New Zealand: Patent Pending: when will the government assist with funding for IP protection?

Last Updated: 7 April 2012

The government forks out for R&D, experts and market entry, so why won't it come to the party on IP protection? asks Simon Rowell, Partner, James & Wells

The Ministry of Science and Innovation (MSI) does good work for the New Zealand innovation ecosystem. MSI provides funding targeted at international market research, finding subject matter experts for R&D, innovative research and preparing for export market entry, among other things.

The funding usually matches the contribution of the recipient.

This is great for encouraging R&D and helping developed products get to market. But why doesn't MSI provide funding for establishing intellectual property1 protection?

I've asked officials at MSI this question and haven't yet heard a satisfactory answer. The concern appears to be that the ministry shouldn't be seen to be using public money to help establish a private asset for a commercial entity - and filing a patent2 creates an asset.

However, MSI is already helping private companies to create assets by funding R&D. The creation of knowledge for a company already confers private benefits on that company. The point of the funding is to help the company succeed, which presumably generates public benefits for the New Zealand economy by creating jobs and taxable revenue.

I have no problem with this funding - in fact I'd like us to do more of it. But we're missing a crucial piece of the puzzle, which is encouraging the funding recipient to protect the R&D created.

In the private world, funders like angels and venture capitalists require that their investments in technology companies are protected as best possible. If patents do not already exist in the company - and it is possible to patent the technology - then the angel or VC will almost always commit funds for that specific purpose. It's a no brainer - they don't want their investment eroded by competitors copying the technology.

The same principle should apply to MSI 'investments'. MSI is investing, on behalf of all New Zealand, in a company to ensure it creates innovation that gets to market. MSI should also contribute funding to ensure this public investment cannot be eroded by foreign competitors free riding on a company's R&D. This may mean filing patents. Otherwise we risk New Zealand being a great source of free innovation for the rest of the world to benefit from.

I'm not suggesting MSI should provide funding from filing to patent grant, in all countries. All that is required is for MSI to provide matching funding for filing a New Zealand provisional patent application3 - then an international Patent Cooperation Treaty (PCT4) application 12 months later, assuming the research and development remains promising and on track.

As I have explained in previous columns, the provisional application might cost around $5000 and the PCT application5 around $15,000. Armed with this type of initial protection, a New Zealand company can feel more comfortable talking to third parties about commercialisation6, will be more attractive to venture capital and has more flexibility and options for commercialisation strategies. This will only cost MSI $10,000 over and above the existing funding it provides the company.

Patent protection is particularly important where the company plans a licensing model as part of its commercialisation strategy. Without adequate patent protection, this simply won't be an option.

You might argue, as perhaps MSI would, that the company should fund its own patent protection. The problem is most companies in New Zealand have a poor or misguided view of the role and importance of patents in international commercial dealings7. I've attacked the naïve notion that patents are only worthwhile if you can afford to enforce them in earlier columns. My point is that MSI can play a positive role in encouraging patent protection by offering matching funding for at least the initial step. By not offering funding for patent protection, MSI makes an implicit statement that patents aren't worth funding.

Until New Zealand business is sophisticated enough to truly understand and value patents as a strategic tool, then I think MSI should provide matching funding for patents. It makes a far more compelling case for a cash-strapped New Zealand startup to patent their new technology if they only have to pay for half of the patent. Without this incentive I'm afraid too many companies will make the wrong decision, placing their technology and our investment through MSI in jeopardy.

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.
2A proprietary right in an invention which provides the owner with an exclusive right for up to 20 years to make, sell, use or import the invention. In exchange for this monopoly the patent is published so that others can see how the invention works and build on that knowledge. The patented invention may also be used by the public once the patent lapses.
3In 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.
4The Patent Co-operation Treaty is an international law treaty establishing a single procedure for filing a patent application in many countries. During the international phase of the application it is assessed for patentability by an international examiner and the application can be amended as a result. After the international phase is the national phase, in which applications are filed and examined in individual countries in which protection is required. Filing a PCT application delays the filing of multiple individual applications in many countries by up to 18 months. Not every country is a member of the PCT so you should always check with your IP advisor.
5Patent Co-operation Treaty is an international law treaty establishing a single procedure for filing a patent application in many countries. During the international phase of the application it is assessed for patentability by an international examiner and the application can be amended as a result. After the international phase is the national phase, in which applications are filed and examined in individual countries in which protection is required. Filing a PCT application delays the filing of multiple individual applications in many countries by up to 18 months. Not every country is a member of the PCT so you should always check with your IP advisor.
6Refers to the process of introducing a new product or service to the marketplace (whether in New Zealand or overseas). For the purposes of a patent application commercial working can include taking orders for a product or service (even if in confidence). It is important to understand that commercial working of an invention before a patent application is filed may invalidate that patent application (see validity below).
7Refers to the process of introducing a new product or service to the marketplace (whether in New Zealand or overseas). For the purposes of a patent application commercial working can include taking orders for a product or service (even if in confidence). It is important to understand that commercial working of an invention before a patent application is filed may invalidate that patent application (see validity below).

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.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
James & Wells Intellectual Property
Baldwins Intellectual Property
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
James & Wells Intellectual Property
Baldwins Intellectual Property
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions