New Zealand: Top 10 reasons to file patents in New Zealand: Why NZ needs to be on your strategic patent hit list

Last Updated: 7 August 2011
Article by Jason Rogers and Justin Sweetman

Although a relatively small market (with a population of 4 million people) there are good reasons for including New Zealand in an international IP portfolio.

1. New technology test bed - NZ early adopters, test quality and useability, explore alternative routes to commercialisation

2. Market test bed - soft product launch in contained and isolated market prior to hard launch in economic markets

3. Early patent examination and grant - indication of likely issues elsewhere

4. Litigation test bed - inexpensive, same common law as UK, indicates likely result elsewhere for negotiations

5. Divisional patents - allow for two bites of the cherry

6. Gateway to Australia and China - free trade agreement

7. Cost effective barrier in downstream export markets

8. Average cost of obtaining a patent - relatively inexpensive

9. Home base for worlds largest dairy exporter

10. Technology areas where New Zealand is a major world player 

1. New Technology test bed - explore alternative routes to commercialise

New Zealand is a tech savvy market and are known for their early adoption of new technologies, for example electronic funds transfer at point of sale (EFTPOS). Given its geographic isolation to most major markets, and small population of 4 million people, it is an ideal place to:
- test a new technology in terms of rate of adoption, quality and useability; and
- explore alternative possible routes that can be used to market a new technology;
without risking technology failure in an economically important market.

2. Market test bed: soft product launch

New Zealand makes a great place for testing market demand for a new product.  New Zealand's relatively small population (circa 4 million people) has a good demographic distribution for market testing, and makes it a great place to undertake a soft product launch. New Zealand provides an "off the radar" location, in a real market situation, to understand the likely market dynamics in major economic markets and to iron out any glitches prior to launching those major markets - where you get often only get one shot to impress.  Additionally, New Zealand is ahead of the northern hemisphere markets in terms of seasons, which provides additional benefits for testing seasonal products (eg ski equipment, agricultural harvesting equipment).

3. Early patent examination and grant

In New Zealand it is possible to receive an examination report within a month of filing a patent application.  If no major objections are raised it is also possible to obtain a granted patent within 6 months. 

The New Zealand examination may give an indication of the likely objections in other markets, and will allow you to test various strategies for overcoming the objections in a cost effective manner, prior to those objections being raised in other jurisdictions.  Our favourable exchange rate and inexpensive legal market allows for arguments and claim amendments to be formulated quickly and inexpensively.

Obtaining an early granted patent is often useful validation when seeking outside investment in a new technology.

Additionally New Zealand allows for complete specifications to be converted to provisional patent applications.  Thus, it is possible to file a complete specification in the first instance, in New Zealand, to obtain an examination report from IPONZ providing an independent insight into possible patentability and clarity issues.  If necessary the complete specification can be converted to a provisional and a revised specification with additional information included can be prepared prior to filing a PCT application. This strategy is particularly advantageous if you want to ensure the specification sufficiently describes the invention and is not prone to added matter objections being raised when the patent application is filed in major markets.

In addition to pre-grant examination New Zealand also has a pre-grant opposition procedure - where third parties can attack a patent on a number of grounds including inter alia lack of novelty, inventive step and sufficiency.

4. Litigation test bed

The enforcement of intellectual property rights in New Zealand is relatively inexpensive when compared to other jurisdictions making it an ideal litigation test bed.   Our intellectual property laws are still based closely on UK laws, and our courts recognise UK case law, meaning it is likely a similar result would be obtained in NZ, as in the UK or any other country whose laws are close to those of the UK.  The Courts also typically give primacy to the existence of registered intellectual property rights placing the patent owner in the driving seat when it comes to obtaining interim injunctions to stop infringing activity.  The proceedings are quick and the outcome of the case can often be used as leverage in negotiations with the infringer in relation to overseas markets, on basis that a similar result could be expected.  As a bottom line New Zealand proceedings provide an insight as to what options need to be considered to strengthen the patent owner's position in key overseas markets where prosecution of the corresponding patent application is still pending.

