The end of the 'wild west' for software patents - does the Patents Act 2013 change New Zealand's treatment of software patents from permissive to restrictive?

• Author: Block, Erin E.

INTRODUCTION I. NEW ZEALAND AND PATENTABLE SUBJECT MATTER A. Impetus for Reform in New Zealand B. Patentable Subject Matter Under the Patents Act 1953 and the Treatment of the Patentability of Computer Programs C. Patentable Subject Matter Under the Patents Act 2013 and the Treatment of the Patentability of Computer Programs D. What Affect Will the Changes Have? II. HAS THE PATENTS ACT 2013 BROUGHT NEW ZEALAND'S TREATMENT OF THE PATENTABILITY OF COMPUTER PROGRAMS IN LINE WITH EUROPE? A. Compare the Treatment of Computer Program Patentability Under 1953 Act to the United States B. Compare the Treatment of Computer Program Patentability Under 2013 Act to the European Patent Convention C. New Zealand has Shifted from a United States Style to a European Style in its Treatment of the Patentability of Computer Programs CONCLUSION INTRODUCTION

New Zealand, like many former English colonies, is a common law jurisdiction, and therefore, draws its basic doctrinal tradition in intellectual property from that of the United Kingdom. (1) However, New Zealand does not recognize the right to a patent under common law; therefore, the right to a patent in New Zealand is statutory-based. (2) The New Zealand Parliament enacted a statutory right to a patent through the Patents Act 1953 (the "1953 Act). (3) The 1953 Act is based off of the Patents Act 1949 of the United Kingdom, (4) which was repealed in the United Kingdom by the Patents Act 1977. (5)

While the 1953 Act has undergone minor revisions, (6) it has served as the primary basis for patent law in New Zealand since its inception. (7) New Zealand has been contemplating significant changes to the 1953 Act for over a decade, (8) which commenced with a review of the 1953 Act by the Office of the Associate Minister of Commerce. (9) After significant time to consider the review of the 1953 Act and the public submissions received in response to Review of the Patents Act 1953: Boundaries to Patentability A Discussion Paper (the "Discussion Paper"), (10) Patents Bill 235-1 (11) was introduced (12) as a government bill (13) on July 9, 2008. (14) After proceeding through the proper legislative process, (15) Patents Bill 235-216 received Royal Assent from the Governor General (17) on September 13, 2013 and was enacted as the Patents Act 2013 (the "2013 Act"), repealing the 1953 Act. (18) The 2013 Act came into full effect on September 13, 2014. (19)

The 2013 Act is significantly different from the 1953 Act. This Comment focuses on one significant change: the 2013 Act's treatment of patentable subject matter. This Comment focuses on the differences between the 1953 Act and the 2013 Act as it pertains to patentable subject matter. In particular, this Comment examines how this change affects the patentability of computer programs and computer software (collectively "computer programs"). While commentators, such as Rob O'Neill from ZD Net (20) and Christopher Mims from Quartz, (21) believe that the 2013 Act contains an outright ban on the patenting of computer programs, I will argue that the 2013 Act is consistent with the European treatment of the patentability of computer programs.

This Paper is organized into three sections. Section I discusses patentable subject matter under the 1953 Act, patentable subject matter under the 2013 Act, and compares how each act treated the patentability of computer programs. In order to provide a basis for the comparison, Section I further discusses the reasons behind the change to patentable subject matter and the patentability of computer programs. Section II discusses the effect these changes may have on patenting computer programs in New Zealand. Finally, Section III examines the patentability of computer programs in the United States and in Europe, and argues that New Zealand's treatment has simply switched from being similar to the treatment in the United States to being similar to the treatment in Europe.

1. NEW ZEALAND AND PATENTABLE SUBJECT MATTER

   New Zealand has made significant changes between the 1953 Act and the 2013 Act to patentable subject matter and the way in which New Zealand views the patentability of computer programs. This section considers three subjects. Part A of this section considers why New Zealand has reformed its patentable subject matter requirements. To understand the significances of these changes, Part B will examine patentable subject matter under the 1953 Act and how it was applied to the patentability of computer programs. Finally, Part C of this Section considers how the 2013 Act substantially amends the requirements for patentable subject matter and how it affects the patentability of computer programs.

