Patents have clearly been brought to the limelight by the year-long (and still ongoing) patent infringement cases being fought by and between Apple and Samsung, as well as other device manufacturers, around the world. While Apple’s main contention in its U.S. lawsuit against Samsung is design and trade dress, software also plays a big part in patents and innovation.

Whether or not the patent system is actually helpful in its current form, we leave to the legal and technical experts. But here’s a jurisdiction that has taken quite a radical approach: New Zealand. ZDNet reports that the New Zealand government is moving ahead with plans to ban software patents.

Ideally, this would be a good move, especially for developers interested in building on existing software and apps, which is the goal of the open source movement. However, developers are crying foul over a provision that software embedded in other inventions or devices can still be patented.

The memoradum that explains the Patents Bill amendment states the following:

Rather than excluding a computer program from being a patentable invention, new clause 10A clarifies that a computer program is not an invention for the purposes of the Bill (and that this prevents anything from being an invention, only to the extent that a patent or an application relates to a computer program as such).

According to the New Zealand Open Source Society, the use of the phrase “as such” at the end of the memorandum has opened a loophole that can be easily exploited. While government’s aim is to “protect genuine innovations and encourage Kiwi businesses to export and grow,” the developer group thinks that the provision allowing software to be patented when attached to an invention might easily be used by big U.S. software corporations that have lobbied for the law to be revised.

In the light of the recent discussions and court resolution of patent-related claims to the tune of $1 billion, it seems a big deal in the mobile industry. But what about software? Does the patent system play a big part in the software business? And are software patents essentially bad for independent developers?