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

The more things change, the more they stay the same.  New Zealand’s new Patents Act 2013 commenced on 13 September 2014 – and with it, the much-heralded shift from the local novelty standard employed under the Patents Act 1953 to absolute, or worldwide novelty. In this article, we consider what effect this shift is likely to have had in real terms.  That is, whether, during the examination of a New Zealand patent application, a patentee’s novelty assessment when considered under the provisions of the new Act legislation is likely to be significantly different from that provided under the old Act.

Introduction

New Zealand’s new Patents Act 2013 (“the new Act”) took effect from 13 September 2014.  It replaced, for non-divisional applications filed after the date of commencement, the long-since-obsolete Patents Act 1953 (“the old Act”).  The new Act has been heralded not only as the dawn of a new era for New Zealand patents, but also a general strengthening of New Zealand’s various patentability criteria.

In this article, we focus specifically on the novelty standard – world-over, generally considered the principal criterion for patentability.  We pose the question – by necessity somewhat academically, whether absolute (or worldwide) novelty, as prescribed under the new Act will be construed any differently to local novelty as it existed under the old Act.

What was “local novelty”, conceptually?

New Zealand was one of the only developed countries that retained (at least for applications filed prior to commencement of the new Act) a local novelty provision in its patents legislation.  When assessing the patentability of an application, local novelty disregards any publication or use outside that particular jurisdiction.  This, in theory, allowed patent applicants to file in New Zealand, validly, after overseas publication, use or sale.

One of the headline features in the move from the old Act to the new Act was that New Zealand patent law was shifting to an absolute novelty standard.  Of course, all this ever stood to do was to conform New Zealand’s novelty standard to that of its major trading partners.  It was a catch-up rather than a leap ahead.  Semantics aside, it is worth considering what difference this shift is likely to have made in real terms.

Local novelty is such an antiquated notion that most countries dispensed with it long ago.  Indeed, the outgoing Patents Act 1953 was based upon the UK’s Patents Act 1949 (which was itself replaced nearly four decades ago).  In such times, in order to import a new technology, one literally had to board a ship, sail a considerable distance, collect the new technology, sail home, offload it – and then try to sell it.  Local novelty “worked” in such an age because it provided an incentive to bring technology, be it new or known elsewhere, to a developing country such as New Zealand was at the time.  Not only this, but given New Zealand’s geographic isolation, there was also a sound argument that anyone prepared to go to these lengths in order to import a new technology may be deserving of a monopoly right upon it.

Is the concept still relevant?

It goes without saying that the world has changed somewhat over the past six decades.  Nowadays, developments in telecommunications – and to a lesser extent planes, trains and automobiles render local novelty largely conceptual and largely impossible to achieve in practice.  To all intents and purposes, local novelty’s death knell was the dawn of the internet age; any such notion is largely untenable where a new technology can be transmitted across the globe via the internet in a matter of milliseconds.

The issue of local novelty versus the internet has been considered at Patent Office level.  At issue before the Intellectual Property Office of New Zealand (IPONZ) in Molecular Plant Breeding’s Application [P25/2005] was the accession date of an internet-based document that was considered relevant to the novelty of the application, i.e., whether a website accessible through the internet constitutes “local publication” until such time as it exists physically (e.g., is printed) in New Zealand.  In this decision, the Delegate accepted that a document available via the internet indeed met the statutory definition of “published”:

“..it is no longer necessary for a hard copy of a document to be available to comply with the requirements of section 2. The internet, by 1999, was widely available to New Zealanders and, in fact, a search of the “web”, by that date, would have been considered virtually essential for any scientist engaged in a survey of literature relevant to his field. There is no doubt in my mind that in the present case the document concerned had been “made available to the public”. It could be inspected “as of right” by the public at any place where a computer with access to the internet was available, free of charge..”.

Whilst it has not been contested formally, the legitimacy of this finding has nonetheless been widely assumed in the interim.  A litigant contesting an old Act case and staking its claim on reversing this finding would require a paradigm shift in the accepted meaning of the term.

Accordingly, “local novelty by publication” was effectively rendered extinct under New Zealand practice as far back as 1999.  This left only “local novelty by use”, which was always rather limited, almost to the point of irrelevance.  Therefore, to all intents and purposes, New Zealand patent law, as prescribed under the old Act, already appeared to operate on a de facto absolute novelty basis.

So why are New Zealand patents more difficult to obtain under the Patents Act 2013?

