Another reason to file early in New Zealand – the time-restricted, self-colliding, poisonous divisional
Published on 28 Aug, 2014
New Zealand’s new Patents Act 2013 takes effect from 13 September 2014. There are compelling reasons to file prior to this date to take advantage of the existing laws, and these reasons have been outlined here. Even so, it is worth making further mention of the New Zealand legislature’s efforts to modify the provisions for divisional applications and how these efforts provide further impetus for bringing forward the filing of your proposed New Zealand patent applications.
Any complete patent application filed prior to 13 September 2014 will progress under the present law and for the purposes of this article are referred to as “old Act” applications. For patent applications filed after this date the new law will apply, and these applications will be referred to as “new Act” applications.
An old Act application can be a parent to any number of divisional patent applications and those divisional applications will also proceed under the old Act, irrespective of whether they are filed before, on or after 13 September 2014. While that is reason enough in itself to bring forward the filing of a new patent application in New Zealand, it becomes even more compelling in combination with many old Act patentability criteria being less stringent than those prescribed under the corresponding provisions of the new Act.
The desirability of having a divisional application proceed as an “old Act” case
Under current New Zealand practice, a divisional application can be filed at any time during the pendency of the patent application that is to define its “parent”. However, unlike Australia, a New Zealand divisional application cannot be filed after its parent application has been accepted. This restriction applies, or will apply, to both old Act and new Act applications, respectively.
Typical reasons for filing a divisional application in New Zealand include:
- The imminent expiry of the statutory deadline within which to place the patent application in order for acceptance. In New Zealand, this deadline is currently 18 months after the issuance of the first examination report, although this will be reduced to 12 months for applications proceeding under the new Act.
- Unity of invention considerations.
- To reserve for a longer period the ability to seek additional protection, or protection of a different scope. For instance, to provide more time to gather market intelligence about a potential infringer before crystallising the scope of the claims. Alternatively, to gain more time to ascertain the outcome of prosecution of corresponding applications in other jurisdictions before deciding upon the scope of protection to pursue in New Zealand.
In short, filing a divisional application can be a matter of necessity, a matter of strategy, or a combination of the two.
An end to “daisy-chaining” divisionals
Under the old Act, there is, theoretically, no reason why an applicant cannot file divisional-upon-divisional-upon-divisional – and in so doing, keep their subject matter fluid for the entire 20-year lifecycle of the patent (however, it should be noted that the Commissioner of Patents has ultimate discretion as to the extent to which such a tactic is allowable). Rightly or wrongly, there seems to have been a perception that this tactic was rife – and was an abuse of the system.
Under the new Act, a new 5-year time limit is set to be introduced during which an applicant must have filed any desired divisional application/s and requested examination of those one or more applications. It will be appreciated that the latter is also a fee-bearing step under the new Act.
The 5-year period commences at the antedated filing date of the divisional application. This is taken to be the filing date of the eldest family member in the sequence of parent/divisional applications. For such a sequence originally based upon a national phase application in New Zealand, the antedated filing date of any divisional application is the international filing date of its eldest parent application.
This new practice has parallels with the recently-repealed practice of the European Patent Office (EPO). As readers will appreciate, this former EPO practice was largely unpopular with applicants and attorneys, alike, and it is anticipated that the incoming New Zealand provisions will enjoy the same popular appeal.
We view this new practice as being unjustifiably restrictive upon New Zealand patent applicants and patentees. In essence, it requires the seeker of the patent rights to have categorically “planted their flag” within five years of the filing date. It necessarily ignores a patentee’s legitimate standpoint whereby they may have just cause (or even need) to keep some subject matter pending beyond the new 5-year time limit. In global terms, five years is an unfeasibly short period when attempting to commercialise technology. It should also be understood that the corresponding patent applications filed in other jurisdictions – such as Europe, Japan, the United States and even Australia – may not have even commenced examination by the time limit set for filing (and requesting examination of) divisional applications in New Zealand. Furthermore, as the prior art revealed by searches undertaken at these better-resourced Offices is often relevant, imposing the 5-year time limit for filing and requesting examination of a New Zealand divisional application is somewhat counterintuitive.
By way of distinction, any New Zealand divisional application that has a parent that is an old Act application will also be subject to the provisions of the 1953 legislation. That is, the 5-year time limit will not apply to such divisional applications – nor will the generally higher patentability standards imposed by the new Act.
Given the above, the advantages of the additional flexibility offered under the old Act for divisional applications are plain. These advantages are heightened for those patent applications where it is anticipated that a unity of invention issue may arise. For example, if during the international phase the ISA or the IPEA has indicated that more than one invention was defined by the claims, this is a clear trigger to entering the New Zealand national phase early, to best accommodate the later filing of any required divisional patent application.
The self-colliding, poisonous divisional
A second compelling reason why a New Zealand patentee is well advised to ensure that any divisionals they may wish to file are subject to the old Act criteria comes by way of what is known as the “self-colliding” or “poisonous” divisional. This concept has gained a fair amount of notoriety recently by way of the UK Patents Court decision in Nestec S.A. & Ors v Dualit Ltd & Ors  EWHC 923 (Pat) (22 April 2013). The general concept at play is that where a claim in a divisional application is not entitled to the earliest priority date of its parent, it can then be anticipated by its parent because of the way in which the prior art base is defined under the new Act. The reverse situation is also true – a divisional application can anticipate its parent in cases where claims of a relatively broad parent application are not entitled the earliest priority date, but the relatively narrow claims of a later-filed divisional are. It should be appreciated that the New Zealand situation will not directly mirror that of Europe because, under New Zealand law, provisional patent applications are not taken to form part of the prior art base. Conceptually, however, the notion of self-collision based upon the recent UK case law appears alive and well under the provisions of New Zealand’s new Act.
