New Zealand: Software patents back on the new Patents Bill

Last Updated: 12 September 2012
Article by Jonathan Lucas

A change to proposed laws on patenting computer-implemented inventions brings good news for New Zealand's software industry.

Under the proposal, the previously considered exclusion of all software inventions is partly rescinded meaning software innovators will be in a clearer position and better able to protect their intellectual property1.

Background to computer software in the Patents Bill

The Patents Bill, which promises a much-needed update to New Zealand's patent2 laws, was first introduced to Parliament in July 2008. Controversy was sparked after a Commerce Select Committee report was published3 in March 2010 that unexpectedly recommended that computer programs be excluded from patentability4.

This recommendation followed no prior discussion of such an exclusion and seemed to result from concentrated lobbying from part of the open source sector.

The Ministry of Economic Development (MED) subsequently published a proposed set of guidelines on how patents for computer software inventions would be examined under the exclusion.

Both the exclusion and the guidelines were extensively criticised by many stakeholders, including notable organisations in New Zealand's software industry. They argued that the exclusion would prevent important developments in computer-implemented technology being protected, which would disincentivise innovation.

Furthermore, the exclusion was seemingly at odds with the Government's intention of allowing patents for "embedded" software. This, combined with the lack of clarity in the guidelines, led to uncertainty around what would be patentable and what would not, which was generally agreed to be an untenable situation.

Resurgence of the Bill

Over the last two years there has been little indication that reform of the patent system has been high on the Government's agenda. Now, this week, a Supplementary Order Paper (SOP) has been released that proposes a number of amendments to the Patents Bill. A second reading of the Bill in Parliament is now imminent.

The SOP recommends a number of minor changes to the Bill but the most significant is the proposed change to the computer program exclusion.

Proposed amendment to the computer program exclusion

Where the previous version of the Patents Bill stated "a computer program is not a patentable invention", the proposed change qualifies this exclusion by limiting it only to computer programs "as such".

The use of these two words is far more significant than it may at first appear. They bring the wording of the Bill into line with patent legislation in both the United Kingdom and Europe. Since this has been the law in those regions for many years, a wealth of case law has been developed which we would expect to also apply in New Zealand (or at least to guide the interpretation and application5 of our own exclusion).

A significant number of the organisations that contributed to the debate, many of whom are New Zealand software innovators or their representatives, and including this firm, argued that the exclusion should not be present at all. However, many also argued that if an exclusion were to be required, the "as such" wording would be essential to reflect the Government's intentions and for clarity.

James & Wells made exactly this recommendation in our submissions in response to publication6 of MED's proposed examination7 guidelines.

Impact on New Zealand innovators

The upshot is that, if passed into law in this form, New Zealand innovators will be in a clearer position to know what is likely to be patentable and what is not because they can refer to analogous cases in the UK or Europe.

While not all novel8 and inventive computer programs will be patentable (as is currently the case and was hoped by many to remain so), it is likely that any sufficiently unique computer-implemented invention9 that provides a technical effect or has a real-world consequence is likely to be patentable.

This will allow innovators to focus research and development budgets on areas where protection is viable, or to begin the patent application process with realistic expectations as to whether protection is likely to be obtained, a timely change given the intentions expressed in the Business Growth Agenda Progress Report on Building Innovation recently released by the Ministry of Business, Innovation & Employment.

The amendment also brings the proposed law back into line with the Trade-Related Aspects of Intellectual Property (TRIPS) agreement, an international agreement which promotes consistency in IP10 laws around the world.

Many will now hope that the software patent saga is at an end and Parliament can surge ahead with enacting the Patents Bill to update New Zealand's archaic patents system.

Footnotes

1Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

2A proprietary right in an invention which provides the owner with an exclusive right for up to 20 years to make, sell, use or import the invention. In exchange for this monopoly the patent is published so that others can see how the invention works and build on that knowledge. The patented invention may also be used by the public once the patent lapses.

3A proprietary right in an invention which provides the owner with an exclusive right for up to 20 years to make, sell, use or import the invention. In exchange for this monopoly the patent is published so that others can see how the invention works and build on that knowledge. The patented invention may also be used by the public once the patent lapses.

4The extent to which an invention is able to satisfy the legal requirements to be the subject of a granted patent. This is dependent on those aspects of the invention for which protection is sought, as defined by the claims of a patent application. In general, the claims of a patent must include at least one feature that is novel, involves an inventive step and is useful to be patentable. A patent search can be carried out to assess whether an invention is patentable in view of known technology.

5The extent to which an invention is able to satisfy the legal requirements to be the subject of a granted patent. This is dependent on those aspects of the invention for which protection is sought, as defined by the claims of a patent application. In general, the claims of a patent must include at least one feature that is novel, involves an inventive step and is useful to be patentable. A patent search can be carried out to assess whether an invention is patentable in view of known technology.

6At some point a patent application is published, meaning its contents are available for anyone to read. In New Zealand publication occurs when a patent application is accepted. However, in most countries publication occurs 18 months after the application is filed.

7The process by which the receiving office (in New Zealand this is the Intellectual Property Office of New Zealand or IPONZ) determines whether the subject matter of a patent application discloses a valid invention and is patentable. Under current New Zealand law the examiner will ensure that the subject matter meets the definition of "invention" and is novel. Under legislation proposed to be introduced in late 2010, examination will determine whether the subject matter is novel, involves an inventive step, is useful and is not excluded subject matter.

8The process by which the receiving office (in New Zealand this is the Intellectual Property Office of New Zealand or IPONZ) determines whether the subject matter of a patent application discloses a valid invention and is patentable. Under current New Zealand law the examiner will ensure that the subject matter meets the definition of "invention" and is novel. Under legislation proposed to be introduced in late 2010, examination will determine whether the subject matter is novel, involves an inventive step, is useful and is not excluded subject matter.

9The product of the creative process of inventing. In intellectual property law "invention" is a legal term usually describing patentable subject matter. Under current New Zealand legislation that subject matter includes any manner of manufacture which is new and involves an inventive step. However, certain types of invention are excluded from patentability. They include inventions which are contrary to morality (for example weapons of mass destruction) and methods of medical treatment (on public policy grounds that such methods should be available for health practitioners to use to the benefit of all society).

10Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

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 & Wells Intellectual Property, three time winner of the New Zealand Intellectual Property Laws Award and first IP firm in the world to achieve CEMARS® certification.

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