New Zealand Patents Bill continues its progression towards enactment with release of Select Committee Report

In IP, legislation, New Zealand, patent on March 30, 2010 at 2:51 pm

New Zealand’s patent legislation dates back to 1953 and is based on the UK 1949 Act. A full review of the Patents Act 1953 has been contemplated and discussed off and on for 20 plus years.

The Patents Bill 2008 was introduced into Parliament on 9 July 2008, and following a change of government was reinstated on 9 December 2008. For a summary of the main changes brought about by the Bill as introduced into Parliament see here.

The Bill was referred to the Commerce Select Committee (“the Committee”) on 5 May 2009. The Committee received and considered 67 submissions and heard 36 submissions.

The Select Committee has examined the Bill and issued its report recommending that it be passed subject to the amendments noted in the report.

The report includes the Committee’s 15 page summary of amendments and the 178 page Bill incorporating the suggested amendments.

In brief, the proposed legislation would align the criteria for granting a patent with international practice. In particular, the Bill introduces an “absolute novelty” standard and examination of applications for usefulness and inventive step.

In a departure from International practice, the Bill also seeks to ensure that the interests of Maori in their traditional knowledge and indigenous plants and animals are protected. Thus, the Bill would establish a Maori Advisory Committee (“MAC”) to advise the Commissioner (on request) whether an invention described in a patent application was derived from Maori traditional knowledge or from indigenous plants and animals. The MAC would advise on whether commercial exploitation of such inventions could be contrary to Maori values. The Commissioner will not be bound by such advice.

A MAC has been operating under the Trade Marks Act 2002 since its enactment. The approach of the MAC appears to be fairly pragmatic and there are very few matters which have been found to be offensive to Maori.

In terms of exclusions from patentability, the Committee recommends the insertion of a non-exhaustive list of inventions, based on Article 6 of the European Biotechnology Directive, by way of example.

Perhaps one of the most controversial points in submissions to the Committee was whether computer software should be patentable. Strong advocacy against patentability of computer software came from the open source proponents.

Under the 1953 Act, computer programs can be patented provided they produce a commercially useful effect. The Bill, as amended by the Committee, lists computer software as not a patentable invention. However, there is an intention that such an exclusion would not prevent the granting of patents for inventions involving embedded software (for example software which plays and integral role in the electronics it is supplied with, such as software incorporated in cars, telephones and washing machines).

The Committee’s report flags impeding increases in official fees and the creation of a maintenance fee. The increased fees are necessary as IPONZ will have to hire more staff to adequately examine patents and the new maintenance fees “would act as a disincentive to maintain applications for inventions people are no longer actively interested in”.

The nature and level of official fees for registering and maintaining IP rights in New Zealand were last reviewed in 1999. Since then, Treasury has been reluctant to allow further increase of fees as the Office operates on a cost-recovery basis. Thus, the enactment of new legislation with higher examination standards, and therefore increased costs to the Office, justifies the increase of fees.

A further amendment to simplify the administrative aspects of the patent regime and to facilitate the efficient management of patent examiner’s workloads, the Committed recommends that the Bill provides for both requests for examination and the Commissioner directing applicants to request examination.

The Bill as introduced to Parliament did not provide for pre-grant oppositions, instead providing for a re-examination process that could be invoked at any time after an application had been accepted. Following submissions, the Committee recommends that amendments be mad that would enable third parties to oppose a patent before it was granted.

The Committee also recommends amendments to allow New Zealand to accept the Protocol Amending the TRIPS Agreement, to Implement the Doha Declaration on the TRIPS Agreement and Public Health. Such an amendment will allow a person to export patented pharmaceuticals under a compulsory license in line with the protocol.

The Bill will now be referred back to Parliament for its second and third readings and enactment. The Regulations still yet need to be drafted and it is expected that the Bill will be fully operational by the beginning of 2013.

  1. Hi Elena
    I can see how software patents are problematical, but I am concerned that this Bill does not throw the baby out with the bath water. How will an inventor stand when inventing a methodology that benefits from computer assistance, even to the point where it would be foolish and impractical not to use a computer? Computers enable, assist and automate aspects of all of our lives. To my mind the blanket exclusion “software is not patentable” is dangerously shallow. If I develop a new process to turn iron into gold using computer software, then of course I cannot patent the iron, or the software, but surely I can be allowed to patent the combination?

    • Thanks for your question.

      The current version of the Patents Bill does seem to suggest a blanket ban on software patents per se.

      However, comments in the Select Committee Report do not support that conclusion. In particular, I refer you to the following excerpt from the Select Committee Report:

      “… we are aware of New Zealand companies who have invested in a significant number of software-related inventions, involving embedded software. We sought advice on the approach taken in other jurisdictions such as the United Kingdom and the United States, and whether legislation that would enable “embedded software” to be patentable might be practicable. After careful consideration we concluded that developing a clear and definite distinction between embedded and other types of software is not a simple matter; and that, for the sake of clarity, a simple approach would be best. We received advice that our recommendation to include computer programs among the inventions that may not be patented would be unlikely to prevent the granting of patents for inventions involving embedded software.

      “We recommend that the Intellectual Property Office of New Zealand develop guidelines for inventions containing embedded software”. (Embedded software is described as computer software which place an integral role in the electronics it is supplied with (e.g. cars, pacemakers, telephones and washing machines).

      I hope this clarifies matters for you?

  2. Embedded software is commonly written into a memory device and dedicated to supporting the operation of an appliance of some description, so an exception is being made for those devices. That’s all very well, but let’s take another example. Designing a cell phone for example – from the user perspective – may be a complex problem. If you have ever tried to add a new number without losing your current call, you will know what I mean. Now suppose I invent a graphical technique to map out these states and to show the transitions between them with elegant clarity.
    I reduce this to practice in the form of a computer program, not embedded software, but a program that is installed within a computer that runs an operating system.
    Let us presume that although one could use pencil and paper to operate my invention, it would be ludicrous and impractical to do so. In fact automation of my technique in software allows me to employ a number of well known algorithms that assist the method and allow it to assist the cell phone designer in an intelligent anticipative manner.
    Furthermore suppose the commercial value of this technique is enormous, and programmers (operating under non-disclosure agreements) report that using my method produces elegant, reliable and simple solutions to a difficult class of problems.
    Would this not be software? Should I not be allowed to patent my method, and it should not be able to be carried out in software?
    The method itself cannot be kept a trade secret – and copyright on the program code would not prevent reverse engineering. Not exactly a recipe for “home grown” success.

    • HI again – defintiely some interesting food for thought. It will be interesting to see how Parliament, the Intellectual Property Office and Courts deal with this vexed issue.

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