Australia: Private Members Bill proposes second-tier New Zealand advancement patent

Last Updated: 11 April 2018
Article by Gareth Dixon

A New Zealand "innovation (or advancement) patent"? Now distinctly possible. Australia's second-tier innovation patent regime has been all over the news recently – literally overnight, it went from death row to receiving a stay of execution. Although it is not without its faults, has been prone to certain unintended outcomes and has recently gained some high-profile critics, the Australian innovation patents regime has arguably been relatively successful in stimulating R&D activity (innovation) amongst Australian small-to-medium enterprises (SMEs).

On the other hand, New Zealand has never previously had (or indeed needed) any such second-tier patents regime. Under the outgoing Patents Act 1953, inventive step was not examined, which in effect, meant that one could often obtain a New Zealand standard (20 year) patent for the same "low level" invention that if pursued before the Australian Patent Office may only have been worthy of an innovation (8 year) patent. With the advent of the Patents Act 2013, this is no longer true. In fact, the balance has been effectively reversed.

Introduction

New Zealand's new Patents Act 2013 (the "new Act") took effect from 13 September 2014. Any complete application filed in the Intellectual Property Office of New Zealand (IPONZ) following commencement of the new legislation is subject to patentability standards substantially aligned with international norms. Such standards include examination for inventive step and represent a perceptible increase with respect to those prescribed under the outgoing Patents Act 1953 (the "old Act").

In the absence of a second-tier patents regime in New Zealand, many applications that would have met the standards for patent protection under the old Act stand to be denied protection under the new legislation. In this article, we briefly examine the justification for this legislative gap and consider ways in which the present imbalance may be redressed, should the New Zealand Government wish to do so.

Private Member's Bill in NZ's Parliament

Call it coincidence or design, but hot on the heels of recent developments in Australia, a Private Member's Bill was tabled in New Zealand's Parliament on 5 April 2018. Introduced by National (liberal, opposition) "list" MP, Dr Parmjeet Parmar (National's science and innovation spokesperson), the Patents (Advancement Patents) Amendment Bill 2018 (the Bill) purports to install NZ's answer to Australia's innovation patent – the "advancement patent". The General Policy Statement recites:

"This Bill seeks to enhance New Zealand's innovative performance by providing intellectual property protection rights to advancements that are novel, useful and non-obvious that may or may not qualify as an invention for the standard patent. This is by introducing a more accessible, quicker, and cost effective second-tier patient system that provides protection to allow management and exploitation of the advancement with reduced risk. The monopoly of use of the advancement through a cost effective and quicker second-tier patent system will not only provide an opportunity for further advancement activity but, like the standard patent system, the ability to commercialise the advancement without the fear of it being copied".

The parallels between NZ's advancement patent and Australia's innovation patent are thereby readily apparent.

An "advancement step"

Clause 6 of the Bill defines what is meant by an "advancement step".

An advancement, so far as claimed in a claim, involves an advancement step if—
  1. the advancement is distinctly different from what would be known before the advancement by a person who is—
    1. a skilled worker in the field; but
    2. has only common general knowledge of the art, having regard to any matter which forms part of the prior art base, and of other related technology, and common general knowledge in other jurisdictions generally; and
  1. the advancement makes a useful improvement to the working of the thing referred to in the claim.

Interestingly, rather than borrow from Australia's "innovative step" definition, the proposed definition is based upon Danish law – which is itself broadly consistent with the recommendations of Australia's former Advisory Council on Intellectual Property (ACIP), as handed down in its review of the innovation patent system in May 2015.

An "advancement step" = a 10 year monopoly

One interesting difference between the Australian and proposed New Zealand regimes is that whereas Australia offers only an 8 year monopoly in exchange for providing the public with an "innovation", the Bill proposes a 10 year term in exchange for an "advancement".

"Certification" is not an option (it's compulsory)

Another aspect of Australia's innovation patents regime that attracts criticism is optional examination ("certification"). As readers will know, an Australian innovation patent isn't enforceable until such time as it is certified – but if enforcement is not intended or envisaged, there is no requirement for certification to ever be requested; the innovation patent can just sit there, unexamined and unenforceable, for the full 8-year term.

Under New Zealand's Bill certification/examination can be commenced following the applicant's request, a third party's request – or of the Commissioner's volition. In general, we view this as being consistent with the broad policy evoked under the Patents Act 2013, in which the public interest of having the patentee's rights established relatively quickly and efficiently are paramount. On the other hand, allowing an advancement patent to go unexamined for 10 years (as it could if Australia's system was borrowed) creates uncertainty for third parties that is generally inconsistent with the "spirit" of the new Act.

Legislative space for the advancement patent

The three main changes that have been effected under the patentability criteria prescribed by the new Act are: a shift from local to absolute novelty; an extension of the examination criteria to include an assessment of inventive step; and the requirement that a patent specification adequately "supports" the invention claimed (as opposed to the lower standard of fair basis required under the old (1953) Act). In real terms, the patentability threshold has been lifted appreciably and the balance of power in the patent bargain shifted perceptibly in favour of the Government (and third parties).

