Australia: The New Zealand Patents Bill - versus the irresistible force versus the immovable object

As readers will know, patent law reform in New Zealand has been going on for more than a decade. However, as of today, New Zealand patent law remains codified by a 1953 Act, itself heavily borrowed from a 1949 UK Act. This means that New Zealand businesses – and overseas entities wishing to do business in New Zealand are governed by legislation that is nearly (given that the UK repealed their previous laws in 1977) four decades obsolete. As a small economy looking to progress, New Zealand is often said to be "shooting itself in the foot" in this regard.

That said, as regular readers will know, the Patents Bill 2008 is presently awaiting debate before a Committee of the Full House; this is one of the final stages in the passage of new legislation in New Zealand. Unfortunately, the Bill has been waiting "a while" and is likely to continue waiting for some time yet. It's not that the Government isn't keen to progress matters – indeed several recent Government publications highlight the desirability of passing the new legislation, pronto. It's more a case of – at least in respect of certain provisions, the Government doesn't appear to know what should be in the new legislation. Patents Bill, meet the "irresistible force" and the "immovable object". These are the Trans-Pacific Partnership ("TPP") and the Single Economic Market ("SEM") reforms. We'll leave it to readers to decide which is which...

In short, the Government's idea of what they'd like in the new Patents Act (as suggested by the present text of the Bill) is at odds with several provisions that will likely be required of it under the TPP and SEM. However, until such time as the TPP and SEM reforms are finalised, passing the Patents Bill would appear somewhat premature. The Government would look pretty silly if it had to turn around and amend several key aspects of its new patents legislation, say, six months after passing them into law; there would be considerable public accountability issues at play too. Furthermore, what better way to irk ones potential TPP partners (especially the US) than to pass the Patents Bill prior to concluding the TPP negotiations?

For instance, there are several key patentability issues that are presently drafted "one way" in the Patents Bill (or are even absent) that one suspects will appear "another way" in the final form of the TPP. The patentability of computer software, a patent term extension for pharmaceuticals, clinical data exclusivity, patent linkage, and the patentability of methods of medical treatment of human beings (to name but a few) are all areas in which New Zealand's current position (as per the Patents Bill 2008) is at odds with the legislation of the United States (which, one suspects, will be closely mirrored in the final text of the TPP).

Moreover, the SEM reforms are now well underway. These reforms, as agreed between the Australian and New Zealand Governments in August 2009, encompass not only IP, but also competition policy, consumer protection, accounting standards, securities offerings, cross-border insolvency and company registrations. The framework thereby aims to accelerate and deepen trans-Tasman regulatory integration and to provide a "seamless" trans-Tasman business environment. The Patents Bill 2008 (having its origins in late 2004) is, somewhat understandably, silent with regard to any such measures.

Therefore, it would seem prudent to await completion of the TPP and SEM reforms before passing the Patents Bill. Short term pain for long term gain? As usual, the answer is "yes and no" – because what's holding up the TPP? You guessed it – IP. The TPP negotiations have been conducted under strict secrecy – that is, until Wikileaks got hold of some of the materials! The facility to trade freely with the United States was always likely to come at a cost – and it seems as though the US is looking to impose some fairly stringent IP-related conditions upon TPP signatories. Now, free trade with the US, especially as it pertains to their dairy industry, would be a massive boon for the NZ economy. Therefore, the cynic must suspect that even though they don't appear in the current draft of the Patents Bill, extension of term, methods of treatment and the liberal patentability of computer software may be all, strictly, "negotiables".

Last year, the TPP parties set themselves a goal of finalising the agreement by October 2013. However, this seems increasingly unlikely to happen; we will wait and see how this plays out over the next few months. However, until such time as the TTP is concluded, one should not anticipate too much – if indeed any – progress in relation to New Zealand's new patents legislation. Put another way, the horse must lead the cart.

Shelston IP has a real interest in these proceedings. Many of our clients will be directly affected by the TPP, SEM and new NZ Patents Act – and for these reasons, we will keep readers promptly informed of progress.

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.

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