Crowd sourcing prior art searching

This year we have seen the United States Patent and Trademark Office (USPTO) and the World Intellectual Property Organisation (WIPO) issue rules for bringing prior art to the attention of patent examiners. We are likely to see the same thing in New Zealand.

It is effectively crowd sourcing of prior art searching. The purpose of the rules is to permit third parties (including competitors) to contribute to the quality of issued patents.

WIPO submissions

From 2 July 2012, third parties have been able to submit observations on an international PCT application during the international phase. Each submission must contain:

• list of no more than 10 patent documents or other publications submitted
• brief indication of how each reference is considered to be relevant
• copy of each reference

USPTO submissions

The USPTO revised its rules for third parties submitting prior art against US patent applications on 16 September 2012. Each submission must contain:

• list of patents, published patent applications and other printed publications submitted
• concise description of relevance of each item listed
• copy of each non-US patent document listed
• English language translations of any non-English language item listed

Patent applicants entering national phase in the United States may also have to disclose relevant prior art to the USPTPO in an Information Disclosure Statement. This effectively gives third parties two opportunities to submit prior art - once during the international phase and again during national phase.

New Zealand submissions

The Patents Bill 2008 currently under consideration will also provide the opportunity for crowd sourcing of prior art searching. Clause 72 requires patent applications to be made open to public inspection 18 months after the earliest priority date.

Once a New Zealand patent application is open to public inspection, clause 86 will permit third parties to assert that it lacks novelty and/or does not involve an inventive step.  The notice must state the reasons for the assertion. Although the regulations are still being prepared, I expect that they will set out requirements for notices such as a list of the references, a description of relevance for each reference and English language translations of any non-English language item listed.

Once the new Bill becomes law I expect that crowd sourcing of prior art searching will be undertaken by the open source community and their allies. InternetNZ for example maintains a patent watch service called IPWATCH. The purpose of the service is to bring New Zealand patent applications in certain Internet-related fields to the attention of the public. Details are published at the start of an opposition period, thereby giving interested parties an opportunity to oppose grant of these patent applications.

According to an official report to the Commerce Select Committee, there were fewer than two dozen submissions on the Patents Bill that dealt solely with the issue of software patents. Most of the submitters opposed to software patents were computer programmers involved with the creation or use of open source software. The report notes that proponents of the open source model are often fiercely opposed to the patenting of software.

One of the main arguments raised by the open source community was that many such patents are granted for trivial or existing techniques. I expect that the ability to crowd source prior art searching, when combined with other aspects of the new regime, will address this argument. Third parties will have the opportunity to provide New Zealand patent examiners with relevant prior art.

Photo courtesy of author andercismo under Creative Commons licence.

Patents for dummies

The Australian Innovation Patent system was introduced in 2001 to protect functional or incremental innovations not sufficiently inventive to be granted a standard patent. Innovation patents have a lower patentability threshold than a standard patent, requiring an innovative step rather than an inventive step. They are in effect patents for dummies. Not for dumb applicants but for "dumb" inventions.

A consultation paper titled Innovation Patents - Raising The Step states that the innovation patent system replaced a petty patent system that was not well utilized, notes a significant rise in innovation patent applications within certain technologies, and then appears to propose a change to the innovation patent system to make it more like the petty patent system that wasn't used much.

At the moment an innovation patent must be both novel and involve an innovative step when compared to the prior art base - section 18(1A). An invention involves an innovative step if the invention varies from the prior art in a way or ways that make a substantial contribution to the working of the invention - section 7(4).

Following Delnorth Pty Ltd v Dura-Post (Aust) Pty Ltd [2008] FCA 1225 and Dura-Post (Aust) Pty Ltd v Delnorth Pty Ltd [2009] FCAFC 81 there is a perception in official circles that the test for innovative step is not tough enough. It permits the grant of innovation patents for enhancements that are obvious. This in turn is seen to create a risk of evergreening or the creation of patent thickets.

To address what might happen, IP Australia proposes a preemptive amendment that innovation patents must involve an inventive step rather than an innovative step. This would make sure that obvious innovations are excluded from the innovation patent system.

The closing date for submissions is Thursday 25 October 2012.

Photo courtesy of author Vermin Inc under Creative Commons licence.

The retrospective tweak

The New Zealand Patents Bill underwent a Second Reading on 12 September and is now awaiting consideration by the Committee of the whole House. The Government has recently proposed a Supplementary Order Paper (SOP 126) to better align the legislation with the intention of the Commerce Select Committee.

