Mallard Trevor: Patents Bill — Second Reading 
Text is incorporated into the Bound Volume 
Mallard Trevor: Patents Bill — Second Reading 
[Sitting date: 12 September 2012. Volume:683;Page:5174. Text is incorporated into the Bound Volume.] 
Hon TREVOR MALLARD (Labour—Hutt South) 
: 
 I am pleased that the Government has decided not to take its last call because it gives a chance for the Opposition to reinforce the position that we are in. What has become clear over the last few days is that this Government has been captured. The Minister of Commerce has been captured by offshore people who are involved in the software industry. 
It is vitally important to thousands of jobs in smaller businesses around New Zealand that we have a clear policy in this area one that is easily understood on the face of the legislation and not one that has to be sorted out time and time and time and time again in the courts. I like only a few members now was a member at the time when Vodafone was trying to set up in New Zealand and Telecom was the organisation that was the incumbent. Telecom chose time after time after time to try to block Vodafone almost never successfully. It used any possible ambiguity in the law to take a case to take it to the High Court to take an appeal to take it to the Court of Appeal—I think the Supreme Court did not exist in New Zealand then—and on occasion to take it even to the Privy Council. The reason that it was able to do that was that there was a bit of doubt in a number of areas of law that had become dated and did not work. These people from Telecom knew that they had the big pockets. Telecom clearly had the big pockets and it knew that the longer it could delay the better its chance of preserving its monopoly and its position for a period of time. 
What we have now is a group of overseas-owned companies that had an agent who was working for them who is alleged—I do not know this for a fact but I will rely on the comments made by my colleague the Hon Lianne Dalziel. The person who was the agent for these multinational software companies working against the interests of New Zealand software companies is now the person who is drafting the rules for the Minister. If that is the case it is an absolute disgrace—an absolute disgrace—if that person is employed by the Ministry of Business Innovation and Employment. I want to say that I have worked with the Chief Executive of the Ministry of Business Innovation and Employment before Mr David Smol. I think he is a highly ethical person who has an understanding of the rules of the Public Service. I am working on the assumption that he is not aware of what is going on here because it is happening down the chain a bit. But I do give notice that the Labour Party will be pursuing this because it is just not ethical for someone to jump from the employ of the group of overseas-owned software companies into a job where they are drafting the rules and changing what was I understand the unanimous view of the Commerce Committee on this. 
I tell you what: this issue is not a new issue. It is not a simple issue. I can remember discussions on this issue when I was the Minister for Economic Development and those discussions go back probably to 2006 and 2007—around those times. It is not simple. The select committee I think made a lot of progress. It got the basic policy position right and then the Government motivated by big offshore interests working for—I want to now say to go back that apparently the individual worked for the Ministry of Science and Innovation. I think that is in the Ministry of Business Innovation and Employment now is it? 
Clare Curran 
: It is. He worked for Science and Innovation at the time. 
Hon Lianne Dalziel 
: Not at the time. 
Hon TREVOR MALLARD 
: But not at the time—but not at the time. The point that I want to make is that there was unanimity coming out of the select committee there is another position that has come from the Minister and there is now a third position which might be even better than the select committee position—certainly a bit clearer. It has been drafted by my colleague Clare Curran with the advice of some people who have a lot of knowledge in the legal area and in the drafting area. It is something that will mean the intention is clear and we are unlikely to get litigation in this area. 
Clare Curran 
: Elegant solution. 
Hon TREVOR MALLARD 
: The member claims that she is elegant in her solution. I can accept that her claim is true. But the point that I would like to make is that there are over a thousand New Zealand companies—and not little companies. I do not know how many members opposite are aware of Orion Software and the incredible international work that it does but I think most people are aware of Jade. People in this House who are not aware of Jade are people who are pretty ignorant. They are the big companies but there are over a thousand small companies. One can wander down Jackson Street in Petone and go upstairs to find probably a dozen places where people are developing software. Some of those places have only one person working there—they are a sole trader. Some of them have two three five or 12 people working there. 
Their businesses are being placed at risk by Craig Foss. I want to ask Craig Foss why he wants to destroy the jobs that exist in Petone. Why does he hate New Zealand software developers so much that he wants Microsoft that he wants other offshore companies like IBM and similar people to be able to tie them up in courts when he could have clear law that will do what he says he wants to do anyway? 
Sitting suspended from 6 p.m. to 7.30 p.m. 
Hon TREVOR MALLARD 
: I thought I would conclude my speech by quoting from Philip Fierlinger from Xero. He is its head of software design. He said: “We have chosen not to seek software patents because we don’t believe they are good for the industry. They divert resources and attention both when creating and enforcing. More importantly they stifle innovation and restrict competition. Competition is a good thing. We welcome competition as a motivation to build a better product. We also stand on the shoulders of giants—our predecessors who designed and invented fundamental software mechanisms and patterns that make software what it is today.” That is a New Zealand innovator. That is the sort of person who will be locked out by the giant international companies if the Minister’s Supplementary Order Paper 120 is agreed to. 
The Labour members will support the second reading of the Patents Bill but we plead with the National Party members to look at Supplementary Order Paper 123 in the name of Clare Curran and to support it. I want to make it absolutely clear that the Committee stage will take a very long time because we will fight them tooth and nail if that amendment is not agreed to and we will not support later stages of this bill if in fact the National Party decides to support overseas-owned giant semi-monopolies—semi-monopolies—against our local software designers. 
Bill read a second time.