New Zealand: Top Five IP Developments in NZ since 2007

Last Updated: 14 March 2012
Article by Ian Finch

James & Wells pick of the Top 5 developments in Intellectual Property in NZ since 2007 are: New Zealand's accession to the Madrid System for the International Registration of Trade Marks; The Copyright (Infringing File Sharing) Amendment Act 2011 (the so called "Skynet law"); The decision in The Muir Electrical Company Pty Limited v The Good Guys Group Limited and its effect on extension applications in trade mark proceedings; The Patents Bill 2008, its lack of progress and why; and The future of the patent attorney profession in New Zealand - proposed joint regulation with Australia.

James and Wells Intellectual Property1 in New Zealand will be published2 in its second edition in March. This book is part of the Thompson Brookers reatise series. Our new edition provides authoritative and definitive works of reference on New Zealand law from patent3, trade mark and copyright law through to border protection and more. It offers a detailed analysis of the relevant legislation and case law as well as practical advice to the lawyer and IP4 manager. Since the first edition was published in 2007 we have consolidated much of the material but still managed to add over 250 pages of new content!

So what are the major changes that have occurred since the first edition was published and why should you buy the second edition?

Top 5 developments in intellectual property in NZ since 2007

  1. New Zealand's accession to the Madrid System for the International Registration of Trade Marks;
  2. The Copyright (Infringing File Sharing) Amendment Act 2011 (the so called "Skynet law");
  3. The decision in The Muir Electrical Company Pty Limited v The Good Guys Group Limited and its effect on extension5 applications in trade mark proceedings;
  4. The Patents Bill 2008, its lack of progress and why; and
  5. The future of the patent attorney profession in New Zealand - proposed joint regulation with Australia.

1. New Zealand's accession to the Madrid System for the International Registration of Trade Marks

Three years after the bill was first introduced into Parliament on 8 September 2008, the Trade Marks (International Treaties and Enforcement) Amendment Bill passed into law on 16 September 2011 paving the way for New Zealand's accession to the Madrid System for the International Registration of Trade Marks (the Madrid Protocol).

The Madrid Protocol marks a significant change in New Zealand trade mark law and will align our regime closer to Australia (which has implemented the Protocol some years ago).

Once the necessary mechanics have been implemented by the Intellectual Property Office6 of New Zealand (IPONZ7), the days of owners having to file separate applications in New Zealand and in overseas jurisdictions to register their marks will be over. Instead, owners will only need to file one application8 in their national or regional trade mark office which will be distributed to the local intellectual property offices in the foreign jurisdictions designated by the owners.

The Madrid Protocol will also simplify post-registration management of trade marks, as subsequent changes to registrations such as assignments and registration renewals can be achieved through a single procedural step.

For the trade mark profession in New Zealand, accession to the Protocol is likely to see a change in focus from filing applications to more contentious work such as oppositions, revocations and litigation - areas in which James and Wells Intellectual Property has considerable strength and expertise.

At the time of going to print, IPONZ had not confirmed the implementation date.

2. Copyright (Infringing File Sharing) Amendment Act 2011

On 1 September 2011, the Copyright (Infringing File Sharing) Amendment Act 2011 came into force. The Act repealed section 92A of the Copyright Act (enacted by section 53 of the Copyright (New Technologies and Performers Rights) Amendment Act 2008 but never in force).

The Act prescribes a "three strikes" notice and take down regime which Internet Service Providers (ISPs), or Internet protocol address providers (IPAPs), are obliged to follow. Under the regime copyright owners are able to send evidence of breaches to ISPs who then, depending on the timing of the infringement, may issue, with increasing severity, one of three kinds of infringement9 notices to internet account holders.

If an account holder ignores the infringement notices and/or repeatedly infringes, copyright owners can claim damages of up to $15,000 against the account holder. The Act also contains provisions which will enable the District Court to order the suspension of the account holder's account for up to 6 months if it deems suspension is justified and appropriate in the circumstances - however those provisions have yet to come into force.

The Act generated significant controversy with fears that rights holders would utilise it to wage widescale war on the New Zealand internet community. To date those fears appear to have been unfounded - with the number of notices being issued very small, probably in no small part due to the cost of each notice which has been regulated at $25.00.

The provisions of the Act are scheduled to be reviewed early this year and further tweaks are possible once all stake holders have been consulted.

3. The Muir Electrical Company Pty Limited v The Good Guys Group Limited

In February 2010, the Hearings Office of the Intellectual Property Office of New Zealand adopted a new practice in relation to the time for filing a notice of opposition10 to the registration of a trade mark as a result of the High Court's decision in The Muir Electrical Company Pty Limited v The Good Guys Group Limited 18/12/09, Lang J, HC Auckland CIV-2009-404-4965.

