New Zealand's Patents Bill 2008 is presently
awaiting its second Parliamentary reading and is expected to come
into effect from late 2012. Two changes that will surely be
effected under the new Act will be a shift from local to absolute
novelty and an extension of Patent Office
("IPONZ") examination criteria to
include an assessment of inventive step. In theory, the balance of
the "patent bargain" will be shifted in favour of the
government – and the patentability threshold lifted as a
One consequence of "raising the bar" on patentability
in New Zealand is that many applications that would have been
eligible for patent protection under the old legislation are likely
to be denied under the new Act. This, in turn raises the question
as to whether low-level applications denied the full benefit of
Letters Patent are nonetheless worthy of some measure of protection
– for instance, by way of an "Innovation
patent" system similar to that of Australia.
The Australian Innovation patent system is still in its infancy
– but is nonetheless considered to have been relatively
successful thus far. Rather than the requirement that a Standard
patent defines an inventive step, an Innovation patent requires
only an "innovative step" pitched such that the
application differs from the prior art in a way that makes a
"substantial contribution to the working of the
invention". Accordingly, an "obvious" variation may
still satisfy the innovative step criterion. The patent bargain is
again shifted such that in exchange for offering only an innovative
step, a patentee is afforded only an eight year monopoly as opposed
to twenty. On the other hand, obtaining a "certified"
Innovation patent is relatively cheap – and given the
practical difficulties in disproving an innovative step, the
limited case law has shown them to be extremely difficult to
revoke. There are, of course, other relativities, advantages and
disadvantages between the Standard and Innovation patent
Historically, second-tier patent systems (e.g., Australia's
Innovation patent, UK's defunct Petty patent and the German
Utility Model) have been pitched so as to encourage local
businesses to develop incremental inventions/innovations for the
local market. In the context of New Zealand, "locally"
can be extended to include Australia, given proximity and trade
relations between the two. The majority of Australasian
"locals" to whom a New Zealand Innovation patent system
may be attractive (especially when operating in unison with an
Australian equivalent) are small-to-medium enterprises (SMEs), who
typically require a relatively swift return on a relatively small
investment (which, in turn means less R&D, less
"invention", and thereby less suitability to the Standard
The "old" New Zealand legislation (i.e., the
Patents Act 1953) has effectively allowed many
Australasian patentees an undue monopoly in the New Zealand market;
this facility will likely be surrendered under the "new"
legislation, where incremental innovations will be denied patent
protection. Given that one of the overriding incentives of any
patent system is to stimulate economic activity, it may be argued
that the revamped legislation should contain provisions that
protect not only the large corporates by way of Standard patents
– but also, "the little guy" through adoption
of a New Zealand Innovation patent.
Whilst the new legislation undoubtedly creates scope for an
Innovation patent system in New Zealand, it is worth noting that a
second-tier system of patent protection was considered prior to
drafting of the Patents Bill 2008 – but did not
"make the final cut". On the other hand, perhaps this is
really a case of "too much too soon". It is generally
accepted that adopting one new patent system will be challenging
enough given the virtual revolution that will be required at IPONZ
level. To that end, taking on two new systems at once was probably
never an option. Given that the Australian and New Zealand
economies are becoming increasingly intertwined, the best that
local SMEs can probably hope for is a separate government review
sometime in the not-too-distant future.
For further information contact GarethDixon@ShelstonIP.com or
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