Ryall Tony: Consumer Protection (Definitions of Goods and Services) Bill — In Committee 
Ryall Tony: Consumer Protection (Definitions of Goods and Services) Bill — In Committee 
[Volume:609;Page:6902] 
Hon TONY RYALL (NZ National—Bay of Plenty) 
: The National Party in Opposition is opposed to these amendments to the Sale of Goods Act. The principal amendment—other than the replacement of the word “things” with the word “choses”—is the addition of the words “to avoid doubt computer software” by which the Government seeks to say that computer software is a good for the purposes of the Sale of Goods Act. I think we will come across the same problem that we have identified with the other changes to legislation when trying to apply the characteristics of tangible goods to intangible items such as computer software electricity gas and telecommunications. 
I want to alert the Minister in the chair Judith Tizard to the fact that I think the Government is making a major blunder in incorporating computer software as a good under the Sale of Goods Act. The reason is that although computer software is often sold with tangible items that are goods—such as instruction books and CDs from which the programme can be transferred to one’s own computer—when it comes to software a licence is usually purchased; the software itself is not purchased. No one buys Windows 2000; one buys a licence to use it. As such it should properly be described as the grant of a licence rather than the sale of a good or a service. 
There is the potential for confusion here because it boils down to the property rights of the purchaser. The Sale of Goods Act makes it quite clear that one actually owns what one sells. But although we might say that buying a suite of Windows 2000 programmes is a good and therefore has to be treated as a good we are not buying Windows 2000; we are buying a licence to use Windows 2000. Even though we are passing an amendment that includes the words “computer software”—that is that a Microsoft program is a good which one should be able to “enjoy quiet possession of” under section 14 of the Sale of Goods Act—it is not actually a good in any sense because one cannot provide title to Windows 2000; one can only provide a licence to use Windows 2000. 
The reason I raise this issue is that it will cause confusion in the future. Parliament is saying that computer software is a good which means that one can give title to it but one simply cannot give title to Bill Gates’ property. One can give a licence to use Bill Gates’ property but that is not a good. Even though Parliament decides that it is a good it will still not be a good and that will lead to considerable confusion in respect of the rights of those who own the Windows 2000 program and those who have a right to use the licence. 
I have legal advice that suggests that the best way to cater for this problem is to use the warranties and representations provided by the Fair Trading Act when something is being sold. A person just cannot own Windows 2000 unless Bill Gates sells it to him or her. What one can own is a licence to use his program so I think that the Government is creating a rod for its own back by saying that computer software is a good because it simply is not a good. 
Gerry Brownlee 
: Where does the licence come into this? 
Hon TONY RYALL 
: Well a licence is not a good; therefore even though Parliament might say it is a good it cannot be a good. Section 14 of the Sale of Goods Act implies that if someone is selling something as a good then that person has title but if one has computer software one does not have title.