As mentioned, popular opinion is that the Patents Act 2013 has raised the bar on New Zealand patents, making them more difficult to obtain and possibly more limited in scope.  If true, this could be something of a double-edged sword.  On the one hand, those wishing to innovate in New Zealand are less likely to be encumbered by thickets of overly-broad, possibly invalid patents.  The economic rationale for the Government wanting to achieve this position is clear – as a small economy, New Zealand should, it is argued, do all it can to encourage foreign innovation and investment.  However, on the other hand, the fear is that a stricter patents regime may in turn make New Zealand less attractive to patent applicants on a cost-versus-scope-versus-population basis.

As the principal criterion for patentability, we can reasonably expect absolute novelty under the new Act to be, at most, very negligibly different from that as assessed under the local novelty provisions of the old Act (at least, post-internet age).  If anything is really going to make New Zealand patents more difficult to obtain, it is most likely to be extending examination to include an assessment of inventive step; under the old Act, inventive step was not examined in IPONZ (although it was always a ground for both opposition and revocation) and the raising of the “support” requirement within the written description.

As such, if New Zealand patents are indeed more difficult to obtain under the provisions of the new Act – and we’ve now had a four-year sample suggesting that this is indeed the case, then this is most likely attributable to the incoming inventive step and support requirements (and the stringency with which these are being maintained during examination) rather than the shift from local to absolute novelty.

Conflicting applications – the shift from prior claiming to whole of contents

It is worth mentioning at this point that another novelty-based  provision of the new Act is the shift from “prior claiming” (i.e., double patenting), as prescribed under section 14 of the old Act to a whole of contents novelty approach for conflicting applications.  If anything, it is this shift that is likely to tangibly affect the novelty-based assessment of a new Act application as opposed to that of an old Act case.  Whereas section 14 of the old Act required not only the same claim, but also, for the prior application to have been filed in New Zealand, the new Act requires only that the claimed invention is disclosed in an earlier application, filed anywhere.  Although this new provision broadens the prohibition on conflicting applications, this needs to be considered against the somewhat rare occasions that any such provision will be invoked; our Australian experience based on a similar provision and a far higher volume of applications teaches us this much.

With the above points in mind, we remain to be convinced that a New Zealand patent will become significantly harder to obtain and/or appreciably narrower in scope under the novelty provisions as prescribed by the new Act.

Whole of contents + single priority date = poisonous priority

In combination with the fact that a New Zealand patent claim is afforded a single priority date only, the move to whole of contents novelty for conflicting applications potentially gives rise to a perfect storm of self-colliding (or “poisonous”) divisional applications.  However, this is probably challenging the limits of this article.

Local novelty and third party challenges

There is, perhaps, one final point to note in relation to the shift from local to absolute novelty.  When contesting new Act cases at an opposition or revocation/court level, the opponent will no longer need to go through the rather laborious task of proving the New Zealand accession date of foreign documents (e.g., the issue at hand in Molecular Plant Breeding, referred to above).  For example – selecting a prior art patent document completely at random, United States patent number 5,582,869 has a publication date of 10 December 1996.  However, upon interrogating the relevant databases (which its itself a somewhat labour-intensive task), its New Zealand accession date was not until 28 January 1997.  Although this is a relatively small difference (around six weeks), one will appreciate that this can be potentially significant (especially for closely-filed applications in a highly competitive field) – and, as mentioned, is somewhat labour and cost-intensive to have to prove.

Summary

As we have mentioned in previous articles, patent applicants could avail of the old Act patentability criteria by filing their complete application in New Zealand prior to the commencement of the new laws.  This would have ensured that such an application was subject to the old Act throughout its lifecycle – and, as mentioned also, renders the above article somewhat academic.

However, in cases where the 13 September 2014 deadline was missed – be it inadvertently, strategically or of necessity, New Zealand patents continue to provide good bang for your buck, with the new Act serving to increase certainty, both for a patentee and for their competitors.  As noted, the one exception to this deadline came by way of divisional applications – a divisional filed from an old Act case is itself, an old Act case (irrespective of when it is filed, and subject to a few potential restrictions).

Hopefully also, increased certainty begets increased attractiveness.  Local novelty – although generally recognised as a lower novelty standard was also somewhat idiosyncratic.  Removing a layer of idiosyncrasy can only be a good thing as far as the attractiveness of New Zealand’s patent system is concerned.

Shelston IP’s New Zealand practice

All of Shelston IP’s patent attorneys are dual-registered to practise in both Australia and New Zealand.  Our New Zealand patent practice thereby leverages significantly from our Australian operation – and our closeness in respect of law, economics, culture and physical distance means that there are compelling drivers for clients to look to us for assistance with their Australasian IP matters.

Authored by Gareth Dixon, PhD

The notion of what constitutes “best practice” when it comes to prosecuting New Zealand patent applications over the past 4-5 years has changed almost as often as Australia has changed Prime Minister.  Over this period, we’ve found that 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 (as they currently stand) 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 a divisional application is not compromised.

