Foss Craig: Patents Bill — In Committee Third ReadingText is incorporated into the Bound VolumeFoss Craig: Patents Bill — In Committee Third Reading[Sitting date: 27 August 2013. Volume:693;Page:12976. Text is incorporated into the Bound Volume.]Hon CRAIG FOSS (Minister of Commerce): I moveThat the Patents Bill be now read a third time. The bill will repeal and replace the Patents Act 1953 other than the provisions relating to patent attorneys. The passage of this bill marks the conclusion of a lengthy process to reform and update New Zealand’s patent legislation. I would like to take this opportunity to highlight key features of the bill that will contribute to ensuring that New Zealand’s patent legislation supports innovation while ensuring an appropriate balance between the interests of patent owners and society as a whole.The Patents Act 1953 does not achieve this objective. Its criteria for the grant of a patent are relatively weak compared with the criteria applied in most other countries. It is possible for patents to be granted for inventions that are not new or that are merely obvious variations of what is already known. The grant of such overly broad patents can impose unnecessary costs on consumers and businesses by restricting access to products and services that should be free for all to use. Such patents can actually inhibit rather than encourage innovation. Most innovations build on what already exists. If existing innovations are too heavily protected by patents it can be difficult for subsequent innovators to build on them. This bill tightens up the criteria for grants in order to as far as possible ensure that patents are granted only for inventions that are genuine innovations—that is innovations that are new that are not obvious and that have identified real-world use.The Commerce Committee in its report to the House on the bill recommended the inclusion of a provision that computer programs should not be patentable inventions. Supplementary Order Paper 237 introduced a number of amendments in the form of a new clause 10A of the Patents Bill which deals with the patentability of computerprograms. The amendments were designed to provide additional guidance on the proper interpretation of new clause 10A in a manner that is consistent with New Zealand’s international obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights. The amendments also provided an appropriate balance between the interests of inventors and the interests of society as a whole which is one of the key purposes of the Patents Bill and was already provided for in clause 3 of the bill.The Supplementary Order Paper amended the Patents Bill to provide additional clarity as to the meaning of the phrase “computer program as such” in new clause 10A. The “as such” wording was taken from the European Patent Convention and the United Kingdom Patents Act. In the United Kingdom the “as such” wording has been interpreted to mean that patent applications that involve or make use of a computer program are ineligible for patent protection if the alleged inventive feature lies solely in it being a computer program. Supplementary Order Paper 237 introduced two new subclauses to the bill subclauses 10A(3) and 10A(4). The effect of these two additional subclauses is to codify in legislation the first three steps of a test set out in an English Court of Appeal decision known as theAerotel test. The amendments provide a clarification about how clause 10A should be interpreted. The Commissioner of Patents and the New Zealand courts should apply theAerotel test and subsequent English jurisprudence that applies the test when considering patent applications involving computer programs.Given the lack of New Zealand cases in this field of patent law the ability to refer to UK case law will assist New Zealand practitioners when providing guidance to their clients. The effect of the test set out in new clause 10A is that it will not be possible to obtain a patent for an invention that involves or makes use of a computer program if the alleged inventive feature lies solely in it being a computer program. However a patent may still be granted for an invention that makes use of or involves a computer program if the actual contribution made by the invention first lies outside of the computer or second affects the computer itself but is not dependent on the type of data being processed or the particular application being used. The amendments in clause 10A as embodied in Supplementary Order Paper 237 provide improved assurances as to the intention behind clause 10A and thus enable the passage of this important piece of legislation.Also included in the bill are measures to take account of concerns expressed byMāori and others regarding the granting of patents over plants and animals. This includes the establishment of aMāori advisory committee to advise the Commissioner of Patents where patent applications involve the use of traditional knowledge or indigenous plants and animals and providing for patents to be refused where commercial exploitation of an invention will be contrary to morality or public policy. I am aware that the Waitangi Tribunal made a number of recommendations for changes to New Zealand’s patents legislation. Some such as the establishment of aMāori advisory committee were already included in the bill. The Government is in the process of considering the other recommendations but no final decisions have been made. The passage of this bill will not prevent any subsequent amendments if the Government decides to accept any of the other recommendations.These features together with the other changes introduced in the bill will provide a simpler and more open environment for innovation to take place in New Zealand. Although patents will be more difficult to obtain patent owners will have greater certainty that their patents will be valid and enforceable. Those undertaking research and development can be confident that their efforts will not be unfairly restricted by overly broad patents. The Patents Act 1953 also contains provisions regulating the patent attorney profession. These provisions will remain in force for the time beingwhile a single regulatory regime for New Zealand and Australia patent attorneys is developed. I intend to introduce legislation implementing such a regime once it has been developed.I would like to thank everyone who has contributed to the bill and the policy process that led to it including the members of the Commerce Committee the Parliamentary Counsel Office officials and members of the public and industry representatives who participated in the various submissions and policy processes. I want to particularly thank one of my intellectual property officials WarrenHassett who has been working on this bill for over 10 years. I am very pleased to commend this bill to the House.