In Muir Electrical, his Honour Justice Lang stated that regulation 75(3) of the Trade Mark Regulations 2003 does not empower the Commissioner to grant an extension of time9 to file a notice of opposition to registration of a trade mark after the deadline to do so has expired - even where the extension of time application was received by the Commissioner before the deadline. His Honour held that an application to extend time must be received (including the other party's consent when required) and granted by the Commissioner of Trade Marks before the expiry of the deadline.

Trade mark attorneys frequently receive clients' instructions to file notices of opposition to trade mark applications close to or on the applicable deadline. Until Muir Electrical, the Commissioner usually granted an extension of time to oppose as long as the application was filed on or before the applicable deadline. Even if an application was made after the applicable deadline, the Commissioner would still occasionally grant the extension by exercising his perceived discretion to do so under regulation 32.

The Court's decision has consequently had a significant impact in practice, particularly where attorneys receive late instructions from their clients.

The same decision has also affected applications for extensions of time generally, with his Honour holding that, for an application to be validly granted, the circumstances leading to the need for the extension must be both genuine and exceptional. While genuineness has proven relatively easy to establish, the High Court (and correspondingly, IPONZ) have set the bar high as regards what will constitute exceptional circumstances for an extension. This has, and will continue, to cause applicants difficulties and has already resulted in a loss of rights in many cases.

4. Patents Bill 2008

Introduced into Parliament in July 2008, the Patents Bill 2008 is intended to replace the Patents Act 1953 - which was based on the long since repealed United Kingdom Patents Act 1949.

There are two significant/controversial aspects to the Patents Bill: the first concerns the test for patentability, and the second being a proposed exclusion from patentability11 of computer programmes.

In New Zealand, patent applications are currently only examined for adequacy of description and novelty12. There is no examination13 for 'inventive step'14 or usefulness, although third parties can oppose the grant of a patent on the basis of lack of inventive step or usefulness. Many other countries examine for both novelty and inventive step. The Bill brings New Zealand's tests for patentability into line with many of the country's trading partners.

It also changes the prior art15 base which may be taken into account when determining the validity16 of a patent application. Currently we apply a local novelty standard - which means only disclosures available in New Zealand may be taken into account. Under the Bill we will be moving to the more common absolute novelty standard which takes into account disclosures anywhere in the world.

Under the Bill, computer programmes will no longer be considered patentable subject matter, although inventions which contain embedded software will be permitted. The exclusion of computer programmes was not originally included in the Bill when it was first contemplated in 2004, and was only added in March 2010 as a result of a Commerce Select Committee recommendation made following submissions from anti-patent lobbying groups. Despite protest from some significant quarters of the IT community in New Zealand, the exclusion was confirmed by the Minister of Commerce in July 2010.

From the authors' perspective there is no rational basis for excluding computer software from the subject matter capable of protection via a granted patent. Provided the end result meets the statutory test for inventive step, it should make no difference if the end result is achieved via, for example, a mechanical machine or a computer programmed to act in a certain way.

At the time of going to press, the Bill is awaiting its second reading in Parliament but may be held up by developments regarding regulation of the New Zealand and Australian patents professions discussed below.

5. Patent attorney profession in New Zealand - proposed joint regulation with Australia

In March 2011, the Ministry of Economic Development (MED) in conjunction with IP Australia released a Discussion Paper proposing the establishment of a single trans-Tasman regulatory framework for patent attorneys. The proposed reform is part of the outcomes for a Single Economic Market (SEM) between New Zealand and Australia.

The proposals in the Discussion Paper are far-reaching. They include the establishment of a single governance body responsible for Patent Attorney education, discipline and regulation, a single registration process and Register of patent attorneys, and a single code of conduct for patent attorneys in New Zealand and Australia. The writers of the report argued that the net trans-Tasman benefits from the proposed framework "would result from economies of scale, reduced transaction costs, enhanced consistency and quality of the trans-Tasman profession and increased confidence in the profession by users" although, at the time this conclusion was reached, MED appears not to have conducted any form of economic analysis which could support the conclusion.

The Discussion Paper received a number of submissions from both New Zealand and Australia, including the two jurisdictions' professional bodies. While the Institute of Patent and Trade Mark Attorneys Australia was "broadly supportive" of the reform proposals, the New Zealand Institute of Patent Attorneys took a contrary view arguing that joint regulation would not achieve the Discussion Paper's stated objectives and instead would have a very negative impact on the profession in New Zealand.

In November 2011 Cabinet agreed in principle the key features of the regime which are largely based on those in the Discussion Paper. Work is now underway on what bilateral arrangement should be in place to implement a single trans-Tasman patent attorney registration process and Register, and what legislative changes are required in both New Zealand and Australia to effect the final bilateral arrangement.

