New Zealand's Software Patent Ban Aims to Block Copyright Trolls

By a vote of 117 to 4, New Zealand passed legislation banning software patents. The bill's passage serves as a stark counterpoint to last week's GAO study, which laid out in detail that the majority of US patent lawsuits now occur in the software realm. Patent troll heads must be spinning with this news from down under.

The Patents Act of 2008 states specifically, "A computer program is not a patentable invention." New Zealand Commerce Minister Craig Foss believes this provision will foster more innovation and competition in software development.

“This Bill is marks a significant step towards driving innovation in New Zealand, it replaces sixty year-old legislation and introduces a patent system suited for the 21st century," Foss said in a press release. “By clarifying the definition of what can be patented, we are giving New Zealand businesses more flexibility to adapt and improve existing inventions, while continuing to protect genuine innovations,” Foss said.

As we've seen in the very public battles between tech giants like Apple and Samsung, it's nearly impossible to come out with a new software-based product without heading to court over patent infringement. While patents certainly protect research and development costs, software practices are so inextricably linked that forced payment for licensing or legal fees can effectively kill startups. True innovation can therefore be slowed in the process.

While the bill is worth reading in its entirety (it also deals with the patenting of human genes and microorganisms), here is the relevant excerpt from the software commentary section:

"We recommend amending clause 15 to include computer programs among inventions that may not be patented. We received many submissions concerning the patentability of computer programs. Under the Patents Act 1953 computer programs can be patented in New Zealand provided they produce a commercially useful effect. Open source, or free, software has grown in popularity since the 1980s. Protecting software by patenting is inconsistent with the open source model, and its proponents oppose it. A number of submitters argued that there is no “inventive step” in software development, as 'new' software invariably builds on existing software. They felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques. In general we accept this position.

While the bill would provide adequate incentives for innovation, however, we are aware of New Zealand companies who have invested in a significant number of software-related inventions, involving embedded software. We sought advice on the approach taken in other jurisdictions such as the United Kingdom and the United States, and whether legislation that would enable 'embedded software' to be patentable might be practicable. After careful consideration we concluded that developing a clear and definitive distinction between embedded and other types of software is not a simple matter; and that, for the sake of clarity, a simple approach would be best. We received advice that our recommendation to include computer programs among the inventions that may not be patented would be unlikely to prevent the granting of patents for inventions involving embedded software.

We recommend that the Intellectual Property Office of New Zealand develop guidelines for inventions containing embedded software."

Now, the question seems to be whether New Zealand's "embedded software" question will become a loophole opening the door for more patent trolling. At the very least, it will create uncertainty in software patent definitions. If the New Zealand Intellectual Property Office is left to draft guidelines, then that leaves them wide open to corporate and patent troll lobbying.

That New Zealand sought "advice" on embedded software patenting issues from the UK and, especially, the US is particularly troubling. As noted above, the US is ground zero for software patent litigation. And if any country knows how to create a legislative backdoor, it is the United States. This influence is reflected above in the language, which says "we concluded that developing a clear and definitive distinction between embedded and other types of software is not a simple matter." Right. Let the games begin.