10 min read

Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020)

This recent decision provides helpful guidance on the principles for partial revocation of trade mark registrations in New Zealand and the determination of a “fair description” for goods and services.

The decision also highlights important differences between the law and practice on non-use removal proceedings in Australia and New Zealand.

Background

Cash Converters Pty Ltd (“Cash Converters”) sought partial revocation of the Office of the Retirement Commissioner’s (ORC) Registration No. 637400 SORTED. It covered Class 36 services in providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement, and providing financial information relating to retirement.

They also sought partial revocation of Registration No. 976028 SORTED, which covered broadly worded Class 36 services “financial affairs; monetary affairs; real estate affairs” and various services in providing advice, consultancy and information the areas of finance, monetary affairs, retirement, real estate, property and insurance and Class 41 educational services and services in providing educational material and information relating to insurance, financial affairs, monetary affairs, real estate affairs.  The full specifications for the registrations are at [1].  

Revocation was sought on the basis of non-use of the SORTED mark for a continuous period of three years.

Facts/evidence

ORC started using its SORTED mark in 2001, when it established its website www.sorted.com for providing information and tools, such as online calculators, to help New Zealanders prepare for, and manage, their finances during retirement. 

From at least 2013 ORC’s use of SORTED expanded to a broader range of services in providing information, advice and resources to promote “the life-long financial literacy of New Zealanders”.  With this expansion in 2013, ORC obtained the later Registration No. 976028 SORTED for the broader range of services. 

ORC’s evidence of use included use of the SORTED mark on guides, booklets, seminar and course details, on online tools and calculators and on an online forum.  [2]

Discussion

As the SORTED mark had not been used on all of the services covered by the registrations, partial revocation was in order.   

The Assistant Commissioner noted the High Court decision in Sky Network Television Ltd v Sky Fiber Inc (Sky Network) confirming how partial revocation applications should be considered:

The case law establishes that the first task is to find as a fact what goods or services there has been genuine use of the trade mark in relation to; and then to ‘arrive at a fair specification of goods having regard to the use made’.”  [3]

ORC was found to have used the SORTED mark to provide generalised information, advice and education on retirement planning and financial literacy generally.  ORC was also found to have used the mark to provide online calculator tools and an online community forum which provided users with more specific information and recommendations. 

In considering what was a “fair description” of those services provided under the mark, the Assistant Commissioner identified the principles set out by Mallon J in Sky Network:

“(a) The assessment has “nothing to do with the defendant.” Defining the goods negatively by reference to the defendants’ activities is therefore not the approach. 

(b) The proprietor has protection outside his or her specification of goods in areas where he or she can demonstrate a likelihood of deception under other provisions. “There is no pressing need, therefore, to confer on the proprietor a wider protection than his [or her] use warrants by unduly broadening the specification of goods.

(c) The width of the surviving specification “must depend largely upon questions of fact and degree.”  “Wide words can cover what are commercially quite different sorts of articles”.  If there is shown to be use of just one of those things “it would be commercially nonsense to maintain the registration for all goods caused by the wide words”. [4]

In summary, and further quoting Mallon J in Sky Network, the Assistant Commissioner noted that:

The “fair description” is one “which would be given in the context of trade mark protection” and depends on the nature of the goods, the circumstances of the trade and the breadth of use proved” and should be approached as ““objective and impartial, balancing the competing interests” and “a view from the trade”.[5]

The Assistant Commissioner recognised the important “balancing exercise” of competing interests of the owner, competitors and the public:

  1. to have the Register uncluttered with unused marks or with registrations with overly broad specifications;
  2. to prevent parties being unjustifiably exposed to infringement of registrations with overly broad specifications; and
  3. “the owner’s interest in protecting its brand” which “aligns with the public interest in consumers not being deceived or confused by use of another trade mark” and the owner’s entitlement “to commercially realistic protection, remembering the test for infringement, extends to similar goods and services”.  [6]

Findings 

The scope of the original specifications was considered to “extend well beyond the actual use that had been made of the SORTED mark”.  [7]

The Assistant Commissioner considered that a “fair description” of the services offered under the SORTED mark could be reached by considering the “functions (the way the mark has been used) and the generalised, rather than personalised, nature of the education, information and advice ORC provides”.  [8] 

ORC was not using the SORTED mark in relation to all types of information, education and advisory services in the areas of insurance, finance, money, real estate and investment.  Those services were all provided in giving advice and information focusing on retirement and personal financial literacy, and not on all aspects of insurance, finance, money and other matters.

The Assistant Commissioner found that it was appropriate to limit the specifications to reflect the focus of the use and reworded the services more narrowly and as all “relating [or related] to retirement and personal finance”.

Further, ORC’s advice was not personalised advice given to individuals.  Rather, it was generalised advice and information.  The general description “advisory services relating to…” in the original Class 36 specifications for both registrations was considered too broad.  The Assistant Commissioner considered that it would be fair to describe those services as “general advice relating to…”.

The original term “consultancy services relating to…” used in the Class 36 specifications for both registrations was removed because ORC would not be reasonably understood to be a consultancy business.  The Assistant Commissioner noted that “there is no aspect of the ORC business that technically requires the description to be used. ORC is able to have commercially realistic protection without the reference to consultancy”.  [9]

The full specifications as amended are at footnote  [10].

Earlier cases considering partial revocation

The Assistant Commissioner provided a helpful summary of earlier partial revocation cases and what was found to be a “fair description” for the goods and services.  This can be found at paragraph 71. 

These decisions show that precise descriptions are applied in partial revocation actions and that broad and unqualified descriptions are unlikely to be allowed under New Zealand practice. 

Comparison with Australian law

The decision highlights some important differences between the law on revocation/non-use removal actions in Australia and New Zealand. 

1. Discretion to remove or restrict a registration

The Assistant Commissioner noted in the decision that there is no “overriding discretion to refuse to revoke or partially revoke a registration”, which follows from the decision Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97].  [11]  Under New Zealand law, a trade mark owner must show use during the three year non-use period, or special circumstances that justify non-use of their mark, to successfully oppose a revocation application.

