The government's decision to change the patent law regarding software has got techies and lawyers up in arms. It's out of kilter internationally and raises questions about the select committee process
It's been a quiet controversy, but last week's decision by Commerce Minister Simon Power that software should not be patented - at least not unless it's "embedded" (ie, software built into a device) - was contentious none the less.
Last Thursday Power asked officials to develop some guidelines to decide what that might mean in practice. They have an unenviable job.
The Minister’s decision marks a substantial change in the law. Software inventions are currently patentable; in fact more than 200 local businesses have
For the most part, the Bill is an uncontroversial and long overdue update of patent law. And when it was introduced that’s all it was. But then during the select committee hearings something new snuck in: clause 15(3A) and its ban on patenting software.
There is of course nothing unusual about a select committee amending a Bill; and there’s nothing odd about select committee MPs being persuaded by the argument of submitters. That is democracy in action. But in this case the addition of clause 15(3A) introduced a new element which hadn’t been hinted at in the Bill before and it wasn’t something which many of these companies directly affected had even considered, let alone submitted on.
Here’s how the process worked. In 2000 the Government launched a three stage review of the Patents Act 1953. Stage three included discussion of software patentability. At that stage submissions generally favoured software being patentable in some form. In 2003 when Cabinet considered the issue it concluded that software should continue to be patentable. (Software inventions have been able to be patented in
Then in June 2009, a month after the Bill was referred to select committee and before submissions closed, an official from the Ministry of Economic Development confirmed in an interview in Computerworld that a decision had been made not to exclude software from patentability.
Again, more than 200
The committee did hear from others opposed to software patents. Judging by their written submissions many seemed motivated by the misconception that the new Bill would introduce software patenting in
The committee was clearly swayed by all submitters. It supported prohibiting software patents (what the open source submitters wanted), but it also sought advice from officials about allowing patenting of embedded software (the issue highlighted by Fisher and Paykel). In response, officials advised against trying to distinguish between software and embedded software – they said it would be an almost impossible line to draw in legislation. They recommended instead that MPs adopt the European model which, officials advised, was the nearest practicable fit to what the committee was after. (The European Patent Office doesn’t use the term “software patent”, but rather “computer-implemented invention”.)
But the MPs seem to have ignored that advice. Clause 15(3A) is not consistent with European law (or
In the meantime IPONZ has to draw up the guidelines to make sense of a law that says one thing while the lawmakers claim it says another.
Matt Sumpter is a partner at Chapman Tripp. He specialises in intellectual property and technology law issues.