NZ updates draft legislation to exclude software “as such”

Following several years of uncertainty over the form and function of New Zealand patent law’s “software exclusion”, the Government has now adopted the “as such” wording of EPC Article 52(3). Although the legislation is still “fluid” insofar as it has yet to be passed by Parliament, recent events lead us to believe that “as such” will indeed become the final form of the exclusion.

 

On 28 August 2012, a Supplementary Order Paper (SOP) was tabled in New Zealand’s Parliament. The SOP proposes certain amendments to the wording of the Patents Bill. Of these, the most significant change comes in relation to computer software.

After initially (back in 2004, when the Exposure Draft of the Patents Bill was released) proposing to allow software patents, the Government then bowed down to a well organised anti-software lobby during the public consultation process; a blanket exclusion was proposed. However, whilst popular with proponents of open-source software, the proposed exclusion had two principal shortcomings.

Firstly, Article 27 of the TRIPS Agreement requires signatories (of which New Zealand is one) to make patents available in “all fields of technology”; the proposed blanket exclusion was thought to contravene this requirement.

Secondly, New Zealand is presently attempting to negotiate a Free Trade Agreement (FTA) with the United States. The US government publishes an annual report entitled Foreign Trade Barriers in which it particularises laws and regulatory mechanisms in foreign countries that are considered “significant barriers to US exports”. In this document, the proposed ban on software patents has been identified as an impediment to trade.

Clearly then, the proposed blanket exclusion was untenable. As an alternative, the Government elected to adopt the wording of Europe’s software “exclusion”. The compromise position is now that rather than excluding a computer program from being a patentable invention, only computer programs “as such” will be excluded. The amended clause allows New Zealand to borrow from some three decades of European case law as to the parameters of “as such”, thereby providing “relative” certainty to patentees and third parties alike. Under the revised Bill, a patent may still be granted for an invention that meets all of the criteria for patentability (for example, novelty and an inventive step) despite the fact that the relevant invention involves a computer program in some respect.

As mentioned above, we feel that “as such” will be the “final” form of the exclusion. Our previous article suggested that the Bill would again pass to a Select Committee – and that public consultation would again be invited. Indeed, this would be the “regular” course of events. However, on 3 September 2012, Craig Foss, the Minister in charge of the Patents Bill indicated that this would not happen: “I do not see any justification for delaying passage of the Patents Bill further, particularly given the benefits to New Zealand in having modern patent legislation,” he said.

Foss’ statement is consistent with our recent impression that the Patents Bill is now a genuine priority for the Government. The Bill now is currently awaiting a second Parliamentary reading – and these recent developments certainly suggest that we are much closer to a new patents regime than we may have thought.