28 August 2013 - 6:37pm | posted by | 0 comments

New Zealand bans software patents

In a move that has some claiming reverberations will be felt around the technology sector New Zealand moved to ban software patents by simply declaring that software is not an invention in the first place.

The Patents Bill was first drafted in 2008 and in 2010, the Commerce Select Committee recommended a total ban on software patents. However a government committee reversed that plan in August there was an outcry.

By taking this approach, it can circumvent its international obligations under TRIPS Agreement which is part of WTO treaties dealing with Intellectual Property. The bill, which had been heavily debated in the New Zealand parliament, passed yesterday and has broad support from that country’s Institute of Information Technology Professionals who said:
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“The patents system doesn’t work for software because it is almost impossible for genuine technology companies to create new software without breaching some of the hundreds of thousands of software patents that exist, often for very obvious work,” Matthews said.

The law who started as a bill in 2008 originally contained the language, “"[a] computer program is not a patentable invention"; however, this proved to be unworkable and revised. The compromise adopted today contains the European "as such" wording. In Europe, hundreds of thousands of software patents have been granted because an exclusion of computer programs "as such" is not an exclusion of patents on software inventions that make a technical contribution.

Essentially, by using the words, “as such”, certain elements of software will not be eligible for patent protection, but other programs will be. The New Zealand compromise seeks to clarify "as such":
“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.”

This goes against the American approach “everything-under-the-sun-is-patentable”. The courts will no doubt have to clarify the extent of the law, as the bill doesn’t give much guidance.

The bill only says that "[t]he hardware used is conventional" and that "[t]he only novel aspect is the computer program", and that "[t]he mere execution of a method within a computer does not allow the method to be patented", but most of the hundreds of thousands of software patents we have in Europe are patented because of a technical contribution that goes beyond what this description says.

The story that is being told by New Zealand politicians and lobbyists/activists is that the New Zealand patent reform bill adopts the UK case law on software patents, which is described as the most restrictive one in Europe. The High Court in England threw out four Apple patents, even though HTC claimed that every one of them was software patent and therefore covered an ineligible invention, it prevailed only once -and even finding of patent-ineligibility was reversed on appeal.

Creative Review: 

An IITP poll of members at the time showed 94% of those with a view were in favour of banning software patents. Already some have claimed that this is a genuine move that will increase creativity and that by removing the patent system this will foster innovation. Others have seen the move as an aggressive move from the New Zealand legislature to combat the dreaded patent trolls. A patent troll is a person or company who enforces patent rights against accused infringers in an attempt to collect licensing fees, but does not manufacture products or supply services based upon the patents in question. Because litigation is so expensive, litigants in patent disputes often settle completely frivolous lawsuits in order to avoid going to trial.

“The patents system doesn’t work for software because it is almost impossible for genuine technology companies to create new software without breaching some of the hundreds of thousands of software patents that exist, often for very obvious work,” Matthews said.

“Today’s historic legislation will support our innovative technology industry, and sends a clear message to the rest of the world that New Zealand won’t tolerate the vexatious practice of ‘patent trolls’”.

New Zealand joins India, whose courts have also ruled that also has passed a ban on software patents.

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