New Zealand: New Dawn for the New Zealand Patent Landscape – the New Patents Act

Last Updated: 24 September 2013
Article by David Macaskill

Parliament passed into law the new Patents Bill on 28 August 2013. This is the biggest shake up in New Zealand's Intellectual Property landscape in over 50 years.

The new law brings New Zealand's patent1 regime into line with many overseas countries. This is great news for New Zealand innovators as it will provide credible protection for their inventions in New Zealand. In addition, it will assist New Zealand businesses to secure patent protection overseas, as the New Zealand process will more closely mirror the processes encountered overseas.

Many of the provisions of the new law are the same as the New Zealand Patents Act 1953 (the '53 Act). Therefore there will be some continuity for patentees and businesses. However, the new patent law will implement some significant changes. Below is a snap shot of several of those changes, how they may affect patentees, and how to prepare for the new law.

Publication of Applications

New Zealand public patent applications will now be published2 18 months after filing. This is consistent with many of New Zealand's major trading partners such as Australia and the United States.

An important consequence of the early publication3 is that it determines the date from which calculation of damages for infringement4 of the eventually granted patent. Therefore, alleged infringers can be held liable for actions that infringe a claim which is substantially the same as a claim in the application5 as published.

The consequence of this is that New Zealand businesses need to be aware of published patent applications which their own activities may infringe. As a result, watching of patent publications in relevant technology fields will be important under the new Patents Act.

Examination for Inventive Step

IPONZ6 will now be able to examine patent applications to determine whether the claims7 involve an inventive step8 over the existing products and documents. Therefore, it is less likely that patent applications will be granted for inventions of dubious inventiveness. This change is a benefit to both patentees and businesses.

Implementation of the new provision however is likely to take some time. Examiners will require significant up skilling on the law of inventive step. This is particularly so given that consideration of inventive step is often a subjective issue. The result is that there is likely to be a bedding in period where patent examiners become familiar with the new law and how it should be applied.

To prepare for this issue applicants should carefully consider the issue of inventive step when preparing a patent specification9 and claims. Thorough canvasing of the issue prior to filing the patent application will help to address potential objections prior to examination10 commencing.

Absolute Novelty

The '53 Act required "relative novelty" for an invention11. That is, to be patentable in New Zealand an invention needed only to be new with regard to what was known in New Zealand prior to the filing date. In-practice relative novelty12 was a redundant consideration. The rise of the internet, early publication of patent applications in other jurisdictions, and internet websites, all combined to provide an effective absolute novelty standard in New Zealand.

The new Patents Act introduces an absolute novelty standard. This brings New Zealand law into line with that in many of our major trading partners.

Patentability of Software

The new Patents Act includes preclusions to the patentability of computer software. However, the Act stopped short of precluding from patentability all computer software. There is still provision for patenting "embedded software" which forms an integral part of a component in which it is sold. This issue has been widely debated in the media. See our website for a discussion on relevant issues to the patentability13 of computer software.

The new Patents Act delegates to the Commissioner the responsibility for drafting regulations on the patentability of embedded software. This will create some uncertainty for patentees. It is also expected that IPONZ will take a hard line on the patentability of embedded software, and therefore those operating in this technology space should pay attention to the Regulations as they are prepared.

Re-Examination

Third parties will be able to request re-examination of a patent application or granted patent. This is in-effect requesting IPONZ to reconsider the patentability of the claimed invention at any time during the life of the patent.

The re-examination process will provide a cost effective way to challenge the claims of an accepted14 application or granted patent. Therefore the re-examination procedures are likely to be of significant value to New Zealand businesses.

Importantly, the re-examination procedures will apply to all patents, including those granted under the '53 Act. However, re-examination of granted patents is limited to the grounds of revocation15 under the '53 Act. The consequence is that patents for computer software inventions granted under the '53 Act cannot be revoked using the exclusions from patentability noted above. This provision is likely to promote early filing of patent applications to sidestep the provisions excluding software from patent protection in the new Act.

Requesting Examination

Applicants must now actively request examination of their patent applications. This must occur before an as yet to be determined deadline, or before a deadline set by the Commissioner in a directive to request examination. The new Patents Act delegates the responsibility for determining the deadlines to the Commissioner through the role of drafting Regulations for implementing the new Act. Therefore, the process of implementing the new Act will be critical for patentees to follow.