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, best practice differs appreciably depending upon which legislation governs any 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 – “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.  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.

The Patents Act 2013 – Early days

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 now 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 best 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 – Latter days

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 5 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 enemy.  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.

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 required 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

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 barIn 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 possible that next year’s Patents Omnibus Bill may provide applicants with some relief from the 5-year absolute bar restriction, this is probably unlikely in practice.  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 by 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 Patents 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 Patents 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 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 “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 their best interests, counsel the applicant 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 six 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.

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 file.  Whereas our personal preference is to request examination at the time of entering the NZ national phase, this must be offset against incurring further 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

In recent weeks, we’ve been following progress on New Zealand’s proposed second-tier “Advancement” patent with interest. As we moved from first, to second and then third updates, optimism that New Zealand’s patent system would be tweaked in favour of “the little guy” quickly waned; it became apparent that support for the Bill (Patents (Advancement Patents) Amendment Bill 2018) was divided along party lines – and that the majority were quite strongly opposed to it.

First reading concludes and the news is all bad

On 8 August 2018, the Bill’s first reading was concluded – and it was voted upon.  As predicted, there were 57 “Ayes” and 63 “Noes”.  The notion of a second-tier New Zealand patent system – at least in the form proposed by the draft legislation, is now dead in the water.

Could this influence what happens with Australia’s “Innovation” patent?

We are disappointed by this outcome and feel as though it’s a case of “opportunity missed” for the New Zealand patent system.  Whether the failure of the Bill at all influences the future of the counterpart “Innovation” patent system in Australia remains to be seen.  As readers will know from our previous update, this has now returned to death row where its fate will doubtless be revealed over the next few months.

As always, we’ll keep readers updated.

Authored by Gareth Dixon, PhD

As reverse manifestations go, this one was pretty good. Within a week of our previous article, which effectively said progress toward New Zealand’s proposed second-tier Advancement patent had stalled, it then resumes in the very next Parliamentary session!

Meanwhile, across the Tasman, draft legislation that purports to cull the Innovation patent system has re-emerged.

This article will be necessarily short – all we really need to cover is what’s happened over the past week – but what a week it’s been…

New Zealand: first reading resumes – but is again “interrupted”

As readers may recall, a Private Member’s Bill (Patents (Advancement Patents) Amendment Bill 2018) was tabled in New Zealand’s Parliament on 5 April 2018.  A stroke of good fortune saw it drawn from a ballot system and its first reading commenced on 16 May 2018.  However, in the time available, only two of the eleven scheduled speeches were completed – and the first reading was “interrupted”.

On 25 July 2018, the first reading resumed.  However, it was again interrupted with the final two speeches still to come.  Slow progress, but progress nonetheless.

When will the first reading continue/conclude?

Given the nature of Private Members’ Bills, there remains scope for it to “yo-yo” up and down the agenda for quite some time.  However, the fact that the first reading resumed after a relatively brief interruption suggests a strong resolve on the part of Parliament to move this Bill on to the next stage – whatever that may be.

What is the next stage?  

The next stage is binary – sink or swim, depending upon how the Bill is received in Parliament.  As we’d suggested previously, there was a strong indication that the (governing coalition majority) Labour party would not support the Bill, which on a purely numerical basis, means that the legislation’s only chance of survival is for the (governing coalition minority) New Zealand First party to cross the floor.  Based on its Deputy Leader’s speech during the resumed first reading, it’s safe to infer that the coalition will not be breaking ranks.  The Greens (confidence and supply agreement with coalition) also appeared to keep their end of the bargain.

On this basis, and at the risk of stating the obvious, the odds of the Bill passing muster don’t look great.  If Members vote as foreshadowed, the result will be 63-55, against.  And that’s just to ensure passage to the next stage of the legislative process – the Select Committee phase.

Meanwhile, across the ditch in Australia…

Probably more by coincidence than design, Australia’s death-row Innovation patent has been in the news again.  We’ve been following New Zealand’s Advancement patent and Australia’s Innovation patent in tandem due to an enduring interest in the Trans-Tasman “Single Economic Market” harmonisation initiatives, which date back to 2009.  The end goal of the SEM reforms, as the name would suggest, is to create unitary market conditions on both sides of the Tasman.  Save for the common currency and the obvious differences in respect of scale, the SEM reforms seek to develop the Australia-New Zealand common market along European lines.  Under SEM conditions, it would be somewhat incongruous to encourage innovation in Australia by way of the Innovation patent, but not to have a New Zealand equivalent (and vice versa).

So, what’s happened in Australia over the past week?

