14 August 2011

IPONZ Issues ‘Explanatory Note’ on Computer Program Guidelines

The term ‘explanatory note’ suggests something in the nature of a brief clarification.  Thus an ‘explanatory note’ that is 50% longer than the original document which it purports to explain would appear to defy conventional interpretation.  However, this is precisely what has occurred in the response by the Intellectual Property Office of New Zealand (IPONZ) to comments received on its Draft Guidelines for the Examination of Patent Applications Involving Computer Programs.  A smaller font, and narrower margins, have been used to keep the page count down, but on a count of either paragraphs or words, the ‘note’ is half as long again as the original draft guidelines.

To make matters worse, the Explanatory Note: Patentability of Inventions Involving Computer Programs does little to clarify the original guidance, and fails to address the majority of concerns raised in the submissions received in response to the draft guidelines.

If any further evidence were required that something has gone very sadly awry in the process of updating New Zealand’s patent laws, this is surely it!

As background for readers who have not been following the developments in New Zealand, there has been an effort to replace the country’s outdated (1953) Patents Act ongoing for about a decade.  Part of the reason for the slow progress was the high level of consultation and careful consideration applied to all aspects of the reform process over this period.  However, with legislation finally drafted, it was referred to the New Zealand Commerce Committee, which also received comments, and made a number of ‘tweaks’ to the draft Patents Bill.  In addition, however, the Committee added an entire new clause, not previously contemplated throughout the entire process, stating that ‘a computer program is not a patentable invention.’  (See NZ Committee Recommends Ban on Software Patents.)

Apparently, however, the Committee did not intend this to mean that all computer-implemented inventions should not be patented.  Inventions in the category of ‘embedded software’ were somehow to evade this seemingly blanket provision.  But rather than attempting to clarify the proposed legislation, the government decided that it should instead fall to IPONZ to prepare draft examination guidelines explaining how the relevant distinction would be made.  IPONZ duly drafted the requested guidelines, which were opened up for public comment.  The response was almost universally negative, from a broad cross-section of stakeholders.  (See Stakeholders Say ‘No’ to NZ Computer Program Exclusion.)

We do not blame IPONZ for the unenviable position in which it finds itself.  It was given an impossible task, at which it was bound to fail – to explain how the proposed provision could mean something other than what it plainly says, and to distinguish between ‘patentable’ and ‘unpatentable’ computer-implemented inventions in a manner which would be acceptable to stakeholders, and which would be consistent with the overall legislative framework.


Normally one would not expect an ‘explanatory note’ to stand alone, but should be read in conjunction with the document which it purports to clarify.

However, the Explanatory Note: Patentability of Inventions Involving Computer Programs can be read and fully understood without reference to the original draft guidelines.

Paragraph 2 of the Note states that:

This note is intended to explain the approach that will be taken by IPONZ when examining patent applications involving computer programs under the provisions of clause 15(3A) of the Patents Bill, taking account of issues raised in the submissions on the draft guidelines. It is not intended to form part of the formal guidelines to examiners – formal guidelines, reflecting the approach set out in the draft guideline, will be published at a later date, when the new Patents Act is passed and brought into force.

So we are to understand that the Explanatory Note is not intended to explain the Draft Guidelines – it is intended to explain the proposed approach to examination (which was what the Guidelines were supposed to do).  And, in any event, neither the Explanatory Note nor the Draft Guidelines are the actual guidelines which will eventually be provided to examiners.

In short, the Explanatory Note is not an explanatory note.  It is a second attempt to address the brief, which adopts a sleight-of-hand to pretend that it clarifies, rather than supplants, the first attempt.

So, looking at it this way, does it succeed?


One criticism levelled by a number of submissions on the original guidelines was that they went beyond the brief by discussing the application of the general ‘manner of manufacture’ test for patent-eligibility, rather than focussing only upon the application of the computer program exception.

In the respect, the Explanatory Note is an improvement.  The only mention of ‘manner of manufacture’ is in paragraphs 3 and 4, by way of placing the exclusion within the context of the overall legislative framework.


Many submissions on the draft guidelines (including one by the present author) argued that the clearest approach that could be adopted in New Zealand would be that which has been developed over an extended period by the European Patent Office (EPO), assuming that an exclusion to patentability for software inventions remains in the legislation.  The Guidelines, by contrast, proposed a modified version of the ‘Aerotel test’ developed by the UK Court of Appeal (Aerotel Ltd. v Telco Holdings Ltd & Ors Rev 1 [2006] EWCA Civ 1371).  A number of submissions criticised this approach, not only because it is less well-developed that the EPO jurisprudence, but also because the UK law has moved on since Aerotel (see Symbian Ltd v Comptroller General of Patents [2008] EWCA Civ 1066).

