NZ Clarifies Proposed Ban On Software Patents

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The NZ government yesterday released further amendments to tighten the proposed legislation around software patentability. The amendments clarify that while the partial ban on software patents is still on the agenda, it has limited applicability to what some may call “pure” computer programs. This announcement will no doubt be of interest to the IT industry and electrical appliance makers.

The old competing proposals

In our previous article NZ to decide on software patents, we have covered the positions on software patents from different sides of NZ politics 8 months ago. The government’s proposal was to exclude only “computer programs as such” from being patentable, while a major opposition party’s proposal was to allow all “embedded computer programs” as an exception to a universal ban on software patents. The “as such” wording was introduced to address concerns that a universal ban could inadvertently ban embedded software. On the other hand, the “embedded computer programs“ wording  was proposed so that a broad universal ban could be codified with embedded software being the only exemption.

The new proposal

On 9 May 2013, the Commerce Minister introduced amendments to the government’s previous proposal1. Immediately obvious from the amendment is that the relevant section has ballooned from about 60 words to about 530 words. The new proposal retains all previous wording on software patentability, including that software patents are still to be banned “only to the extent that [it] relates to a computer program as such”. The additional wording is aimed to explain how the words “as such” should be interpreted. What is interesting is the two examples -  a “washing machine” example and a “document populating process” example – to illustrate what is and is not a patentable computer program, respectively. While it is somewhat uncommon to describe actual examples, it does illustrate just how complicated software patent issues are.

“Washing machine” vs “document populating”

The new proposal provides a “washing machine” example in which a computer program is patentable. The invention is a computer program which controls a washing machine operating in a new and improved way to save on electricity. Such a computer program is considered patentable because the actual contribution of the invention (a new and improved way of operating a washing machine) lies outside the computer.

The new proposal also provides a “document populating process” example in which a computer program is not patentable. The invention is a computer program which asks a user questions and stores the user’s answers for automatically completing a document. Such a computer program is considered not patentable because the actual contribution of the invention (execution of a method within a computer) lies solely in it being a computer program.

The proposal does not specify why these two examples have been selected. However, the “washing machine” example seems to be directly addressing electrical appliance makers, whereas the “document populating process” example has similarities to an Australian patent application that is currently the subject of an appeal on patentability before the Federal Court of Australia2.

Where is the contribution

From these two examples, the Explanatory Note and the actual proposed wording, it is clear that determining where the contribution of the invention lies is crucial in deciding software patentability. If the contribution lies outside, even partially, the computer program or the computer, it is patentable. If the contribution lies solely within the computer program, it is not patentable unless the contribution affects the computer, in which case it is patentable if the effect is independent of the type of data being processed or the particular application being used. This approach will likely still exclude from patentability a large number of innovations and leave the status of others uncertain.

Further, the new proposal explains that new wording “does not include any consideration of whether the claim has a technical character or effect”. This is a departure from European jurisprudence where a computer program “as such” is interpreted as requiring a certain technical contribution by an invention to, for example, provide a technical solution to a technical problem.

All clear ahead?

The NZ government’s new proposal seems to strike a balance between its earlier proposal and a major opposition party’s wording to exempt embedded computer programs from the ban. With the declared support of a minor opposition party3, the new proposal could well be the final episode of the political controversy in software patents in New Zealand for the time being. We may soon see the Patents Bill 2008 repealing the Patents Act 1953 and replace it with the Patents Act 2013 (or 2014).

1. Supplementary Order Paper 237
2. VID817/2011
3. United Future press release