Readers may recall that Australia’s Innovation patent had been on death row, but then received something of an Easter resurrection, when clauses providing for its abolition were mysteriously removed from legislation tabled in Australia’s Federal Parliament on 28 March 2018.  As proponents of the Innovation patent system, and active lobbyists for its retention, we were hopeful that this signalled a change of heart on the part of the Australian Government.

Unfortunately, however, another reverse manifestation appears in progress and Patentology reported earlier this week that the Innovation patent is once again on the chopping block under a recently-published exposure draft, the Intellectual Property Laws Amendment Bill (Productivity Commission Response Part 2 and Other Measures) Bill 2018.  The proposed measures are the same as they were previously – in other words:

  1. The legislation is passed into law on “date-X”; it takes effect from “date-Y”, which is 12 months from date-X.
  2. At any time prior to date-Y (e., between now and date-X, and then between dates X and Y), new Innovation patent applications can be filed. In other words, nothing changes until the legislation takes effect on date-Y.
  3. As of date-Y, no new Innovation patent applications can be validly granted. However, an existing standard patent application (having a filing date prior to date-Y) can still be converted into an Innovation patent, or can have a divisional Innovation patent filed from it.  With Innovation patents having an 8-year term, it will be appreciated that under the proposed system, all Innovation patents will have expired by “date-Z” (effectively, date-Y+8).

The proposed transitional arrangements also give rise to another interesting consequence: added matter restrictions. An Innovation patent claim having a priority date on or after date-Y cannot be validly certified.  This guards against effective US C-I-P practice such that a claim reliant on added subject matter may not be entitled to its original priority date; if its revised priority date falls after date-Y, the claim cannot be certified following examination and is thereby not enforceable at law.

A coordinated approach across AU/NZ Governments, or mere coincidence?

Inevitably, the latter.  Conspiracy theories outlining coordinated parliamentary schedules tend not to hold much water.  However, if it’s mere coincidence that sees second-tier patents regimes being considered simultaneously across Australia and New Zealand, then, as proponents of such regimes, we’ll take it.

Next steps

In New Zealand: the first reading of the Advancement Patents Bill needs to be completed and voted on.  As noted above, the end may come swiftly and relatively painlessly.

In Australia: the exposure draft is open for public submission until 31 August 2018.  One would anticipate a spirited debate.  The worst-case scenario is a slow, painful death as outlined above.

As always, we’ll keep readers duly informed of developments.

Authored by Gareth Dixon, PhD

As seasoned patent scribes, who have between us covered almost everything of significance coming out of New Zealand over the past 15 years, the manner in which a recent article resonated was somewhat unexpected. The article didn’t cover the new Patents Act 2013, poisonous divisionals, the TPP, or even Eminem supposedly suing the NZ Government for copyright infringement – rather, it related to the proposed “Advancement” patent. On reflection, recent goings-on in Australia regarding the will they/won’t they nature of the “Innovation” patent cull probably served to bring the notion of Australasian second-tier patents more into the global IP focus than it might otherwise be. Nonetheless, given that we’ve fielded a few recent questions of the “what’s happening?” variety, this seems like an opportune time for a quick update.

Update – Has the Advancement patents legislation advanced at all?

The short answer is “yes, but not much”.  As readers may recall, the Private Member’s Bill (Patents (Advancement Patents) Amendment Bill 2018) was tabled in New Zealand’s Parliament on 5 April 2018.  A stroke of good fortune saw it drawn from a ballot system (applicable to Members’ Bills – those not introduced by sitting Ministers) and its first reading commenced on 16 May 2018.  However, in the time available, only two of the eleven scheduled speeches were completed – and the first reading was “interrupted”, where it has remained for the past two months.

When will the first reading continue?

The very nature of the Bill means that it is uncertain when the first reading will continue.  Firstly, Parliament only considers Members’ Bills once a fortnight – and even then, only for a short allotment of the session.  Secondly, the Parliamentary Order Paper is re-drawn prior to every session – and so last on the previous session certainly doesn’t mean first off the next (we saw this numerous times during consideration of the Patents Act 2013, which spent nearly five years yo-yo-ing up and down the queue).

At present, the Bill has slipped a little way down the agenda.  This may reflect one of two things: firstly, Parliament’s changing/adapting priorities; and secondly, the fact that the Bill is sponsored by a member of the Opposition.  In these respects, it is uncertain when the first reading will resume.

Any clues so far as to how it’s been received?  

Somewhat surprisingly, after just two speeches, some of the political landscape confronting the Bill has begun to reveal itself.  Dr Parmjeet Parmar (the sponsor) provided the first speech.  Predictably, Dr Parmar spoke of all the “pros” for adopting a second-tier patent system.  Indeed, in respect of recent efforts to save Australia’s Innovation patent, many of these economic and social arguments have had a good amount of air-time lately.  The political arguments, on the other hand, haven’t been as prevalent in Australia’s Innovation patent debate.

