Following its review of the proposed Patents Bill, the Commerce Select Committee has recommended excluding computer programs as inventions capable of patent protection.
This recommendation has received a lot of attention and has led to a range of submissions on the issue of patentability of computer programs and the potential impact of the Select Committee’s recommendation.
Reform of the Patents Bill
The Patents Bill seeks to repeal and replace the Patents Act 1953 (Patents Act), which is modelled on the now repealed United Kingdom Patents Act 1949 and is viewed by some as imposing a low threshold for patentability compared with similar laws in other countries. The Patents Bill proposes to “align the criteria for granting a patent with international practice”.
After its first reading in Parliament on 9 May 2009, the Patents Bill was referred to the Select Committee to receive and consider public submissions. After reviewing all of the submissions received, the Select Committee released its report on 30 March 2010 (Select Committee Report), in which it recommended that the Patents Bill be passed by Parliament with a number of amendments. One of the major amendments recommended by the Select Committee is for computer programs to be excluded from patentability.
Proposed amendment to Patents Bill
The actual proposed amendment is straightforward. The Select Committee seeks to amend clause 15 of the Patents Bill (which sets out inventions that are not patentable) by including the following additional wording: “A computer program is not a patentable invention”.
Having received many submissions concerning the patentability of computer programs, the Select Committee has adopted the position of those who submitted that “there is no inventive step in software development as new software invariably builds on existing software”, and that “software patents can stifle innovation and competition, and can be granted for trivial or existing techniques”. The Select Committee also agreed that the growing popularity of the open source software model is inconsistent with allowing patent protection for software.
The Select Committee did not, however, recommend prohibiting the patenting of inventions incorporating embedded software (i.e. computer software that plays an integral role in the electronics it is supplied with, such as cars, washing machines or telephones). In a number of cases, software may not be able to be separated from the invention. Accordingly, the Select Committee recommended that the Intellectual Property of New Zealand (IPONZ) develop guidelines for inventions containing embedded software.
Current patent law
Currently, computer programs can be patented provided they meet certain criteria relating to novelty, inventiveness and utility. According to IPONZ guidelines, for a computer program to be a patentable invention, it must:
- be industrially applicable (i.e. able to be made or used in some kind of industry);
- contain an inventive step that is non-obvious (i.e. it cannot be already known, or be two or more products or processes put together with no new or improved effect); and
- be new or novel. If the invention has already been used, displayed or otherwise made available in New Zealand or been described in any public document, including an overseas document available in New Zealand, it will not normally be patentable.
The Select Committee recognised that under the Patents Act, computer programs can be patented provided they produce a “commercially useful effect”. However, in its review of the submissions to the Patents Bill, the Select Committee accepted the argument that there is no inventive step in software development and that software patents can be granted for trivial or existing techniques. Accordingly, it has recommended excluding computer programs from the New Zealand patent regime.
If the Select Committee’s recommendation is adopted, computer programs will not be capable of patent protection. Instead, developers will need to rely on copyright and other measures to protect their intellectual property. While some commentators have supported the Select Committee’s proposal, there are many – particularly those involved in the commercial software sector – who believe that the loss of patent protection would cause difficulties for developers.
Support for the Select Committee’s Proposal
The Select Committee’s recommendation has been welcomed by various parties, including the New Zealand Open Source Society, the New Zealand Computer Society, Internet New Zealand Inc. and Orion Health (New Zealand’s largest exporter of software).
In their support of the Select Committee’s recommendation, they made the following arguments:
- software patents are damaging to the ICT industry and New Zealand as a whole as they stifle innovation, which they believe is contrary to the current purpose and rationale of patent law (being to encourage innovation and growth in productivity);
- software patents create unnecessary and unpredictable risk for software developers as developers must continuously check their work against patents;
- the patent process has been misused in the past in respect of software, including issues with patenting of trivial or existing inventions;
- patent owners can more easily monopolise a market than they could without patent protection; and
- patents are unsuited to computer programs, and copyright law provides more appropriate protection.
The various supporters of the Select Committee’s recommendation also believe that software patents are inconsistent with the open source model. Proponents of this model license software in a way which makes source code available to users of a software program and enables users to modify that software. Under many open source licences, any such modifications must in turn be made available under an open source licence.
The open source model has proven increasingly popular amongst developers, many of whom believe that it promotes innovation and collaboration between developers. While the link between software patents and the open source model has not been clearly articulated by the Select Committee, there is a sense that the exclusivity rights which accompany patent protection of software are contrary to the ideals of open source.
Labour MPs Lianne Dalziel and Clare Curran have echoed the sentiments of many submitters to the Select Committee in stating that the exclusion of computer programs from the Patents Bill is “a step towards helping New Zealand become more innovative”.
Opposition to the Select Committee’s Proposal
The Select Committee’s recommendation to exclude patent protection for computer programs has also drawn a great deal of criticism. Many critics of the recommendation, which include large software development houses, law firms and ICT industry bodies, consider patents to be a vital tool in protecting intellectual property rights in relation to software protection alongside copyright and other measures.
Critics of the Select Committee’s recommendation consider that the arguments put forward in favour of that recommendation are open to debate, and have raised the following arguments in support of their position:
- Software patents facilitate innovation. If software developers are able to protect their inventions through patents and rely on the exclusive right to exploit their inventions while those patents remain in effect, they are more likely to invest in research and development. In addition, as patent owners must publish details of their invention, this encourages others to learn and develop from those inventions.
- Software does build on existing software, but this cannot be used to argue that software cannot be inventive and, therefore, should not have patent protection. Almost every invention builds on what has gone before, and every invention must meet the “inventive step” requirement for patentability before patent protection can be granted. Software should not be treated differently to any other invention.
- Patents may have been, and may continue to be, granted for trivial or existing techniques. However, the requirements of patentability for software are the same as for any other invention – there are no lower standards. In fact, the Patents Bill seeks to strengthen the criteria for granting a patent by introducing an “absolute novelty” standard and requiring patent applications to be examined for usefulness and the presence of “an inventive step”. As a result, it will be more difficult to grant patents for trivial inventions.
Overseas approach
Patent laws in the UK and throughout Europe specify a non-exhaustive list of things that are not regarded as inventions and, therefore, unable to be patented. This list includes computer programs. However, the UK patent laws, in following the European Patent Convention, make a distinction between standalone computer programs and embedded software, and appear to allow patents for the latter.
In contrast, US and Australian patent laws permit patents to be granted for all types of software (provided the invention meets the patentability requirements) and do not make a distinction for embedded software.
The Select Committee’s proposed amendments aim to align the Patents Bill with the approach taken in the UK and the European Union. However, this will mean a divergence from the patent law of Australia, notwithstanding that the New Zealand Government has expressed an intention to more closely align its intellectually property processing regime with that of Australia.
Next steps
The amendments recommended by the Select Committee will be debated in Parliament before a decision is made whether to introduce the amendments into the Patents Bill. Following this, the Patents Bill must undergo two further readings in Parliament and another Select Committee examination before it can be passed as law. Therefore, the Patents Bill may be subject to further amendments and the recommendations of the Select Committee may not adopted by the Government.
Regardless of your thoughts on removing the ability to patent certain software, this change is being seriously considered. While copyright protects developers against the copying of code, it does not provide protection against emulation of processes. If the Select Committee’s recommendation is adopted and patent protection for software removed, developers will need to look at other measures to protect the investments made to develop new software.
Note: All quotes appearing in this article have been taken from the Select Committee Report.