The proposed five year time limit on the filing of divisional applications has the potential to considerably reduce applicants' flexibility during the examination process. We recommend filing now under the current Act.

New Zealand's new Patents Act 2013 will come into force on or before 13 September 2014. The main changes include tougher examination of patent applications, timing and deadlines, subject matter exclusions and divisional applications.

Applications will now be examined for inventive step, not just novelty. The prior art base, against which both novelty and inventive step will be tested, encompasses all matter and information available anywhere before the priority date.  Under the current Act, New Zealand had a 'local novelty' requirement only. Applicants will also need to request examination within five years of the filing date while currently examination occurs automatically.

Although these changes are quite substantive, in practice they are unlikely to faze most international applicants, who are already familiar with similar law and practice in other jurisdictions.

Filing of divisional applications restricted to five years from filing date

On 2 July, a cabinet paper was issued that reviewed the draft Regulations and included a new proposed regulation that would restrict the period in which a divisional application can be filed. At present, a divisional application can be filed at any time before the parent application is accepted for grant, but the proposed regulation would change this to a maximum of five years from the effective filing date of the parent application.

While the cabinet paper characterises it rather misleadingly as a 'minor and/or technical regulation', the time limit will significantly disadvantage patent applicants by reducing their flexibility in the examination process.

The change has been introduced somewhat sneakily and the cabinet paper does not give any explanation on why the time limit is proposed.  Similarly, a discussion paper on the proposed regulations that the Intellectual Property Office of New Zealand (IPONZ) issued last December is silent as to the proposed change.

Based on informal discussions with officials, IPONZ takes the view that the divisional system is being abused by applicants, and the new rule is an attempt to stop this abuse.  Other jurisdictions, notably the European Patent Office, have tried similar restrictions, but have failed to achieve the intended result and then reversed the restrictions.

How will the change affect patent applicants?

Divisional applications are most often used to address examiners' objections that an application claims more than one invention.  Filing divisional applications allows the applicant to pursue protection for all of the individual inventions that may be described in a single application.

However, divisional applications are also very useful strategically, in allowing applicants to keep some flexibility despite the strict deadlines and requirements of the patent examination system.

For instance, in the pharmaceutical and biotechnology areas, it will typically take many years to assess an invention's commercial potential, and to identify and develop a potential commercial embodiment of the invention, such as a drug to be tested in clinical trials. Filing a divisional application effectively extends the time available for putting the application in an allowable form. Keeping a divisional pending while the invention is being developed further gives the applicant extra time to modify the claims as necessary, to ensure the potential commercial embodiment is most effectively protected.

In addition, most applications filed in New Zealand by international applicants are part of a portfolio filed in many other jurisdictions.  New Zealand applications are usually examined much earlier than in some other jurisdictions, such as the USA, Europe and Australia. International applicants often want to base the claims they file in New Zealand on claims granted in the USA and Europe, or other important jurisdictions.  Filing a divisional application allows time for examination in those jurisdictions to catch up where it is lagging behind New Zealand.

In other cases, sometimes the time available for the applicant to address the examiner's objections turns out to be not long enough. Examples are cases where the objections prove unexpectedly difficult to overcome and cases where examiners raise new, substantial objections late in the examination process. Filing a divisional application buys the applicant more time to address the issues, and can be more convenient than the alternative of requesting a hearing before the Commissioner on the outstanding issues.

The proposed five year time limit on the filing of divisional applications has the potential to considerably reduce applicants' flexibility during the examination process. This in turn will impact on their ability to obtain commercially relevant patent protection.

File now under the current Act

The proposed time limit is another reason for applicants to consider filing in New Zealand while the current, less restrictive rules still apply, particularly where they anticipate that divisional applications may be needed. The current rules will continue to apply to all New Zealand patent applications filed with a complete specification before 13 September 2014, and to PCT applications that enter the national phase in New Zealand before 13 September 2014.