Patents Bill Passes Second Reading in Parliament

Friday 14th September 2012

The Patents Bill had its second reading in Parliament on 12 September 2012, over four years after being first introduced to replace New Zealand’s dated Patents Act 1953.

The second reading gave Members of Parliament their first opportunity to debate changes to the Patents Bill proposed by the Commerce Select Committee in March 2010 and by the Government in a Supplementary Order Paper dated 28 August 2012.

Unsurprisingly, there was near-universal support in Parliament for progressing the Patents Bill to modernise New   Zealand’s patent law, with the Bill comfortably passing its second reading.  However, a number of MPs made it clear that their continuing support for the Bill was contingent upon the rejection of a proposed amendment to the exception from patentability for computer programs.

Patentability of Computer Programs

The second reading was dominated by debate focussed on the Minister of Commerce Craig Foss’s controversial Supplementary Order Paper proposing an amendment to the broad exclusion of computer programs from patentability.  As outlined in a previous article, deficiencies in the exclusion led to the introduction of the Supplementary Order Paper which proposed amending the wording of the Bill to correspond with similar exclusions in the United Kingdom and Europe.

Opponents of the Government’s proposed amendment argued that the amended wording would in fact allow patents for a wide variety of computer programs, asserting that this would favour only large foreign companies at the expense of innovation in New Zealand’s software industry.

Instead, the opposition supported adoption of an alternative amendment proposed in a subsequent Supplementary Order Paper submitted by Labour party communications & IT spokesperson, Clare Curran (as outlined in an earlier article).  That amendment specifies that the broad computer program exclusion proposed by the Commerce Committee “does not prevent an invention that makes use of an embedded computer program from being patentable.” 

However, it is highly debateable whether this alternative amendment is any clearer or complies with New Zealand’s obligations under the TRIPS agreement, which requires that patents be available for inventions in all fields of technology provided that they are new, inventive, and industrially applicable.  The Government’s amended exclusion, on the other hand, represents a significant limitation to patentability compared with the existing Patents Act 1953 (which places no limitation whatsoever on the patentability of computer programs) while addressing concerns regarding TRIPS compliance and the lack of legal precedents for assisting in interpreting and applying the exclusion.

Next Steps for the Patents Bill

Having passed the second reading, the Patents Bill will in due course proceed to the committee of the whole House, giving Members of Parliament the opportunity to debate in detail the provisions of the Bill and amendments proposed in the Supplementary Order Papers, and to propose any final changes.  

It is not yet clear whether the Government will have the numbers required to adopt its proposed amendment to the computer program exclusion or, alternatively, whether the opposition will prevail with their alternative limitation.

Once the House agrees to the final form of the Patents Bill, it will proceed to a third reading and a vote by Parliament on whether the bill will be passed.  It is rare for a Bill to be rejected at such a late stage.  If passed, the Bill will become law upon receiving the Royal assent, although transitionary provisions mean that the existing Patents Act 1953 will continue to have effect for existing applications.

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