The New Zealand Patents Bill, which recently passed its third reading and is expected shortly to receive Royal Assent, includes changes to New Zealand patent law which will explicitly exclude computer programs 'as such' from patentability. Whilst many IT industry players have reportedly welcomed the provisions of the new Patents Act 2013 as an effective ban on software patents, it appears that the extent of the exclusion is likely to be limited, and in practice is merely aligning the law with that of the UK.

A brief history of the software patent debate in NZ

The Patents Act 2013 will replace the Patents Act 1953, and intends to strike a balance between protecting the interests of inventors' and the general public. Prior to the Patents Bill passing its third reading, patenting of software had been hotly debated with some members of the IT industry, including free and open source (FOSS) advocates, backing an outright ban. Indeed, an earlier version of the Patents Bill included a sweeping exclusion that '[a] computer program is not a patentable invention'.

New Act to exclude computer programs 'as such'

The new Act seeks to ensure NZ complies with its obligations under international agreements, such as TRIPS. The new provisions appear to have tempered the previous proposed exclusion, requiring that a 'computer program is not an invention ... only to the extent that a claim in a patent or an application relates to a computer program as such'. A number of additional sub-clauses are also provided which attempt to clarify the nature of a 'computer program as such'. Several examples are offered in this regard, including one which indicates that a process relating to embedded software controlling a washing machine may be patentable.

Following the UK lead on software patenting

Indeed, the corresponding Explanatory note clarifies that the approach of the new clause is intended to be consistent with UK precedent. In particular, some commentators have drawn parallels between the proposed clause, and the tests outlined in Aerotel Ltd. v Telco Holdings Ltd [2006] EWCA Civ 1371.It should also be noted that recent case law in the UK has held that subject matter such as a software method for designing a drill bit,1 and a system for monitoring electronic communications and alerting users when content may be inappropriate,2 do not fall within the 'computer programs "as such"' exclusion and are thus patentable.

Are software patents now banned in NZ?

Therefore, whilst on the face of it the new Patents Act 2013 appears to embrace an outright ban on software patenting, the recitation of the phrase 'as such' means that in practice the exclusion will not be so far reaching, and at least some software processes will still be protectable. In any event, ultimately this will be for the courts to decide.