After a three-stage review of the Patents Act that began in August 2000, the Patents Bill finally heads into a Second Reading after a Supplementary Order Paper (SOP) was released yesterday (28 August).

We've been awaiting the amendments recommended by the Commerce Select Committee since March 2010.

The SOP suggests a few amendments in three main areas.

Patentability of computer programs

During the Select Committee process the Ministry of Economic Development* (MED) prepared a Supplementary Report to the Commerce Select Committee in January 2010 ("the January Report") on the issue of the patentability of computer programs.

The report recommended an exclusion from patent protection for computer programs, "the wording of the exclusion being similar to, or the same as, the exclusion for computer programs contained in the [European Patent Convention] and the UK Patents Act." The January report stated that "[The Intellectual Property Office of New Zealand] has indicated that if such an exclusion was provided, it would use [European Patent Office] and UK case law and practice to interpret the exclusion".

It was therefore surprising to see the Commerce Select Committee recommend an exclusion that did not follow European law. The exclusion inserted by the Select Committee, clause 15(3A) simply reads "A computer program is not a patentable invention."

The Supplementary Order Paper replaces the exclusion in clause 15(3A) with new clause 10A. This new clause reads as follows:

10A Computer programs

(1) A computer program is not an invention for the purposes of this Act.

(2) Subsection (1) prevents anything from being an invention for the purposes of this Act only to the extent that a patent or an application relates to a computer program as such.

The Explanatory note states that the new clause is "considered to be more consistent with New Zealand's international obligations ... [and] is also more consistent with overseas precedents and makes it clear that it is only computer programs themselves that are ineligible for patent protection.

The Government's press release on this issue describes the SOP as introducing "a minor amendment to the Patents Bill to clarify whether computer programs are patentable". We see the amendment as clarifying legislative wording that does not reflect what was intended in the first place.

Digital patent system

New clause 278A amends the regulation-making powers and other provisions to ensure that a fully electronic patent system can be implemented. It will now be a requirement that all requests, applications and other documents must be filed electronically.

The proposed legislation requires the use of a "prescribed electronic delivery method (or another delivery method permitted by the regulations) in the prescribed manner". There will still be situations in which the prescribed electronic delivery method is not practical. For example, in some cases IPONZ systems will not have the required security. In others they may not be available at all due to a systems outage.

It is hoped that the regulations will continue to permit conventional delivery methods in addition to electronic delivery.

Timing issues

Other clauses in the SOP recognise the fact that the Patents Bill has been waiting for a Second Reading for a while. Clause 2(3) is amended to extend the date for the Act coming into force from 31 December 2012 to 31 December 2013.

New clause 293A empowers transitional regulations to be made to enable an orderly implementation of the transition from the Patents Act 1953 to the new Patents Bill given the complex nature of reform. The transitional period is three years.

Next steps

For many New Zealanders the revived interest in patent law reform will come as a relief. As mentioned in the Government press release, "[t]he Bill will continue to protect genuine innovations and encourage Kiwi businesses to export and grow ... Progressing the Patents Bill is part of the Government's Business Growth Agenda. It builds on initiatives that will help create a more productive and competitive economy".