New Zealand’s “drop-dead” divisional deadline… drops dead

New Zealand patent practice has long operated on a “drop-dead” deadline for the filing of a divisional application – once the would-be “parent” case is accepted, the facility to file a divisional application expires, irrespective of the circumstances.  Many have sought an extension/correction on some entirely reasonable grounds – clerical errors, communication problems, time-zone issues, computer failures, you-name-it (all reasons that tend to be looked upon favourably when it comes to Australian practice) – and all have failed.  Along with death and taxes, IPONZ’ drop-dead divisional deadline was one of life’s absolute certainties.

 

Fast forward to 2019 – and two decisions issued in quick succession from IPONZ that provide some hope for attorneys and applicants alike.  Given the frequency with which NZ’s divisional filing deadline seems to cause issues, readers should expect these two cases to be cited somewhat frequently in future restorative actions.

What’s in a name?

It seems strangely appropriate that a decision entitled “Magic Leap” (Magic Leap, Inc. [2019] NZIPOPAT 8 (30 April 2019)) is one of two discussed in this article.  The other is Primapak LLC [2019] NZIPOPAT 1 (7 January 2019).  The fact situations in Primapak and Magic Leap are fairly similar – with the claims in condition for allowance, an administrative staff member withdrew the postponement of acceptance, thereby allowing both cases to proceed to acceptance.  In both instances, no divisional was filed beforehand.  In both cases, the attorney had received instructions to file a divisional.  This reads squarely on an “error or omission” of the type generally correctable in Australia, but not so in New Zealand.

New Zealand’s “drop-dead” divisional deadline

IPONZ has been historically brutal when it comes to assessing late-filed divisionals.  We’re not talking “the dog ate my homework” here – we’re talking genuine and verifiable fact situations that perhaps ought to evoke some flexibility.  However, conscious of NZ’s status as a net importer of IP, the decision always fell in favour of third-party certainty: the applicant had its chance and failed to take it – and third parties were therefore entitled to act upon it.

For this reason, attorneys practising in New Zealand have been quite legitimately “spooked” by IPONZ’ divisional filing deadline.  Few things invite a sleepless night like timely instructions unable to be acted upon due to an error at the attorney’s end (genuine or otherwise).

But wait – there’s more.  The drop-dead divisional deadline was squarely in the Government’s consciousness during the recent transition from the Patents Act 1953 to the Patents Act 2013.  Significantly, the relevant provision did not change – NZ divisional practice was the way it was because that’s precisely how the Government wanted it.  Or so it seemed…

In both Primapak and Magic Leap, the respective applicants sought leave under subsection 202(1) of the 2013 Act to correct clerical errors, allowing the sought divisional applications to be filed validly.

The decisions are more interesting than the facts

These are very much cases where the findings and their implications are far more interesting than the decisions themselves.  Subsection 202(1) of the Patents Act 2013 provides that the Commissioner may correct an error.  There was no precedent case law on ss.202(1) and as such, ss.88(3) of the Patents Act 1953 was relied upon in the applicants’ submissions; this affords the Commissioner a broad discretion.

Subsection 88(3), however, seemed as problematic as it did helpful to the applicants’ position.  A notice of acceptance did not fall within the specified categories of correctable documents, which of course juxtaposes nicely with the broad discretion afforded to the Commissioner.  Indeed, high-profile failures in Fisher & Paykel Limited [1995] NZIPOPAT 6, Baxter Healthcare SA [2011] NZIPOPAT 2 and American Aerogel Corporation [2011] NZIPOPAT 3 had effectively rendered ss.88(3) somewhat toothless for the purposes of correcting genuine administrative errors.

What was needed, therefore, was a softening of the hard-line stance previously adopted by IPONZ.  Perhaps unexpectedly, IPONZ came to the party.

An action that was taken… is untaken

The Assistant Commissioner found in Primapak—and it was followed by the Delegate in Magic Leap—that despite withdrawal of the postponement of acceptance being a deliberate action taken on behalf of the responsible attorneys, it nonetheless amounted to the required “error” insofar as the client’s express instructions to file a divisional application were not able to be carried out.  Presumably this reasoning could be applied to a broader category of “errors” beyond merely withdrawing the postponement of acceptance via the IPONZ website. Regulation 52(2) of the Patents Regulations 2014, which requires that a request for antedating a divisional be filed at the same time as the divisional itself, was waived in both instances under Reg.149; the IPONZ website physically prohibited this regulation being complied with at the time the respective divisionals were filed.  This seems entirely reasonable under the circumstances and represents a further softening of IPONZ’ stance in relation to the correction of errors.

Finally, the net effect of both decisions was that the act of erroneously withdrawing the postponement of acceptance was taken never to have been performed.  As such, both “parent” cases were not formally accepted until the postponement expired 12 months after issuance of the first examination report.  By corollary, both divisionals were taken to have been filed during the pendency of their respective parent and were therefore now taken to have been filed validly.

What it all means

In combination, Primapak and Magic Leap provide a safety net that had previously been missing from NZ patent practice.  The divisional deadline isn’t the wholly inflexible invitation to mess up that it may have appeared previously – rather, depending upon the fact situation, and provided that such circumstances are verifiable seemingly to the nth-degree, it may (emphasis on “may”) be possible to late-file a divisional application.

Old Act, new Act and ongoing law reform

The drop-dead divisional filing deadline applies to both 1953 and 2013 Act cases alike.  However, as readers will know, the 2013 Act imposes an additional landmine by way of the 5-year absolute bar on requesting examination.  In combination, these two factors make NZ divisional practice something of a dark art.

New Zealand divisional practice is currently under Government review and, along with many other features of NZ IP law, may rear its head later this year in the long-awaited IP Omnibus Bill.  However, that is not to suggest that this particular aspect of the legislation is slated to change – we’ll just have to wait and see.

The big picture

Trans-Tasman patent attorneys have largely welcomed these decisions.  On the one hand, Australian practice is somewhat accommodating when it comes to correcting genuine errors – and it always appeared somewhat incongruous that the other jurisdiction we service, New Zealand, had assumed a position diametrically opposite.  In terms of our ability to sell the package deal—the “mini-Europe”—any degree of consistency is to be encouraged.

Quite where this leaves those who have tried and failed in the past is uncertain.