The notion of what constitutes “best practice” when it comes to prosecuting a New Zealand patent application has always been somewhat subjective. For every move that seems like a good idea, there’s usually a decent counterpoint. However, we have recently attempted to reconcile all the pros and cons – and came to the conclusion that requesting early examination was as close to “best practice” as you were going to get.
More recently, the Intellectual Property Office of New Zealand (IPONZ) has announced some (fairly modest) increases in official fees, along with some new fees altogether. In combination, these stand as further drivers toward requesting early examination. In fact, if Applicants act quickly (i.e., prior to 13 February 2020), the additional fees may be avoided altogether.
Why again was early examination thought to be “best practice”?
It’s all to do with managing the 5-year statutory bar on requesting examination of a new Act (Patents Act 2013) case. Beyond five years of its filing date, a request for examination cannot validly be made. This, of course, creates all sorts of headaches when it comes to potential divisional applications (which can be filed, but not examined; the “zombie divisional” scenario). Throw in the fact that IPONZ presently has a large backlog of cases awaiting examination, and an Applicant risks having the 5-year bar expire on them before such time as they know where they stand on the divisional issue. Applicants can either guess – and file a precautionary divisional that may never be needed, or else run the gauntlet and risk missing out altogether in the event that unity is later raised, or the application cannot be placed in condition for acceptance prior to expiry of the 12-month acceptance deadline.
This is all a bit messy.
Accordingly, “best practice”, according to us, was to request examination of a New Zealand application as early as possible following filing in IPONZ (as a Convention or National Phase application). That way, by the time a first report issues, the Applicant will still have plenty of time up their sleeve when it comes to the 5-year bar. If a divisional is required, the Applicant is thereby enabled to make an informed decision as to whether to proceed.
Better still, in our recent experience, Applicants seem generally happy to accept this advice. This, of course, avoids attorneys later having to write “awkward” letters in the event that the divisional route turns out to be unavailable.
So, what does this have to do with IPONZ’ fee increases?
For existing Applicants (or Applicants filing in IPONZ within the next few months), requesting examination before 13 February 2020 avoids two further fees – one increased, and one new.
Increased fee for requesting examination
The official fee for requesting examination prior to 13 February 2020 is NZ$500 (about US$315, €290, RMB2300, or ¥34,000). If requesting examination on or after this date, the fee rises to NZ$750.
The justification for the fee increase is the labour-intensity of conducting examination under the Patents Act 2013. However, it also makes a New Zealand application costlier to examine than its Australian counterpart.
Keeping the magnitude of the increase in perspective, it will be appreciated that the increase in official fee provides a mild driver for Applicants to consider early examination as a means of avoiding it.
New fee for “excess” claims (30 or more)
Again, requesting examination before 13 February 2020 avoids this new fee entirely. Requesting examination on or after this date means that the fee becomes payable if, at any stage during examination, the specification contains 30 or more claims.
The new fee will be payable following acceptance of a New Zealand application (i.e., payment is necessary before an accepted application moves to grant) and is levied at NZ$120 for each 5th claim in excess of 25 (e.g., 30 claims = NZ$120; 56 claims = NZ$720, etc). Importantly though, the fee is payable based upon the maximum number of claims on file during examination. Reducing the number of claims immediately prior to acceptance (as we do, routinely, under Australian practice) does not avoid or lessen the fee.
Because IPONZ has never previously levied a “claims fee” of any type, we’ve never had to worry about the number of claims on file at any stage during prosecution. The new fee will thereby precipitate a slight change in practice amongst New Zealand attorneys – best request examination early (prior to 13 February 2020) and avoid it altogether.
Requesting early examination not only ensures that the divisional route remains available, it also minimises the official fees payable to IPONZ. However, the only way to effectively achieve both outcomes is for an attorney to be both vigilant and proactive in managing it. As such, the suggested action is clear: request examination as soon as possible upon NZ national phase entry. This maximises the chances that an Applicant will have, at least, a first examination report prior to expiry of the statutory bar – and as such, will have at least a pointer as to where they may stand in relation to a potential divisional application.