Unlike New Zealand, under Australian law the Registrar has the discretion under s 101(3) of the Trade Marks Act 1995 not to remove a registration even where there has not been use of the mark if “satisfied that it is reasonable” not to remove the registration.  Further, s 101(4) provides that in deciding under subsection (3) not to remove a registration the Registrar may take into account use of the mark on similar goods or closely related services or similar services or closely related goods. 

2. Standing to apply for removal for non use

New Zealand law requires that only an “aggrieved person” can apply for revocation of a registration.   As noted in the decision “the term “aggrieved person” is given a wide and liberal interpretation.  This will generally include trade rivals.  As well as someone who is disadvantaged in a legal or practical way.”  [12]

However, under Australian law any person can apply for removal of a registration for non-use and there is no requirement for the removal applicant to show aggrievement to have standing to apply for removal. 

3. Date of revocation

In the New Zealand decision, the Assistant Commissioner noted that “the result of revocation is that the owner’s rights cease to exist on the date the application revocation was filed, or at an earlier date if the Commissioner is satisfied the non-use ground has been made out at an earlier date.”  [13]

Under Australian law, the date of removal of a registration for non-use is the date of the Registrar’s decision and the Registrar does not have the discretion to determine an earlier date for removal.

Takeaway

There are important differences in relation to standing and discretion in revocation/non-use removal proceedings in New Zealand and Australia which trade mark owners should note.

When defending a non-use removal action in Australia, and there has been no use of the mark during the 3 year non-use period, trade mark owners should still consider whether there are grounds for convincing the Registrar to refuse removal of the registration, such as some residual reputation in the mark from earlier use or possibly overseas reputation.

In New Zealand, it is much more likely than it is in Australia that broad descriptions will be restricted to more specific and limited descriptions.


[1] Services covered by Registration No. 637400 SORTED:

Class 36:Providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet

Services covered by Registration No. 976028 SORTED:

Class 36: Financial affairs; monetary affairs; real estate affairs; providing advisory, consultancy and information services relating to finance, investment and financial planning for and during retirement; advisory services relating to real estate ownership; providing financial information relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet; consultancy services relating to insurance; information services relating to insurance; insurance advisory services; insurance information; provision of insurance information; consultation services relating to real estate; providing information, including online, about insurance, financial and monetary affairs and real estate affairs; provision of information in relation to real estate; provision of information relating to property (real estate); provision of information relating to real estate; real estate advisory; services; real estate investment advice

Class 41: Dissemination of educational material; education services; educational services; life coaching (training or education services); provision of educational information; provision of education services via an online forum; publication of educational materials; publication of educational texts; the aforementioned relating to insurance, financial affairs, monetary affairs, real estate affairs

[2] Arguing that ORC did not provide financial advisory services, Cash Converters’ evidence in support of the revocation application referred to ORC’s disclaimers on its website that its information and tools “should be treated as a guide only” and should be used before seeking professional advice.  It was also noted that ORC’s “Investor Kickstarter” guide is referred to on the website as a guide only which  “does not constitute investment advice to any person”.  The evidence also noted that ORC is not a registered financial services provider under the Financial Services Provider (Regulation and Dispute Resolution) Act 2008 (RDR Act). 

In reply, ORC filed evidence that it is not required to be registered under the RDR Act as it is not a business which provides financial services as defined under the Act.  ORC also noted that their “Investor Kickstarter” tool asks high level questions to categorise participants into one of five types of investors and that their disclaimer clarifies that the advice given through this tool is not the type of financial advice to which the Financial Advisors Act 2008 would apply. 

[3] Office of the Retirement Commissioner v Cash Converters Pty Ltd [2020] NZIPOTM 27 (23 December 2020), paragraph 39.

[4] ibid, paragraph 44.

[5] ibid, paragraph 45.

[6] ibid, paragraph 52.

[7] ibid, paragraph 110.

[8] ibid, paragraph 113.

[9] ibid, paragraph 96.

[10] Registration No. 637400

Class 36: Providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the worldwide web, an intranet or the Internet

Registration 976028

Class 36: Providing information and general advice, including online, about insurance, financial and monetary affairs and real estate affairs related to retirement and personal finance; provision of financial calculation services relating to retirement and personal financial planning including budgeting, personal debt, home buying, mortgages, superannuation, investment and savings, including by way of online; calculators; providing information services and general advice relating to finance, investment and financial planning for and during retirement; providing financial information and general advice relating to retirement by means of telecommunication and electronic networks including online, via a global or other communications network, the world-wide web, an intranet or the Internet.

Class 41: Education services related to retirement and personal financial matters including financial planning and budgeting, debt, home buying, mortgages, superannuation, investment and savings; provision and dissemination of educational material and information related to retirement and personal financial matters, including by way online communication, websites, web blogs, social media, forums, publications (including texts, guides and brochures), news articles, training, courses, seminars and meetings.

[11] ibid, paragraph 12 quoting  Crocodile International Pte Ltd v Lacoste [2017] NZSC 14 at [97]

[12] ibid, paragraph 28.

[13] ibid, paragraph 11.

Authored by Michelle Howe and Sean McManis

Welcome to Shelston IP’s round up of Australian and New Zealand trade mark cases for 2020.

While there were plenty of cases in 2020, we have selected a few which we think are interesting and provide an indication of the types of issues dealt with by the Courts and Trade Marks Office throughout the year.

Please click here for a quick snapshot of each case followed by a more detailed discussion of the main issues that arose in each case.

Read our full report

Authored by Sean McManis and Michael Deacon

Welcome to Shelston IP’s wrap-up of the most notable patent law decisions in Australia and New Zealand delivered during 2020 – a remarkable year indeed. The High Court delivered its first decision in a patent case since 2015, and there was an interesting spread of Full Federal Court, Federal Court, Australian Patent Office and Intellectual Property Office of New Zealand decisions relating to issues of patent validity, infringement and amendment as well as procedural issues.

