One major effect, he says, would be to discourage venture capitalists from investing in the industry. Investors would be less willing to sink money into a project whose result will not have adequate protection against imitation.

"This will make it hard for ICT to remain competitive for venture capital alongside other industries that can still get patents for the products," he says.

Loss of patent rights, as flagged as favoured by Parliament's Commerce Select Committee last month, will also discourage people with keen minds from entering software development, Auld predicts. Instead they will apply their idea-generating capability to other fields, such as biotechnology or agricultural technology, worsening ICT's already serious staff shortage.

"Maybe that [diversion of bright minds into other fields] is government's intention," he says; "I don't know, I find this move hard to understand.

However, Open Source Society president Don Christie says Auld's is a "very tired old argument that has been discredited".