New Zealand: Software Patent Strategy in New Zealand After Exclusion from Patentability in New Patents Act

Last Updated: 4 August 2010
Article by Jason Tuck

There has been substantial debate surrounding the uncertainty created by the Minister of Commerce's announcement that the new Patents Act will exclude all software from patent protection, while Intellectual Property Office of New Zealand (IPONZ) guidelines will allow for "embedded" software ( http://www.jaws.co.nz/media/breaking-news-are-software-patents-in-new-zealand-a-thing-of-the-past).

Putting aside whether or not software should be patentable, the immediate question is – what does this mean for those wanting patent protection for software related inventions in New Zealand now?

In the short term, not a lot. Until the new Act commences (perhaps not for several years), the status quo will remain and computer programs will continue to be patentable in New Zealand – embedded or otherwise.

Some parties are questioning the value of proceeding with the patent process for their software related inventions if there is the potential (or even likelihood) that the new Act could exclude the subject matter of their invention from patentability. What about those patents already granted, or applications filed before the new Act comes into force? Given that the lifespan of a granted patent in New Zealand may be up to 20 years, this is a valid question.

Firstly, the current Patents Bill includes several transition provisions directed to this very issue.

Essentially, the current New Zealand Patents Act 1953 will continue to apply to those granted patents and complete applications having a filing date before commencement of the new Act. The same applies to divisional applications if "the fresh patent application is given a date before that commencement".

As computer programs are patentable subject matter under the current Act, patents/complete applications which fall within the transition provisions and are directed to computer programs which: 1) embody a novel concept, and 2) have a commercially useful effect, will continue to be valid after commencement of the new Act.

Complete-after-provisional applications claiming priority to an earlier priority date, but filed on or after the date of commencement will fall under the new Act. Patent applicants having a pending provisional patent application filed within one year before the new Act comes into force would be recommended to discuss filing an early complete application with their patent attorneys to take advantage of the provisions.

Secondly, as other commentators have already pointed out – it is still unclear what software related inventions the new Act will actually exclude in practice. It is probable that patent attorneys will test the limitations on behalf of their clients, and the scope of protection available may not be as restricted as feared (or celebrated). Many inventors/businesses could miss out on protection they were ultimately entitled to because they chose not to patent in the face of such uncertainty. Additionally, often the underlying invention is not restricted to being expressed only in software – something businesses may not appreciate until they talk to a patent attorney.

In any case, an application may be highly useful as part of your commercial strategy beyond the ability to enforce your rights after grant. It may have value for its deterrent effect, or in defining the invention and contributions of inventors when entering into dealings with other parties.

Thirdly, we are talking about New Zealand legislation only. Software is patentable in many international jurisdictions such as Australia and the US, with others such as Europe allowing "embedded" software. Even after commencement of the new Act, filing a New Zealand provisional patent application may be a relatively inexpensive means for establishing a priority date for overseas applications. For a small market like our own, this is a highly relevant consideration.

To summarise, the patentability of software is a highly contentious issue around the world. In New Zealand, the simple facts are these:

  • Computer programs are currently patentable in New Zealand;
  • The proposed changes to legislation will not come into force for some time;
  • The effect of these changes on the patentability of software is unclear;
  • There are provisions confirming the eligibility of patentable subject matter for existing software patents/applications after the change; and
  • New Zealand patent applications may form the basis for applications in other jurisdictions, regardless of whether the subject matter is ultimately patentable in New Zealand.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

James and Wells is the 2009 New Zealand Law Awards winner of the Intellectual Property Law Award for excellence in client service.

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