   1. Impetus for Reform in New Zealand

      New Zealand had a number of reasons to repeal the 1953 Act and change what constituted patentable subject matter. The requirements to receive a patent in New Zealand were low compared to many other countries, (22) and thus, New Zealand has historically issued disproportionate numbers of patents to foreign nationals, (23) as indicated by The Ministry. (24) According to the Discussion Paper, the purpose for allowing patents in New Zealand is to promote invention while still benefiting New Zealand society. (25) However, the Discussion Paper did not make an affirmative recommendation eliminating the patentability of computer programs in the discussion paper. (26)

      Why make a significant change to the manner in which patents are issued for computer programs then? Many of the same arguments for the general reform of patentable subject matter also apply to the argument to reform the ability to receive a patent for a computer program, especially since the development of law in New Zealand lead to a very permissive allowance for the patenting of computer programs. (27) Further, a number of additional factors contributed to the desire to limit the ability to patent computer programs in New Zealand.

      First, foreign nationals are able to take advantage of New Zealand's permissive laws (28) due to its adherence to a range of international treaties. (29) As the Discussion Paper indicates and some proponents for New Zealand patent reform, such as Paul Matthews, chief executive for the Institute of IT Professionals, argue, the disproportionate number of patents issued to foreign nationals may be stifling innovation in New Zealand. (30) Further, other scholars, such as Richard Stallman, argue that the issuance of patents for computer programs stifles innovation in general. (31) Together, these arguments appear to have been a prevailing force when the Patents Bill had its first reading in Parliament in 2009. (32) Additionally, New Zealand has a strong open source contingency that successfully lobbied and promoted the idea that computer programs should not be included as patentable subject matter. (33) This contingency was supported by a majority of New Zealand citizens in the programming field. (34) Finally, as pointed out by the Ministry and by Parliament, the change brings New Zealand more in line with how Europe treats the patentability of computer programs. (35)

   2. Patentable Subject Matter Under the Patents Act 1953 and the Treatment of the Patentability of Computer Programs.

      Under the 1953 Act what constitutes patentable subject matter was defined in a broad manner, while the exclusions to patentable subject matter were narrow and limited. The 1953 Act was drafted in a permissive positive manner, which allowed for any invention (36) that is novel, industrially applicable, and non-obvious to be patented. (37) This definition created two primary requirements for an invention to be patentable subject matter: (1) that it be "new," and (2) "that it be a 'manner of manufacture.'" (38) Further, the 1953 Act only requires the examination of these criteria in relationship to information publicly available in New Zealand. (39)

      The 1953 Act did not specify categories of manufacture that are excluded or excepted from patentability. A patent application is not considered to have a patentable invention if the examiner decides the subject matter of the application does not fall under the definition of invention. (40) This leaves the decision of what is patentable subject matter open to interpretation by the examiner and the patent office. However, the New Zealand courts have ruled "the Commissioner of Patents may only refuse to grant a patent if it was 'practically certain' that if a patent was granted it would be held to be invalid. If there is any dispute, the applicant is to be given the benefit of any doubt." (41) Therefore, the 1953 Act establishes a generally low requirement for patentable subject matter in New Zealand.

      The patent law of New Zealand traditionally determined that computer programs were not suitable subject matter eligible for patent protection. (42) However, in an unreported decision in 1994, computer programs were recognized as patentable, (43) which was further publicly approved by the Commissioner of the Intellectual Property Office of New Zealand in 1999. (44) Therefore, computer programs were determined to be eligible for patent protection under an interpretation of the 1953 Act. (45) The Intellectual Property Office of New Zealand had determined that mathematical algorithms themselves ineligible for a patent; however, "they may be patented under the Patents Act when used in a computer, so long as they produce a commercially useful effect." (46) The minimal requirements to receive a patent and permissive definition of invention made it relatively easy to receive a patent on a computer program in New Zealand.

   3. Patentable Subject Matter Under the Patents Act 2013 and the Treatment of the Patentability of Computer...