The existing New Zealand patent system

A patent is a right granted by the Commissioner of Patents, after an examination process by the Intellectual Property Office of New Zealand (IPONZ), to prevent others from using an invention for twenty years. The right continues for that length of time provided that renewal fees are paid by the end of the fourth, seventh, tenth, and thirteenth years after the grant. The patents regulatory system is established under the Patents Act 1953 (the 1953 Act) and the Patents Regulations 1954. The 1953 Act is based on the United Kingdom Patents Act 1949. This statue was replaced in the United Kingdom by the Patents Act 1977 (UK). This Act made significant changes to the United Kingdom patent laws. New Zealand, however, has made no substantial change since 1953.

The law relating to patents in the United Kingdom and New Zealand has its origins in England in the early modern period. Patents giving monopolies for new inventions were first granted by Queen Elizabeth I to encourage the establishment of new industries within the realm. In 1623 Parliament passed the Statute of Monopolies which restricted monopolies already granted and prohibited the granting of new monopolies except to the true and first inventors of "a manner of new manufacture" which was not being used by others at the time of the grant.

A patent may be granted for an invention that is a "manner of new manufacture" and entitles the grantee (the patent owner) with a right to exclude others from making, using or assigning the patented invention during the term of the patent. The patent owner must make public a complete description of the invention, so that once the patent expires other persons will be able to use it.

The regulation of patents is carried out through the Patent Office. The Patent Office is required to keep a register of patents, into which must be entered the particulars of:

• patents in force;

• assignments and transmissions of patents and of licences under patents; and
• other matters affecting the validity or proprietorship of patents as the Commissioner of Patents thinks fit.
• The chief executive and chief statutory officer of the Patents Office is the Commissioner of Patents who is appointed under the State Sector Act 1988 (Sections 3, 4, 5 and 83 of the Patents Act 1953).
• The need for this Bill
• "The Bill gives effect to the Government’s decisions to:
• "strengthen the criteria for granting a patent by introducing an “absolute novelty” standard, examination for inventive step and usefulness, and a “whole of contents” approach to dealing with conflicting applications;
• "provide that the current requirement for the Commissioner to give applicants the benefit of the doubt when deciding whether to grant a patent be replaced by a balance of probabilities approach;
• "retain the current definition of patentable subject matter as a “manner of manufacture” and provide specific exclusions from patent protection for human beings and biological processes for their generation, methods of medical treatment of human beings, plant varieties, and inventions whose commercial exploitation would be contrary to public order or morality;
• "establish a Māori advisory committee to provide advice to the Commissioner in respect of patent applications for inventions involving indigenous plants and animals;
• "introduce a specific experimental use exception into New Zealand’s patent legislation;
• "provide for automatic publication of patent applications at 18 months from their earliest priority date;
• "provide that where an invention involves a micro-organism, the requirements for disclosure of the invention can be met by depositing a specimen of the micro-organism in a recognised depositary;
• "provide that all examiners’ reports and communications relating to a patent application be open to public inspection once the application has been accepted;
• "provide that disclosures of an invention, up to 12 months prior to filing of an application, will not destroy novelty if the disclosure was derived from the inventor and disclosed without the inventor’s consent;
• "simplify the procedures for granting a patent by—

• "replacing the present “right to apply” requirement with a “right to grant” provision; and
• "providing that the Commissioner may set time limits for responses to examination reports. Failure to meet these limits will result in the application being deemed to be abandoned; and
• "removing the current requirement for local applicants to seek permission to file a foreign patent application if they have not filed an application in New Zealand;

• "streamline the procedures for challenging the grant of a patent by—

• "providing for a re-examination that allows third parties to object to the grant of a patent on the grounds that the invention is not novel or lacks an inventive step;
• "removing the current standing requirements for revocation proceedings, while providing safeguards against frivolous or vexatious proceedings;
• "providing an administrative revocation procedure where third parties can, at any time during the term of a patent, apply to the Commissioner to revoke the patent on any of the grounds on which grant could be refused. The existing High Court procedure for revoking a patent will remain;
• "repealing the current pre-grant opposition procedure;

