New Zealand: Patents Bill: "As such" or not "as such" - that is the question

Last Updated: 19 September 2012
Article by Jonathan Lucas

The Patents Bill will provide a much needed update to New Zealand's outdated patent laws but contains some controversy in a proposed exclusion to patentability for inventions involving computer programs.

Second reading gains widespread parliamentary support

On 12 September 2012, the New Zealand Patents Bill had its second reading in Parliament, over three years after its first reading and over four years after it was first introduced as a Bill.

In the parliamentary debate that followed there was unanimous support for the Patents Bill in general, with all parties acknowledging the need to update New Zealand's outdated patent1 laws. A modernisation of the 60-year old Patents Act was seen by most as essential for promoting economic growth in New Zealand by incentivising innovation. Many of the proposed changes to the patent legislation will also bring New Zealand into line with equivalent laws in other countries.

Debate over software clause

Almost all of the parliamentary debate centred on recently introduced changes to a proposed clause to exclude computer programs from patentability2.

Prior to the second reading, the Government released Supplementary Order Paper No 120 . That paper proposed to amend the exclusion to software patents to exclude only inventions that "relate to a computer program as such". The two words "as such" were added to the existing form of the exclusion, a small but arguably important change to clarify the extent of the exclusion by mirroring the wording of legislation in the UK and Europe.

While the National Government defended the recently proposed amendment, MPs from Labour, the Green Party and NZ First opposed the change. Labour MP Claire Curran tabled Supplementary Order Paper No 123, which proposes to amend the wording of the exclusion to state that it does not extend to any inventions that "make use of an embedded computer program".

Introduction of an exclusion

A first point of note is that the inclusion of any exclusion at all is a victory for the anti-software patent lobbyists. In both the current law and the first draft of the Patents Bill there was no software exclusion of any kind and nor were submissions on an exclusion sought by the Select Committee which heard public submissions on the Bill after its first reading.

Some of the MPs opposing the Government's preferred "as such" wording complained that Craig Foss, the Minister of Commerce, introduced the recent amendment to the exclusion without due consultation.

However, this objection could be viewed as hypocrisy from the anti-software patent contingent since the exclusion itself was surprisingly introduced to the Bill prior to its second reading on the recommendation of the Commerce Select Committee (CSC). That recommendation resulted from lobbying from a number of small Kiwi software developers and was not subsequently opened to a democratic submission process.

Options for the software exclusion

The crux of the debate pivots on the choice of wording for the clause that will exclude some software inventions from patentability.

It is fair to say that everyone recognises the importance of clear wording. If innovators have a clear understanding of what is and is not patentable under the legislation, they can make an informed decision about whether to apply for patent protection and litigation costs (generally seen as only benefitting the legal sector) can be minimised.

It is also fair to say that advocates of both alternatives believe their preferred wording provides the most clarity. But who is right? And does it matter?

It could certainly be argued that the aim of all parties, in terms of legislating on what inventions should be patentable and what should not, is the same and that, ultimately, both options will be interpreted in a similar way. But even if that is the case, there is obviously a preference for the clearest and most robust wording.

The benefits of "as such"

In our view, while not ideal, the "as such" version is the better option.

On the face of it there would seem little difference between excluding "computer programs" and "computer programs as such" from patentability. But the words "as such" are essential to clarify that, while the particular software steps chosen to implement a computer program should not be patentable, the fundamental effect of the computer program itself may be, provided of course that it is novel3 and sufficiently inventive (the same criteria applied to any patentable invention4). This follows the intentions of the CSC who introduced the exclusion.

Another benefit of "as such" is that it mirrors the equivalent legislation in the UK and Europe. Those patent regimes have used this wording for some time now, meaning NZ software developers and decision makers have access to a wealth of case law to clarify any uncertainty in its meaning.

In the Parliament debate, Claire Curran and others argued against the "as such" wording by noting some criticism of the UK and European legislation. It is certainly true that there have been some contentious cases in these jurisdictions but the more cases that are decided, the greater the clarity that follows, and at least our decision makers can hit the ground running.

The problems with "embedded"

Compare that with defining the exclusion of software inventions except "embedded computer programs". The term "embedded" is not defined and has not been considered by any patent office or court anywhere in the world.

Ms Curran herself states that "the boundaries of embedded software [will] be determined by the Government on a case-by-case basis as appropriate". In other words, to reach the clear position everyone wants, cases will need to be litigated. Ironically, this is the very situation Ms Curran seeks to avoid. Given the few New Zealand patent cases that go to a patent office hearing, and the fewer still that reach the courts, it could be a long time until the much-needed clarity is found, and that clarity will come at a significant cost to those unlucky litigants required to blaze the trail.

Another issue with the term "embedded" is that the field of computer technology is advancing so quickly that its relevance may change in a short space of time. Devices running embedded software today may be run by non-embedded software in the future. For example, the line between mobile devices (that are generally considered to run embedded software) and general-purpose computers (that do not) is quickly fading. The Patents Bill needs to be future-proof to remain relevant and avoid the need to re-legislate in a few years' time.

Making the patent system work for Kiwis

It is mostly small Kiwi software developers that support the broadest exclusion possible. Some anti-software patent proponents have argued that only multinationals are in favour of the narrower exclusion but submissions in response to draft guidelines on how patent applications involving computer programs might be examined released by the Ministry of Economic Development show that many large New Zealand companies also take this view.

The smaller developers seem to see patents as tools that will be used against them. And it is true that the vast majority of NZ patents are filed by overseas companies. But perhaps small Kiwi innovators are not seeing how the patent system could work to their advantage?

Imagine you are a small Kiwi software company that develops a genuinely innovative product. For that product to stand a chance of success when faced with international companies who have the resources to quickly copy it, patents provide the best way to protect the intellectual property5 in the product and then to commercialise it, for example through licensing.

By using patents to their advantage, New Zealand software developers can take their innovations to places that would not be possible if the option to protect did not exist.

Where to from here?

Craig Foss has indicated that the Bill will not be referred again to the CSC so it will now be prepared for a third reading. It remains to be seen whether the Government will stand its ground or amend the controversial software clause in the face of the opposition6 it faces, if only to advance the much-needed reforms of New Zealand's patent laws.

Whatever happens, you can read about it here in subsequent updates. In the meantime, let us know what you think. Is the "as such" exclusion good or bad, and why do so many Kiwi software developers seem to struggle with the concept of patent protection being a shield not a sword?


1 A 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.

2 A 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.

3 One of the requirements for patentability and the first part of the test for inventive step. In patent law "novel" simply means new or not previously known. New Zealand currently has a "local novelty" requirement for patentability. This means that the subject invention will not be novel (and therefore will not be patentable) if it was known or used in New Zealand before the date on which the application for a patent was filed. There is a proposal to amend our legislation in late 2010 to move to an "absolute novelty" standard. This means that the subject matter must not be known or used anywhere in the world before the date of application in New Zealand. If the subject matter is known or used before the date of application, this is known as "anticipation".

4 The 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).

5 Refers 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.

6 In New Zealand, once a patent application has been accepted, it will be published in the Intellectual Property Office Journal. There is then a three month period where the application may be objected to (or opposed), by a third party. If no opposition is made the patent application will proceed to grant.

Any party that has an interest in the subject matter of the patent can oppose acceptance. The grounds that can be used to oppose a patent application include lack of novelty, lack of inventive step and insufficient disclosure of the invention. Not all countries have an opposition period on patent applications. For country specific information, contact your IP advisor.

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.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.