law, but as with all copyright, it is the expression of the idea that is protected, rather than the idea itself. In New Zealand the term of copyright runs until 50 years after the death of the author, or, for computer generated works, 50 years after the end of the calendar year in which the copyright work was made.

Software that is novel and inventive and has a "commercially useful effect" can be patented in New Zealand. Software patenting appears to fly in the face of the open-source software model, as the software is protected by the patent holder and can legally only be used by others under license. The software must be disclosed to the public as a trade off for gaining a monopoly, so is available for others to learn from, but it is not available to be distributed, used or copied without permission from the patent holder. However, there is no reason that patented software cannot be licensed as open source. The patent protection in such a case would only be used against those who used the software outside the terms of the relevant open source license.

In New Zealand, computer software is currently patentable provided it meets the test from the 1992 case International Business Machines (IBM) Corp v Commissioner of Patents 22 (IPR) 417. This test requires that for software to be patentable it must embody an inventive concept and have a commercially useful effect. This test was confirmed in Hughes Aircraft Co's Application (P03/1995, 3/5/95), where the IBM case was applied to allow a patent covering computer programs for calculating conflict alert status in aircraft.

More recently the New Zealand Commissioner of Patents decided in Microsoft Corp's Application (P04/2007/5/3/07) that data structures enabling computer systems to process information are patentable. This decision was made on the basis that the data structure may enable data to co-operate with a computer programme in a more efficient way, which in turn can lead to a commercially useful effect.

For participants in the open-source model, it pays to be aware of rights existing under copyright and licence agreements, as well as the rights of those who opt for patent protection for their works. Certain open source licences may be restrictive or onerous and these conditions should be taken into account when choosing a particular open source software product. Patenting software in New Zealand is relatively easy in comparison to other countries such as India, where software patents are not allowed, and as such there is an increased chance that the software you have developed infringes pre-existing patent rights.

Before software is commercially launched in New Zealand, a patent infringement search may be beneficial to establish the patent landscape. This will ensure your open-source software will not come under fire from those with pre-existing patent rights.

Novelty searches are equally important for those looking to secure patent protection for their software. As the amount of open-source code available increases, the larger the prior art base grows. Any published prior art can potentially be cited against a patent application, which may prevent your patent being granted. Having a thorough search conducted prior to applying for your patent can reduce the chances of having the patent rejected or invalidated at a later date.

This article was also published in Asia Law in October 2008.

By Jennifer de Vere