The second (reply) speech was given by a Government Minister, Iain Lees-Galloway, and hints at some of the obstacles Dr Parmar may face in ultimately having the Bill passed.  The Minister raised the Australian example.  Paraphrased, if second-tier patents are so great, why is Australia on the brink of abolishing theirs?  Further, where is the evidence that NZ SMEs are crying out for a second-tier patent?  Finally, the Minister suggested that the (governing coalition majority) Labour party would not support the Bill, which on a purely numerical basis, means that the legislation’s only chance of survival is for the (governing coalition minority) New Zealand First party to cross the floor.

On this basis, the odds don’t look great.  And that’s just to ensure passage to the next stage of the legislative process – the Select Committee phase.

A political football?    

Should a second-tier patents regime have been included in the Patents Act 2013?  We’d actually canvassed that notion previously, and concluded, all things considered, that it was probably a case of “too much too soon”.  In this respect, it took more than a decade to modernise a single patents regime that had its origins in World War II and included such antiquated concepts as local novelty – two regimes were probably never on the cards.

However, Minister Lees-Galloway’s short speech did allude to the possibility of the Advancement patent becoming something of a “political football”.  Were the Government and Opposition to effectively blame each other for not including both regimes in the Patents Act 2013, they would be conveniently forgetting something we’ve mentioned above: the 2013 Act took more than a decade to come into effect – both main parties formed Government during that period and both had equal opportunity to include it.  To this end, we’d hope that the legislation stands or falls on its merits – not on the back of a political blame-game.

Pre-history of the Advancement Patents Bill

New Zealand’s new Patents Act 2013 took effect from 13 September 2014.  Any complete application filed in the Intellectual Property Office of New Zealand (IPONZ) following commencement of the new legislation is subject to patentability standards substantially aligned with international norms.  Such standards include examination for inventive step and represent a perceptible increase with respect to those prescribed under the outgoing Patents Act 1953, under which a second-tier patents regime was never needed.

Why the impression that New Zealand never “needed” a second-tier patents regime?

Under the outgoing Patents Act 1953, inventive step was not examined, which in effect, meant that one could often obtain a New Zealand standard (20 year) patent for the same “low level” invention that if pursued before the Australian Patent Office may only have been worthy of an Innovation (8 year) patent.  With the advent of the Patents Act 2013, this was no longer true.  Indeed, the balance had been effectively reversed.

Private Member’s Bill in New Zealand’s Parliament

Call it coincidence or design, but hot on the heels of recent developments in Australia, a Private Member’s Bill was tabled in New Zealand’s Parliament on 5 April 2018.  The Bill purports to install NZ’s answer to Australia’s Innovation patent – the “Advancement” patent.  The General Policy Statement recites:

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

The parallels between NZ’s Advancement patent and Australia’s Innovation patent are thereby readily apparent.

First impressions – Did Australia somehow patent the Innovation patent?

First impressions upon reading the Bill was that it was very similar, but certainly not identical to Australia’s (currently) death-row “Innovation” patent.  In fact, it gave the impression of being a “workaround” – almost as though the Australian Government had somehow patented the Innovation patent, and the New Zealand Government was trying to get as close to it as possible without actually infringing.

Of course, as Dr Parmar explained in her speech, the differences aren’t just in relation to Australia – indeed, 58 other countries have second-tier patents regimes and the differences purportedly reflect New Zealand’s uniqueness.  Objectively though, they do seem slightly arbitrary, for instance, the criteria for an “advancement step” and how/why this should be different to Australia’s “innovative step”.

An “advancement step”

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

An advancement, so far as claimed in a claim, involves an advancement step if—

(a) the advancement is distinctly different from what would be known before the advancement by a person who is—

(i) a skilled worker in the field; but

(ii) has only common general knowledge of the art, having regard to any matter which forms part of the prior art base, and of other related technology, and common general knowledge in other jurisdictions generally; and

(b) the advancement makes a useful improvement to the working of the thing referred to in the claim.

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

 An “advancement step” = a 10 year monopoly

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

“Certification” is not an option (it’s compulsory)

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

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

Legislative space for the Advancement patent

The three main changes that have been effected under the patentability criteria prescribed by the Patents Act 2013 are: a shift from local to absolute novelty; an extension of the examination criteria to include an assessment of inventive step; and the requirement that a patent specification adequately “supports” the invention claimed (as opposed to the lower standard of fair basis required under the 1953 Act.  In real terms, the patentability threshold has been lifted appreciably and the balance of power in the patent bargain shifted perceptibly in favour of the Government (and third parties).