One consequence of increasing the patentability threshold in New Zealand is that many applications that would have met the criteria for patent protection under the old Act are likely to be denied protection under the new Act. This, in turn raises the question as to whether low-level inventions denied the full benefit of Letters Patent are nonetheless worthy of some measure of protection, for instance, by way of a second-tier regime similar to that of Australia. This, of course, is where the proposed advancement patent fits in.

Following Australia's lead

One of the goals of any second-tier patent system is to encourage local SMEs to develop low-level or incremental inventions/innovations and market them locally. In the context of New Zealand, the term "locally" can be extended to include Australia, given proximity, trade relations and ongoing Single Economic Market (SEM) reforms between the two. The majority of Australasian (AU/NZ) locals to whom an advancement patent system may be attractive are SMEs that typically require a relatively quick return on investment (which, in turn means less R&D, less "invention", and thereby less suitability to the standard patent system).

Striking an appropriate balance

The old Act patentability standards enabled many local patentees to get established in the New Zealand market without the threat of direct competition. This facility has been lost under the new Act. On the other hand, the old Act also allowed foreign patentees to do the exact same thing and in so doing, stymied competition and innovation throughout New Zealand. Given that one of the overriding incentives of any patent system is to stimulate economic activity, it may be argued that the new Act should properly contain provisions that protect not only the large corporates by way of standard patents, but also SMEs and the like; the adoption of a New Zealand advancement patent appears a reasonable means to this end.

Trans-Tasman harmonisation initiatives

The SEM harmonisation initiatives were first signalled by the Australian and New Zealand Governments in 2009. However, such reforms are by no means revolutionary. They merely represent the next phase in the ongoing trans-Tasman harmonisation, something that began, in earnest, in the early 1980s.

The end goal of the SEM reforms, as the name would suggest, is to create unitary market conditions on both sides of the Tasman Sea. Save for the common currency and the obvious differences in respect of scale, the SEM reforms seek to develop the Australia-New Zealand common market along European lines. Under SEM conditions, it would be somewhat incongruous to encourage innovation in Australia by way of the Australian innovation patent, but not in New Zealand. As such, the ongoing SEM initiatives actually serve to create pressure toward a New Zealand advancement patent system.

Importantly, within the context of this article, we have used the term "SEM" holistically, to refer to the SEM reforms over all areas of government. Perhaps somewhat ironically, as can be gleaned from our past article, some of the specific patent-related SEM initiatives (SAP/SEP, for instance) are unlikely to eventuate.

Too much too soon?

The new legislation undoubtedly creates scope for the adoption of an advancement patent system in New Zealand. Moreover, the ongoing SEM reforms create impetus for this to occur. However, it is worth noting that a second-tier system of patent protection was actually considered (perhaps all too briefly) during the initial consultation and drafting of New Zealand's new Act – although it never appeared in any draft legislation. On the other hand, perhaps this is really just 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 has been required at the IPONZ level; taking on two new systems at once was possibly never an option. On the other hand, given that the Australian and New Zealand economies are becoming increasingly intertwined, there does appear to be some initial impetus in support of the advancement patent.

Australia's lead does not necessarily take us towards a NZ advancement patent

As readers will know, the future of Australia's innovation patents regime is presently uncertain. As noted by my colleague in his recent article, there is at least now a chance that it will be retained – albeit most likely in an amended form.

Whether Australia abolishes its innovation patent system, or whether New Zealand establishes an advancement patent system is neither here nor there when considered against the economic imperative that for a common market to truly exist, unitary market conditions are required on both sides of the Tasman. Whether New Zealand follows Australia, or vice versa, remains to be seen.

Summary

Under the old Act, one could essentially take an invention/innovation worthy only of an Australian innovation patent (8 year term) and use it to obtain a New Zealand standard patent (20 year term); this facility has been removed with the advent of the new Act. However, in so doing, a New Zealand patent applicant having only a low-level invention is left with no fallback position, for there is currently no second-tier/innovation patent system.

In this article, we have identified the legislative space for such a system, the economic drivers for its adoption and the harmonisation measures that suggest that such a regime would be a matter of evolution rather than revolution.

Next steps

As noted, the Bill was aired in Parliament for the first time on 5 April 2018. As such, there is a great deal of water to flow under the legislative bridge before any "real" progress is known. Doubtless, NZ parliamentarians will be keeping a close eye on developments across the Tasman in respect of the innovation patent.

Finally, given some of the economic market reasoning alluded to above, my personal feeling is that once the dust has settled, Australia and New Zealand will end up with largely similar patents regimes. Whether this includes or excludes a second-tier innovation/advancement patent remains to be seen. Watch this space.

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 Mondaq.com.

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

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
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”

Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
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
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

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 or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq 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 of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions