New Zealand hits ‘Go’ on new Patent law

In late August 2013 the New Zealand Patents Bill passed its final reading in Parliament. When it comes into effect, anticipated to be around a year away, it will make sweeping changes to New Zealand patent law across the board. In our article of last week, we introduced the new Act and some of the changes in it. This article takes a deeper look at the content of the new Act and its implications.

The Patents Act 2013 will replace the current legislation dating back to 1953 and will bring New Zealand patent law up to date in many respects. The Act also aims to streamline processes for granting, and challenging, a patent by way of a number of procedural changes encompassed in the Act.

All of this is good news for the New Zealand patent system and the quality of New Zealand patents in general, however most patent applicants can expect more stringent requirements to obtain a patent. That said, these requirements are likely to be similar to those encountered in other countries already. For New Zealand patent applicants, the more stringent application process here should stand them in good stead when taking their application elsewhere.

Nevertheless it seems likely that we will see an uptake in patent applications prior to commencement of the new provisions, to take advantage of the more relaxed, current requirements. Key changes in the Patents Act 2013:

Software patents

Probably the most contentious aspect of the Patents Bill has been the approach to patents for inventions incorporating software. We have covered this topic over the years – see here, here and here. Although the final position has been hailed as a victory by those in the software industry campaigning for restriction of patents in this area, the reality is somewhat more nuanced.

No doubt it will be more difficult to obtain software related patents in the future than it is now. Currently New Zealand follows the relatively liberal Australian approach. However under the new Act, software “as such” will not be patentable. In reality many inventions incorporate both software and other inventive elements. If the actual contribution which the invention makes to the existing art is judged to arise from an aspect of the invention other software, it will be patentable.

The software provision of the new Act has been derived from the Aerotel test developed by the English Courts, and therefore will allow the Intellectual Property Office of New Zealand (IPONZ) and the New Zealand courts to draw on the existing case law there on the topic. However the difficulty in reaching any hard and fast rule on the eligibility of software for patent protection is well illustrated by a recent case in which the English Court of Appeal considered an invention relating to the organisation and operation of touch screen devices, and upheld its patentability.

It seems likely that there will be a considerable ‘bedding in’ period as the as the new provisions are applied in practice, particularly until a case reaches the High Court, allowing for some judicial guidance.

Raising of patentability standards

The threshold for obtaining a patent will be raised in a number of ways, coupled with significant tightening of examination procedures:

  • Examination and opposition standards: Examination will now be conducted on the basis of a ‘balance of probabilities’ test as to patentability, rather than giving the applicant the benefit of the doubt as is currently the case. This test will also apply in opposition proceedings, replacing the current standard under which the application must be shown to be clearly not entitled to grant. Given that the threshold in opposition proceedings is currently so high, few oppositions are successful. The number of successful oppositions can be expected to rise, which may in turn, encourage would-be opponents to bring such proceedings.
  • Absolute novelty: Currently a ‘local’ novelty standard applies in New Zealand. That is, novelty is considered in light of material published or used in New Zealand. New Zealand law is out of step in this regard with most other countries which have adopted an ‘absolute’ novelty requirement – prior art anywhere in the world can be taken into account in assessing the validity of a patent. Given information flow over the Internet, the rationale for absolute novelty is clear, and in practice the wide availability of information from around the world in New Zealand has meant that the local novelty test has had diminishing relevance. Under the new Act, New Zealand will adopt absolute novelty.
  • Obviousness: IPONZ will now examine patent applications for obviousness. Previously, although obviousness was a ground for opposition or invalidity, patent applications were not examined in this respect. The quality of granted patents should therefore increase in light of this change. Patent applicants should bear this in mind when preparing a patent specification and consider potential obviousness issues from the outset.
  • Whole of contents objections: Currently prior unpublished patents will only be relevant as prior art if they claim the invention as claimed in a later patent application. Under the new Act, a ‘whole of contents’ approach will apply. Any information contained in a patent specification with an earlier priority date can anticipate a patent application, even if the earlier patent specification has not been published.

Contentious proceedings

Pre-grant opposition remains as an option to challenge a patent application, but re-examination is also introduced as an alternative, either before or after grant. Under re-examination, any person can request that a patent be re-examined by IPONZ, but that person has no further right to participate in the proceeding or be heard. The party requesting the re-examination also has no right of appeal against the outcome.

Re-examination is therefore perhaps less satisfactory than an opposition or revocation action, but in cases where the issue is not so significant as to warrant the costs of those procedures, re-examination will provide a useful alternative.

A further change in relation to contentious proceedings is that revocation proceedings in IPONZ (rather than the High Court) will be available at any time, not just in the first year after grant as currently. This provides a further more cost-effective way for interested parties to challenge the validity of a patent.

No pharmaceutical patent term extensions

Many other countries in world provide some form of term extension for patents in the pharmaceutical space, given often long time period it takes to get a product to market, often meaning that much of the patent term is gone before the relevant product is launched. Despite much discussion around this issue, the new Act does not introduce any form of patent term extension. It remains to be seen whether the ongoing Trans-Pacific Partnership talks have any impact in this regard.

Other notable changes

  • Publication of patent specifications: Patent specifications will now be automatically published 18 months after the earliest priority date.
  • Maori advisory committee: A Māori advisory committee will be established to advise the Commissioner on whether an invention is derived from Māori traditional knowledge or indigenous plants or animals, and if so, whether commercial exploitation of the invention is likely to be contrary to Māori values. This process mirrors the procedures provided for under the Trade Marks Act 2002.

Commencement and transitional provisions

The commencement date of the Act is yet to be confirmed, however the Bill is expected to receive Royal assent shortly, with the commencement date being reported as likely to be one year from the date of such assent.

The transitional provisions of the 2013 Act provide that the current 1953 Act provisions will apply:

  • where a complete specification has been filed before the commencement date
  • to divisional applications, even if filed after commencement, where the parent is governed by the current Act and the divisional application is antedated to a date before commencement
  • to PCT applications if a request to enter New Zealand national phase is made before commencement.

Given the higher threshold for patentability in various respects under the 2013 Act, and the more stringent examination procedures, anyone contemplating making a New Zealand patent application would be well advised to do so before commencement of the 2013 Act. This will particularly be the case for would-be software patent applicants.

Additionally, applicants with a current provisional application, or a PCT application not yet in New Zealand national phase, may particularly benefit from early progression of their application, to ensure it is dealt with under the current provisions.