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

Following Australia’s lead

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

Striking an appropriate balance

The 1953 Act patentability standards enabled many local patentees to get established in the New Zealand market without the threat of direct competition.  This facility has been lost under the 2013 Act.  On the other hand, the old Act also allowed foreign patentees to do the exact same thing and in so doing, stymied competition and innovation throughout New Zealand.  Given that one of the overriding incentives of any patent system is to stimulate economic activity, it may be argued that the new Act should properly contain provisions that protect not only the large corporates by way of standard patents, but also SMEs and the like; the adoption of a New Zealand Advancement patent appears a reasonable means to this end.

Trans-Tasman harmonisation initiatives

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

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

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

Australia’s lead does not necessarily take us toward a NZ Advancement patent

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

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

Summary

Under New Zealand’s 1953 Act, one could essentially take an invention/innovation worthy only of an Australian Innovation patent (8-year term) and use it to obtain a New Zealand standard patent (20 year term); this facility has been removed with the advent of the Patents Act 2013.  However, in so doing, a New Zealand patent applicant having only a low-level invention is left with no fallback position, for there is currently no second-tier patent system.

Whereas the legislative space for a New Zealand second-tier patent system and the economic drivers for its adoption have been well known and publicised, Dr Parmar now provides a political impetus that had previously been lacking.

Next steps

Notwithstanding the many and varied pitfalls noted above, there remains a great deal of water to flow under the legislative bridge before any “real” progress is achieved.  Doubtless, NZ parliamentarians will be keeping a close eye on developments across the Tasman in respect of the Innovation patent.

Finally, given some of the economic market reasoning alluded to above, our feeling is that once the dust has settled, Australia and New Zealand will end up with largely similar patents regimes.  Whether this includes or excludes a second-tier Innovation/Advancement patent remains to be seen.  Watch this space.  There has been an unusual level of interest in this topic – and we’ll keep readers duly informed.

Authored by Gareth Dixon, PhD

New Zealand, with its remote geographical location and relatively small population, can sometimes be overlooked by patentees. However, there are compelling drivers for considering, and indeed pursuing patent protection in New Zealand.

For starters, New Zealand is consistently ranked one of the easiest countries in which to do business (The World Bank, 2017), and renowned as one of the world’s least corrupt economies (Corruption Perceptions Index, 2016).  It has a strongly Westernised consumer culture, a deregulated labour force and economy – and through ongoing harmonisation initiatives, is closely aligned with Australia (and now, by virtue of the CPTPP, much of the Pacific Rim) in respect of trade.

In respect of patent protection, New Zealand is relatively quick, easy and low cost.  Patentees are unlikely to be stuck in limbo for any significant time whilst their application is being considered; one tends to know where they stand within 6 to 12 months.  Compare this with the average patent pendency across the major offices around the world and there’s a certain attraction that should be immediately apparent.

That said, a relatively quick grant is only really attractive where it’s supported by an economy that facilitates the effective exploitation of a patent right.  In this respect, New Zealand offers some unique opportunities:

  • The cost of obtaining patent protection in New Zealand is relatively inexpensive. In New Zealand it is generally possible to obtain a granted patent for around US$5000, depending on the technology and nature of any rejections raised during examination.
  • An effective test market for new and emerging technologies (soft product launches). New Zealand is a Westernised, technology-savvy market known for its early adoption of new technologies.  Given its geographic isolation and small population, it is actually an ideal place to test a new technology in terms of rate of adoption, quality and useability. Further, it is perfect for exploring alternative routes to market for a new technology.
  • Modernised patent regime delivering just outcomes. New Zealand’s patents regime is one of the world’s most modern.  The Patents Act 2013 borrows from US, European and Australian laws to provide legislation uniquely suited to New Zealand’s social, political and economic standards.
  • Early patent examination and grant. Under the Patents Act 2013, examination typically commences within 12 months of national phase entry, with patent grant often following within a further 12 to 18 months.
  • Effective test bed for litigation. Economies of scale dictate that New Zealand should be a relatively cost-effective test bed for patent litigation.  An efficient legal process aids in this impression, as does the persuasive standing of various US, European and Australian precedent cases.
  • Divisional applications for both offensive and defensive purposes. The time-limited facility to retain a pending divisional application enables a patentee to fine-tune the scope of its monopoly should an infringer subsequently enter the market.  A divisional application may also provide scope to amend should an opposition or revocation action be initiated by a competitor.
  • Gateway to Asia via free trade agreements. New Zealand has bilateral FTAs with China, Japan, Korea, Malaysia, Singapore, Thailand, as well as multilateral agreements with the ASEAN bloc and more recently, the CPTPP countries.
  • Diverse technology sphere in which New Zealand is a significant world player. Contrary to popular belief, New Zealand is not all meat, fish, dairy and forestry.  Although these industries form the backbone of the economy, New Zealand is also an emerging hotbed for veterinary science, boatbuilding, film, hi-tech and digital industries.

