The Quick Read

What are some of the key changes under the new Patents Act?

  • Novelty: a shift from an assessment of local novelty to absolute (worldwide) novelty;
  • Obviousness: patent examiners will be required to examine for an inventive step;
  • Computer programs: computer programs "as such" will be excluded from patentability;
  • Patentability: patentability will be assessed on the "balance of probabilities" rather than on a presumption of patentability;
  • Pharmaceuticals: the new Act does not include patent term extension for pharmaceuticals; and
  • Opposition and Re-examination: potential opponents will have longer to oppose a patent application and will also have the option of requesting re-examination of accepted/granted patents.

When will the majority of the key provisions be in force?  In approximately 12 months' time.

Practical Advice - What you need to know:

  • Computer programs: After decades of debate, computer programs "as such" are still not patentable in New Zealand. New Zealand has adopted a stance similar to Europe, allowing only patents where a computer program has an extrinsic (physical) effect.
  • More Robust Examination/Transitional Provisions: One of the practical effects of the introduction of the new Act is to make patent examination more robust and therefore obtaining a patent more difficult. Certain patent applications will, however, continue to be examined under the current lower patentability thresholds after the new Act is in force. Applicants should consider whether they can take advantage of this.
  • No Patent Term Extensions: New Zealand has failed to follow its major trade partners, refusing to allow patent term extensions beyond the 20 year life of a patent. This will be unpopular with innovators, particularly in the pharmaceutical sector. However, this is a key term of the Trans-Pacific Partnership negotiations, so there may still be a possibility to change this.

The Detail

After decades of waiting, the new Patents Act is almost here.

The new Act will raise the bar for patents in New Zealand in a number of respects. These include shifting from an assessment of local novelty to absolute (worldwide) novelty, enabling patent examiners to examine for an inventive step, excluding computer programs "as such" from patentability, and an assessment of patentability on the "balance of probabilities" rather than a presumption of patentability.

The new legislation is currently expected to come into force in 12 months' time. This delay will provide businesses with the opportunity to review their patent portfolios and possibly beat the changes to higher patentability thresholds. Filing a New Zealand patent application, or entering into national phase in New Zealand in the next 12 months may provide an opportunity to ensure that your patent application is subject to the current lower patentability thresholds. If in the software industry, there may be an opportunity to achieve protection for software inventions during this time.

We discuss some of the more important changes below.

Increasing Patentability Threshold

Under the 1953 Act, the threshold for patentability over the past few decades, relative to most of New Zealand's trading partners, has been comparatively low. The new Act makes significant changes that increase the threshold of what will be patentable in New Zealand.

These include:

  • Novelty: Under the 1953 Act, patent applications are only required to be examined against "local novelty", meaning that an invention need only be novel (eg not previously known) in New Zealand to be registered. Under the new Act, patentability is to be examined in accordance with "absolute novelty", meaning novelty will be assessed against all matter that has been made available to the public anywhere in the world before the priority date. This brings New Zealand into line with most other key trading partners.
  • Obviousness: Under the 1953 Act, while "obviousness" (or lack of inventiveness) is a ground of opposition, examiners cannot examine for it. Under the new Act, they will. This more thorough examination is likely to result in a less cluttered patents register (although possibly a slower examination process). It is also likely to remove some of the burden on third parties to oppose or apply to remove obvious patents from the register.
  • Utility: In addition to examining for obviousness, examiners under the new Act will also examine for whether an invention has "specific, credible and substantial utility".
  • Opposition and Re-examination: Under the 1953 Act, any "interested party" may oppose accepted patent applications during the three months following publication of the complete specification. Under the new Act, an opposition is able to be filed by "any person" at any stage pre-grant (although, practically, before publication of the complete specification, there may be limited information on which to base an opposition). A potential opponent also now has the ability to request a patent be re-examined, both before and after registration. These changes may result in more potential opponents and give them more options to consider when objecting to a patent application. A potential opponent will also have more time in which to object.Currently, only a small number of oppositions are successful. With the additional examination criteria, coupled with examiners using a balance of probabilities test for patentability (see below), we predict that more oppositions will succeed under the new Act.
  • Balance of Probabilities: The new Act shifts from allowing patent applicants the benefit of the doubt that their invention is patentable to requiring that a patent is inventive "on the balance of probabilities". This change should stop many "bad" patents proceeding to grant, and is also likely to result in more successful oppositions.
  • Maori Advisory Committee: Paralleling the Trade Marks Act 2002, the new Act has created a Maori Advisory Committee. The Committee will advise, on request by an examiner, whether an invention seeking to be patented is derived from Maori traditional knowledge from indigenous plants or animals. The Committee will also advise on whether commercialisation would be contrary to Maori values. This is designed to ensure that patents do not unduly offend against Maori cultural heritage and support Maori custody of their heritage.
  • Specific Exclusions: The new Act specifically states subject matter that is excluded from patentability. These include methods of medical treatment for human beings, human beings and biological processes for their generation, plant varieties, and inventions whose commercial exploitation would be contrary to public order or morality. As noted, another notable "exclusion" is computer programs which is worthy of a separate mention below.

While these changes are of key concern to future inventors generally, there are also a couple of industries that are likely to be interested in specific aspects of the new Act.

Computer Programs

Since the introduction of the Patents Bill, lobbying and commercial influences in relation to the patentability of computer programs led to three amendments being made to the computer programs provision before the third reading of the Patents Bill. The final outcome is that computer programs "as such" are not patentable.

A computer program is not patentable if the actual contribution made by the alleged invention lies solely in it being a computer program. However, it can be patentable if the invention's contribution lies outside of the computer or if the contribution affects the computer itself but is not dependent on the type of data being processed or the particular application being used. The example given in the new Act is of a claim in an application that provides for a better method of washing clothes when using an existing washing machine. That method is implemented through a computer program on a computer chip that is inserted into the washing machine. The washing machine is not materially altered to perform the invention. While the only thing that is different about the washing machine is the computer program, the actual contribution lies in the way the washing machine works (rather than in the computer program "as such").

As experienced in Europe, this provision is likely to cause many a headache for patent examiners.

Pharmaceutical Term Extension

The new Act does not introduce patent term extension for pharmaceuticals, meaning New Zealand remains out of step with most of its major trading partners. This may not be the end of the story, however. With the Trans-Pacific Partnership negotiations far from complete, this is one area that will continue to receive focus, possibly leading to the new Act's amendment to provide for patent term extensions.

Transitional Periods

The Act is likely to come into force in approximately 12 months. Transitional provisions will apply to some patents and not others.

In relation to patent applications:

  • So long as a complete specification is submitted before the relevant provisions of the new Act come into force, the application will be dealt with by reference to the requirements of the 1953 Act.
  • Patent Cooperation Treaty applications will continue to be dealt with under the 1953 Act if the applicant has entered national phase in New Zealand before the relevant provisions of the new Act come into force. Those entering into national phase in New Zealand after the relevant provisions of the new Act come into force will be examined under the new Act, even though their priority dates may be up to 2 ½ years earlier.
  • If a new application is made in respect of another patent application under the 1953 Act (eg a divisional application), so long as the new application is given a date before the relevant provisions of the new Act come into force, the new application will be dealt with by reference to the requirements of the 1953 Act.

Obtaining granted patent protection is about to get tougher for patent applicants. However, the new Act will be seen as a positive from an overall innovation perspective and it is likely to result in a higher quality of patents proceeding to grant. While the end is in sight for New Zealand's low standard of patentability, it is not yet upon us. With this in mind, perhaps now is a good time to check whether your New Zealand patent portfolio could be bolstered before the relevant provisions of the new Act come into force.