New Zealand's parliament is preparing to vote on a major patent reform bill that will tighten the country's standards of patentability. One of the most significant changes in the proposed bill is a specific patentability exclusion for software. If the bill receives parliamentary approval in its current form, it will broadly eliminate conventional software patents in New Zealand.

The bill was drafted by the Select Commerce Committee, which decided to include the exclusion after reviewing feedback from the software industry. The bill's official summary acknowledges that software patents are detrimental to the open source software development model and have the potential to seriously stifle innovation.

"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," the bill summary says. "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."

The Commerce Committee says that the ban on software patents will not block companies from patenting hardware inventions that encompass embedded software. It will be up to the Intellectual Property Office of New Zealand to craft the specific rules for determining what kind of embedded software is patentable.