Although many recognise that New Zealand is a land abounding in opportunity, this impression has not always extended to the patent space.  We hope that the above information stimulates a re-think.

Shelston IP is a “Trans-Tasman” firm – we practise in both Australia and New Zealand.  We are intimately familiar with the commercial landscape in both countries and can provide clients with a wealth of expertise in both jurisdictions.

Authored by Gareth Dixon, PhD

In the past, New Zealand has trumped Australia in relation to a range of important policy issues including: votes for women; native title rights for indigenous people; environmental laws and renewable energy; and marriage equality. Now New Zealand appears to be leading Australia again, this time in relation to innovation policy.

As reported by Shelston IP last week, New Zealand National MP, Parmjeet Parmar, has introduced a private members’ Bill directed to a second-tier patent system: the “advancement patent”, similar to Australia’s innovation patent system. Significantly, and in contrast to New Zealand’s pro-innovation approach, the abolition of Australia’s innovation patent system remains on the agenda despite a recent reprieve. Thus, it appears that Australia and New Zealand are heading in diametrically opposite directions in terms of their innovation policies.

Ms Parmar, made it clear that “the Patents (Advancement Patents) Amendment Bill will introduce a more accessible and cost-effective second-tier patent system that will protect novel creations that don’t qualify for the standard patent”. She went on to say that a second-tier patent system will “provide forward-thinking people with the opportunity to commercialise their creation whilst continuing the vital research and development component of our economy”.

In my role as council member of the Institute of Patent and Trademark attorneys of Australia (IPTA), I have coordinated discussions between IP Australia, Government Ministers, the Opposition, cross-bench Senators and innovators from Australian small and medium-sized entities (SMEs) in a bid to save Australia’s innovation patent system. Relevantly, the reasons put forward by Ms Parmar for introducing a second-tier patent system in New Zealand wholly align with the comments made by concerned Australian SMEs in their support for the Australian innovation patent system.

Given the work that has been carried out to better align the Australian and New Zealand patent systems, the proposed introduction of a second-tier patent system in New Zealand will provide further compelling reasons for Australia to retain the innovation patent system.

Authored by Gareth Dixon, PhD

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

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

Introduction

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

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

Private Member’s Bill in NZ’s Parliament

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

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

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

An “advancement step”

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

An advancement, so far as claimed in a claim, involves an advancement step if—

(a) the advancement is distinctly different from what would be known before the advancement by a person who is—

(i) a skilled worker in the field; but

(ii) has only common general knowledge of the art, having regard to any matter which forms part of the prior art base, and of other related technology, and common general knowledge in other jurisdictions generally; and

(b) the advancement makes a useful improvement to the working of the thing referred to in the claim.

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

 An “advancement step” = a 10 year monopoly

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

“Certification” is not an option (it’s compulsory)

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

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

Legislative space for the advancement patent

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

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

Following Australia’s lead

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

Striking an appropriate balance

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

Trans-Tasman harmonisation initiatives

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

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

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

Too much too soon?  

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

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

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

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

Summary

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

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

Next steps

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

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

Authored by Gareth Dixon, PhD

New Zealand’s new Patents Act 2013 commenced on 13 September 2014, and was given effect by the accompanying Patents Regulations 2014.  Over the ensuing 3½ years, a few “uncertainties” (unintended consequences/drafting errors) have come to light.  On balance, none were deemed significant enough to warrant immediate amendment to the Regulations and indeed only one (micro-organism deposit receipts, see below) prompted the release of a Practice Note.  Rather, IPONZ collated the required changes as they came to light and has now gazetted them in the Patents Amendment Regulations 2018; these come into effect as of 5 April 2018.

Overview of the changes

At the outset, we should make it clear that any changes stand to affect attorneys, not New Zealand patent applicants.  Even then, to the extent that the changes do affect attorneys, they are fairly minor in nature – in large measure, all they do is clarify a few instances of day-to-day New Zealand practice that some may have had cause to question in view of the original wording of the Regulations.

Substance of the changes

As per the explanatory note, the Patents Amendment Regulations 2018 provide that:

  • An address for service may be an Australian or a New Zealand address

This is fairly inconsequential given that most Trans-Tasman firms maintain an address for service in both Australia and New Zealand anyway.  That said, it is in keeping with what remains of (from a patents point-of-view) the Single Economic Market (SEM) reforms between the Australian and New Zealand Governments, which commenced in 2009.  Readers may recall that other aspects of the SEM patent reforms such as the Single Application Process (SAP) and Single Examination Process (SEP) were culled back in 2016.  Our article can be found here.