• "update the regulatory regime for patent attorneys by—

• "repealing the current age and citizenship requirements for registration as a patent attorney; and
• "allowing a person’s registration as a patent attorney overseas to be recognised for the purposes of registration in New Zealand under specific conditions; and
• "introducing a good character requirement; and
• "establishing a Patent Attorneys’ Standards Board, comprising the Commissioner and representatives of the patent attorney profession, with functions including the administration of the qualifications and disciplinary regimes for patent attorneys; and
• "requiring a code of conduct meeting specified objectives to be developed for and maintained by the patent attorney profession; and
• "specifying the grounds on which a complaint about a patent attorney’s conduct can be made, the procedure for making a complaint, and the orders following any breach of acceptable standards of service.

• "The Bill also makes a number of other changes to update and simplify the administrative aspects of the patents regime" [1]   .

The basic principles of the Bill and significant changes from the present law are described below.

Purposes

The Bill provides that the purposes of the Bill are to:

• ensure that a patent is granted for an invention only in appropriate circumstances by establishing appropriate criteria for the granting of a patent and providing for procedures that allow the validity of a patent to be tested; and
• provide greater certainty for patent owners and the users of patented inventions that patents will be valid after they are granted; and
• address Māori concerns relating to the granting of patents for inventions derived from indigenous plants and animals or from Māori traditional knowledge; and
• promote quality, expertise, and integrity in the profession of patent attorneys; and
• ensure that New Zealand’s patent regime takes account of international developments (Part 1, Clause 3).

What is patentable?

The Bill provides that a patent may be granted for a patentable invention. An invention is patentable if the invention, so far as claimed in a claim:

• is a manner of manufacture within the meaning of section 6 of the Statute of Monopolies; and
• when compared with the prior art base, is novel and involves an inventive step; and
• is useful; and
• is not excluded from being a patentable invention under Clauses 14 or 15 (Part 2, Subpart 1, Clauses 12 and 13).

Meaning of "prior art base", "novel", "an inventive step" and "useful"

The Bill defines the terms "prior art base", "novel", "an inventive step" and "useful" as follows:

• The term " prior art base" means all matter (whether a product, a process, information about a product or process, or anything else) that has at any time before the "priority date" (see below) of the relevant claim been made available to the public (whether in New Zealand or elsewhere) by written or oral description, by use, or in any other way. In relation to the definition of novel, the definition of prior art base also includes the information contained in a complete specification filed in respect of another patent application in certain circumstances. A disclosure must be disregarded for the purposes of this definition of prior art base if:

• the disclosure occurred during the one-year period before the filing date of the patent application and the disclosure was due to information having been obtained unlawfully or in breach of confidence;
• the disclosure occurred during the one-year period before the filing date of the patent application and the disclosure was made in breach of confidence by a person who obtained information in confidence from the inventor;
• the disclosure was due to the communication of the invention to a government department;
• the disclosure occurred during the six-month period before the filing date of the patent application and that disclosure was due to the display of the invention at certain specified international exhibitions;
• the disclosure was due to the invention being publicly worked, at any time during the one-year period before the filing date of the patent application, by certain persons (Part 1, Subpart 1, Clauses 8 and 9).

• The term "novel" means that the invention, so far as claimed in a claim, does not form part of the prior art base (Part 1, Clause 6).
• The term "inventive step" means, so far as claimed in a claim, that it is not obvious to a person skilled in the art, having regard to any matter which forms part of the prior art base (Part 1, Clause 7);
• The term "useful" means that the invention has a specific, credible, and substantial utility (Part 1, Clause 10).

Exclusions from patentability

The Bill contains exclusions from what is patentable. An invention is not a patentable invention if the commercial exploitation of the invention, so far as claimed in a claim, is contrary to "public order" or morality. In addition, the following are not patentable inventions:

• human beings and biological processes for their generation;
• inventions of methods of treatment of human beings by surgery or therapy;
• inventions of methods of diagnosis practised on human beings;
• plant varieties (Part 2, Subpart 1, Clauses 14 and 15).