Read our full report

  • The High Court of Australia has endorsed the doctrine of exhaustion in favour of the longstanding doctrine of implied licence with respect to patented products in Australia, but made clear the critical question remains whether the modifications made to a product in each case are properly characterised as permissible repair or impermissible re-making (Calidad v Seiko Epson).
  • An enlarged Full Federal Court has confirmed that a protocol for a clinical trial that is publicly available can be novelty-defeating, provided the information disclosed is sufficiently specific and complete to disclose the invention that is later claimed. The Full Court has also provided important guidance on the nature and scope of Swiss-style claims, and the circumstances under which such claims may be infringed (Mylan v Sun).
  • The Full Court of the Federal Court has found that a computer-implemented method that linked website users to online advertising was not a manner of manufacture and therefore not patentable subject matter (Commissioner of Patents v Rokt). In separate decisions, a computer-implemented method relating to “sandboxing” (Facebook) and an invention relating to the hardware and software components of an electronic gaming machine (Aristocrat v Commissioner of Patents) were held to be patent-eligible subject matter, while a modified roulette table was found not to be patent-eligible (Crown).
  • The Full Court of the Federal Court has confirmed that section 105(1A) of the Patents Act 1990 (Cth), introduced by the Raising the Bar reforms, confers on the Federal Court the power to direct amendments to patent applications during the course of an appeal hearing (Meat and Livestock Australia v Branhaven).
  • In the long-running patent dispute relating to Lundbeck’s antidepressant, Lexapro (escitalopram), the Full Court of the Federal Court overturned a decision that had found Sandoz liable for patent infringement during the extended term of a patent after it was restored, and awarded damages. Lundbeck has recently been granted special leave to appeal to the High Court of Australia, which for the third time will hear an appeal regarding an aspect of this long-running litigation (Sandoz v Lundbeck).
  • The Federal Court provided its first detailed analysis of the Raising the Bar reforms to Australian patent law concerning sufficiency and support. A subsequent judgment on final relief, delivered in November 2020, highlights the challenges facing a defendant who seeks to resist final injunctive relief on public interest grounds (Merck Sharp & Dohme v Wyeth). Those sufficiency and support requirements, as well as best method, were also considered in detail by the Australian Patent Office (University of British Columbia, Gliknik v CSL).
  • In an unprecedented decision, the Federal Court of Australia has considered and dismissed a claim by the Commonwealth Government for compensation from sponsors of innovator pharmaceutical products, pursuant to undertakings as to damages given in exchange for an interlocutory (preliminary) injunction restraining the launch of the first generic product (Commonwealth v Sanofi).
  • A party which gave undertakings not to launch an allegedly infringing biosimilar without first giving notice successfully resisted an application for preliminary discovery (Pfizer v Sandoz). Conversely preliminary discovery was granted against a former employee, but limited in scope due to the prevailing financial circumstances (Sovereign v Steynberg).
  • Extension of term applications were refused for pharmaceutical patents (Pharma Mar, Ono).
  • An opposition to an Australian patent application based solely on a challenge to entitlement was successful (Liquid Time v Smartpak).
  • The Federal Court considered the applicability of the Crown use defence to infringement, and the effect of prior disclosures by the Crown on validity (Axent v Compusign).
  • The nature and detail of disclosures in prior art and the common general knowledge proved determinative of the validity in decisions concerning a combination pharmaceutical product (Boehringer v Intervet) and a parking management system (Vehicle Monitoring Systems v SARB).
  • The construction of claims in the context of the entire specification proved determinative of issues of infringement and validity in several decisions (Caffitaly v One Collective, Nufarm v Dow, CQMS v ESCO).
  • The Intellectual Property Office of New Zealand has delivered decisions demonstrating the difficulty of opposing an application under the “old” 1953 Act (Lonza v Koppers), the high burden for computer-implemented methods (Thomson Reuters) and the more onerous support requirements under the “new” 2013 Act (Taiho Pharmaceutical).

As we continue into 2021 (and away from 2020), we hope this review provides a practical and comprehensive resource. Please do not hesitate to take the opportunity to contact our authors, all subject-matter experts in their respective fields, for advice on the issues raised by these important decisions.

Authored by Duncan Longstaff and Dr Roshan Evans

5 min read

New Zealand patent practice has long operated on a “drop-dead” deadline for the filing of a divisional application – once the would-be “parent” case is accepted, the facility to file a divisional application expires, irrespective of the circumstances.  Many have sought an extension/correction on some entirely reasonable grounds – clerical errors, communication problems, time-zone issues, computer failures, you-name-it (all reasons that tend to be looked upon favourably when it comes to Australian practice) – and all have failed.  Along with death and taxes, IPONZ’ drop-dead divisional deadline was one of life’s absolute certainties.

Fast forward to 2019 – and two decisions issued in quick succession from IPONZ that provide some hope for attorneys and applicants alike.  Given the frequency with which NZ’s divisional filing deadline seems to cause issues, readers should expect these two cases to be cited somewhat frequently in future restorative actions.

What’s in a name?

It seems strangely appropriate that a decision entitled “Magic Leap” (Magic Leap, Inc. [2019] NZIPOPAT 8 (30 April 2019)) is one of two discussed in this article.  The other is Primapak LLC [2019] NZIPOPAT 1 (7 January 2019).  The fact situations in Primapak and Magic Leap are fairly similar – with the claims in condition for allowance, an administrative staff member withdrew the postponement of acceptance, thereby allowing both cases to proceed to acceptance.  In both instances, no divisional was filed beforehand.  In both cases, the attorney had received instructions to file a divisional.  This reads squarely on an “error or omission” of the type generally correctable in Australia, but not so in New Zealand.

New Zealand’s “drop-dead” divisional deadline

IPONZ has been historically brutal when it comes to assessing late-filed divisionals.  We’re not talking “the dog ate my homework” here – we’re talking genuine and verifiable fact situations that perhaps ought to evoke some flexibility.  However, conscious of NZ’s status as a net importer of IP, the decision always fell in favour of third-party certainty: the applicant had its chance and failed to take it – and third parties were therefore entitled to act upon it.

