The Open Source Society has accused the Government of "betrayal" after Commerce Minister Craig Foss announced a "minor amendment" to the Patents Bills, clarifying the status of computer software.

Foss said the effect of the change was that while computer programs would not be an invention for the purposes of the bill, patents could be granted for inventions that included computer programs.

A clause stipulating that "a computer program is not an invention for the purposes of this act" will be qualified by another that prevents anything from being an invention for the purposes of the act "only to the extent that a patent or an application relates to a computer program as such".

The New Zealand Open Source Society reacted angrily to the bill's new wording in a blog post. "With the removal of the explicit software patent exclusion, and the addition of two tiny words, 'as such', Foss has more or less thrown Kiwi software developers under a bus," it said.

The minister might believe he had struck a "clever compromise", but the clarification represented "a legal loophole the size of a bus", it said.

Matt Adams, a patent expert with law firm AJ Park, whose clients include Microsoft, said Foss had provided a "sanity check" on the original legislation.

Former Commerce Minister Simon Power delighted the open-source software movement and angered large corporates such as Microsoft in 2010 when he first agreed to include a clause in the bill, recommended by a select committee, stipulating that software was not a patentable invention.

However, the bill has been awaiting its second reading for more than two years and fears of a backtrack grew after the Office of the United States Trade Representative (USTR) took aim at the law change in its last annual report on "foreign trade barriers" in April. The USTR said the clause excluding software from patent-ability "departed from patent eligibility standards in other developed economies".

The Government is also understood to have been concerned by the possible impact of a blanket exclusion on businesses such as Fisher & Paykel Appliances many of whose innovations rely on embedded software loaded into microchips in its whiteware products.

The abolition of software patents has become something of a "cause celebre" for large tracks of the information technology industry because of concerns they have primarily been used by big businesses and "patent trolls" to claim ownership over obvious business processes and as a "nuisance factor" to stymie innovation. The Government's original stance had been seen as a significant development internationally.

Foss said the change would ensure inventions that made use of embedded computer programs would be patentable. "The bill will continue to protect genuine innovations and encourage Kiwi businesses to export and grow," he said.