New Zealand’s new Patents Act: The waiting game continues

Progress toward New Zealand’s new Patents Act is a somewhat subjective term. Indeed, the new Act has been gestating since late 2004, and has survived changes in content, a change in Government, and several changes in its estimated date of commencement.

The Patents Bill 2008 is presently scheduled for its second Parliamentary Reading, following which the Minister of Commerce has stated that he expects the Bill in its present form to be passed into law. Moreover, the quoted date of commencement of the new Act is 31 December 2012, which suggests that this second Reading should happen fairly soon.

Unfortunately, in reality, things aren’t quite so straightforward. The Patents Bill has now fallen to #40 on the Parliamentary Agenda. In our estimation, the chances of it being aired this year are rather slim. To this end, there are several issues standing in the way of this second Reading that New Zealand – and New Zealanders in general would consider of far greater importance. When considered against the backdrop of the Christchurch earthquake, the Pike River mine collapse, the Rugby World Cup and the General Election scheduled for 26 November 2011, one begins to get a feel for our scepticism.

Most changes proposed in the Bill reflect public opinion and global standards – and appear to have been embraced, whereas others have clearly been more controversial. As summarised below, the Bill is essentially a hybrid of the current Australian and United Kingdom legislation. The Bill is essentially as per its initial (December 2004) exposure draft, with the significant addition of a statutory Experimental Use Exception to patent infringement (this had been the subject of a separate government review, but given the interim period, now appears to have been consumed within the broader reforms) – and the recently-proposed exclusion of patents for computer software.

A brief synopsis of some of the salient features of the Bill reads:

  1. Replacement of the current local novelty standard with absolute novelty.
  2. Examination will be extended to now include an evaluation of inventive step.
  3. “Whole of contents” objections based unpublished applications having an earlier priority date may be made in respect of both novelty and (unlike Australia) inventive step.
  4. A claimed invention must be a “manner of manufacture”, within the meaning of s6 of the Statute of Monopolies, and “useful”, insofar as it must have “specific, credible, and substantial utility”.
  5. A patent may be refused if its “commercial exploitation” (possibly narrower than mere “use”) is contrary to public policy or morality.
  6. Inventions derived from Māori traditional knowledge, or whose exploitation would be considered contrary to Māori values will be denied protection.
  7. New IDS requirements will oblige Applicants to disclose the results of any documentary search conducted in any foreign Patent Office in respect of a corresponding application. Sanction for failure to comply is forfeiture of the right to perform post-grant amendment to overcome any prior art so uncovered. The obligation applies until grant and is directly analogous with the recently repealed Australian law in this respect.
  8. Methods of diagnosis will be statutorily excluded from patentability, irrespective of whether such method is part of a surgical procedure. Other specific exclusions include human beings, biological processes for their generation, therapeutic, surgical and diagnostic methods for their treatment, and plant varieties. No specific exclusion is provided for either business methods or software.
  9. An application will be published 18 months from the priority date and damages are accruable for infringement from this point. Publication of an international PCT application is to be treated as a local publication.
  10. Infringement provisions will be expanded to include contributory infringement.
  11. Between publication and grant, a third party may lodge observations as to novelty and/or inventive step.
  12. Re-examination is provided for both pre- and post-grant, either upon request by a third party or of the Commissioner’s own volition. The Bill does not provide for opposition proceedings and ex parte re-examination appears to be intended as a substitute.
  13. The grounds of revocation are broadened due to the expansion of the prior art base, as outlined above. Filing for revocation before the Commissioner may become a cost-effective means for challenging a patent’s validity.
  14. The continuing absence of an extension of patent term for pharmaceuticals (itself, the subject of a separate review), in relation to the proposed retention of “springboarding”, and the launch of the Trans-Tasman Therapeutic Products Agency.
  15. Clarification of the employee/employer relationship and derivation of title.
  16. The continued absence of a statutory basis upon which an employee may seek compensation for a commercially successful invention.
  17. Benefit of the doubt to be replaced by a balance of probabilities approach when deciding whether to grant a patent.
  18. Introduction of an Experimental Use Exception: “It is not an infringement to do an act for experimental purposes relating to the subject matter of an invention (which includes determining how the invention works, its scope, or the validity of the claims, or seeking an improvement of the invention) if that act does not unreasonably conflict with normal exploitation of the invention”.
  19. The disclosure requirements for a micro-organism can be met by depositing a specimen in a recognised depositary.20. Examiners’ Reports are placed open for public inspection once an application has been accepted.
  20. Grace period of 12 months where the disclosure was without the Inventor’s consent.
  21. Removing the current requirement for New Zealand Inventors to seek the Commissioner’s permission to file a foreign application if they have not already filed a first/priority application in New Zealand.
  22. Inventions in the field of computer software will be statutorily excluded. However, patents for “embedded software” will be allowed subject to meeting a to-be-decided examination standard.
  23. The new Act will apply to all applications with a complete specification filing date on or after the date of commencement; the Patents Act 1953 will continue to apply to all applications with a complete specification filing date before the date of commencement.
  24. Patents granted under the Patents Act 1953 are continued under the Bill, with their existing key dates, term, and grounds for revocation. This is necessary because with the stricter criteria for granting a patent, which means that some patents granted under the current Act would be invalid under the new Act.
  25. Regulation of the Patent Attorney profession will now be provided for under the Patent Attorneys Bill 2010, which is slated to unify regulation of the profession throughout both Australia and New Zealand.

Each of Shelston IP’s Australian Patent Attorneys is also dual-registered in New Zealand where we practice extensively. We retain an active interest in seeing New Zealand’s present, outdated patents legislation modernised appropriately, to the expected benefit of all stakeholders.