Opinion: Good news, bad news on software patents

InternetNZ Vikram Kumar looks at the amendment to the Patents Bill

Despite the heat and noise, there is remarkable alignment between Government and the majority of the New Zealand software industry on software patents. Specifically, that software should not be eligible to be patented. Copyright protection is sufficient. Both also agree that an otherwise patentable invention should not be barred from being patented simply because it uses software (“embedded software”).

Given the fears that the Government would continue to keep the issue of patentability of software on the backburner while it negotiates the Trans-Pacific Partnership Agreement, it is a relief to see that the Government did not buckle under public pressure applied by the US Government in various forums. This included the Office of the United States Trade Representative (USTR) frowning on New Zealand’s proposal to remove software from patents in an annual report on “foreign trade barriers”.

The changes introduced by the Government via a Supplementary Order Paper also do a great job of ensuring that New Zealand meets its international obligations, in particular under TRIPS (Trade-Related Aspects of Intellectual Property Rights).

Where government and the software industry differ is on the path to that common objective.

The government’s view is that the path to follow is a European-style approach. Clause 10A(2) was therefore introduced which does not allow patents for “a computer program as such.” (emphasis added)

On the other hand, the New Zealand software industry believes that the words “as such” will lead to European-style problems that defeat the government’s intention. If in the future a test for technical contribution is introduced, say by the courts, it is likely that there will be such a big loophole that most software will in fact be patentable, even though the common objective of both government and the industry is exactly the opposite.

The window of opportunity to properly address the issue is too small as the government is intent on quickly pushing through the Patents Bill without further consultation or submissions. Given the years put into the effort to “reform and modernise New Zealand patent law”, the intent of the Patents Bill, it makes sense for the government to pause while it fixes the problem. The small resulting delay may save millions of dollars in wasted litigation and is therefore the right thing to do.

There are several options to meet the common objective of both government and the industry while meeting New Zealand’s international obligations. All of them involve replacing the problematic clause 10A(2) and moving away from the “as such” path.

The first is the amendment put forward by the New Zealand software industry. In a petition at no.softwarepatents.org.nz the solution is to replace the current words in clause 10A(2) with the words, “Subsection (1) does not prevent an invention that makes use of an embedded computer program from being patentable.” One legal opinion supports the position that the Patents Bill does not have to explicitly define the term “embedded computer program” in the same way as the Bill does not define “computer program” or “software”.

Another option is to define the exclusion as best as possible. While this will still lead to litigation, it is a narrower problem area than the litigation that will inevitably result from using the words “as such” in clause 10A(2).

There are probably more ways of resolving the difference between government and the software industry on the path to follow.

The important thing right now is for government to pause and fix the words of the Patent Bill rather than put its head down and charge ahead regardless. Otherwise, the consequence will be millions of dollars wasted on litigation. It also means giving up the real opportunity to market New Zealand as a global magnet for innovation with consequent economic growth, exports and jobs.

In a world infested with patent trolls, New Zealand is blowing away the chance of being a beacon of sanity.

Vikram Kumar is InternetNZ CEO