Comment

The wording of this exclusion is intended to be consistent with Article 27 of the World Trade Organisation Agreement on Trade Related Aspects of Intellectual Property Rights (the Agreement). This provides: " ... patents shall be available for any inventions, whether products or processes, in all fields of technology, provided that they are new, involve an inventive step and are capable of industrial application" and " ... patents shall be available and patent rights enjoyable without discrimination as to the place of invention, the field of technology and whether products are imported or locally produced". "Members may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law". "Members may also exclude from patentability:

(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;

1. plants and animals other than micro-organisms, and essentially biological processes for the production of plants or animals other than non-biological and microbiological processes. However, Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof".

In neither the Agreement nor the Bill are the terms "public ordre"/ "public order" or "morality" defined.

What rights attach to patents?

The Bill provides that a patent is personal property (Part 2, Subpart 2, Clause 16) and gives the patentee the following rights:

• the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention (this means to do any of the following: to make, hire, sell, or otherwise dispose of the relevant product or, if the invention is a process, to use the process or to do any of those acts in respect of a product resulting from that use) (Part 2, Subpart 2, Clause 17);
• the rights have effect throughout New Zealand (Part 2, Subpart 2, Clause 18).

The term of every patent is 20 years from the patent date (which is generally the filing date of the complete specification) unless renewal fees have not been paid within the prescribed period, unless that period is extended (which may be up to six months after the expiry of the prescribed period (Part 2, Subpart 2, Clauses 19 and 20).

Patent ownership

The Bill provides that a patent for an invention may only be granted to a person who:

• is the inventor; or
• derives title to the invention from the inventor; or
• is the personal representative of a deceased person mentioned above.

The Bill enables a patentee to deal with a patent as the absolute owner of it. Provision is made for co-ownership of a patent by two or more persons. The Bill provides that the Commissioner of Patents may determine disputes as to inventions made by employees (with a right of review to the Employment Relations Authority) and the Employment Relations Authority or the Commissioner may apportion the benefit of an invention made by an employee and of a patent relating to that invention (Part 2, Subpart 3, Clauses 21-29).

Comment

The present role of the High Court is to be performed by the Employment Relations Authority under this Bill.

Process for obtaining grant of patent and other matters

The Bill makes detailed provision for the making of applications and for the granting of patents. Applications must be accompanied by a specification which, broadly, describes the invention and (in certain circumstances) describes the method by which it is to be performed. Requirements and procedures differ depending on whether the application is a "treaty application" (international applications made under the Patent Cooperation Treaty that contain a request specifying New Zealand as a designated State under Article 4(1)(ii) of that Treaty) or a "convention application" (a convention applicant is able to make a convention application in relation to a basic application within 12 months of the day on which the basic application is first made in a convention country). A basic application is an application for protection that is made in a convention country. A convention country is an entity declared by regulations to be a convention country. The convention applicant is the person who has made the basic application or is the assignee or personal representative of that person.

The Bill makes particular provision for priority dates. The priority date of a claim is important when considering the extent of the prior art base for the purposes of the "novelty" and "inventive step" tests in Clause 13 of the Bill and described above. The Bill provides that the Commissioner must examine a patent application and the complete specification relating to the application and report on whether the specification complies with the specification requirements in the Bill and whether, to the best of the Commissioner’s knowledge, the invention, so far as claimed, is a patentable invention under clause 13 (Part 3, Subpart 6, Clause 60). The Commissioner may refuse to proceed with an application or require the application or specification to be amended if the Commissioner reports that the application or specifications do not comply with the requirements of the Bill or of the regulations or the invention is not a patentable invention or there is any other lawful ground of objection to the grant of a patent in respect of the application. (Part 3, Subpart 6, Clause 61). The Bill makes detailed provision for the accepting and amending (if necessary) of applications, their publication, the consideration of objections to them and consequent amendment, the eventual granting of the patent and for their surrender and revocation (Part 3, Subparts 1-13, Clauses 30-132).

