The Productivity Commission has recently released a
draft report recommending software and business methods be
specifically excluded from being patented. Shelston IP believes
that such action would be harmful to Australia's technology
start-up sector, in particular to SMEs whose competitive advantage
resides in innovative software interfaces and
Most heavily affected are businesses whose innovative technology
is public-facing, and hence unable to be hidden in code. Examples
include user interface technologies, eCommerce platforms, mobile
apps, and innovative website technologies. Furthermore, often where
the crux of a software invention is at the concept level (and not
reliant on unique coding approaches), businesses with those forms
of software (e.g. in fields such as data security, search engines,
and data management/processing) face difficulties in advertising
their product offerings without enabling competitors to develop
Without an ability to secure patent protection, there is nothing
to prevent a business' innovative software technologies from
being copied, at the concept level, by competitors. This is a
greater problem for smaller enterprises, whose ability to operate
commercially in a successful manner would be obliterated in the
event that competitors were to copy and replicate significant
technology that distinguishes them in the market place.
Without software patent protection, technology companies face at
least the following difficulties:
Raising capital. Investors want to know that a business can
protect its core value-add software technologies from being
replicated by competitors. Inability to secure protection will
inhibit the flow of capital to new and growing software
Remaining innovative. Where innovation can be copied freely at
a functional level, focus turns to being a "copy economy"
rather than an innovative market. Indeed, in such a copy economy,
innovation carries with it a risk of providing competitors with
advantages (given that software innovative functionalities are able
to be freely copied).
Implementing exit strategies. Without patent protection, there
is limited incentive for acquisitions. A potential acquirer has an
option to simply engage their own programmers to replicate
innovative software functionalities developed by what would
formerly have been acquisition targets.
The Ugg boots case revolves around who holds the trade mark rights to the word 'Ugg' in relation to sheepskin boots.
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