The ruling party in New Zealand has decided to drop a controversial plan to expand patenting of software in the island nation. The move was hailed by IT professionals and open Internet advocates.

Earlier versions of the government's proposed overhaul to New Zealand's patent laws seemed to open the door to patents on software by only excluding patents that covered "a computer program as such." The opposition Labour Party warned that the words "as such" could be "fatal for Kiwi innovation," as it would be easy for companies to draft patents that effectively covered software inventions without claiming software "as such."

"It's not too late for Mr. Foss to change his mind and listen to our Kiwi software innovators," a Labour spokeswoman said earlier this year. "If not then his legacy will be one of massive failure for our local software industry."

This week, New Zealand Commerce Minister Craig Foss bowed to pressure from software patent opponents. The latest language states clearly that "a computer program is not an invention," and is not eligible for patent protection. The Labour Party called it "a humiliating back down."

The decision was hailed by InternetNZ, a non-profit organization that promotes an open Internet. "Patenting software would not only make the continued development of the Internet more difficult, it would reduce innovation and could well stymie interoperability of various software platforms," the group wrote on Thursday.

New Zealand's Institute of IT Professionals also praised the move. "If you look at the New Zealand market, you would be hard pressed to find many people that were thinking patents would be a good idea," the organization's chief executive Paul Matthews told the New Zealand Herald.

For decades, the United States has suffered from much ambiguity over the legal status of software patents. The Supreme Court has long held that mathematical algorithms cannot be patented, but lower courts' interpretation of the court's decisions has been rather muddled. Congress has never directly addressed whether software can be patented.