Patentability Threshold

The new Act raises the bar on the standard to secure a grant of a patent. The new standard is "balance of probabilities", whereas the '53 Act required that the "benefit of the doubt" be provided to the patentee".

The problem with the new standard is that it is a subjective one. In combination with the new requirement to examine for inventive step, IPONZ examiners will be given significant powers to determine whether an invention qualifies for grant of a patent. That is a potential point of concern given that those same Examiners have not previously had to consider these issues. As a result, there is likely to be a period of uncertainty and bedding in to this new provision. It is also anticipated that it will be harder to secure grant of a patent in New Zealand.

Transitional Provisions

Patent applications filed under the '53 Act will continue to be examined under that law. However, there are a number of notable exceptions, being:

  • The complete specification is filed in support of the patent application after the commencement date of the new Act.
  • The application is post-dated to a date after the commencement date of the new Act.

These provisions are important for patentees to consider when deciding how to secure protection for an invention. Steps should be taken to ensure that any complete specifications are filed before the commencement date of the new Act, so as to avoid the higher standard for patentability and examination for inventive step.

The new Act also provides that applications from overseas will be governed according to the law in force when filed in New Zealand. Therefore, any PCT16 applications entering the national phase before the commencement date of the new Patents Act will be governed by the '53 Act. In contrast, any applications which enter the national phase17 after the commencement date will be governed by the new Act.

It is likely that applicants will opt to file national phase applications in New Zealand early so as to side step the provisions of the new Act and the uncertainty around examination noted above.

Conclusion

The new Patents Act is a significant improvement to New Zealand's Patent Laws. It will therefore significantly benefit patentees and New Zealand businesses.

However, the new Act will require some bedding in. It is anticipated that there will be a period of uncertainty for patentees as IPONZ grapples with the new issues that they must consider during examination.

Footnotes

1A 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.

2At some point a patent application is published, meaning its contents are available for anyone to read. In New Zealand publication occurs when a patent application is accepted. However, in most countries publication occurs 18 months after the application is filed.

3At some point a patent application is published, meaning its contents are available for anyone to read. In New Zealand publication occurs when a patent application is accepted. However, in most countries publication occurs 18 months after the application is filed.

4Refers 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.

5In 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.

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.

7Numbered paragraphs at the end of a patent complete specification which define the scope of the invention protected by the patent. The purpose of the claims is to define clearly and with precision the monopoly for which protection is sought so that others know the exact boundaries of protection.

8A 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.

9The document that accompanies a patent application. It defines the scope of the invention in the claims and provides a detailed description of the nature, use and purpose of the invention. A specification may be provisional or complete and there are different rules applying to each.

10The 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.

11The product of the creative process of inventing. In intellectual property law "invention" is a legal term usually describing patentable subject matter. Under current New Zealand legislation that subject matter includes any manner of manufacture which is new and involves an inventive step. However, certain types of invention are excluded from patentability. They include inventions which are contrary to morality (for example weapons of mass destruction) and methods of medical treatment (on public policy grounds that such methods should be available for health practitioners to use to the benefit of all society).

12One of the 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".

13The extent to 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 technology.

14Refers to the status of a patent application which has been examined by the receiving office (in New Zealand, the Intellectual Property Office of New Zealand or IPONZ) and given conditional approval. The application will then typically be advertised in the Patent Office Journal for a brief period to enable third parties to lodge an objection to grant (known as an opposition).

15A procedure in which the validity of a granted patent is contested. Any party that has an interest in the subject matter of the patent can apply to revoke (annul) the patent. Revocation can be applied for at IPONZ or the High Court, depending on the circumstances. A revocation proceeding involves the submission of arguments and supporting evidence from both the patentee and the party seeking revocation and will usually be resolved in a hearing. The grounds that can be used to revoke a granted patent include lack of novelty, lack of inventive step and insufficient disclosure of the invention. The procedure for challenging a patent application is known as an opposition.

16The 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.

17Refers to part of the process of filing a PCT application. After the international phase a PCT application enters the national phase which begins when patent applications are filed in each country protection is required in. The advantage of filing a PCT application is that this step can be delayed by up to 18 months. Examination of the application will then proceed in each country separately. Some countries will base examination on the assessment performed by the PCT examiner.

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 & Wells Intellectual Property, three time winner of the New Zealand Intellectual Property Laws Award and first IP firm in the world to achieve CEMARS® certification.

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