I cover the main features of earlier SOP 120 released on 28 August in my post A makeover for the Patents Bill. I cover SOP 123 and SOP 124 in my post Patent party in the House.

SOP 126 released on 18 September is a Government SOP intended to better align legislative wording with legislative intent. In this sense it is the same as SOP 120 I discussed earlier.

It is not uncommon for New Zealand resident patent applicants to file their first patent application in New Zealand. Subsequent patent applications are then filed offshore claiming priority from the New Zealand application. Many New Zealanders, for example, file an international PCT application claiming priority from their New Zealand patent application.

The problem arises when the applicant enters national phase in New Zealand (called a Treaty application) from the PCT application.

Due to an oversight in a Convention Order, New Zealand is not listed as one of the countries from which priority may be claimed. This means that every New Zealand patent issued from a Treaty application claiming a New Zealand priority date may not be entitled to the priority date the owner thinks it is.

The Patents Bill includes a retrospective fix for the situation in which some New Zealand patentees find themselves. SOP 126 proposes to amend Clause 298A inserted by the Commerce Select Committee to read:

298A Validation of priority date for Treaty applications(1) This section applies to a Treaty application made under the Patents Act 1953 that claims the priority, under Article 8 of the Patent Cooperation Treaty, of an earlier application made in New Zealand.
(2) The claim to priority by the application is validated and must be taken to be, and always to have been, lawful to the extent that it would have been valid under the Patents Act 1953 if New Zealand had been a convention country for the purposes of that Act.
(3) Nothing in subsection (2) affects a claim to priority by an application that is the subject of a proceeding commenced in a court before 30 March 2010.

SOP 126 inserts subsection (3) to reflect the fact that a retrospective validation should not override any court proceedings on particular Treaty applications brought before the date on which the Commerce Select Committee reported the Bill back to the House. Any court proceedings already commenced before that date may be completed on the basis of the former law.

This is a good example of 20:20 hindsight being a useful tool with which to align legislative wording with legislative intent.

Photo courtesy of author kenteegardin under Creative Commons licence.

Patent party in the House

It's always good to try something new. This week I gathered some of my work colleagues together and we watched the Second Reading of the New Zealand Patents Bill on the tellie. I didn't quite know what to expect but I wasn't surprised at what I saw.

A flurry of SOPs

In a previous post A makeover for the Patents Bill I mentioned Supplementary Order Paper (SOP) 120 tabled by the Government on 28 August. The three main changes proposed in the SOP are:

• a sanity check on the computer program exclusion proposed by the Commerce Select Committee


• amendments to encourage the use of digital technology


• changes to the implementation date to recognize the fact the Bill has been waiting for a Second Reading for a while

There were two last minute SOPs released on 11 September, the day before the Second Reading. SOP 123 is a Labour proposal attempting to embalm the term "embedded computer program" in legislation. SOP 124 from the Greens proposes an amendment to the Patents Bill to exclude not only plant varieties but organisms (including plant varieties) and traits in organisms.

The Government angle

The Second Reading opened with a rather discordant duet by National Party's Minister of Commerce Hon Craig Foss and Labour's Clare Curran. I believe the draft transcript is available on Hansard.

National MPs Jonathan Young, Peseta Sam Lotu-Iiga, Mark Mitchell, and Mike Sabin were all supportive of what was originally a Labour Party Bill. They touched on most of the aspects of the Bill on which most parties agree. I discuss these briefly below.

Greater confidence of validity

Under the new regime examiners will now be formally permitted to examine for inventive step. The new prior art base for examiners will include matter published or used in New Zealand or elsewhere. Examination is going to be tougher with a shift from 'benefit of the doubt' to 'balance of probabilities'.

The Bill provides several processes for third party challenge to a patent application or patent. These are opposition before grant, re-examination before grant, assertion before acceptance, revocation before the Commissioner or Court, and re-examination after grant.

Cultural Awareness

The Bill seeks to ensure that the interests of Māori in their traditional knowledge, and indigenous plants and animals are protected.

A Māori Advisory Committee will advise the Commissioner of Patents (on request) whether an invention is derived from Māori traditional knowledge or from indigenous plants or animals. If so, the Committee will advise whether commercial exploitation is likely to be contrary to Māori values.

Subject matter exclusions

The Bill excludes from patentability any invention where commercial exploitation of the invention is contrary to ordre public (public order) or morality.

The Bill further excludes human beings, methods of treatment of human beings, methods of diagnosis practiced on human beings, computer programs and plant varieties. These last two exclusions are the subject of the SOPs mentioned above.