  • Regulation 19(2)(b) is revoked so that only form requirements need to be satisfied for documents to be considered “filed”

This change merely removes any uncertainty as to whether a document is taken to have been properly “filed” if it fails to comply with the Act and Regulations.  Previously, there had been some concern that a document falling foul of any one (even relatively minor) provision of the Act or Regulations may not be taken to have been properly “filed”; this seemed excessive and clearly was not the intent of the original legislation which, we believe, had a duty to promote accessibility over formality in respect of the New Zealand patent system.

  • Regulation 52(3) is revoked and Regulation 82 is amended to apply requirements regarding the respective content of divisional and parent patent applications at the acceptance of specification stage, rather than the application stage

Commonsense prevails.  New Zealand’s approach to double patenting, paraphrased heavily, is that  parent/child/grandchild(ren) should not claim substantially the same subject matter (the degree of overlap permissible, of course, being somewhat subjective).  The original wording of the Regulations had caused concern that a divisional filed with claims that overlapped its parent may be invalid (or more correctly, “never filed” such that it did not comply with the Regulations – see, Regulation 19(2)(b), above).  However, the amendments make it clear that the critical time for comparison of the claim scope of a parent and its divisional is at acceptance, not at filing.  Accordingly, a divisional is allowed to overlap with its parent at the time of filing, but any “substantial” overlap should be removed during prosecution.  Many had felt that this was always the intent of the legislation – and, indeed, IPONZ had acknowledged this informally in the past.  However, the longer we went without a Practice Note having issued from IPONZ, the more concerned some had become.  This clears things up nicely and ensures that the claims of a divisional application can be settled during its prosecution phase, rather than at the time of filing.

  • Regulation 59 (which relates to deposit requirements for micro-organisms) is amended to provide that the prescribed period for the purposes of section 43(1)(b) is the same as the period prescribed for the purpose of section 71(1) of that Act (which relates to the time for putting an application in order for acceptance), namely, 12 months after the date of issue of the first examination report under section 65

My colleagues had flagged this potential issue within two days of the new legislation taking effect.  The original text required that a patent applicant provide a micro-organism deposit receipt potentially years before filing their patent application in New Zealand.  Of course, this was wholly impractical and IPONZ moved quickly to remedy the situation by way of Practice Note 2014/01, which provided interim relief to applicants and attorneys alike.  The deadline for providing the deposit receipt is now the same as the deadline for placing the application in condition for acceptance – namely, 12 months from the date of the first examination report.  As such, the deposit receipt is merely now a formality that must be satisfied prior to formal acceptance being recorded.

  • The time limit in regulation 61 for amending documents forming part of the complete specification is changed from 19 months to 22 months in line with revised international requirements

Regulation 61 amendments (for the purposes of this provision) are the same as PCT Article 34 amendments.  The previous situation was unworkable where IPONZ’ internal deadline (19) months was shorter than WIPO’s (22 months).  In effect, this provided an incentive for wary Trans-Tasman attorneys to file their international applications with IP Australia as the receiving office (or WIPO, etc.) rather than IPONZ.  This has now been rectified, making IPONZ an equally attractive RO.

  • Regulations 103, 104, and 161 are amended to clarify that the period for filing a counter-statement to an application for revocation of a patent may also be extended under regulation 161 in certain situations. The effect of the amendments, in summary, is that extensions will be possible under both regulations 103 and 161 in certain circumstances, and either one or two extensions are possible depending on which regulation the first extension application is made under

These changes relate to the very rare circumstances in which revocation before the Commissioner is sought by a third party.  In respect of its counterstatement (reply to the petitioner’s statement of case), a patentee is now afforded up to two extensions of time, provided certain criteria are met.  Regulation 161 was not previously available to patentees requiring an extension of time within which to file their counterstatement.

Net effect of the changes

Day-to-day patent practice before IPONZ will be largely unaffected by these changes.  Over the past 3½ years, attorneys had been well aware of the need to “tread carefully” in some of these areas and IPONZ had been accommodating to the extent possible such that few, if indeed any, cautionary tales emerged.  That said, what the changes have achieved is to dispel (or at least lessen) the urban myth that New Zealand had become a somewhat patentee-unfriendly jurisdiction since the new legislation took effect.  Provided that attorneys and applicants abide by the revised Regulations, there should be very few unintended consequences of the new legislation going forward.

Authored by Gareth Dixon, PhD