The New Zealand Government recently announced a proposed change to patent law involving the patentability of computer programs. The Government is calling it a clarification of the law. One opposition party is calling it a humiliating backdown. Others see it as unequivocally ruling out software patents in New Zealand.
How can the Patents Bill appear so different to so many people? Why is it moving so slowly through the parliamentary process? Have we at last found the mythical kiwi chameleon?
The current law
The Patents Act 1953 defines an invention as any “manner of new manufacture”. Nobody looks at this literal definition any more. What is patentable subject matter and what is not patentable subject matter is defined by case law.
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.
The Cool 123 decision reminded us that mere computer implementation of a manual process does not qualify as an invention.
That’s pretty much the law in New Zealand today.
Boundaries to patentability
Under the watchful eye of the Government of the day, the Ministry of Economic Development (now called MBIE) commenced a review in August 2000 of the Patents Act. A paper published in March 2002 titled “Boundaries to Patentability” included formal consultation on the topic of computer software. A summary of the submissions shows strong support for computer-implemented inventions being patentable in some form.
In July 2003 Cabinet agreed to policy changes based on the outcome of the public consultations. It was concluded that there are “no strong arguments” for excluding software from patent protection and that “software should continue to be patentable as long as [it] meet[s] the requirements for patentability.”
The Patents Bill is born
A draft Patents Bill was released for public consultation in December 2004. It did not restrict or exclude patents for computer-implemented inventions. There followed a change in government. It fell to the new Government to introduce the Patents Bill to Parliament in July 2008.
The Government that had concluded in 2003 there were “no strong arguments” for excluding software from patent protection was now in opposition.
The Patents Bill was referred to the parliamentary Commerce Select Committee which then called for submissions. In the lead up to the submission deadline MED publicly confirmed that patentability of computer-implemented inventions would remain unchanged.
People tend to make submissions on legislation that they want to see changed. Many took comfort from the wording of the Patents Bill and the media statement by the MED. It is therefore not surprising that more submissions objected to the proposed treatment of computer-implemented inventions than supported it.
Many of the submitters were from the New Zealand Open Source Society (NZOSS) or their supporters. People who were opposed to “software” patents emphasised that innovation is strong, even “rampant“, with the law that’s in place. It is obvious that many submitters had a poor knowledge of the current law and had certainly experienced no detrimental effects from it.
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 chameleon changes colour
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”.
MED’s view was that the Committee intended this to be interpreted similarly to the way similar exclusions in the legislation of other countries, in particular the United Kingdom and other European members are interpreted. 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.
The Government introduced Supplementary Order Paper SOP 120 to better align the proposed wording of the exclusion with the intention of the Committee, with New Zealand’s international obligations, and with overseas precedents. The new clause had a European look about it as it excluded computer programs “as such”.
The opposition party that had originally drafted a Patents Bill with no restriction for computer-implemented inventions now objects to legislation that does not include one. The party appears to have implemented an evidence-based change in policy without the evidence.
Another change in colour
All of this brings us to the most recent Supplementary Order Paper (SOP 237). New clause 10A introduced by SOP 237 reads as follows:
10A: Computer programs
(1) A computer program is not an invention and not a manner of manufacture for the purposes of this Act.
(2) Subsection (1) prevents anything from being an invention or a manner of manufacture for the purposes of this Act only to the extent that a claim in a patent or an application relates to a computer program as such.
(3) A claim in a patent or an application relates to a computer program as such if the actual contribution made by the alleged invention lies solely in it being a computer program.
(4) The Commissioner or the court (as the case may be) must, in identifying the actual contribution made by the alleged invention, consider the following:
(a) the substance of the claim (rather than its form and the contribution alleged by the applicant) and the actual contribution it makes:
(b) what problem or other issue is to be solved or addressed:
(c) how the relevant product or process solves or addresses the problem or other issue:
(d) the advantages or benefits of solving or addressing the problem or other issue in that manner:
(e) any other matters the Commissioner or the court thinks relevant.
(5) To avoid doubt, a patent must not be granted for anything that is not an invention and not a manner of manufacture under this section.
Clause 10A contains several additional new clauses intended to clarify the meaning of the term “as such “. It seems reasonably clear that computer programs that control an external device may give rise to patentable subject matter. On the other hand, computer programs that merely automate a manual process appear to be excluded, although these types of inventions would have been subject to obviousness issues anyway.
Under the new regime the Intellectual Property Office of New Zealand (IPONZ) will need to consider the problem or other issue to be solved or addressed. It remains to be seen how IPONZ will treat computing devices that are programmed to perform a task that is technical in nature. The UK courts for example have allowed patents for a computer programmed to work better (Symbian), a better way of designing drill bits (Halliburton), and organisation of touch screen devices (HTC Europe v Apple).
The way forward
It is hard to see how the proposed law change can be a humiliating backdown, a clarification of the law and unequivocally ruling out software patents all at the same time. Not all expectations are going to be met. Despite all the noise and chatter, it is good to see some progress at last on patent law reform. Even chameleons get somewhere eventually.