This article reports continuing progress toward New Zealand's new Patents Act.
Following its introduction before the House of Representatives on 9 July 2008, the Patents Bill 2008 then survived a general election in November 2008, before having its first Parliamentary reading on 5 May 2009. The Bill was approved by a clear majority of the House – and then in line with New Zealand's legislative process, opened to public submissions before being passed to a Parliamentary Select Committee for further consideration.
The Select Committee has now reported back to Parliament – and has provided two "curveballs" with respect to the expected course of the new legislation. Firstly, in terms of excluded subject matter, the proposal to allow patents to computer software (subject to a "technical effect" criterion) has been reversed. It would appear as if public submissions on issues pertaining to open source and embedded software, in particular, have swayed the Select Committee against recommending that computer software is proper subject matter for letters patent. The other especially controversial exclusion, to methods of medical treatment of human beings, is retained.
The second major deviation has been that "Part 5" of the Patents Bill 2008, relating to the regulation of the patent attorney profession, has been divided out into separate proposed legislation, the Patent Attorneys Bill 2010. The reasons for this division were twofold: firstly, because the Patents Bill 2008 did not provide for a unitary trans-Tasman framework for regulating patent attorneys (such a framework was signalled by the Australian and New Zealand governments in August 2009); and secondly, that establishing such a framework would slow the passage of the remainder of the Bill unnecessarily.
Other changes recommended by the Select Committee include:
1. Abolishing the proposed IDS requirements which would have otherwise obliged Applicants to disclose the results of any documentary search conducted in any foreign Patent Office in respect of a corresponding application. The obligation was directly analogous with the recently repealed Australian law in this respect.
2. Retaining pre-grant Opposition. This was to have been replaced with both pre- and post-grant re-examination.
The remainder of the Select Committee Report has approved, at least in substance, the remainder of the proposed legislative changes. This is not at all surprising given that most changes proposed in the Bill reflected public opinion, global standards and were clearly in accordance with New Zealand's best interests.
As summarised below, the Bill is essentially a hybrid of the current Australian and United Kingdom legislation and is essentially as per its initial exposure draft of December 2004, with the significant addition of a statutory Experimental Use Exception to patent infringement. This had been the subject of a separate government review, but given the interim period, was consumed within the broader reforms.
A brief synopsis of some of the more significant upcoming changes includes:
1. Replacement of the current local novelty standard with absolute novelty.
2. Examination will be extended to now include an evaluation of inventive step.
3. "Whole of contents" objections based unpublished applications having an earlier priority date may be made in respect of both novelty and (unlike Australia) inventive step.
4. A claimed invention must be a "manner of manufacture", within the meaning of s.6 of the Statute of Monopolies, and "useful", insofar as it must have "specific, credible, and substantial utility".
5. A patent may be refused if its "commercial exploitation" (possibly narrower than mere "use") is contrary to public policy or morality.
6. Inventions derived from Māori traditional knowledge, or whose exploitation would be considered contrary to Māori values are denied protection.
7. Methods of diagnosis will be statutorily excluded from patentability, irrespective of whether such method is part of a surgical procedure. Other specific exclusions include human beings, biological processes for their generation, therapeutic, surgical and diagnostic methods for their treatment, and plant varieties. No specific exclusion is provided for either business methods or software.
8. An application will be published 18 months from the priority date and damages are accruable for infringement from this point. Publication of an international PCT application is to be treated as a local publication.
9. Infringement provisions will be expanded to include contributory infringement.
10. Between publication and grant, a third party may lodge observations as to novelty and/or inventive step.
11. The grounds of revocation are broadened due to the expansion of the prior art base, as outlined above. Filing for revocation before the Commissioner may become a cost-effective means for challenging a patent's validity.
12. The continuing absence of an extension of patent term for pharmaceuticals (itself, the subject of a separate review), in relation to the proposed retention of "springboarding", and the launch of the Trans-Tasman Therapeutic Products Agency.
13. Clarification of the employee/employer relationship and derivation of title.
14. The continued absence of a statutory basis upon which an employee may seek compensation for a commercially successful invention.
15. Benefit of the doubt to be replaced by a balance of probabilities approach when deciding whether to grant a patent.
16. Introduction of an Experimental Use Exception: "It is not an infringement to do an act for experimental purposes relating to the subject matter of an invention (which includes determining how the invention works, its scope, or the validity of the claims, or seeking an improvement of the invention) if that act does not unreasonably conflict with normal exploitation of the invention".
17. The disclosure requirements for a micro-organism can be met by depositing a specimen in a recognised depositary.
18. Examiners' Reports are placed open for public inspection once an application has been accepted.
19. Grace period of 12 months where the disclosure was without the Inventor's consent.
20. Removing the current requirement for New Zealand Inventors to seek the Commissioner's permission to file a foreign application if they have not already filed a first/priority application in New Zealand.
21. The new Act will apply to all applications with a complete specification filing date on or after the date of commencement; the Patents Act 1953 will continue to apply to all applications with a complete specification filing date before the date of commencement.
22. Patents granted under the Patents Act 1953 are continued under the Bill, with their existing key dates, term, and grounds for revocation. This is necessary because with the stricter criteria for granting a patent, which means that some patents granted under the current Act would be invalid under the new Act.
We now estimate that the Bill, incorporating at most, only relatively minor changes, will pass into New Zealand law around early 2011. The complementary Patents Regulations should follow shortly thereafter. The proposed date of commencement, however, is 31 December 2012; this will allow the Regulations to give effect to the provisions of the new Act.
Each of Shelston IP's Australian Patent Attorneys is also dual-registered in New Zealand where we practice extensively. We retain an active interest in seeing New Zealand's present, outdated patents legislation modernised appropriately, to the expected benefit of all stakeholders.
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.