Breach of patent rights and proceedings

• The Bill provides that a person infringes a patent if (other than under a licence or with the consent or agreement of the patentee) the person does anything in New Zealand that the patentee has the exclusive right to do under section 17 (i.e. the exclusive rights, during the term of the patent, to exploit the invention and to authorise another person to exploit the invention (i.e. to make, hire, sell, or otherwise dispose of the relevant product or, if the invention is a process, to use the process or to do any of those acts in respect of a product resulting from that use). The Bill also provides that a person infringes a patent if the person supplies another with the means for putting an invention into effect if doing so would infringe a patent and the person knows (or ought reasonably to have known) that the supplied means are suitable and intended for that purpose. There is an exception for the supply of staple commercial products (Part 4, Subpart 1, Clauses 133 and 134).

The Bill also sets out the things which do not constitute infringement. These are:

• doing an act for experimental purposes relating to the subject matter of an invention (which includes determining how the invention works, its scope, or the validity of the claims, or seeking an improvement of the invention) if that act does not unreasonably conflict with normal exploitation of the invention (Part 4, Subpart 1, Clause 136);

• using an invention in the stated ways on foreign vessels, aircraft, or vehicles that come into New Zealand accidentally or only temporarily(Part 4, Subpart 1, Clause 137);
• making, using, importing, or selling an invention solely for uses reasonably related to the development and submission of information required under New Zealand law, or other law, that regulates the manufacture, construction, use, importation or sale of any product (Part 4, Subpart 1, Clause 138).
• The Bill provides for the manner of bringing infringement proceedings in a Court and the type of relief which a Court may award. A Court may also make a declaration of non-infringement and other remedies are available. The Attorney-General has various powers to intervene in proceedings (Part 4, Subparts 1 and 2, Clauses 139-159).

Registration, dealings, licenses, and transmission of interests

The Bill requires a person acquiring a patent, a share in a patent, or an interest in a patent (whether by assignment, transmission, mortgage, licence, or by any other means) to apply for registration of the title or interest. However, the application can instead be made by the person who disposes of the patent or the share in the patent or who confers the interest in the patent. The Commissioner may vest patents or substitute persons as patent applicants or nominated persons for deceased persons without probate or letters of administration in certain cases. The Bill allows an interested person to apply to the court for the grant of a licence under a patent on the grounds that a market for the patented invention is not being supplied, or is not being supplied on reasonable terms, in New Zealand. The Bill allows any government department to exploit any patented invention for the services of the Crown and allows a person to make a request or claim to be mentioned as inventor in a patent (Part 4, Subparts 4-7, Clauses 160-183).

Patent attorney profession

The Bill provides for the patent attorney profession Only individuals may register as patent attorneys, but patent attorney services may be provided by patent attorneys either alone or through a patent attorney company or patent attorney partnership. In addition to establishing criteria for registering patent attorneys, the Bill sets up a code of conduct and a complaints and disciplinary regime for patent attorneys and patent attorney companies (Part 5, Subparts 1-6, Clauses 184-240).

Administrative provisions and appeals

The Bill provides for the patents register which must be kept by the Commissioner (Part 6, Subpart 1, Clauses 241-253). The Commissioner is required to periodically publish a journal (which may be published electronically) on patents, patent applications, and other matters and may produce other types of indexes and classifications (Part 6, Subpart 1, Clauses 254 and 255). The Commissioner may award costs in proceedings before him or her and he or she (or the Court, on appeal) may require security for costs if the person does not reside and does not carry on business in New Zealand. A person may appeal the Commissioner’s decisions under the Bill to the High Court, and then to the Court of Appeal in certain cases (Part 6, Subpart 2, Clauses 256-265). The Bill provides for the appointment of the Commissioner and Assistant Commissioners by the chief executive of the Ministry as employees of that Ministry (Part 6, Subpart 3, Clauses 266-271). The Intellectual Property Office of New Zealand (IPONS) is provided for. The Bill requires the Commissioner to appoint a Māori advisory committee. A person must not be appointed to the committee unless, in the opinion of the Commissioner, the person is qualified for appointment, having regard to their knowledge of mātauranga Māori (Māori traditional knowledge) and tikanga Māori (Māori protocol and culture). The committee’s function is to advise the Commissioner (on request) on whether an invention claimed in a patent application is derived from Māori traditional knowledge or from indigenous plants and animals and, if so, whether the commercial exploitation of that invention is likely to be contrary to Māori values. That advice must be considered by the Commissioner but is not binding (Part 6, Subpart 3, Clauses 275-278).

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