Patents Bill - Changes to Computer Program Exclusion Proposed

Almost two and a half years after the Commerce Select Committee presented its report on the Patents Bill, progress is again being made towards the replacement of New Zealand’s dated Patents Act 1953. After languishing in the Parliamentary Order Paper for many months, the Patents Bill has suddenly been propelled up the list and a second reading of the Bill in Parliament now appears to be imminent. On 28 August 2012, the Government released a Supplementary Order Paper (No. 120) proposing a number of amendments to the Patents Bill. Among numerous relatively minor changes is an amendment and qualification to the Commerce Committee’s proposed exclusion of computer programs from patentability.

The unexpected recommendation to exclude computer programs from patentability was undoubtedly the most controversial change to the Patents Bill recommended by the Commerce Committee in its report of March 2010. Lauded by advocates of free and open source software but widely criticised by both local and foreign patent applicants and patent attorneys, the exclusion came contrary to previous indications that there would no change to the existing practice of granting patents for computer-implemented inventions.

Most concerning, however, was the scope of the proposed exclusion which appeared to go far beyond those of other jurisdictions such as the United Kingdom and Europe which have for some time excluded from patentability computer programs “as such”. The Supplementary Order Paper replaces the previous exclusion by stating that a computer program “as such” is not considered an invention for the purposes of the Patents Bill.

Similar exclusions elsewhere have been interpreted as meaning that computer-implemented inventions are patentable only if they make an inventive “technical contribution” to the art, or solve a “technical problem” in a non-obvious way. That is, a novel and inventive method or scheme will no longer be patentable subject-matter merely due to the fact that it is performed by a computer, as is presently the case. It is likely that the qualified exclusion will therefore have the effect of precluding patents for computer-implemented schemes, rules and methods for performing mental acts, playing games or doing business, for example, while permitting patents for “embedded systems” and the like as intended by the Commerce Committee.

Opponents of so-called “software patents”, who ironically previously lobbied the Commerce Committee for adoption of the exclusion of the United Kingdom and Europe, have subsequently vehemently opposed any suggestion that New Zealand should adopt such a qualification upon the broad exclusion recommended by the Commerce Committee, and are unlikely to be pleased at the amendment proposed in the Supplementary Order Paper. However, the amendment goes a long way towards addressing concerns regarding inconsistency between the wording and intent of the previous exclusion, uncertainty as to the scope of the exclusion in view of the inapplicability of foreign precedents, and inconsistency with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

Previous examination guidelines that issued based on the broader exclusion will need updating and it remains to be seen what impact the change will have on what is eligible for patent protection. It may well be that patent examiners will implement the exclusion in the same way but they should now be able to allow claims that involve software at some level.