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Some musings on the Patents Bill

In Intellectual Property, IP, legislation, New Zealand, patent on July 23, 2010 at 1:13 pm

Background

New Zealand’s Patents Act dates back to 1953 and is largely based on the UK Act of 1949.  Significant amendments were made in 1992 to deal with PCT applications.  But other than that the Act has not been much amended since 1953.

The need for new patent legislation to deal with technological changes over the last 60 years has been the subject of discussion from time to time and finally a Bill made it through its first reading in May 2009, and the Select Committee process by the end of March 2010.

As at 22 July, the Patents Bills sits at number 29 on the Order Paper for Parliamentary business for its second reading.

The computer program conundrum

The Select Committee recommended amending clause 15 to include computer programs among inventions that may not be patented.

There were many submissions concerning the patentability of computer programs. Under the Patents Act 1953 computer programs can be patented in New Zealand provided they produce a commercially useful effect.

Open source software proponents, in particular, were critical of the protection of software by patent. Opponents felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques. In general the Select Committee accepted this position.  However, on the other side of the fence, are those New Zealand companies who have invested in a significant number of software-related inventions, involving embedded software.

The Select Committee 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. However, it turned out to be too difficult for the Select Committee to develop a clear and definitive distinction between embedded and other types of software.

Therefore, “for the sake of clarity” the Select Committee decided that “a simple approach would be best”.

Based on advice that their 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, the Select Committee recommended the insertion of clause 15(3A) into the Bill in the following terms: “A computer program is not a patentable invention”.   

This recommendation was coupled with the further recommendation “that the Intellectual Property Office of New Zealand develop guidelines for inventions containing embedded software”.

 The Discussion continued

Even though the Bill had been through the Select Committee process when members of the public get to make submissions on the proposed legislation, the discussion did not end there with various parties making further arguments in favour or against the patentability of computer programs.  

The Commerce Minister was viewed as flip flopping and put an end to speculation in a media release earlier this month confirming that clauses 15(3A) will remain as it is with IPONZ to make guidelines.

 My two cents worth – But is it good law?

I think not!

In this day and age of clear and concise legislation that can be understood by the man (or woman of course) on the street, it is ridiculous that the plain and clear words of an Act – “A computer program is not a patentable invention” – is not intended to mean what it appears to mean.

Surely any IPONZ Guidelines – which are merely “guidelines” and not law – must be ultra vires if they conflict with the clear intent of the Act.  Why should a Judge be expected to look behind the clear meaning of the words of an Act in interpreting it?

It seems likely that the meaning of “computer program” will become the issue with parties on each side to a dispute arguing that the software in issue is or is not a computer program.  This could lead to some interesting arguments.

Why should our innovators be forced to take a matter to the Court to interpret such a provision?   

Given the likely interest in protecting computer programs in New Zealand, this may well be a hard fought battle on both sides with any such dispute potentially going through the court hierarchy up to the Supreme Court – a costly and time consuming process which will lead to much uncertainty and delay for other patents in the interim.  Will previously granted patents become invalid?  

In sum, the Select Committee recommendation will lead to unnecessary delay, uncertainty and cost.  I am disappointed that our parliamentary process has resulted in such an absurdity.

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Beehive – Minister announces way forward for software patents

In legislation, patent on July 16, 2010 at 2:10 pm

Press Release from Commerce Minister: Beehive – Minister announces way forward for software patents.

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NZ’s accession to the Madrid Protocol

In IP, legislation, Madrid Protocol, New Zealand, trade mark on July 7, 2010 at 7:41 pm

At the INTA meeting in Boston in May, I gave a brief presentation at the LinkedIN Madrid Protocol Group regarding the progression of New Zealand’s accession to the Madrid Protocol – NZ’s accession to the Madrid Protocol

It had been hoped that the Trade Marks (International Treaties and Enforcement) Amendment Bill would have its second reading in June. Not only has the Bill not had its second reading, it is slipped from number 28 to number 31 on the order paper of business before the House. Parliament is scheduled to next sit on 20 July.

More on the Patents Bill

In IP, legislation, New Zealand, patent on June 25, 2010 at 2:34 pm

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 ”.

The controversy around this provision continues…. As of 22 June 2010 the Patents Bill is number 37 on the Order Paper for Parliamentary business awaiting its second reading.

It appears that parties in favour of patentability are having some sway and there is a suggestion that a Supplementary Order Paper “to clarify the intent” is to be issued.

Following amendments by the Select Committee, the Patents Bill currently states that computer software is not a patentable invention. However, there is an intention the Intellectual Property Office will issue guidelines on the matter and 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).

I would have to agree that the current wording is not suitable and that a number of interested parties have expressed their view on this to Simon Power, the Minister of Commerce. There appears to be an intention that certain types of software will be patentable and for the European practice to be adopted. Thus, it seems inevitable that the Bill will be revised to more clearly state this intention.

Watch this space …

Legislative updates

In copyright, IP, legislation, New Zealand, patent on May 3, 2010 at 2:13 pm

The Copyright (Infringing File Sharing) Amendment Bill (see my previous discussion here) has been referred to the Commerce Select committee who has called for submissions by 17 June 2010.

The second reading of the Patents Bill is item number 23 on the Order paper (agenda) for the next Parliamentary sitting day on 4 May 2010 whereas the Trade Marks (International Treaties and Enforcement) Amendment Bill, which will enable New Zealand’s accession to the Madrid Protocol has dropped to number 31.

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.