Software patents in New Zealand and Australia: a little clarification

From Matt Pini (a partner in the Australian bit of Marks & Clerk) comes an expression of grave concern that the law in New Zealand concerning that patenting of computer software has been misunderstood. Software patents have not actually been banned, despite some excitedly explicit headlines to that effect (see eg CBC here, ZDNet here and Ars Technica here). Explains Matt:

The restriction on patenting computer-related inventions is qualified to the extent of proposed clause 10A of the recently-passed NZ Patents Bill [or Act? See Katnote below] which clearly states that a computer program, as such, is not to be considered an invention, but it will however be possible to obtain patent protection for a computer program if the inventive contribution lies outside of the computer or if the contribution affects the computer itself but is not dependent on the type of data being processed or the particular application being used. More obviously for readers, a blanket ban on patenting computer-software related  inventions would hardly be considered a boost for innovation in most modern countries. Moreover, the quote of Paul Matthews (chief executive of the Institute of IT Professional’s in New Zealand) seems to fall squarely within numerous existing patent laws around the world to hold the view, as stated, that 

“The patents system doesn't work for software because it is almost impossible for genuine technology companies to create new software without breaching some of the hundreds of thousands of software patents that exist, often for very obvious work.”  

Current patent laws based on hundreds of years of legislation and case law have provisions for denying or revoking patents for “obvious work” so the validity of any such patents would be on shaky ground.  To say that hundreds of thousands of such shaky software patents are granted and enforceable is to overlook the evolving practices and attitudes of many Patent Offices spending much time and effort over many years now to improve the standards of and resources for examination.

Furthermore, it is noteworthy that the new direction in NZ appears to be in complete contrast to the very latest development in Australia.  Whilst the legislature in NZ have adopted a new restriction on computer-related inventions under the newly passed Patents Bill, a decision of the Australian Federal Court on appeal from the Commissioner of Patents has essentially retracted the recent practice of the Australian Patent Office in rejecting computer-implemented inventions.  In RPL Central Pty Ltd v Commissioner of Patents [2013] FCA 871, 30 August 2013, Middleton J confirmed that the question of patentability under Australian law is to be guided by the seminal and watershed decision of the Australian High Court in NRDC v Commissioner (1959) 102 CLR 252. In my opinion and that of many other Australian practitioners, NRDC ought to be considered the undisputed authoritative statement of principle in regards to the patentable subject matter standard in Australia.  That the NRDC decision is our test for patentability, regardless of whether a software invention, a biotech advance or pots, pans or a mouse trap is being considered, is a view I have long held since my days in the Australian Patent Office during the introduction of the 1990 Patents Act examining patent applications in the field of digital computing, as well as the odd pot, pan and mousetrap!  The RPL decision reaffirms that software patents are allowable under Australian law provided they are a manner of manufacture or, as put in NRDC, “an artificially created state of affairs in the field of economic endeavour”.

Thanks, Matt, for this explanation.

Katnote: This Kat can't understand whether the legislation in question is a Bill or an Act. According to IPONZ -- the New Zealand Intellectual Property Office -- it's an Act, and this view appears to be supported by the New Zealand Parliamentary Counsel Office where the text of the Act appears in full. However, Matt says:

"There won’t be sections of an Act until the Bill is enacted and the NZ government have not yet given a timetable for that as yet. The official New Zealand Patent Office website states currently that: “IPONZ will announce an enactment date for the Bill and a consultation timetable for the regulations in due course.” Whilst the relevant clauses of the Bill may stay with the same numbering for sections of the Act, that isn’t guaranteed".

The version of the Act on the PCO website has the bit about computer programs at section 11, which states:

11Computer programs

• (1)A computer program is not an invention and not a manner of manufacture for the purposes of this Act.
  (2)Subsection (1) prevents anything from being an invention or a manner of manufacture for the purposes of this Act only to the extent that a claim in a patent or an application relates to a computer program as such.
  (3)A claim in a patent or an application relates to a computer program as such if the actual contribution made by the alleged invention lies solely in it being a computer program.

  Examples

  A process that may be an invention

  A claim in an application provides for a better method of washing clothes when using an existing washing machine. That method is implemented through a computer program on a computer chip that is inserted into the washing machine. The computer program controls the operation of the washing machine. The washing machine is not materially altered in any way to perform the invention.

  The Commissioner considers that the actual contribution is a new and improved way of operating a washing machine that gets clothes cleaner and uses less electricity.

  While the only thing that is different about the washing machine is the computer program, the actual contribution lies in the way in which the washing machine works (rather than in the computer program per se). The computer program is only the way in which that new method, with its resulting contribution, is implemented.

  The actual contribution does not lie solely in it being a computer program. Accordingly, the claim involves an invention that may be patented (namely, the washing machine when using the new method of washing clothes).

  A process that is not an invention

  An inventor has developed a process for automatically completing the legal documents necessary to register an entity.

  The claimed process involves a computer asking questions of a user. The answers are stored in a database and the information is processed using a computer program to produce the required legal documents, which are then sent to the user.

  The hardware used is conventional. The only novel aspect is the computer program.

  The Commissioner considers that the actual contribution of the claim lies solely in it being a computer program. The mere execution of a method within a computer does not allow the method to be patented. Accordingly, the process is not an invention for the purposes of the Act.
  (4)The Commissioner or the court (as the case may be) must, in identifying the actual contribution made by the alleged invention, consider the following:

  • (a)the substance of the claim (rather than its form and the contribution alleged by the applicant) and the actual contribution it makes:

  • (b)what problem or other issue is to be solved or addressed:

  • (c)how the relevant product or process solves or addresses the problem or other issue:

  • (d)the advantages or benefits of solving or addressing the problem or other issue in that manner:

  • (e)any other matters the Commissioner or the court thinks relevant.
  (5)To avoid doubt, a patent must not be granted for anything that is not an invention and not a manner of manufacture under this section.

Further reading:
Darren's blogpost "New Patents Act in New Zealand", 29 August 2013, here
A New Patents Act for New Zealand, from Marks & Clerk UK here