On 28 August 2013, after nearly a decade’s gestation, New Zealand’s new patents legislation was passed by a clear majority (117-4) of the House of Representatives. The Patents Act 2013 will replace the current 1953 Act, which is itself based upon the long-since-repealed United Kingdom Patents Act 1949. Given that the current legislation contains many antiquated provisions such as “local novelty”, many are of the view that a new Act was well overdue.
Assuming Royal assent is given (this generally follows within a few days), the new legislation is likely to enter into force on the first anniversary of such assent; the accompanying Patents Regulations will need to be drafted within this period. Accordingly, the exact date of commencement remains to be confirmed.
The new Act will essentially bring most of New Zealand’s patentability standards into line with those of its major trading partners. The economic rationale for wanting/needing to do this is that, as a net importer of technology, New Zealand required legislation that encourages foreign investment and trade. Overly-broad patents granted under the relatively relaxed criteria of the 1953 Act, it was argued, may have restricted New Zealand’s economic progress.
Regular readers of our articles will recall that perhaps the most controversial aspect of the new Act (which essentially confined the draft legislation to the “too hard basket” for the best part of four years) relates to the patentability of computer software. Ignoring TRIPs for a moment (as some would argue the New Zealand Government has done), New Zealand’s position under the new Act will be essentially the same as that of the European Patent Convention: computer programs “as such” will be excluded from patentability. Consequently, a computer program characterised by largely conventional programming steps is unlikely to be patentable. On the other hand, a program that tangibly affects the way in which a product works may be eligible for patent protection. Regular readers will know that the Government “zigged and zagged” several times in reaching this end. Proponents of open-source software, who lobbied the Government long and hard over several years, will doubtless rejoice.
Whereas software has been the undoubted “star” during the passage of the new Act, there are several other salient features of the new legislation. The provisions that appear most significant – either on the basis that they are different to New Zealand’s current position, or that they are at odds with the position adopted by many of New Zealand’s major trading partners,are:
- Examination criteria will be extended to include absolute novelty and inventive step (currently, the criteria include local novelty and no inventive step – although inventive step is a ground for opposition/revocation!).
- No extension of term for pharmaceuticals.
- Methods of medical treatment of the human body are statutorily excluded.
- An Experimental Use Exception to patent infringement: “It is not an infringement to do 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”.
- Patent applications can be refused if they are deemed “contrary to morality”. Interestingly, a recently-proposed amendment to Australia’s patents legislation follows suit.
There are, of course, many other notable inclusions and absences; these will form the basis of a later, more detailed article.
While the new Act may have been long overdue, its timing is somewhat curious. As readers will know, New Zealand – along with Australia, the United States and several other Pacific Rim countries is currently in the midst of negotiating the Trans-Pacific Partnership (“TPP”) Free Trade Agreement. It is well known that the draft agreement seeks to impose some fairly strict IP-related obligations upon TPP signatories. No extension of term for pharmaceuticals, no methods of medical treatment and heavy restrictions on software patents are unlikely to be acceptable. It is therefore conceivable that in the near future, the New Zealand Government may need to make a choice: abide firmly by the content of their new Act and risk foregoing the TPP (and with it, access to the lucrative US dairy industry) – or alter many of the provisions of their new legislation in order to accommodate the TPP.
The new Act, irrespective of when it commences, requires patent applicants to make some decisions. According to the transitional provisions, any complete application filed in New Zealand (e.g., as a PCT national phase entry) prior to commencement of the new legislation will be examined under the “old Act” provisions and will be subject to the 1953 Act throughout its lifecycle. Conversely, a patent application filed in New Zealand after commencement of the new Act will be subject to the provisions of the 2013 Act.
Therefore, those with patent applications “in the pipeline” – and for which New Zealand is a target market may wish to consider bringing forward their New Zealand filings so as to avail of the 1953 Act. Of course, patent applicants will have the best part of a year before any “early” filings would need to be effected. In the interim, it may be reassuring to know that: 1) we can file unpublished PCT applications in New Zealand; and 2) by taking advantage of the existing process we can ensure that any such applications will not be published until after the PCT (or foreign Patent Office) publication is first made. Aside from bringing costs forward, we believe there should be no negative consequences in filing early in New Zealand so as to take advantage of the current legislation.
In conclusion, the passing of the new Act can be viewed as something of a double-edged sword. On the one hand, it is reassuring to have some certainty as to the provisions of New Zealand patent law (even if the ongoing TPP negotiations may dilute that somewhat). On the other hand, as with any changes, there will be winners and losers – and in the present instance, software patentees stand to lose more than most.