For this reason, attorneys practising in New Zealand have been quite legitimately “spooked” by IPONZ’ divisional filing deadline.  Few things invite a sleepless night like timely instructions unable to be acted upon due to an error at the attorney’s end (genuine or otherwise).

But wait – there’s more.  The drop-dead divisional deadline was squarely in the Government’s consciousness during the recent transition from the Patents Act 1953 to the Patents Act 2013.  Significantly, the relevant provision did not change – NZ divisional practice was the way it was because that’s precisely how the Government wanted it.  Or so it seemed…

In both Primapak and Magic Leap, the respective applicants sought leave under subsection 202(1) of the 2013 Act to correct clerical errors, allowing the sought divisional applications to be filed validly.

The decisions are more interesting than the facts

These are very much cases where the findings and their implications are far more interesting than the decisions themselves.  Subsection 202(1) of the Patents Act 2013 provides that the Commissioner may correct an error.  There was no precedent case law on ss.202(1) and as such, ss.88(3) of the Patents Act 1953 was relied upon in the applicants’ submissions; this affords the Commissioner a broad discretion.

Subsection 88(3), however, seemed as problematic as it did helpful to the applicants’ position.  A notice of acceptance did not fall within the specified categories of correctable documents, which of course juxtaposes nicely with the broad discretion afforded to the Commissioner.  Indeed, high-profile failures in Fisher & Paykel Limited [1995] NZIPOPAT 6, Baxter Healthcare SA [2011] NZIPOPAT 2 and American Aerogel Corporation [2011] NZIPOPAT 3 had effectively rendered ss.88(3) somewhat toothless for the purposes of correcting genuine administrative errors.

What was needed, therefore, was a softening of the hard-line stance previously adopted by IPONZ.  Perhaps unexpectedly, IPONZ came to the party.

An action that was taken… is untaken

The Assistant Commissioner found in Primapak—and it was followed by the Delegate in Magic Leap—that despite withdrawal of the postponement of acceptance being a deliberate action taken on behalf of the responsible attorneys, it nonetheless amounted to the required “error” insofar as the client’s express instructions to file a divisional application were not able to be carried out.  Presumably this reasoning could be applied to a broader category of “errors” beyond merely withdrawing the postponement of acceptance via the IPONZ website. Regulation 52(2) of the Patents Regulations 2014, which requires that a request for antedating a divisional be filed at the same time as the divisional itself, was waived in both instances under Reg.149; the IPONZ website physically prohibited this regulation being complied with at the time the respective divisionals were filed.  This seems entirely reasonable under the circumstances and represents a further softening of IPONZ’ stance in relation to the correction of errors.

Finally, the net effect of both decisions was that the act of erroneously withdrawing the postponement of acceptance was taken never to have been performed.  As such, both “parent” cases were not formally accepted until the postponement expired 12 months after issuance of the first examination report.  By corollary, both divisionals were taken to have been filed during the pendency of their respective parent and were therefore now taken to have been filed validly.

What it all means

In combination, Primapak and Magic Leap provide a safety net that had previously been missing from NZ patent practice.  The divisional deadline isn’t the wholly inflexible invitation to mess up that it may have appeared previously – rather, depending upon the fact situation, and provided that such circumstances are verifiable seemingly to the nth-degree, it may (emphasis on “may”) be possible to late-file a divisional application.

Old Act, new Act and ongoing law reform

The drop-dead divisional filing deadline applies to both 1953 and 2013 Act cases alike.  However, as readers will know, the 2013 Act imposes an additional landmine by way of the 5-year absolute bar on requesting examination.  In combination, these two factors make NZ divisional practice something of a dark art.

New Zealand divisional practice is currently under Government review and, along with many other features of NZ IP law, may rear its head later this year in the long-awaited IP Omnibus Bill.  However, that is not to suggest that this particular aspect of the legislation is slated to change – we’ll just have to wait and see.

The big picture

Trans-Tasman patent attorneys have largely welcomed these decisions.  On the one hand, Australian practice is somewhat accommodating when it comes to correcting genuine errors – and it always appeared somewhat incongruous that the other jurisdiction we service, New Zealand, had assumed a position diametrically opposite.  In terms of our ability to sell the package deal—the “mini-Europe”—any degree of consistency is to be encouraged.

Quite where this leaves those who have tried and failed in the past is uncertain.

Authored by Gareth Dixon, PhD and Chris Byrnes

2 min read

A number of New Zealand trade mark owners have recently received incorrect notifications in relation their International Registrations designating New Zealand (“IRNZ”).  The Intellectual Property Office of New Zealand (“IPONZ”) advise these incorrect notifications appear to be the result of a “system issue” concerning communications with the World Intellectual Property Organisation (WIPO) who are responsible for overseeing the International Registration system.

As a result, some IRNZ’s are currently displaying a different status on the WIPO and IPONZ databases.  For example, an IRNZ may have been accepted by IPONZ, but due to the “system issue” between IPONZ and WIPO, this mark may have (erroneously) been communicated to WIPO as a refusal.  Further, some trade mark owners have received notification from IPONZ and/or WIPO confirming their IRNZ has been formally (i.e. finally) refused, despite responding to the provisional refusal of the relevant IRNZ in good time.

IPONZ have now located the cause of this “system issue” and identified all relevant IRNZs where a notification was sent in error.  IPONZ are currently working with WIPO to reverse these transactions.  The current notifications on WIPO’s database are not expected to impact the status of the relevant IRNZs on the New Zealand Register of Trade Marks or IPONZ trade marks database.

If you or your clients are concerned about the current status of trade marks in New Zealand (including the status of any IRNZs), our firm can assist you by confirming the status of such marks or securing suitable trade mark protection in New Zealand.

Authored by Nathan Sinclair and Sean McManis

1 min read

Welcome to Shelston’s wrap-up of the most notable patent decisions in Australia and New Zealand delivered during 2019. It was a busy year for patent jurisprudence with some interesting themes emerging – in particular, it has been a banner year for decisions on the “manner of manufacture” requirement for patentable subject matter.