The Opposition angle

Following the introduction by Clare Curran, Labour's Clayton Cosgrove, Lianne Dalziel, David Cunliffe and Trevor Mallard spoke on various topics, with Mallard on both before and after the dinner bell.

There was talk of a meeting that occurred on 9 June 2010 between representatives of the Ministry of Economic Development (MED) and representatives of the NZICT Group. The implication is that somehow the NZICT convinced MED to draft amendments along the lines of the European Patent Convention's exclusion for computer programs.

This implication just doesn't make sense to me. In January 2010 the MED advised the Commerce Select Committee that a European-style exclusion was the preferred option.

How could the NZICT influence the MED in June 2010 if the MED had independently formed the same view months earlier? Could it be that MBIE (the new name for MED) is simply giving Minister Foss the same advice now as it gave the Commerce Select Committee back in January 2010?

Something else that I found a little confusing was a comment that "the Institute of Patent Attorneys ... support that amendment". I think the amendment being talked about is the Labour SOP.

I am a Council member of the New Zealand Institute of Patent Attorneys. I'm therefore in quite a good position to know what the NZIPA supports and what it doesn't. The NZIPA does not support the Labour SOP. Perhaps the reference was to the Institute of Patent and Trade Mark Attorneys of Australia. But they don't support the Labour SOP either.

The Greens put on a showing by Steffan Browning and Gareth Hughes. NZ First put forward Denis O'Rourke as a speaker.

The Greens support the Labour SOP and their own SOP. NZ First supports both the Labour SOP and the Greens SOP. Labour on the other hand supports its own SOP but did not (as far as I could tell) mention the Green SOP.

What next?

My main observation is that my colleagues and I will not make a habit of watching Parliamentary debates on the tellie. Another observation is that if I had to predict what will happen next, I would say that the National SOP will be adopted whereas the Labour and Green SOPs will fail.

As the Government said in a press release titled Progress towards modernising patent law , the Bill will continue to protect genuine innovations and encourage Kiwi businesses to export and grow. The changes will overhaul sixty-year old legislation and create a balanced patent system that will protect inventions and encourage innovation. The Bill will align our patent laws more closely with international best practice, and builds on initiatives that will help create a more productive and competitive economy.

Photo courtesy of author sheiladeeisme under Creative Commons licence.

Patents Bill - The Green approach

I have always admired the Green Party. They are genuinely nice people and they have some good policies on environmental issues.

What I tend to forget is that the Party has policies in areas outside environmental issues. I am often surprised when some of these policies emerge. One example is the Party's stance on the New Zealand Patents Bill.

The Patents Bill had a First Reading back in May 2009. Hansard records Green MP Kevin Hague as the only MP to mention computer software. He states that

'[t]he bill proposes that software should be patentable; the opposite direction to that being pursued by the European Union. This is a very bad idea.'

Reading the remainder of the member's speech on computer software, I hope that the research for it was more than just typing the words "richard stallman" into a web browser.

The Green Party was presumably aware of a Discussion Paper prepared by the Ministry of Economic Development (now called the Ministry of Business, Innovation and Employment) in March 2002 titled "Review of the Patents Act 1953: Boundaries to Patentability". The Discussion Paper records on page 46 that computer-implemented inventions have been patentable in New Zealand since at least 1995. On page 48 the authors state that computer-implemented inventions are patentable in Europe, provided the software is directed to carrying out a "technical process".

That's why I was surprised to see a recent press release from the Green Party titled "Govt backtrack on software patents damaging". The press release states that:

'[t]he Minister of Commerce, Craig Foss, tabled in Parliament last night amendments to the Patents Bill that will, in practice, open the door to the patenting of software despite the Parliamentary Select Committee's decision to explicitly leave software out.'

I cover the Supplementary Order Paper (SOP) setting out proposed amendments to the Bill in an earlier blog post.
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According to a Government press release, the SOP introduces a minor amendment to clarify whether computer programs are patentable. Under the amendment, computer programs 'as such' will not be eligible for patent protection. It was never the intention of the Commerce Select Committee to exclude all software-related inventions from patentability. The SOP better reflects the Commerce Select Committee's intention.

The Explanatory note accompanying the amendment states that the new clause is "considered to be more consistent with New Zealand's international obligations ... [and] is also more consistent with overseas precedents and makes it clear that it is only computer programs themselves that are ineligible for patent protection".

It seems strange to me that the Greens complained back in 2009 that the Patents Bill did not contain a European-style exclusion, and now complain about a Supplementary Order Paper that introduces one.

Photo courtesy of author DBduo Photography under Creative Commons licence.

