New Zealand: Daisy-chaining of divisionals to be nipped in the bud following NZ Government review?

Last Updated: 26 September 2016
Article by Gareth Dixon

A New Zealand Government review has commenced under which the facility to "daisy chain" divisionals from applications proceeding under the Patents Act 1953 is under threat. In this article, we examine some of the rationale behind this review – and conclude, all things considered, that changes are likely.

"Old Act", "new Act" and "daisy chaining"

New Zealand patent applications are presently binary. They are either what we term an "old Act" case (subject to the Patents Act 1953 throughout its lifecycle), or a "new Act" case (subject to the Patents Act 2013). The critical date here was 13 September 2014, which corresponds to the date of commencement of the new Act – an application for which a complete specification was filed in IPONZ prior to this date is an "old Act case"; and an application filed on or after this date is a "new Act case".

The one exception to this rule arises with respect to divisional applications. A divisional filed from an old Act case is itself to proceed as an old Act case, irrespective of whether it was filed before, on, or after the date of commencement. Availing of this facility is advantageous in two main respects: a) the patentability criteria prescribed under the old Act are perceptibly softer; and b) the "daisy-chaining" of old Act divisionals is not restricted, meaning that in theory, one can keep the subject matter of a patent application pending throughout its 20-year lifecycle.

Unsurprisingly, a divisional filed from a new Act case will itself proceed as a new Act case. The new Act prescribes not only higher patentability standards, but also limits the period that a divisional can be filed to five years from the filing date of the original "parent" application.

As such, from a patentee's perspective, it is clearly advantageous for a divisional to proceed as an old Act case, if possible – lower patentability standards and the facility to daisy chain for 20 years makes this a fairly uncontroversial statement. Indeed, this was identified in our earlier article as one of the main incentives for bringing forward the filing of a New Zealand patent application to before the date of commencement (i.e., to capture an application as an old Act case).

Government review

New Zealand's Ministry of Business, Innovation and Employment ("MBIE") has published a paper entitled "Divisional patent applications: Possible changes to the transitional provisions in section 258 of the Patents Act 2013". Public submissions have been sought, with the closing date being Friday, 14 October 2016.

As stated in the paper, the purpose of the review is to: feedback on whether or not the transitional provisions in section 258 of the Patents Act 2013 ("the 2013 Act") relating to divisional patent applications should be amended to limit when divisional applications can be filed or examined under the Patents Act 1953 ("the 1953 Act"), and if so, what those amendments should be.

In other words, there has been a recognition on the Government's part that the present arrangement could give rise to unintended consequences. Specifically, it is plausible that we could still have the last of the old Act divisionals pending in the year 2033. The question, therefore, is whether the transitional provisions attached to the Patents Act 2013 are consistent with the policy intent underpinning such legislation.

Policy intent of the Patents Act 2013

Paraphrased heavily, the policy intent of the Patents Act 2013 could be summarised as, on the one hand, a recognition that the primary users (patentees) of the New Zealand patent system are foreigners – and on the other hand, that those principally encumbered by thickets of broad patents (as were achievable under the old Act) are locals (third parties). The new Act thereby sought to redress any imbalance – be it real or perceived – in favour of third parties.

Hand-in-hand with this broad policy objective comes the realisation that the facility to daisy chain old Act divisionals indefinitely (of course, not beyond the 20 year patent term) created an undue burden on third parties. Whether a patent applicant intent on maintaining pendency (and thereby uncertainty on the part of competitors looking to enter the market) for a period of two decades was abusing, or merely making use of the system is immaterial – the point is that with this possibility came a perception on the part of the New Zealand Government that third parties were being commercially paralysed in the interim. In general, locals could not afford to do battle with foreign corporations during opposition or revocation proceedings – and the facility to daisy chain indefinitely meant that even if they could (and assuming that they won), the next generation divisional/s would effectively block them for the entire 20-year patent term.

Of course, the above is an extreme/unlikely scenario. However, it nonetheless exists as defining the practical limits to which the present transitional provisions could be worked in favour of the patentee – and this has been identified as potentially contrary to the spirit of the new legislation.

Proposals under the review

The review puts forward three main proposals:

  1. Do nothing/maintain the status quo. This option will likely prevail should public submissions fail to identify indefinite daisy chaining as being an issue.
  2. Establish a final date by which no further old Act divisionals may be filed. This option arguably goes too far in respect of removing certainty for patentees (taking away their right to file a divisional) and may be inconsistent with New Zealand's international obligations (Paris Convention, Articles 4G(1) and 4G(2)).
  3. Establish a date after which any divisional filed from an old Act case will proceed under the new Act. This is MBIE's preferred option having regard to the competing factors identified above.

Is indefinite daisy chaining actually an issue?

The review identifies that as of mid-July 2016, there were still 3054 pending applications made under the old Act. Of these, more than half (1693) were divisionals. Further, 661 of the 1693 divisionals are "first generation" divisionals (divided from applications that are not themselves divisional applications); 691 of the 1693 are "second generation" divisionals (divided from applications that are first generation divisionals) and 341 are "third generation" divisionals, divided out of second generation divisionals.

The data thereby show that whilst the practice of daisy chaining is indeed being followed, there is a drop-off from second to third generation (and likely beyond). This is unsurprising – and suggests that in the extreme situation whereby old Act divisionals could conceivably still be pending in 2033, it is highly unlikely that there would be many such applications. This, itself, is somewhat self-evident even in the absence of any data. However, the issue at hand for MBIE in conducting this review is whether the mere facility to have old Act divisionals still pending in 2033 is contrary to the policy underpinning the new Act. To this end, there are also significant implications for IPONZ:

The effect of this is that the Intellectual Property Office of New Zealand ("IPONZ") must maintain the capacity to examine 1953 Act divisional applications potentially for up to twenty years after entry into force of the 2013 Act. This requirement would mean examiners would need to be trained to examine applications under both Acts until at least the early 2030s. This imposes additional costs and complexity for IPONZ which may mean that IPONZ fees may be higher than might otherwise be the case.

One could suspect, on the basis of the data presented, the longer-term implications for IPONZ and the over-arching policy incentive to promote the interests of third parties that a significant "issue" will be identified throughout the public submission process. In such circumstances, the status quo is unlikely to prevail and options 2 and 3 (of which the latter is the only reasonable option) may come to be considered in greater depth at Government level. That is, after a certain to-be-determined date, a divisional filed from an old Act case will proceed as a new Act case, subject to (amongst other restrictions) the five year limit on daisy chaining identified above.


We are presently only three years into the new Act – and as such, any genuine issues relating to daisy chaining are yet to be encountered in practice. That said, the Government review is predicated largely on preventing any such issues before such time as they manifest in day-to-day New Zealand practice. In that sense, there was a certain inevitability to this review, given that the daisy chaining facility had been identified as a possible unintended loophole immediately upon release of the final text of the new Act.

All things considered, we suspect that the facility to daisy chain old Act divisional applications indefinitely will soon be "nipped in the bud".

Shelston IP's New Zealand practice

All of Shelston IP's Australian-registered patent attorneys are also dual-registered to practise in New Zealand. Our New Zealand patent practice thereby leverages significantly from our Australian operation – and our closeness in respect of law, economics, culture and physical distance means that there are compelling drivers for clients to avail of Shelston IP for their Australasian IP matters.

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.

Shelston IP ranked one of Australia's leading Intellectual Property firms in 2015.

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

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

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”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
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
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.