Read our full report

  • An expanded Full Federal Court clarified the “manner of manufacture” test for computer-implemented methods to be patentable (Encompass), a topic that was also central to several other Federal Court (TettmanRepipeWatson) and Patent Office (Apple) decisions.
  • There were also important “manner of manufacture” decisions in the life sciences space, with single judges finding both a diagnostic method involving a process of detecting genetic material (Sequenom) and use of genetic information to infer traits (Meat & Livestock Australia) to be patentable subject matter.
  • The Full Court confirmed there is no doctrine of patent exhaustion in Australia, the critical distinction being between repairs permitted by implied or express licence terms brought home to the purchaser of a product, and the impermissible re-making of the product beyond the scope of any licence (Calidad (No. 1)).
  • The Full Court confirmed that a permanent injunction framed in general form by reference to the claims of an infringed patent is generally appropriate and may be ordered in addition to a specific injunction describing products or conduct found to infringe (Calidad No. 2).
  • The Full Court overturned an award of additional damages for flagrant patent infringement on the basis that the infringer had believed, on objectively reasonable grounds, that its conduct did not infringe the patent (Oxworks).
  • The tide continued to turn against pharmaceutical patentees being granted interlocutory injunctions (MylanSanofi-Aventis).
  • Patentees learned some harsh lessons as the Full Court dismissed infringement claims based on the construction of the terms “contains” (construed exhaustively in Nichia) and “recognise” (construed broadly in Davies).
  • There were several applications by patentees to amend patent claims and specifications after commencing infringement proceedings (Meat & Livestock AustraliaNeurimBlueScope), with mixed success.
  • Consideration was given in the Patent Office to Australia’s “raised bar” requirements for support and sufficiency (Gary CoxUniversal Polymers).
  • Both clinical trial patient consent forms (InterPharma) and academic conference posters (Regeneron) were considered prior art documents in life sciences cases.
  • There were further decisions regarding families of patents that have been litigated for a decade or more (GlobaltechSNF).
  • There were also decisions regarding the admissibility of “WayBackMachine” evidence (Dyno Nobel), summary dismissal of an infringement case (Pilkin), a successful application for preliminary discovery (MMD), a failed cross-claim for unjustified threats (Liberation), a failed attempt to withdraw admissions relating to infringement (Juno), a “strawman” opponent to a patent application having to pay security for costs in an appeal despite winning the opposition (Toolgen) and a party commencing infringement proceedings despite not being a proper exclusive licensee having to pay indemnity costs (Vald).
  • Two recent decisions issued by the Intellectual Property Office of New Zealand provide new hope that, in certain circumstances, it may be possible to obtain an extension of time to file a divisional patent application (PrimapakMagic Leap).

As 2020 gets underway, we hope this provides a useful and practical resource and, of course, please do not hesitate to take the opportunity to contact our authors, all subject-matter experts in their respective fields, for advice on the issues raised by these important decisions.

Authored by Dr Roshan Evans, Duncan Longstaff and Onur Saygin

4 min read

Trade mark owners should be aware of recent amendments to the New Zealand Trade Marks Act 2002 (TM Act), introduced under the Regulatory Systems (Economic Development) Amendment (No.2) Act.  These changes, which came into effect on 13 January 2020, are summarised below.

Renewal Grace Period

The grace period to renew a New Zealand trade mark registration after its due date for renewal has expired (“expiry date”) has been reduced from 12 months to 6 months.

While in this 6-month grace period a trade mark will show the status of “registered-past expiry date” on the Register and, if is not renewed within 6-month grace period, will then be removed from the Register and cease to have effect.

While having the status of “registered-past expiry” (within the 6-month grace period) no civil proceedings for trade mark infringement, criminal proceedings for counterfeit or other trade mark offences can be commenced.  However, other actions, such as assigning the trade mark or third-party revocation proceedings against the trade mark for non-use, can still be performed. The trade mark will also continue to be treated during the grace period as a valid trade mark for the purposes of preventing the registration of a conflicting later trade mark application filed by a third-party.

If the trade mark is renewed before the end of the grace period, new section 60(3) of the TM Act provides that the renewed registration takes effect from the expiry date and that the “trade mark is taken to have remained a registered trade mark for all purposes from that date as if its status had not changed”.  The legislative intent was not to encourage trade mark registrations to be infringed during the grace period and so, according to new section 60(3), any ‘infringing” act that occurs within this 6-month grace period will be considered an infringement, if the trade mark is renewed.  This can be contrasted with section 128 of the Australian Trade Marks Act 1995, which provides that, if a trade mark is renewed within the 6-month grace period after it has expired, an action may not be brought in respect of an “infringing” act “after the registration had expired and before it was renewed”.

Non-use Revocation and Removal of Commissioner’s Discretion

Any possibility of the New Zealand Commissioner for Trade Marks exercising discretion not to revoke a trade mark registration for non-use has been removed.

Previously, it was unclear whether the Commission had a residual discretion to allow a registered trade mark to remain on the Register, notwithstanding the trade mark owner failing to show the trade mark has been used or that there were special circumstances outside the owners’ control that prevented its use.  For example, exercise of the discretion might have been appropriate, where the registered trade mark had had been used only for goods that were closely related to the registered goods.  The amendment now makes it clear that there is no such discretion.

This contrasts with the position in Australia where the Registrar has a broad discretion.

Ownership restriction on Certification Trade Marks

The owner of a certification trade mark must not own another trade mark registration for the same goods and services.

Certification trade marks are used to indicate that goods or services have been “certified” as meeting a particular standard of quality or accuracy, have a particular composition, mode of manufacture, performance, geographical origin or some other characteristic.  Approved users of a certification trade mark must follow a set of rules that ensure that their goods or services meet the certified characteristic and the owner of a certification mark is responsible for setting these rules and controlling the approved users’ compliance.

