New Zealand Allows Patents on "Embedded Software" but Fails to Provide a Definition

Back in April this year, the parilament of New Zealand voted for a major Patents Reform Bill that tightened the standards of patentability of software-implemented inventions, such that they would have been broadly eliminated in New Zealand. The bill was drafted by the Select Commerce Committee after consulting the country's (open source) software industry, represented by the Computer Society (NZCS) and the Open Source Society, which obviously convinced the lawmakers that patents are detrimental to open source software development. In this regard, the bill summarises that Protecting software by patenting is inconsistent with the open source model, and its proponents oppose it. [...] 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. Unsurprisingly, there were not only happy faces in New Zealand and some buisiness voices expressed their fear that the decision damages investments in New Zealand's software development industry, among which was the NZICT, which claims to represent "New Zealand's ICT industry" and, as such, also the local subsidiaries of a number of international patent holders (e.g. Microsoft, IBM, HP). Further, Chris Auld, director of New Zealand software developer Intergen, critisised that the Bill would “suck the lifeblood” out of the New Zealand software development industry and added that the justified criticism agains software patents should better have led to improvments of the quality of search and examination of software-related patent application by the NZ Intellectual Property Office (IPONZ). The Commerce Select Committee was especially critisised for particularly listening to the rather passionate open source lobby. In the end the bill suggested to explicitly exclude software from patentability: "We recommend amending clause 15 to include computer programs among inventions that may not be patented." When the Select Commerce Committee issued its report on the Patents Bill in early July 2010, it also mentioned the possibility of an exception for "embedded" software. i.e. software whose only purpose is to control a machine. During its consideration of the Bill, the Committee received submissions that inventions relating to "embedded" software as part of a machine should be able to obtain patent protection. But, since the Commitee found that too difficult to define, such a distinction was not put in the Bill, whereas the Committee added “that our recommendation [...] would be unlikely to prevent the granting of patents for inventions involving embedded software". Then reports occured that NZ Commerce Minister Simon Power publicly indicated that the government would support the computer program exclusion, but that the Ministry of Economic Development (MED) is backing away from the Commerce Committee’s recommendation and instead plans to redraft the …