Under the old Act, members of the same patent family (e.g., a parent application and one or more divisional applications) need only comply with the “prior claiming” provision and, in particular, section 14 of the old Act. This provision is extremely narrow and intended primarily to prevent double patenting. By comparison, under the new Act, there has been adopted a “whole of contents” test for novelty. The documents that are available to be used when applying this test are enunciated by the definition contained within the new Act for the term “prior art base”. It is this definition that enables the threat of self-collision between a divisional application and its parent, and vice versa.
The potential for self-collision is heightened by the new Act requiring that the description within the patent specification adequately “supports” the claims. This is a higher standard than the “fair basis” requirement specified under the old Act. As such, it is anticipated that the claims in divisional applications proceeding under the new Act will be more susceptible to forfeiting one or more of their priority claims, which in turn, opens to door to the threat of a self colliding, poisonous relationship with its parent application.
Legislative intent or legislative accident?
It can be argued that the potential for self-collision is not simply an artefact of the way the new Act is drafted and that it is actually consistent with the intent of the new legislation. The draft legislation, dating back to late 2004, previously contained an “anti self-collision” clause attached to the definition of the prior art base, in order to prevent a divisional application anticipating its parent, or vice versa. However, this clause was deliberately removed by the New Zealand Government during the final stages in the passage of the new Act.
On the one hand, the removal of the anti self-collision provision from the draft legislation seems consistent with the overall tenet of the new Act. For example, throughout the new Act, the onus is increasingly being placed upon a patent applicant or patentee to “plant their flag” as quickly and definitively as possible. This onus should provide, relative to old Act applications, an increased degree of certainty to third parties from a very early stage in the patent process. As such, one could speculate that it was the intention of the legislature to provide a re-balance between the interests of patentees and third party interests.
On the other hand, the anti self-collision clause may have been removed to gain greater conformity with international norms. For instance, the corresponding clause had not been well received during negotiations toward the WIPO draft Substantive Patent Law Treaty (SPTL), which ran concurrently with the early stages of patent law reform in New Zealand. Indeed, Australia – New Zealand’s closest trading partner, lacks any such provision in its Patents Act 1990. As such, whilst its removal from the new Act may have been intentional, the potential consequences of such removal may not have been. To this end, we note the recent publicly-accessible dialogue between the New Zealand Law Society and the Ministry of Business, Innovation, and Employment (the Government Department responsible for administering the new Act) toward a possible amendment to the new Act to clarify the situation. However, this is not likely to result in any immediate progress given the full legislative agenda at present. This agenda includes the Trans-Tasman “Single Economic Market” harmonisation reforms – a complex-enough matter in its own right. Moreover, when considered against the fact that there is a New Zealand General Election taking place next month, the chances of any short-term breakthrough are somewhat low. In our previous article, we alluded to a raft of amendments to the new Act that may become necessary depending upon the outcome of the Trans-Pacific Partnership (TPP) negotiations. If, or when, this occurs, that should present the Government with a perfect vehicle to correct the self-collision issue, should it wish to do so.
All the more reason to file “early”
Irrespective of whether it was intended or not, the potential for self-colliding divisional applications is a feature of the new Act – at least for now. The simplest way to avoid this complication is, as we have recommended previously, to file “early” in New Zealand. This will ensure that an entire patent family is subject to the old Act criteria.
In the lead up to the commencement of the new Act on 13 September 2014, Shelston IP has encouraged all clients to file early in New Zealand, so as to ensure that any such application (and by corollary, any subsequent divisional/s) is governed by the old Act. Aside from the specific limitations imposed upon divisional applications under the new Act, the patentability criteria specified under the old Act can be considered perceptibly softer – which can, in turn, lead to broader (valid) claims than may be achievable under the new Act criteria. Moreover, the old Act provides means for a patentee to establish their patent position in New Zealand without rushing unduly – and without exposing themselves, be it by accident or design, to the threat of self-collision. As such, the advantages in bringing forward a filing so as to avail of the old Act criteria far outweigh any perceived inconvenience in doing so.
In conclusion, New Zealand’s new patent legislation can be viewed as something of a double-edged sword. On the one hand, the new Act represents an opportunity both to patentees, who can easily avail of the old Act patentability criteria should they wish and to New Zealand at large, as modernised patent laws have been shown to encourage foreign investment. On the other hand, the new Act can also be viewed as somewhat of a threat as patent applicants will be required to very quickly establish and assert their patent position; there is a comparative lack of flexibility here which could be considered unduly restrictive.
As with any changes of this nature there will undoubtedly be winners and losers. As such, prospective New Zealand patentees have been strongly encouraged to review their portfolios to ascertain which pending or proposed applications should be filed in New Zealand before 13 September 2014. In particular, any application for which one or more divisionals is likely (either by way of necessity or strategy) is strongly recommended to be pursued as early-filed old Act application.
Shelston IP’s patent attorneys are registered to practise in both Australia and New Zealand and are well versed in the laws and practices in both jurisdictions. Any reader having a New Zealand patent application in prospect, who requires specific advice to supplement the general commentary provided above, should contact their Shelston IP patent attorney, or either of the co-authors of this article.