Examples of registered certification marks in New Zealand include:

Fair Trade Certified
New Zealand Made
FeedSafe NZ

To be effective, a certification trade mark must serve as a reliable indication to consumers of the characteristic certified and denote independent and objective certification that the goods and services possess that characteristic.  If the registered owner of a certification trade mark were also to own and use the same trade mark for the same kind of goods and services, the registered owner could not objectively and independently provide and regulate the certification scheme and the certification standards to be followed by the approved users.

To this end, new section 13A of the TM Act will now ensure that the registered owner of a certification trade mark cannot separately register a trade mark for goods or services of the same kind for its own use.

Security for costs

In any legal proceedings before the court or Commissioner, including an opposition to a trade mark application, non-use revocation action, or invalidity proceedings against a registered trade mark, a party to the proceedings can seek an order that the other party pay security for costs within a specified time. Previously, the Commissioner and courts could order a party to pay security for costs only when that party did not reside or carry on business in New Zealand.  This has now been extended to any party the Commissioner or court has reason to believe will be unable to pay the other party’s costs if unsuccessful in the proceedings.  If a person does not comply with an order to pay security for costs, the Commissioner or court can treat the proceedings as abandoned by that person.

Fee Changes to New Zealand Trade Marks

In other news, the New Zealand Intellectual Property Office (IPONZ) has announced reduced fees relating to pre-filing search and advice provided by IPONZ and the filing and renewing of New Zealand trade marks, which will apply after 13 February 2020.  These reduced fees are set out in the following table.

NZ Fee increase ASL

(These can be found on the IPONZ online classification tool at https://app.iponz.govt.nz/ipol/app/ui/services/preApprovedGS)

If readers have any questions about the fee increases, please do not hesitate to contact any of our Shelston IP trade mark attorneys.

Authored by Sean McManis

7 min read

On 13 February 2020, the Intellectual Property Office of New Zealand (IPONZ) will increase many of its fees – and add several new ones.  As with any fee hike, some are justified more easily than others, some are “idiosyncratic” – and importantly, within the context of this article, some are avoidable altogether.

Specifically, if Applicants request voluntary examination prior to 13 February 2020, two of the changes, potentially amounting to several hundreds of dollars in additional fees, can be dodged:

  • The increase in examination fees (currently NZ$500, increasing to NZ$750); and
  • The new and unlikely-to-be-popular claim fees (NZ$120 per bank of 5 claims in excess of 25).

There is a narrow window within which to act – and it will soon slam shut.  We encourage clients to take proactive steps for the reasons provided below.

It’s not just cost reduction, it’s also “best practice”

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.

Around the same time – more by coincidence than design, IPONZ 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.

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 during prosecution (after the 5-year bar), or the application cannot be placed in condition for acceptance prior to expiry of the 12-month acceptance deadline (in cases where difficult prosecution is encountered).

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.  This can be particularly important as a peculiarity of New Zealand patent practice is that divisional applications must be filed before the parent is accepted.

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.  Again, this is important because due to its backlog, IPONZ is not presently issuing directions to request examination.

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 by 50% 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.

Under certain circumstances, the advent of claim fees may necessitate filing a voluntary amendment to reduce the total number of claims at the time of requesting examination.

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.

The solution

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.

NZ chart Jan 20

Are there 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 remain 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, especially when conducted in one of the larger, better-resourced offices; 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

Renewals

Note: the period for payment of renewal fees commences three months before the anniversary of the filing date of the complete specification and ends at the close of the anniversary date.

1

Filing and examination fee changes

2

Excess claims fees

3

Amendment fees

4

Restoration fees

5

Trade mark fee changes

Renewals

6

Application fees

7

Search and preliminary advice fees

8

If readers have any questions about the fee increases, please do not hesitate to contact any of our Shelston IP patent or trade mark attorneys.

Authored by Gareth Dixon, PhD and David Hvasanov, PhD

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.

The solution

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.

NZ NP and Exam

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

Renewals

1

Filing and examination fee changes

2

Excess claims fee changes

3

Amendment fees

4

Restoration fees

5

Trade mark fee changes

Renewals

6

Application fees

7

Search and preliminary advice fees

8

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

Across most jurisdictions, the facility to file a divisional application is an essential part of a patent attorney’s toolkit.  It is also an avenue of potential strategic advantage to patent applicants.  As Trans-Tasman patent attorneys, we’re presently seeing the two jurisdictions we service move further and further apart in respect of divisional practice.  Australia remains nice and friendly whereas New Zealand seems to be going in the opposite direction.  In New Zealand over the past 4-5 years, at least one of legislation (Act and Regulations), precedent law, Patent Office throughputs, examination protocols and international/bilateral obligations has remained somewhat fluid – and with it, the challenge for patent prosecutors to strike an appropriate balance between cost, scope and expediency has remained an imperfect science.  In this article, we play some of these factors off against each other – and come up with some ideas as to how attorneys and applicants alike can effectively manage the prosecution of New Zealand patent applications so that the facility to file (at least one) divisional application is not compromised.

First things first – why file a divisional?

The reasons why an attorney/applicant may wish to file a divisional application are by no means unique to New Zealand practice.  In general, they are the same as they are anywhere: to maintain pendency, for defensive or commercially-strategic reasons, and/or to satisfy a unity of invention rejection.  Article 4G of the Paris Convention requires that the facility to file a divisional application is made available to patent applicants.  More on this, later…

Brief history

As readers will know, New Zealand patent law has recently changed; on 14 September 2014, the Patents Act 1953 (the “old Act”) was replaced by the Patents Act 2013 (the “new Act”).  On the one hand, this creates a binary old Act/new Act distinction – and as we will see, divisional practice differs appreciably depending upon which legislation governs a particular New Zealand application.  However, as we will also see, life under the new Act is itself divisible into distinct pockets of time, each of which has caused our coveted “best practice” to fluctuate somewhat.

