SMX quits NZICT in protest over Patents Bill stance

Co-founder of email security company resigns from industry group in open letter; NZICT responds

Security company SMX has publicly resigned from NZICT this afternoon, following the industry group's support of controversial changes to the Patents Bill.

In an open letter to NZICT CEO Candace Kinser, SMX CTO and co-founder Thom Hooker says the group's stance is a reflection of its funding being derived from off-shore companies (see email below).

SMX is based in Auckland, and its backers include Stephen Tindall and Sam Morgan. Last year the company signed a global agreement with Symantec.

In response to the letter Kinser says: "NZICT's stance has always been, publicly and within the membership, pro-patents and for the idea of aligning New Zealand with other global practices for patents.

"The successes of many Kiwi tech companies over the past decade doesn't suggest NZ's current law that allows software patents for those who want them has stifled innovation or business growth.

"From time to time there will be issues that divide our membership. That is the nature of our industry.”

SMX letter below:

"SMX is one of your members and we find NZICT's recent engagement with the NZ government to convince them to change their position on software patents repugnant. As a result we are canceling our NZICT membership, effective immediately.

We feel that NZICT does not represent NZ software companies' interests, as its tier 1 membership, board and funding is derived from large off-shore companies or their local partners. These off-shore software companies have a huge amount invested in the software patent gravy train and in stifling local competition.

SMX believes that innovations in software can and do occur without the need for patents and that patents only serve to further entrench the large international software vendors' position in the market. Patents also stifle innovation, something New Zealanders are told we're good at yet NZICT would prefer to see software developers handicapped in the race to innovate? SMX has had a lot of success overseas without lodging a single patent, but how many future New Zealand startups will not succeed because of the (perceived) software patent problem?

SMX has grown beyond the startup phase but we spent a lot of time and money during fund raising rounds to satisfy our investors around software patent issues. These investigations ultimately led nowhere and invariably the only winners in this process were the IP lawyers. How many other New Zealand startups are faced with the same costly patent investigations and how many innovations will now not happen because of the extension of this bill?

As to your release today stating that " the clause would have been unique in the world", what is wrong with that? Surely NZICT recognise that New Zealand was leading the world in an innovative way of dealing with the software patent issue? This innovation has now been shutdown by the likes of NZICT and your members are only representing their own interests in this debate and not what is best for New Zealand software developers. To draw a parallel from history, what if New Zealand had not taken a position that was "unique in the world" at the time by allowing women to vote in the late 19th century?

SMX is a big supporter and user of open source software. Where would the Internet be if UCB had patented BIND, for example, the primary DNS resolver family used on the Internet to this day? Or email as described in RFC822? Software should not be eligible for patent because it strangles innovation and only works to entrench the existing patent oligarchs and SMX would like nothing to do with an organisation so diametrically opposed to our beliefs.

SMX calls on other NZICT members who have the same concerns as SMX to cancel their NZICT membership as well."