New Zealand: No, NZ has not abolished software patents

Last Updated: 14 May 2013
Article by Kate Wilson

The patentability of software in New Zealand has been an highly emotional topic with many of those in the NZ IT industry vigorously opposed to "software patents" as such.

Media reporting has been coloured as a consequence and the recent amendment to proposed patents bill has been mis-reported as a 'victory' for the anti software patent1 lobby, whereas the reality is more nuanced.

Recent Supplementary Order Paper

In August last year, the proposed wording referred to a computer program as not being an invention2. However the recent Supplementary Order Paper (SOP237) softens(!) the effect of this wording by bringing in sub clauses that align the proposed NZ Patents Act with wording influenced by UK case law. This provides greater clarity around interpretation of the Act. Further, given the dearth of cases in New Zealand, this ability to reference UK case law will assist New Zealand practitioners in giving guidance to their clients.

Effectively, if the invention lies purely in software, then it is considered unpatentable. However, as outlined in the explanatory note of the SOP, patents will still be able to be granted for inventions that:

  1. Make use of computer programs where the contribution lies outside of the computer, or
  2. Affect the computer but is not dependent on the type of data being processed or the particular application3 being used.

Essentially embedded software is patentable where it improves the operation of hardware, along with software that improves the way a computer runs. Again, consistent with the UK.

New Zealand vs Australia

However, this is less than what is currently considered patentable in New Zealand (new, inventive and having a commercially useful4 effect). And, takes New Zealand law away from Australia's broader position on the patentability5 of software inventions. The latter runs counter to the stated desire by the NZ and AU governments to align their IP6 laws and systems and possibly reflects the impact of the NZ IT industry's objections.

Patents already granted

It should be noted that patents already granted under the present Act will still retain their scope and validity7 following implementation of the new Act.

Retrograde step

My take on it all? While thankful for the clarification by the recent SOP, I think reducing the scope of protection is a retrograde step. The NZ software industry is an innovative one and ought to have their innovations protected in their own country against less innovative competitors. Further, the more restrictive position here may lead to NZ businesses not protecting their software innovations in less restrictive markets (eg US and AU), again making them more vulnerable to competition from bigger players."

Footnotes

1A 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.

2The 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).

3In most jurisdictions patent applications are subjected to an examination process to determine whether the subject matter is novel and inventive. The terms "application", "pending" or "patent application" are used to describe the status of the application up to grant.

4The document that accompanies a patent application. It defines the scope of the invention in the claims and provides a detailed description of the nature, use and purpose of the invention. A specification may be provisional or complete and there are different rules applying to each.

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.

6Refers 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.

7A patent is valid if it is legally enforceable. This means that it must fulfil the criteria of patentability and not be able to be invalidated by a patent revocation proceeding. It is possible that a granted patent may not be valid, or at least its validity could be questionable. Ultimately, only the Courts can judge the validity of a granted patent.

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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