New Zealand Finally Gets a Modern Patent Law (With Software)

On 28 August 2013, the New Zealand Parliament finally passed the bill which will henceforth be known as the Patents Act 2013.

This is actually a fairly momentous event – and not principally because of the supposed ‘software patent exclusion’ (which I discuss further below).  It is mostly significant because it means that New Zealand will finally have patents legislation which is in line with most of the world’s developed nations, rather than a law dating back to just a few years after the Second World War.

The current patent law in New Zealand is set out in the Patents Act 1953, i.e. a 60-year-old piece of legislation, which was itself based on the 1949 UK Act.  Australia also had laws based on the old UK Act, in the Patents Act 1952, which was replaced over 20 years ago by the current legislation, the Patents Act 1990.

So when the existing New Zealand patent laws came into effect, the exciting new inventions of the day included the transistor (1947), Velcro (1948), super glue (1951) and the black box flight recorder (1953).  While the world has moved on somewhat since then, the New Zealand patent laws have not!

Archaic Features of the Current Law

These old laws had a few features that are considered more than a little anachronistic today.  For example, novelty and inventive step were assessed only against knowledge, use and publications available within the jurisdiction.  This criterion, known as ‘local novelty’ meant that, in principle at least, a person could get a patent for something already known and used overseas, i.e. as a first ‘importer’ of technology, rather than a true first inventor.

Another feature of the older laws was that examiners were (and still are in New Zealand, until the new Act comes into effect) permitted to examine only for novelty, and not for inventive step.  This meant that the Patent Office was obliged to accept applications that were obvious variations of known technology.  Challenges based on a lack of inventiveness could only be made through the intervention of third parties via opposition proceedings, or post-grant revocation actions.

These limitations made some kind of sense in earlier times, when access to foreign information and publications was more limited, and examiners (in common with the general population) generally less highly skilled and educated than they are today.  Nowadays, however, such limitations might be considered appropriate, if at all, only for developing nations.  A modern, developed nation should have modern, developed patent laws!

A Brief History of the Patents Act

The UK ditched its 1949 Act in 1977, when it aligned its laws with the provisions of the European Patent Convention.  Australia entered the modern era of patent legislation in 1991.  New Zealand starting thinking about it in about 2001, then engaged in a lengthy process of consultation which resulted in the Patents Bill being introduced to the New Zealand Parliament in July of 2008.  It was reintroduced later that year, following an election, and had a first reading in May 2009, after which it was referred to the Parliamentary Commerce Select Committee.

The fate of the Bill since then has been reasonably well-documented on this blog:

1. in March 2010, the Select Committee reported back, and recommended a number of amendments, including the first version of a ‘computer programs’ exclusion;
2. controversy ensued, and the Intellectual Property Office of New Zealand (IPONZ) was directed to draft some ‘guidelines’ for implementation of the proposed exclusion;
3. more controversy ensued, resulting in IPONZ issuing an ‘explanatory note’ to clarify its ‘guidelines’ (which was, in fact, longer then the original guidelines);
4. a change of Minister led to replacement of the controversial exclusion with another controversial exclusion;
5. unsurprisingly, controversy ensued, this time in the New Zealand Parliament itself, during the second reading debate (by now it was September 2012);
6. then, apparent silence replaced the controversy, although it eventually transpired that some discussions and deal-making had been going on behind the scenes to deliver a compromise on the computer programs exclusion which was acceptable to most stakeholders.

So the bill has now passed, five years after it was first introduced to the Parliament, for more than three of which it was stalled by the contentious computer programs exception.

Software Patents – Banned, or Not Banned?

So, after all that, are software patents actually banned in New Zealand?  Contrary to the impression you might have if you have been reading TechDirt, itnews.com.au or engadget (among many others) – not really, although it does depend a little on how you define ‘software patents’.

The software patent restriction in the bill as passed by the New Zealand Parliament is the same one that I wrote about back in May this year, when it was first presented as the agreed solution to the impasse.  As I explained at the time, the objective of the provision is to emulate the position in the UK as closely as possible.  And, as I also explained, the courts in the UK have recently upheld software patents covering a computer-implemented method of designing a drill bit, and a networked ‘alarm’ system combining ‘packet sniffing’ and SMS messaging to alert parents when their children access ‘inappropriate content’ on the internet.

If the opponents of software patents genuinely believe they have won a great victory in New Zealand, and if it turns out that, in fact, the Patents Act permits the kinds of software patents that have been upheld in the UK, then it seems likely that further controversy will ensue at some future date.  But then, the new law is no stranger to controversy.

Conclusion

The ‘computer programs’ exclusion is just one small and – in the larger scheme of things – relatively insignificant component of New Zealand’s new patent law.  The passage of the Patents Act 2013 represents a once-in-a-lifetime overhaul of the law relating to patents in New Zealand.

The Act will shortly receive the ‘Royal Assent’, i.e. formal approval by the Governor General as the Queen’s representative in New Zealand.  This will commence a 12-month period before the new law actually comes into effect, during which time it will be necessary to draft the associated Regulations.

The one-year commencement period will also provide ample time for all of us to familiarise ourselves with the new Act, and as the time approaches I expect that I will be writing more about the content and operation of New Zealand’s shiny, modern Patents Act.

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Tags: Computer programs, Law reform, New Zealand