Monday, September 16, 2013

New Zealand bans patents for software

New Zealand rejects software patentsThe New Zealand Government recently put in place a new Patents Act. One of the hotly debated topics was the extent to which patent protection should be available for computer-implemented inventions. These types of inventions are often referred to in mainstream media and anti-patent communities as "software patents".

So have we banned software patents? Or have we banned patents for software? There is a difference. The reporting so far on the new law is a little unclear.

The Washington Post reported that "New Zealand voted to ban software patents". Another post on ZDNet announced that New Zealand has "passed a new Patents Bill that will effectively outlaw software patents".

The Wall Street Journal reports that New Zealand will no longer grant patents for software. World Intellectual Property Review dismisses media outlets that  have reported the changes to the bill as an outright ban on patenting software. FOSSpatents acknowledges that the "movement pushing for abolition [of software patents is declaring] victory, that's not only inaccurate but also an irresponsible thing to do".

Despite conflicting opinions on the issue, one simple fact remains - New Zealand will continue to grant patents for inventions that make use of or involve a computer program.

The current law

Until the new law comes into force, inventions will be assessed under the Patents Act 1953 (the old act). The old act defines an invention as any "manner of new manufacture". What is patentable subject matter and what is not patentable subject matter is defined by case law and decisions of the Commissioner of Patents.

The Hughes Aircraft Company decision established the appropriate test for patentable subject matter in 1995 as: … whether each of the claims define a method which, either directly or by clear implication, embodies a commercially useful effect.

The Haddad decision held that the term "manner of new manufacture" implies a situation which involves some sort of interaction with a real entity or which achieves a tangible product or result.

A blanket exclusion

A draft Patents Bill was released for public consultation nearly 10 years ago in December 2004. It did not restrict or exclude patents for computer-implemented inventions. A new government introduced the Patents Bill to Parliament in July 2008.

The Patents Bill was referred to the parliamentary Commerce Select Committee which then called for submissions. Many of the submitters were from the New Zealand Open Source Society (NZOSS) or their supporters who wanted an exclusion for computer programs. What followed would later be acknowledged in Parliament as a departure from the "formatted process".

Many submissions urged a consistency of approach with other markets. The NZOSS for example suggested that "New Zealand could follow the European lead in patent law".

The committee published a revised Patents Bill in March 2010. The revised bill included new clause 15 (3A) simply reading "a computer program is not a patentable invention".

The view of government officials was that the committee intended this to be interpreted similarly to the interpretation of similar exclusions in the legislation of other countries, in particular the United Kingdom and other European members. This would allow computer programs to be patented if they produce a "technical effect".

There was understandable concern that the wording proposed by the committee did not clearly express the committee's intention. There was also concern that the courts would not interpret the restriction in the manner intended by the committee.

It is no surprise to see the most vocal supporters of the controversial clause acknowledge in Parliament that the new law is better of without it.

The 'as such' restriction

The government introduced supplementary order paper SOP 120 to better align the proposed wording of the exclusion with:
  • the intention of the committee
  • New Zealand's international obligations
  • overseas precedents.

The new clause had a European look about it as it excluded computer programs "as such". There was some concern from some of those submitters who had asked the Commerce Select Committee for an exclusion for computer programs. In order to address these concerns the government introduced supplementary order paper SOP 237. New clause 10A deals with computer programs.

Interpretation of the new restriction

As I said in the World Intellectual Property Review,
“Minister Foss has given a clear direction to the Commissioner of Patents and the New Zealand courts to apply the steps of the Aerotel test established by the English Court of Appeal. The Minister intends New Zealand practice to follow the Aerotel test, and subsequent English jurisprudence that applies the test, when considering patent applications involving computer programs".
The Intellectual Property Office of New Zealand (IPONZ) will apply the Aerotel test, at least initially. Subsequent English jurisprudence will also assist us. The UK courts for example have allowed patents for a computer programmed to work better (Symbian), a better way of designing drill bits (Halliburton), a technique for monitoring the content of electronic communications (Protecting Kids the World Over), and organisation of touch screen devices (HTC Europe v Apple).

A ban on software patents?

So, the question remains, have we banned software patents? Or have we banned patents for software? There is still some confusion on this issue.

Nowhere is this more evident than in the final Parliamentary debates. There was an observation made that software code is a mathematical algorithm, like a phrase in a book or a piece of music. I have seen similar sentiments echoed within anti-patent communities.

This is an interesting observation, but it has nothing to do with patent law.

As I said in the Wall Street Journal,
“The way that I look at it, is a computer program and a processor are just raw materials like plastic, like wire, like wood and you are not patenting raw materials but you are patenting what you’ve made with those materials”.
It is the underlying technical function of the code that is patentable, rather than the code itself. That was always the case with the old law. That will continue to be the case with the new law. New Zealand will continue to allow patents for technical functions that software code causes a processor to perform. We will continue to grant patents for computer-implemented inventions.

So when we talk about software patents, if we actually mean computer-implemented inventions, we haven't banned them at all.

Photo courtesy of author under Creative Commons licence.
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