The New Zealand Patents Act 2013 (the ‘New Act’) will commence on 13 September 2014, replacing the Patents Act 1953 (the ‘Old Act’) and marking the largest reform to New Zealand patent law in 60 years.

We recently highlighted several substantive changes to the legislation that will come into effect on 13 September 2014 in our News Alerts of 9 January 2014 and 20 May 2014, and explained some of the benefits associated with ensuring that any New Zealand cases are handled under the Old Act. Those benefits included examination of patent applications under the existing, known standards (and not including inventive step), and limitation of any potential pre- or post-acceptance third party actions to current grounds and standards.

On 2 July 2014, a Cabinet Paper approving the proposed changes to the new Patents Regulations 2014 (the ‘New Regulations’) was released1. The proposed New Regulations, which are expected to be finalised in mid-August, expose additional reasons to take action before 13 September 2014, especially from the perspective of filing new patent applications (including NZ national phase entry) and maintaining granted patents. These additional reasons relate primarily to the filing of divisional applications and the payment of examination and renewal fees.

In view of these changes we recommend early entry into the PCT national phase or direct filing in New Zealand before 13 September 2014.

Divisional Applications

The proposed New Regulations will introduce what will effectively be a 5-year deadline for filing divisional applications.2

Presently, it is possible to file a divisional application in New Zealand at any time, provided that the immediate parent application is pending and has not yet been accepted (allowed). This practice allows for so-called ‘daisy chains’ of divisional applications to be filed.

The New Act will govern PCT national phase entries and other complete applications filed on or after 13 September 2014. According to the current proposals, examination of a divisional application must be requested by a deadline of 5 years, calculated from the date of filing of the original application in a chain of applications.3Under the transitional provisions, divisional filing rights will not be affected for any cases having a New Zealand national phase entry date, or New Zealand direct filing date, prior to 13 September 2014.4

Importantly, in the case of applications for which national phase entry is effected on or after 13 September 2014, the 5-year deadline under the New Regulations will mean that Applicants will typically have less than 2.5 years within which to file all associated divisional applications (and examination requested), following the 31 month national phase entry deadline. Once the 5-year deadline has passed, it will no longer be possible to file a divisional application for any reason. For example, the practice of filing a divisional application for continued prosecution (where an application was not accepted prior to the initial prosecution deadline), or to pursue additional inventions where a lack of unity is found, will no longer be possible after the 5-year deadline expires.

In order to take advantage of the current provisions, we recommend filing direct applications or PCT national phase entries in New Zealand prior to 13 September 2014 where possible, particularly where a unity objection is expected, or has been raised in the ISR or IPRP and the need to file divisional application(s) is anticipated.

Renewal Fees

The proposed New Regulations will see an increase in the overall cost and frequency of renewal fee payments. Currently, renewal fees are due on the 4th (NZ$170), 7th (NZ$340), 10th (NZ$540) and 13th (NZ$1000) anniversary of the filing date of the complete specification, payable after grant (including all back-dated fees).5The New Regulations will require annual payment of renewal fees, payable from the 4th anniversary of the filing date of the complete specification, regardless of whether this falls pre- or post-grant.6

All applications, whether filed before or after 13 September 2014, will be subject to the new annual fee schedule for all renewal fees falling due after that date.7 However, where national phase entry or direct filing occurred before 13 September 2014, these renewal fees will only be payable after grant.8 Similarly, renewal fee payments for divisional applications entitled to treatment under the Old Act will only become payable after grant.9

The proposed schedule for payment of renewal fees under the New Regulations is as follows: 4th-9th year (NZ$100 p/a); 10th-14th year (NZ$200 p/a); 15th-20th year (NZ$350 p/a).10 This schedule reflects an overall increase of $1300 in official fees across the 20 year lifetime of a patent. Because of the increased number of actual payments, we expect overall fees charged by renewal fee managers over the 20 year period could be far more significant.

Prior to the New Act coming in to force, it is possible to pay renewal fees for granted patents in advance. In doing so, the main cost saving in official fees is with early payment of the 13th year renewal, after which no other renewals will need to be paid. Under the New Regulations, advance payment will be restricted to within 3 months of the due date.11

Benefits of Filing before 13 September 2014

In addition to those discussed above, benefits of entering national phase or filing a complete application in New Zealand prior to 13 September 2014 will be apparent from the following table comparing the salient features of the Old Act and the New Act:

Click here to view table.

For a more detailed discussion of these points, please see our News Alerts of 9 January 2014 and 20 May 2014.

Inventive Step under the New Act

The standards for patentability will be raised significantly under the New Act. Currently, a local standard of novelty applies, while inventive step and utility are not grounds for examination.12 Inventive step is, however, a ground for opposition13 and revocation.14 Further, where there is doubt as to the allowability of an application, the ‘benefit of the doubt’ currently goes to the Applicant.15

The New Act will see inventive step and utility introduced as grounds for examination16, and a ‘balance of probability’ standard will be applied in determining the validity of an application.17 The prior art base for novelty will be expanded and applied to inventive step investigations to include all matter that has at any time before the priority date of that claim been made available to the public (whether in New Zealand or elsewhere).18

While IPONZ is likely to adopt a similar approach to examining inventive step as the EPO, the standard that will actually be applied is unknown. We expect that, at least initially, IPONZ will apply a high standard of inventiveness and it may be some time before any binding precedent clarifying the standard to be applied is set.

To ensure that patent applications benefit from the more lenient provisions of the Old Act, we recommend entering national phase or filing a complete specification in New Zealand prior to 13 September 2014.