OPINION: TPP - Groser trades away tech to save agriculture

A pending international trade treaty could override a recent New Zealand law change that excluded software from patent protection.

LATEST: No need to worry about TPP - Groser

There are also hints from Trade Minister Tim Groser that he could be willing to make tech sector trade-offs if that's what it takes to protect our agricultural exports (see "Too much focus on agriculture" below).

All the political parties supported the controversial change. But the Trans Pacific Partnership Agreement (TPPA) could see the US pro-patent view override our local law makers.

Last month, I met Mr Groser and the government’s chief trade negotiator to get the inside word on what was happening with the TPPA, particularly in relation to technology and intellectual property (IP).

Mr Groser’s openness and candour was excellent and I can’t speak highly enough about the minister’s willingness to engage and discuss these issues.

However, I left the meeting more than a little concerned about the impact TPPA might still have on New Zealand’s IP laws.

Then ...
I think it’s worth talking about New Zealand’s position going into negotiations to start with. New Zealand’s confidential position paper was leaked online. It said, in part: Analysis of the costs and benefits of IP protection shows there is a tendency toward overprotection of IP in all our societies, particularly in the areas of copyright and patents. 

The analysis also shows the optimal rate of protection differs between countries and that it can differ across time as countries move through different stages of economic development.

The problems of overprotection are particularly acute for technology importing countries, including developing countries.

The analysis shows that for these countries, IP rights that are too strong will detract from innovation rather than promote it.

We were very proud to see this from our government and it sums things up nicely, including why it’s fundamentally important to the growth of technology in a relatively “young” country like New Zealand that we don’t end up with an overly heavy-handed IP enforcement regime as we grow and develop. Nobody’s saying IP shouldn’t be protected by the way – it absolutely should.

However, software patents and other IP mechanisms are designed to enforce a “status quo” approach where those countries in a “development” phase (such as New Zealand) are in a far less advantageous position as those in a “mature” market phase, such as the US, and it’s great to see that recognised by our government early in negotiations.

... and now
Discussing this with the minister, it was clear New Zealand’s position hadn’t changed much. Both he and the negotiating team clearly understand the issues and the concerns of many in our sector (and the public) and it’s obvious from other released correspondence that they have been pushing this point hard in TPPA negotiations.

However, it’s equally as clear that the US is pushing hard the other way and its efforts are intensifying.

Back in February the text of the US-written chapter dealing with intellectual property was leaked and made for sobering reading. As an example, Article 8 of this document deals with patents and, as written in that draft, specifically prevents a country from determining for themselves the types of patents they will recognise.

NZ law could be overridden
New Zealand recently completed a review of the outdated Patents Act and, among other things, the new bill, supported by both sides of the House, contains the following exclusions in Clause 15:

(2) An invention of a method of treatment of human beings by surgery or therapy is not a patentable invention.

(3) An invention of a method of diagnosis practised on human beings is not a patentable invention.

(3A) A computer program is not a patentable invention.

All three of these exclusions would be specifically disallowed in this draft of the TPPA, regardless of the fact that New Zealand’s commerce committee, made up of all parties in Parliament, unanimously supported them.

You read that right: the proposed Article 15 of TPPA would specifically prevent New Zealand enacting law that was unanimously agreed by all parties in Parliament.

In essence, if this clause doesn’t change and we sign up to TPPA, New Zealand law written through a transparent select committee process will be overridden by a foreign country’s view of patents.

While it has been denied, I find it hard to believe the reason the Patents Bill hasn’t been passed into law yet is not because it’s awaiting the outcome of TPPA negotiations. Time for a Tui ad I reckon.

Trade as a concept is mightily important and by and large free trade agreements are good things. But this recent trend of trying to negotiate IP-related issues through trade agreements rather than through the traditional international vehicles has to stop.

Too much focus on agriculture 
Meeting with Trade Minister Tim Groser last month (see main text, above), I couldn’t help but get the impression that agriculture concessions were the primary area of concern to government, not technology. 

Obviously agriculture is important for New Zealand but at what cost to the rest of the country?

Agriculture is fundamentally important to New Zealand’s economy and we don’t want to be pitting one industry against another.

However, the fact still remains, technology is on a strong growth trajectory and if supported, will lead New Zealand’s economic recovery.

Companies in software, information technology (IT) services and high-tech manufacturing are now generating as much export revenue as meat (also around $5 billion) and not as far as you think behind the dairy industry traditionally thought of as our mainstay (around $11 billion).

The number employed in the tech sector and high tech manufacturing has grown from 24,000 in 2010 to 30,000 this year. (For more, see www.nbr.co.nz/tin100).

In the face of this type of growth and value to New Zealand it would certainly be somewhat disappointing if the sector was hung out to dry in TPPA talks by a government chasing benefits elsewhere.

Paul Matthews is chief executive of NZCS, the professional body of the ICT sector.