The changes are part of a broader focus on aligning the Australasian IP professions, application process and, potentially, laws in each jurisdiction pursuant to a 23 June 2010 Memorandum of Understanding which establishes medium term (ie by the end of 2014) goals to:

  • Have a single trans-Tasman trade mark regime;
  • Have a single trans-Tasman plant variety right regime; and
  • Have a single application process for patents in both jurisdictions.

It seems inevitable that there will also be an alignment of IP laws in the future and this may be one of the reasons why the Patents Bill has stalled.

Footnotes

1Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

2Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

3Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

4Refers to the ownership of an intangible thing - the innovative idea behind a new technology, product, process, design or plant variety, and other intangibles such as trade secrets, goodwill and reputation, and trade marks. Although intangible, the law recognises intellectual property as a form of property which can be sold, licensed, damaged or trespassed upon. Intellectual property encompasses patents, designs, trade marks and copyright.

5Deadlines given to respond to matters in a patent prosecution can often, but not always, be extended. Obtaining an extension to a deadline may be useful for a number of reasons, including to delay costs or to keep competitors in the dark as to your intentions. Your IP advisor can tell you what extensions are available for any given deadline.

6The Intellectual Property Office of New Zealand. IPONZ (formerly called the Patent Office) is a Government agency that is part of the Ministry of Economic Development and is responsible for the examination, granting/registration and administration of registrable intellectual property rights such as patents, designs and trade marks.

7The Intellectual Property Office of New Zealand. IPONZ (formerly called the Patent Office) is a Government agency that is part of the Ministry of Economic Development and is responsible for the examination, granting/registration and administration of registrable intellectual property rights such as patents, designs and trade marks.

8In most jurisdictions patent applications are subjected to an examination process to determine whether the subject matter is novel and inventive. The terms "application", "pending" or "patent application" are used to describe the status of the application up to grant.

9Refers to the commission of a prohibited act with respect to a patented invention without permission from the patentee. In New Zealand, the Deed of Letters Patent confers on the patentee a monopoly to make, use, vend or exercise the invention in New Zealand. Performing any of these acts without the permission of the patentee will amount to an infringement if the patent is current and in force. Permission will typically be granted in the form of a license. Remedies for infringement can include an injunction to restrain further infringement, payment of damages suffered by the patentee as a consequence of the infringement or payment by the infringer of any profit he/she/it made by virtue of the infringement, and legal costs.

10In New Zealand, once a patent application has been accepted, it will be published in the Intellectual Property Office Journal. There is then a three month period where the application may be objected to (or opposed), by a third party. If no opposition is made the patent application will proceed to grant. Any party that has an interest in the subject matter of the patent can oppose acceptance. The grounds that can be used to oppose a patent application include lack of novelty, lack of inventive step and insufficient disclosure of the invention. Not all countries have an opposition period on patent applications. For country specific information, contact your IP advisor.

11Deadlines given to respond to matters in a patent prosecution can often, but not always, be extended. Obtaining an extension to a deadline may be useful for a number of reasons, including to delay costs or to keep competitors in the dark as to your intentions. Your IP advisor can tell you what extensions are available for any given deadline.

12to which an invention is able to satisfy the legal requirements to be the subject of a granted patent. This is dependent on those aspects of the invention for which protection is sought, as defined by the claims of a patent application. In general, the claims of a patent must include at least one feature that is novel, involves an inventive step and is useful to be patentable. A patent search can be carried out to assess whether an invention is patentable in view of known

13the requirements for patentability and the first part of the test for inventive step. In patent law "novel" simply means new or not previously known. New Zealand currently has a "local novelty" requirement for patentability. This means that the subject invention will not be novel (and therefore will not be patentable) if it was known or used in New Zealand before the date on which the application for a patent was filed. There is a proposal to amend our legislation in late 2010 to move to an "absolute novelty" standard. This means that the subject matter must not be known or used anywhere in the world before the date of application in New Zealand. If the subject matter is known or used before the date of application, this is known as "anticipation".

14The process by which the receiving office (in New Zealand this is the Intellectual Property Office of New Zealand or IPONZ) determines whether the subject matter of a patent application discloses a valid invention and is patentable. Under current New Zealand law the examiner will ensure that the subject matter meets the definition of "invention" and is novel. Under legislation proposed to be introduced in late 2010, examination will determine whether the subject matter is novel, involves an inventive step, is useful and is not excluded subject matter.

15A legal term to describe a non-obvious improvement over known technologies. In New Zealand, inventive step is currently tested by asking two questions. First, is the claimed invention different from what is already known and/or used in New Zealand (ie is it novel or has it been anticipated)? Second, is that difference non-obvious to a skilled person in the same field of technology? Both questions will need to be answered 'yes' for there to be inventive step.

16The collective term for information (documents and prior used products, processes etc) that has been made available to the public before a given date that might be relevant to the novelty of the subject matter of a patent application.

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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