Curran Clare: Patents Bill — In CommitteeText is incorporated into the Bound VolumeCurran Clare: Patents Bill — In Committee[Sitting date: 27 August 2013. Volume:693;Page:12922. Text is incorporated into the Bound Volume.]CLARE CURRAN (Labour—Dunedin South): There is a real story to tell about this bill the Patents Bill. It is a story about patience and tenacity. The tenacity is particularly the tenacity of a growing economic force in New Zealand which I would like to call the vanguard of the new economy. This force is the software developers who could also be described as our new frontiers people the forgers and the creators of our new economy. It is a story of progressive law and we have actually got there. This might seem like an unusual thing for a member of the Labour Opposition to say but this is a progressive law. We have finally got there. It has taken 3½ years to get here but it does appear that we are here today discussing in the Committee stage the patents law and the revision of the Patents Act 1953.When the Commerce Committee reported back to the House on the Patents Bill on 30 March 2010 it was the product then of parliamentary work at its best—the repeal of an Act that was clearly out of date. That was the Patents Act 1953 which was modelled on a United Kingdom Act from 1949. It certainly did need revamping. It was very out of date. The revamped Act proposed a regime to align the criteria for granting a patent with international practice. It aimed to promote innovation and economic growth while also providing a balance between the interests of inventors and patent owners and also society as a whole.The new bill that was sent back to the House was a major accomplishment. It was seen as a major accomplishment then. At the heart of that bill and the changes to it was a commitment to provide a real incentive to help grow the New Zealand economy through its software industry and through its weightless economy. An awful lot of work went into that debate at the Commerce Committee and I do want to pay respect and tribute to the officials who did that work back at that time and also to the chair of the select committee at that time the Hon Lianne Dalziel who chaired a united committee that only a few of the original members are still on. But it was a united committee on this particular bill. That select committee did a very good job of working through all the issues and sending those issues back to the officials to go away and do more work.What that bill sought to address was that New Zealand’s existing patent law was too generous to the people seeking patents and that there were too many corporations getting monopoly rights and many of those corporations were multinationals that could get patent rights to inventions inside New Zealand that would not be protected overseas. That discouraged innovation and growth the committee felt which was the last thing that we wanted to do as a nation. In relation to software that meant having moresoftware companies being taken to court and tied up for years to stop those companies from inventing new software because of the threat of patent lawsuits.When that bill came back to the House in 2010 the Commerce Committee proposed something groundbreaking and innovative. The select committee proposed after hearing much evidence and discussing it in depth with officials to exclude software as being patentable. It was one of a number of exclusions that were proposed. Those exclusions included methods of medical treatment of humans human beings and biological processes for the generation of human beings plant varieties inventions whose commercial exploitation would be contrary to morality or public policy and computer programs. This was historic. This was the first time in the world—that we knew of—that a piece of law included such a proposal. It was seen as being groundbreaking.The reason for this was that the existing regime allowed patents for anything that met the relevant criteria whether or not they were implemented in software. When you think about it I suppose in 1953 this was not an issue so the bill simply was out of date. I think everybody acknowledged that. But when software applications first arose the Intellectual Property Office of New Zealand and the courts had no legislative guidance. Early applications were knocked back but were faced with no provision saying that they should not be granted. Software patents were generally available in New Zealand from the mid-1990s but they were starting to get to a point where they were exploding. There was a view put very strongly to that select committee that the trickle of software patents worldwide had turned into a flood and so it was decided that our patent law would come into the 21st century and that software patents would be on the agenda.I do want to take you through the history of this and if it takes a little while then so be it because it is such an important new groundbreaking piece of law. There were four options that New Zealand could have chosen from when we were considering this. The first was to allow patents on anything under the sun which really was to use a description of the US regime and allow software patents without any particular restrictions—in other words the status quo. This option was rejected. It was ruled out by the Commerce Committee because we accepted that software patents were becoming increasingly problematic. That view has been borne out in the United States in recent years with software patents coming under fierce criticism. I spent a month in the US last year. This issue is being hotly debated in the US right now even though the regime does still favour software patents. It has even been acknowledged by President Obama and in studies highlighting the economic and innovative harm that software patents are causing.The second option was to implement a partial or a weak exclusion of software patents as the European Union has done. It has been contended that it is unlikely that this is what the European Union actually intended but this is what it has ended up with as a result of the now infamous “as such” provision which has received a lot of coverage in New Zealand. It is one little phrase that has received a lot of debate as to what it actually means. It is a term that is vague and has effectively negated the software patent exclusion in the European Union and led to much confusion and criticism.The third option was to implement a broad strong exclusion of software patents such as in the UK. The UK also uses the “as such” language but judges have taken a much more robust approach than their counterparts in the European Union and in 2006 they developed a legal test that specifically evaluated patents involving software. That was known as theAerotel test. The result of that was that the UK now has tougher criteria for software patents rather than the European Union countries.The fourth option which was what the Commerce Committee actually decided back in 2010 was to chart our own course take a new way forward and clearly excludesoftware patents. This was the preferred option of many of the submitters who appeared before the select committee particularly New Zealand’s Kiwi innovators. But there was a lot of concern around whether this would give rise to international trade obligations and also about whether there should be a definition in the bill around what embedded software is—for example where you have an invention such as a Fisher and Paykel washing machine and within that you have a piece of software where does the beginning and the end of the software happen?But it was considered by the select committee that it was simpler to exclude software from being patentable altogether and we asked that the Intellectual Property Office of New Zealand would be writing the guidelines as to the embedded software. This came back to the House. The Minister at the time—