Life under the Patents Act 1953

Prosecuting applications under the old Act was (as remains, for any old Act divisional applications still pending) a fairly easy gig.  Automatic examination, local novelty, no consideration of inventive step, fairly gentle written description requirements, no time limit on filing a divisional (other than it must be filed pre-acceptance of its immediate parent) and relatively slow Patent Office throughputs meant that somewhat broad New Zealand patents could generally be obtained with a relative minimum of time, hassle and expense.  Often (albeit with a few notable exceptions relating to patentable subject matter), IPONZ was effectively only rubber-stamping what had gone before it in IP Australia, the EPO, USPTO or wherever.  Under the old Act, New Zealand was very much a follow-on jurisdiction.

Critically though – at least within the context of this article – “divisional best practice” essentially took care of itself.  As IPONZ throughputs were relatively slow (certainly, much slower than those of IP Australia for counterpart AU/NZ cases), and because divisional applications could be “daisy-chained” indefinitely, applicants faced little by way of time pressure.  Arguably, it was all biased a little too heavily in favour of the applicant and New Zealand’s patent landscape was becoming encumbered with thickets of overly broad (and possibly invalid, remembering that inventive step wasn’t examined, but was a ground for opposition and revocation) patents, granted principally to foreigners, at relatively minimal expense.  Many, including the Government, felt that change was overdue.

For completeness, it is worth noting that the facility to daisy-chain old Act divisionals is presently under threat.  The Government has recently released a discussion paper ahead of the impending IP Omnibus Bill, which details three potential mechanisms by which daisy-chaining may be phased out over the short-medium term.

The Patents Act 2013 – the “honeymoon” period

Applications filed in IPONZ on or after 14 September 2014 are subject to law and practice governed by the new Act(divisional applications filed from old Act cases notwithstanding).  Generalising slightly – and with a few notable exceptions, new Act law and practice at the time of commencement was closely akin to life under Australia’s Raising the Bar reforms of 2013.  To some extent, this was a natural consequence of the now-abandoned Single Application Process and Single Examination Process initiatives that took place between IP Australia and IPONZ.  Examination was now commenced by way of formal request, inventive step was examined, heightened support and written description standards applied, and Patent Office turnarounds were published, somewhat aspirationally, on the IPONZ website.  In a nutshell, New Zealand practice was now going to be quicker, stricter – and as a consequence, more labour-intensive and ultimately more expensive.

Under the new Act, divisional applications still had to be filed pre-acceptance.  However, in addition, a new 5-year statutory bar on requesting examination was introduced (which, due to the speed at which IPONZ was then operating, was unlikely to be a problem – more on that, below).

As with the old Act, best practice under the new Act was effectively self-governing: IPONZ dictated the speed at which an application progressed through examination – and so long as a divisional was filed before acceptance of its immediate parent, the 5-year statutory bar was unlikely to raise its head for at least one further generation of application.

The new Act effectively represented a 180-degree change in New Zealand practice – from slow, broad and cheap to fast, narrow(er) and more labour-intensive.  However, the principal take-home has already been alluded to above: best practice under both the old Act and during the early days of the new Act was effectively self-governing.  If an applicant did what IPONZ told them to do (when they told them to do it), their interests would be effectively preserved; attorneys didn’t need to exercise a great deal of imagination in terms of how best to manage timelines (including the 5-year statutory bar) during the early days of the new Act.

The Patents Act 2013 – post-honeymoon

Around mid-2016, things began to change again – for a variety of reasons, IPONZ started to fall behind and application pendency began to increase as a result.  Now, if this were Australia (and assuming the applicant didn’t have cause for wanting to expedite prosecution), it wouldn’t necessarily represent a problem – but remember that with New Zealand’s new Act came the 5-year statutory bar on requesting examination.  The kicker, here, being that the five years commenced at the filing date of the application (or antedated filing date – generally the PCT filing date of its eldest parent application in the case of divisional applications).  As IPONZ throughputs continued to slow, readers will appreciate that the action of requesting examination began to converge for both parent and any divisional applications.  This really now sets the cat amongst the pigeons…

During the early days of the new Act, a direction to request examination would generally issue around 7 months from the date of national phase entry.  First exam reports issued fairly quickly – around 3-4 months later, setting in place a 12-month acceptance deadline.  Adding everything up, the final acceptance deadline for a New Zealand national phase entry would generally fall around 40-45 months from its filing date, i.e., well within the 5-year/60-month statutory bar for not only filing, but also requesting examination of any subsequent divisional application/s.  In other words, an applicant knew where they stood (relative to whether or not they needed to file a divisional application) comfortably within the deadline for doing so.  Remember also, that the quoted 40-45 months is an “outside” timeframe also – for applications prosecuted actively (part of the reason for IPONZ’ new response deadline), further time could be saved – perhaps even enough to allow a full prosecution cycle for a first-generation divisional application before any decision on a second-generation divisional needed to be made.

Fast forward to today.  The backlog at IPONZ is now so deep that directions to request examination are no longer issuing at all; it’s all now on an applicant’s attorney to keep them apprised of the 5-year deadline and what is required of them within this period.  Here’s an everyday example of “passive” attorney work (let’s call it “worst” practice): An applicant, in the absence of a direction, instructs its attorney to request examination shortly before the 5-year deadline; an examination report issues 6 months later raising a unity of invention objection that would otherwise be addressed by filing a divisional application.  Oops…  Alternatively, if an obviousness (or any other) objection cannot be overcome within the 12-month acceptance deadline, the facility to maintain pendency via a divisional application is again extinguished.  In such circumstances, an applicant really does rely on its NZ attorney to have its back and come up with something a little more constructive than a passive prosecution strategy.

Note, however, that any delay at IPONZ’ end is not with respect to the time taken to produce a first examination report; in fact, they remain fairly quick in this regard.  Timeframes published on the IPONZ website range from 3 months (mechanical) to 6.5 months (biotech); this is considerably faster than the Australian Patent Office, which presently generates first reports in around 12-14 months across all technology spheres.  Any delay, as such, relates strictly to the absence of examination directions – and this is where “the problem” lies.

The problem, summarised

In the absence of proactive case management by an its attorney, time can be a New Zealand patent applicant’s worst nightmare.  If the applicant finds itself backed into a corner from which the only escape is a divisional application, they had better hope that the 5-year statutory bar has not yet passed.  As readers will appreciate, slower, stricter examination in IPONZ only serves to heighten this possibility – and with it, the imperative that attorneys are proactive in managing the deadline.

