New Zealand: New Zealand follows UK lead on software patents

Brief Counsel

The new Patents Act has finally been passed, completing the first reform of New Zealand's patent law in 60 years.

We run through the main changes – dealing first, and in detail, with the tricky question of computer program patents.

A brief history

The previous Act was passed in 1953 and was long out of date. Government officials and the local IP community started talking about reform options in the 1980s. Those discussions culminated in a 2008 Patents Bill.

In 2009, however, reform became mired in debate over whether "computer programs" should be patentable. Chapman Tripp's commentaries on this debate are available here and here.

On one side was the Free and Open Source Software (FOSS) movement which wanted computer software banned from the patents regime. On the other were local inventors like Fisher & Paykel who rely on patents to justify their investment in computer-implemented inventions.

In May this year, Commerce Minister Craig Foss ended the stand-off by introducing Supplementary Order Paper 237, the text of which appears as section 10A of the Patents Act.

What does section 10A mean for software patents?

When section 10A first emerged in SOP 237 it attracted headlines like "Software not subject to Patents Bill"1. But section 10A of the Patents Act does not ban "software patents".

Computer-implemented inventions will continue to be patentable in New Zealand where the invention as a whole has practical or technical application. The Act gives the following example:

A process that may be an invention.
A claim in an application provides for a better method of washing clothes when using an existing washing machine. That method is implemented through a computer program on a computer chip that is inserted into the washing machine. The computer program controls the operation of the washing machine. The washing machine is not materially altered in any way to perform the invention. The Commissioner considers that the actual contribution is a new and improved way of operating a washing machine that gets clothes cleaner and uses less electricity. While the only thing that is different about the washing machine is the computer program, the actual contribution lies in the way in which the washing machine works (rather than in the computer program per se). The computer program is only the way in which that new method, with its resulting contribution, is implemented. The actual contribution does not lie solely in it being a computer program. Accordingly, the claim involves an invention that may be patented (namely, the washing machine when using the new method of washing clothes).

Section 10A in practice

We expect the Patents Commissioner and the Courts to interpret and apply section 10A in line with English case law. Consistent with that authority, we believe section 10A will permit patents for inventions:

  • implemented entirely on a computer
  • even if the way the invention works is entirely as a result of a computer program operating on that computer.2

In English law you ask what task the program (or the programmed computer) actually performs. A computer programmed to make a contribution to the art which is technical in nature, is a patentable invention and may be claimed as such.3

In that context the UK Patents Office has granted patents for a variety of computer-implemented inventions over recent years, including:

  • computer program implemented methods of pre-paying telephone calls4
  • methods of accessing files in a dynamic link library which make a computer operate faster and more reliably5
  • a computer-implemented method of designing a drill bit6
  • a system for monitoring electronic communications which caused text messages or emails to be sent outside the system in specific circumstances7,

and so on.

We expect similar sorts of inventions to be patentable in New Zealand from now on.

In the result, section 10A moves New Zealand toward the European approach to patent eligibility. That move is unlikely to have any significant impact on patenting practices in the technology sector.

What we think

Clause 10A strikes the right compromise.

Intellectual property rights like patents incentivise individuals and organisations to invest in research and development in the hope that the gamble pays off down the track. Patents, which protect inventions and new ideas, have been front and centre in this incentive scheme since the 17th century. Computer programs play an integral role in an exponentially growing number of inventions in this country and abroad.

The new Patents Act continues to allow certain computer-implemented inventions to be patentable in New Zealand. Which is a good thing: it gives Kiwi inventors the option to protect and commercialise innovative computer programs through the patent system. And that option will drive inventiveness in this country until, one day, it's time to look at patent law reform again.

Other features of the new regime

The definition of what constitutes an "invention" has been tidied up, although the traditional wording (in part dating from the 1623 Statute of Monopolies) remains intact, as does all the accumulated common law about the ambit of what might be patentable.

One of the key points of validity for a patent is novelty. New Zealand has brought its law up to date with the requirement for universal novelty. What might destroy a patent's validity is that someone, anywhere in the world, has published or used information, a process, product or anything else that essentially covers what the inventor has claimed.

Moreover patent applications will be examined for "usefulness" and "inventive step", previously grounds available only to third parties to raise in a subsequent opposition or revocation attack.

The new Act also spells out in more detail and more broadly things that are excluded from patentability, including the following:

  • human beings, and biological processes for their generation
  • methods of medical treatment of human beings by surgery or therapy
  • a method of diagnosis practised on human beings
  • plant varieties, and
  • inventions the commercial exploitation of which would be contrary to public order or morality.

Exactly what the last category means remains to be seen. Amongst other things, it is intended to catch any invention claimed in an application that is possibly derived from Maori traditional knowledge or from indigenous plants or animals, the commercial exploitation of which "is likely to be contrary to Maori values".8

The new Act establishes a special Maori advisory committee to tell the Commissioner of Patents about such patent applications if they arise, though the Commissioner is not bound by that advice.

New Zealand has also updated the law by raising the threshold for patentability, aligning us with international practice. The standard is now whether the Commissioner is satisfied "on the balance of probabilities" that the application meets the requirements.

Rights of objection

After filing, there are new procedures and new ways in which third parties can object.

The old "opposition" proceedings remain but now a third party may:

  • file "assertions" on novelty and inventive step, and
  • seek "re-examination" of a patent both after acceptance but before the patent is granted and also after grant.

It will still be possible to apply to revoke a patent, a common reaction by a defendant sued for patent infringement.

The general law on infringement will continue as before, but the new Act makes clearer the patent holder's exclusive rights, including the right to exploit the invention and to authorise others to do so.

Footnotes

1Stuff, 9 May 2013: http://www.stuff.co.nz/technology/digital-living/8653758/Software-not-subject-to-Patents-Bill

2Halliburton Energy Services Inc's Patent Application [2012] RPC 297 (HC) at [30], [36]; Symbian Ltd v Comptroller General of Patents[2009] RPC 1 (CA) at [48]-[51]

3Halliburton at [32]

4Aerotel Ltd v Telco Holdings Ltd [2007] RPC 7 (CA)

5Symbian (Symbian being a paradigm "better computer" case where the program at issue solves a technical problem relating to the running of computers generally. In English law, "making computers work better is not excluded by [the UK equivalent to s10A]": Halliburton at [37]

6Halliburton

7Protecting Kids the World Over (PKTWO) Ltd [2011] EWHC 2720 (Pat)

8Explanatory Note to the Patents Bill.

The information in this article is for informative purposes only and should not be relied on as legal advice. Please contact Chapman Tripp for advice tailored to your situation.

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