The Explanatory Note justifies this proposal specifically on the basis that the Aerotel test differs from the EPO approach.  Paragraphs 17 and 18 state:

A number of interested parties who made submissions on the draft guidelines noted that the Aerotel test has been the subject of some criticism in the UK and Europe. It appears that this criticism stems from the fact that the Aerotel test differs from the way in which the European Patent Office (EPO) assesses whether or not a claimed invention falls within one of the exclusions in the EPC, rather than because the test is considered inherently bad.

Section 130(7) of UK Patents Act 1977 requires certain provisions of that Act, including section 1(2), to be given the same effect as the corresponding provisions of the EPC. This has led the UK Courts to modify the application of the Aerotel test to move UK practice relating to exclusions closer to EPO practice. Neither IPONZ nor the New Zealand courts are obliged to follow EPO practice. On this basis, the criticisms of the Aerotel test do not seem relevant to whether the test could be used in New Zealand.

While this might be so, the major concern regarding adoption of the Aerotel test in New Zealand is that a single decision of the UK Court of Appeals provides very little guidance as to the application of the test in other circumstances.  And without such guidance, confusion and uncertainty will necessarily remain.


The Explanatory Note refers to an earlier UK case, CFPH LLC’s Patent Applications [2005] EWHC 1589 (Pat), as a source for additional guidance.  As stated at paragraph 38 of the note:
For inventions that involve the use of computer programs, a number of questions can usefully be asked as part of the process of determining whether or not the contribution is just a computer program:

(1) Is the artefact or process new and non-obvious merely because there is a computer program? If yes, the contribution is a computer program, and the artefact or process is likely to be excluded from patent protection.

(2) Would the artefact or process still be new and non-obvious in principle even if the same decisions and commands were undertaken a different way? If no, then the contribution is likely to be a computer program and the artefact or process is excluded form patent protection.

(3) Is the computer program merely a tool adapted to achieve efficiency or something similar? If yes, then the artefact or process is not likely to be excluded.

We are not sure that these questions would meaningfully exclude most computer-implemented inventions which also pass the ‘manner of manufacture’ test.  In many cases, such inventions are preferably claimed as processes without reference to specific hardware or software elements, precisely because it is the process, rather than the program, that is new and inventive.


To further add to the potential confusion, the Explanatory Note provides examples of the application of the guidelines, one of which is essentially the invention claimed in the Symbian case (noted above).  Specifically, the example at paragraph 47 is:

The applicant has disclosed a method of improving the operation of a computer by providing a way of indexing Dynamic Link Library (DLL) functions so as to ensure that the computer will continue to operate reliably after changes are made to the library. Application of the questions set out in paragraph 38 above determines that the contribution is no more than a computer program, and so the invention is excluded by cl 15(3A).

In the Symbian case, the UK judge stated of the invention (at [54]):

… not only will a computer [programmed according to the invention] "be a better computer", … it can also be said that the instructions "solve a 'technical' problem lying with the computer itself". Indeed, the effect of the instant alleged invention is not merely within the computer programmed with the relevant instructions. The beneficial consequences of those instructions will feed into the cameras and other devices and products, which … include such computer systems. Further, the fact that the improvement may be to software programmed into the computer rather than hardware forming part of the computer cannot make a difference….

The judge applied the Aerotel test, and concluded that the invention was patentable.  We therefore cannot understand why it would not be patentable in New Zealand according to the approach set out in the Explanatory Note.

The Explanatory Note suggests, at paragraph 48, that the difference is due to the requirement in Europe for a ‘technical contribution’, which is not present in New Zealand.  But the technical contribution is an additional requirement, checked at step 4 of the Aerotel test, which is not included in the approach proposed by IPONZ.  The exclusion of the technical contribution requirement logically implies that there are inventions which would be unpatentable in the UK but which would be patentable in New Zealand.  The converse cannot be true.


The Explanatory Note clarifies little, and is just another confusing attempt to do the impossible.

The only solution to this ever-escalating mess lies with the New Zealand parliament.  The new Patents Act must itself be clear as to what (if anything) is, or is not, to be excluded from patentability.

Regardless of one’s view on the patenting of computer-implemented inventions, New Zealand is just a small step away from becoming a complete laughing stock on this issue, and the sooner its politicians wake up to this fact, the better.


Emma_dddk said...

i agree

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