Continuing Progress Toward New Zealand’s New Patents Act

This article reports continuing progress toward New Zealand's new Patents Act.

Following the release of an exposure draft of the Patents Bill in late 2004, subsequent due process and public consultation, we now report that the amended Bill was finally introduced to the House of Representatives on 9 July 2008.

As summarised below, the Bill is essentially a hybrid of the current Australian and United Kingdom legislation. However, passage of the Bill into NZ law remains uncertain – both in terms of its form and its timing. There is a General Election scheduled for November 2008, and with it, the very real prospect of a change in government. The prospective new government has expressed a desire to align NZ's patent law and practice more closely with that of Australia, which may mean further changes in terms of both law and practice.

The Bill is essentially as per the exposure draft, 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, now appears to have been consumed within the broader reforms.

A brief synopsis of some of the salient features of the Bill 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" considerations are applicable to both novelty and (unlike Australia) inventive step.
4. A claimed invention must be "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 Maori traditional knowledge, or whose exploitation would be considered contrary to Maori values are denied protection.
7. New IDS requirements will require Applicants to disclose the results of any documentary search conducted in any foreign Patent Office in respect of a corresponding application. The obligation is directly analogous with the recently repealed Australian law in this respect.
8. Methods of diagnosis will be statutorily excluded from patentability. 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.
9. An application will be published 18 months from the priority date and damages are accruable for infringement from this point.
10. Infringement provisions will be expanded to include contributory infringement.
11. Between publication and grant, a third party may lodge observations as to novelty and/or inventive step.
12. Re-examination is provided for both pre- and post-grant. The Bill does not provide for opposition proceedings and ex parte re-examination appears to be intended as a substitute.
13. The grounds of revocation are broadened and filing for revocation before the Commissioner may become a cost-effective means for challenging a patent's validity.
14. The continuing absence of an extension of patent term for pharmaceuticals (itself, the subject of a separate review), and the proposed retention of "springboarding".
15. Clarification of the employee/employer relationship and derivation of title.
16. The continued absence of a statutory basis upon which an employee may seek compensation for a commercially successful invention.
17. Benefit of the doubt to be replaced by a balance of probabilities approach when deciding whether to grant a patent.
18. 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 if that act does not unreasonably conflict with normal exploitation of the invention".
19. The disclosure requirements for a micro-organism can be met by depositing a specimen in a recognised depositary.
20. Examiners' Reports are placed open for public inspection once an application has been accepted.
21. Grace period of 12 months where the disclosure was without the inventor's consent.
22. Removing the current requirement for NZ inventors to seek the Commissioner's permission to file a foreign application if they have not already filed a first/priority application in NZ.
23. 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.
24. 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 mean that) some patents granted under the current Act would be invalid under the new Act.

Our initial estimations that the new Act would be in operation by now appear to have been "optimistic", and we now estimate that the Bill, possibly in an amended form as noted above, will pass into NZ law early next year, as the Patents Act 2009. The complementary Patents Regulations should follow shortly thereafter.

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 NZ'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.