5. Divisional patents: allow for two bites of the cherry

In New Zealand it is possible to have co-pending divisional applications pending even after the grant of the parent application.  Thus, allowing a patent owner more scope to further fine tune the scope of the claims should an infringer subsequently enter the market with a competing variant product which embodies the essence of the invention but perhaps arguably falls outside the scope of the presently granted claim set.  A divisional application may also enable the patent owner to successfully amend the specification of the divisional to overcome a validity attack on the granted patent by a competitor.

6. Gateway to Australia and China- free trade agreement

New Zealand is unique in that it has a free trade agreement with Australia and a free trade agreement with China.  New Zealand therefore offers Chinese exporters an opportunity to enter Australia via New Zealand.  Conversely, Australian exporters can also use New Zealand as a gateway to China.  New Zealand in turn welcomes foreign investment which is a key to the above gateways.

7. Cost effective barrier in downstream export markets

Typically many start up companies, or early stage exporters, find themselves only able to justify, and/or afford, the filing of patent applications in one or two major overseas markets, where they are presently exporting or are about to export.  As a consequence many other lucrative downstream overseas markets are vulnerable to the establishment of outside competition which can diminish returns to the original innovator.   

However, if your technology is one where:

- New Zealand is active in R&D, or
- a competitor in your field is based in New Zealand;

then filing a patent application and obtaining a New Zealand patent can be useful.

The existence of a New Zealand patent or patent application can be useful in preventing, or at least deterring/delaying, a New Zealand company from exporting to overseas markets where you have no patent protection.  Thus, safeguarding, at least for a period of time, any potential downstream export countries, still possibly 5 years away from market entry.

New Zealand is highly active in the technology areas listed at point 10.

8. Average cost of obtaining a patent - relatively inexpensive

In New Zealand it is possible to obtain a granted patent from around USD $5,000 to USD 10,000 depending on the technology and nature of objections raised in an examination report(s).  Thus, New Zealand can be a particularly cost effective country for filing a patent application giving "great bang for your buck" especially if one takes into account the other strategic benefits described in this article.

9. Home base for worlds largest dairy product exporter: Fonterra

Fonterra is the world's largest dairy product exporter exporting annually around NZD 10 billion in 2009.  Fonterra exports to around 140 countries.  Thus if you are involved in the dairy industry, nutraceutical industry, food processing equipment industry, food packaging industry or food manufacturing industry, then filing a New Zealand patent application is recommended: as these are all areas in which Fonterra is active as a milk processor.

10.   Technology areas where New Zealand is a major world player

  • Dairy products (Fonterra world's largest dairy exporter exporting to more than 140 countries);
  • Meat and meat processing equipment (NZ exports 50% of world's sheep meat and is home to the world's no.1 sheep meat processing technology company Milmeq (formerly called Realcold Milmech);
  • Forestry, wood and wool products (AgResearch Ltd is a world leader in Agritechnology);
  • Veterinary Products (in 2010 Bayer acquired NZ company Bomac which has more than 290 products and numerous patents);
  • Fish and aquaculture (New Zealand has the 6th largest fishing zone in the world at 4.1 million square kms; New Zealand is one of the world leaders in mussel farming);
  • Machinery (Gallagher's is the No.1 electric fence manufacturer in the world);
  • Electronics (Tait Electronics Ltd is a world leader in mobile radio technology).
  • Geothermal energy (Mighty River Power is exporting its geothermal knowledge to various countries)
  • Boat building and high performance construction materials www.alloyyachts.co.nz
  • Film and television computer generated effects and animation (Weta Workshops, Massive Software are world leaders in this space)
  • Hi-tech agricultural and horticultural technology
  • Plant breeding (Plant and Food Research bred the green and gold kiwifruit varieties marketed by NZ world leader Zespri)

If your business or your clients business are interested in one or more of the above areas, New Zealand must be considered a strategically important country. For more information contact Jason Rogers or Dr Justin Sweetman.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

James and Wells is the 2010 New Zealand Law Awards winner of the Intellectual Property Law Award for excellence in client service.

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