By Julian Bajkowski and Paul Hemsley

The New South Wales government has maintained a crucial concession to the local software industry and continued arrangements that cede intellectual property (IP) rights back to technology developers by default – rather than returning a system where the government retains IP under state procurement deals.

The confirmation that existing provisions will be kept resolves a key question for Australia’s $100 billion information technology sector that has been running a decade-long campaign for state and federal governments to permit innovations made on government jobs to be resold.

To cement the arrangement, the NSW Procurement Board has now ordered all state agencies to use the new Procure IT framework to speed up purchase times and cut paperwork for small to medium businesses bidding for government contracts.

“Under Procure IT, ownership of the intellectual property will remain with the supplier,” NSW Minister for Finance and Services, Greg Pearce, said.

“This will provide businesses with a greater opportunity to commercialise their products and grow their business.”

However the procurement edict also allows the government to keep control of intellectual property when “it is in the interests of taxpayers,” Mr Pearce said.

The rollout of the Procure IT framework follows extensive negotiations between the government and the ICT industry to cut through the legal labyrinth faced by small to medium IT suppliers that created an over-reliance on large companies that delivered questionable value because of a lack of competitive tension.

Lobby group the Australian Information Industry Association (AIIA) has hailed the mandate as a win for its members on the basis that it provides cost savings for business and government.

“Over many years we have been working on behalf of AIIA members and the ICT industry to address the inconsistent and unnecessary red tape and legal requirements faced by companies when supplying ICT goods and services to the NSW Government,” AIIA chief executive Suzanne Campbell said.

Government agencies seeking to lock-down technology related IP has proved an impediment for the local industry for many years, not least because it often meant that companies had an invidious choice between a one-time only public sector deal or staying out of race to win government business.

Such provisions compared poorly to other countries seeking to export software where developers were not only allowed to commercialise IP, but often had their products endorsed by government buyers.

A further issue was that taxpayers were effectively forced to foot higher bills for software because the development costs of IP could not be offset through additional sales, a situation that dampened incentives for innovation and new developments.