The embedded software conundrum

In the next few weeks the New Zealand Patents Bill is expected to head into a second reading in Parliament. Also on the table is a Supplementary Order Paper (SOP) setting out proposed amendments to the Bill. I comment on the contents of the SOP in an earlier post.

According to a Government press release, the SOP introduces a minor amendment to clarify whether computer programs are patentable. Under the amendment, computer programs 'as such' will not be eligible for patent protection. It was never the intention of the Commerce Select Committee to exclude all software-related inventions from patentability. The SOP better reflects the Commerce Select Committee's intention.

The Committee reported that it "received advice that our recommendation to include computer programs among the inventions that may not be patented would be unlikely to prevent the granting of patents for inventions involving embedded software".

The obvious question is why doesn't the SOP introduce the words 'embedded software' into the legislation? Most obvious questions have an obvious answer. The answer is that the term 'embedded software' if used in legislation will create uncertainty.

What the Commerce Select Committee said

The Committee's report said that it had sought advice as to whether legislation that would enable "embedded software" to be patentable might be practicable. The answer was 'no'. The report went on to state that:

'[a]fter careful consideration we concluded that developing a clear and definitive distinction between embedded and other types of software is not a simple matter; and that, for the sake of clarity, a simple approach would be best'.

As mentioned above, the Committee noted it had received advice that excluding computer programs would not affect the patentability of inventions involving embedded software. That advice was to introduce a European style exclusion.

What the officials said

The Ministry of Economic Development (now part of MBIE) prepared an October Report. The advice to the Committee was that if the "Committee feels that it is essential to maintain the patentability of embedded software in New Zealand, it may be best to maintain the status quo". In this case the Patents Bill "should not contain any explicit provisions regarding the patentability of computer software".

For reasons known only to the Committee, it asked for a further briefing on the issue of the patentability of computer programs. This resulted in a Supplementary Report, the January Report. This report looked at two possible approaches to the patentability of computer-related inventions. These were:

(a) allow patents on embedded software and exclude all other software; or
(b) exclude computer programs from patent protection.

Option (a) was not the MED preferred option. The main reasons against an 'embedded software' definition in the legislation were:

• there is no simple definition of "embedded" software that could be incorporated into the Bill;
• technical advances may mean that any definition fixed in legislation becomes obsolete fairly quickly;
• no other country has attempted to make the distinction between "embedded" and "non-embedded" computer programs in patent legislation;
• IPONZ and the New Zealand courts would have to develop their own practice from scratch with decisions from other jurisdictions providing little guidance;
• there would be considerable uncertainty for both IPONZ and patent applicants.

Option (b) in the January 2010 report suggested an exclusion from patent protection for computer programs, "the wording of the exclusion being similar to, or the same as, the exclusion for computer programs contained in the EPC and the UK Patents Act." The MED report stated that "IPONZ has indicated that if such an exclusion was provided, it would use EPO and UK case law and practice to interpret the exclusion".

It is clear from the October Report and the January Report that MED's preferred approach is to have no specific exclusion for computer programs. If however there has to be an exlusion, a European style exclusion is the preferred option. Trying to include "embedded software" in legislation is not a preferred option.

What the submitters said

The MED's views echo the views of the most vocal submitters. For example, the submission process attracted 3 written submissions from the NZ Open Source Society. The first submission (21) favoured harmonisation with Europe. The second (21A) tabled an academic paper. The third (21B) was made well after submissions closed.

The third submission was sent to only two members of the Commerce Select Committee. Ironically, it criticised what it saw as multiple submissions made by others, named other submitters as liars, criticised the practice of addressing issues raised by other submitters, and asked that its third submission be taken into account "in the interests of completeness and fairness".

Putting aside the hypocritical and slightly rabid tone of the third submission, the author does express concerns about the term 'embedded software' and states that:

'... the idea that software embedded with hardware is somehow different from other forms of software does not bear scrutiny. Traditionally "embedded" software is simply code that rather than sitting on a magnetic disk drive is stored on a Read Only Memory (ROM) device or an Erasable/Programmable ROM (EPROM). These devices are exactly the same as USB memory sticks of today or the replacement for magnetic disk drives - solid state drives'.

What happens now?

I think the amendment introduced by the Supplementary Order Paper aligns the legislation with the Commerce Select Committee's intention. Introducing 'embedded software' into the Patents Bill is likely to create the uncertainty already highlighted by the Commerce Select Committee, their advisors, and the most vocal of those who made submissions on the Bill.

Photo courtesy of author Ed Townend under Creative Commons licence.