In fact, if an Applicant requests voluntary examination upon entering the NZ national phase, there is probably sufficient time (without rushing unduly) to begin prosecuting a second-generation divisional prior to expiry of the statutory bar.
Any reasons why early examination may not be “best” practice?
Perhaps the most significant downside to early examination is that post-acceptance amendments in New Zealand are fairly heavily restricted. Aside from correcting obvious mistakes, an Applicant can generally only amend down (i.e., narrow) an accepted claim – you can’t broaden, and you can’t move sideways should a killer piece of prior art emerge after an application has been accepted.
Although readers will appreciate that this is, of itself, a good reason to delay (rather than expedite) examination in New Zealand, it should be tempered with the observations that: a) international phase searching is generally fairly comprehensive; b) IPONZ only rarely uncovers new prior art itself; and c) with the majority of New Zealand applications coming by way of the US or Europe, additional high-quality searching will usually have been completed well before the counterpart New Zealand case is due for acceptance – even if examination is brought forward, as suggested.
The other main drawback to requesting early examination is that it brings forward costs that may not have been budgeted for so soon after the significant expense of a foreign filing campaign.
Conclusion – what is current New Zealand examination “best practice”?
With so many moving pieces to consider, the notion of “best” practice is perhaps a little subjective. Rather, let’s only make the claim that we’re suggesting “good” practice. To this end, even though such pieces will probably never synchronise, a proactive attorney can effectively manage the 5-year absolute bar for requesting examination and with it, mitigate any attendant risks (and minimise official fees payable to IPONZ) by:
- Reviewing international phase/EPO/USPTO prosecution histories shortly (g., 2-3 months) following NZ national phase entry.
- Incorporating any potential issues that may give an applicant cause to want/need to file a divisional into early advice following NZ national phase entry.
- Assuming it is in an applicant’s best interests, counsel them to request examination sooner, rather than later.
- Proactively managing IPONZ’ new response deadline (this action is largely self-regulating; IPONZ sets the deadline and attorneys/applicants need to comply).
- Avoiding, to the extent possible, applications going “down to the wire” in terms of the 12-month acceptance deadline. Rather, address the Examiner’s objections as soon as possible and if necessary or advisable, maintain the postponement of acceptance.
- Maintaining postponement of acceptance until such time as the applicant has made an informed decision regarding a divisional (remembering that acceptance of a NZ application triggers an unextendible bar on filing a divisional from it).
- Being cognisant of the restrictions on post-acceptance amendments under New Zealand practice – what are the chances of close prior art surfacing after the case has been accepted?
- Whilst juggling each of these seven balls, keep the closest eye on the 5-year statutory bar deadline – and remember it’s not just for filing a (or all) divisional application/s – it’s for requesting examination of any such application/s.
To conclude, if there’s one thing to take away from this article, it’s that these considerations are perfectly manageable – both individually and in sum. However, it requires an attorney who is in sync with the requirements and their limitations working in combination with an Applicant who is prepared to prioritise – at least during the initial stages, a filing in what is likely one of the smaller jurisdictions in which they have elected to pursue. Whereas our general preference is to request examination at the time of entering the NZ national phase, this must be offset against incurring costs that can always be deferred. As always, it’s a case-by-case, client-by-client proposition – but it is eminently manageable.
Which other fees will increase on 13 February 2020?
The fact this this is hidden at the back end of this article reflects its secondary importance relative to the notion of New Zealand best practice. In general, the cost of the more labour-intensive tasks (re-examination, assessing applications for restoration, etc.) has been increased, and the cost of annuity fees brought into closer conformity with those levied in Australia.
Patent fee changes
Filing and examination fee changes
Excess claims fee changes
Trade mark fee changes
Search and preliminary advice fees
If readers have any questions about the fee increases, please do not hesitate to contact any of our Shelston IP patent attorneys.
Authored by Gareth Dixon, PhD