Is the problem incompatible with the Paris Convention?

Imagine this scenario:  A first examination report issues from IPONZ raising unity of invention.  The applicant wishes to address the rejection by filing a divisional directed to the “second” invention – there’s just one problem: the 5-year statutory bar has passed and the divisional route is therefore closed.

However, Article 4G of the Paris Convention (to which New Zealand is signatory) requires member states to make the divisional route available to applicants:

“If the examination reveals that an application for a patent contains more than one invention, the applicant may divide the application into a certain number of divisional applications and preserve as the date of each the date of the initial application and the benefit of the right of priority, if any”.

On the face of it, there seems to be an essential incompatibility between Article 4G and the 5-year statutory bar.  This has been raised previously and will no doubt surface again during the consultation process prior to drafting the upcoming IP Omnibus Bill (Intellectual Property Laws Amendment Bill – Patents Act 2013, Trade Marks Act 2002, Designs Act 1953).  However, until such time as it is firstly agreed upon by Government and then legislated around, the issue remains – and the only way around it is via proactive attorney involvement in managing the 5-year deadline.

The solution

Short of legislative reform to allow New Zealand law and practice to live together, there appears no “perfect” solution to this problem.  The only way to effectively tackle the 5-year statutory bar is for an attorney to be both vigilant and proactive in managing it.  If IPONZ isn’t going to issue a direction requiring an applicant to request examination, then this responsibility effectively now vests in the attorney – and internally, at our firm, we have adopted this practice.

As such, the suggested action is clear: encourage the applicant to 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.

However, what is the perfect number?  When should attorneys be reaching out to clients encouraging them to request examination?  Of course, there is no right or wrong answer to this question – only a very general “the sooner, the better”.  We’ve heard 3 years suggested recently (i.e., about 18 months post national phase entry) – and on the face of it, this seems as good as any other suggestion.  It allows an applicant a period of financial recovery following national phase entry (remembering that national phase entry day is the most expensive time a patentee will face), and means that an examination report will issue in good time, setting the acceptance deadline (and with it, the first deadline for filing a divisional) comfortably before the 5-year statutory bar.

NZ NP2

We have attempted to show this in the timeline above.  However, it will be appreciated that with the time increment between requesting examination and acceptance relatively consistent (depending upon technology) at around 15-18 months, the sooner examination is requested on a “parent” application, the more time is available for prosecuting a first-generation divisional prior to expiry of the statutory bar.  In fact, if an applicant requests voluntary examination upon entering the NZ national phase, there is sufficient time (without rushing unduly) to begin prosecuting a second-generation divisional prior to expiry of the statutory bar.

NZ NP exam2

In the appreciably-rare cases where more than two divisional are required, the applicant of course has the option of filing several at once (it doesn’t need to be one at a time).  The take-home is that despite its apparent rigidity, New Zealand practice is flexible enough to accommodate any number of prosecution strategies.  It simply requires proactive case management on the part of the attorney responsible.

Other measures to help manage the 5-year statutory bar

Whereas current IPONZ throughputs and the 5-year statutory bar may be, in practice, somewhat incompatible, there are some other measures available to an attorney that may help mitigate the risk that an applicant misses the deadline.

Firstly, an attorney should review any international phase prosecution history for potential unity of invention issues.  In this respect, New Zealand law is that same as that expressed under PCT Rule 13.2; if it is foreshadowed during international phase, there’s a good chance it will be raised during examination in IPONZ – all the more reason to request early examination and find out for sure.

Secondly, an attorney should make use of the comprehensive online file wrapper facilities at either the USPTO or EPO.  The majority of New Zealand patent applications are PCT national phase entries from US or EP first filings.  Often, by the time the New Zealand national phase is entered, the precursor application will already be well advanced in its jurisdiction of origin.  Is there anything in the recent file history that would suggest prosecution before IPONZ may be problematic?  Patentable subject matter, strong obviousness citations, restriction requirements – any one of these would give an applicant cause to keep a close eye on the 5-year statutory bar.

Is the 5-year statutory bar here to stay?

Although it is still possible that the upcoming IP Omnibus Bill may provide applicants with some relief from the 5-year absolute bar restriction, this is probably unlikely in practice (it was not foreshadowed in the recent discussion paper).  Rather, we believe that IPONZ will maintain its current position that management of the deadline is an applicant’s responsibility (of course, via its attorney).  The reason we expect the status quo to be maintained reflects what has been a palpable shift in focus from the somewhat applicant-friendly old Act to the more third party-centric new Act – in other words, the New Zealand Government considers it in the public interest that an applicant’s position is established as quickly as possible so that third parties are not encumbered by the eternal pendency of divisional-upon-divisional-upon-divisional (i.e., daisy chaining).  All things considered, this position is unlikely to change (although we’d be very happy to be proved wrong here).

Any reasons why early examination might 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.

Are there any other aspects of NZ divisional practice requiring proactive management?

Unfortunately, yes.  Self-collision is the big one.  Although it’s outside the scope of this article, we’ve written previously on the subject of poisonous priority.  Popular opinion seems to be that if the IP Omnibus Bill is going to correct any aspect of NZ divisional practice, it’s probably going to be this, rather than the 5-year statutory bar.

(Don’t) fear the walking dead

For completeness, another aspect of current NZ divisional practice that may/should be cleared up by the Omnibus Bill is the concept of the “zombie” divisional.  This occurs where a divisional is filed outside the 5-year statutory bar.  The Patents Regulations 2014 don’t actually prevent filing outside of the deadline; they only prevent the act of requesting examination.  As such, current NZ practice provides for zombie divisionals, which are filed validly, but cannot ever be examined and won’t ever have any legal effect; they just metaphorically roam the patent landscape in a permanent state of undead.  This is probably a loophole worth closing in the upcoming legislation.

Conclusion – what is current New Zealand divisional “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 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.

Authored by Gareth Dixon, PhD