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Intellectual Property Law

Intellectual Property

Review of the Patents Act 1953

Author: Baldwin Shelston Waters       

By Julie Ballance.

This article was also published in the magazine Trademark June/July 2002 and is reprinted with permission of Trade New Zealand.

In early April 2002, the Ministry of Economic Development issued a long-awaited discussion paper on the review of the Patents Act 1953 ("the Act"). The Act has long needed updating to take into account the technological and social changes since its introduction, so the paper is a welcome step forward.

It actually represents stage three of the review. The first two stages have already been completed, and cover technical and operational changes that have largely been agreed by government, industry, and other interested parties.

The sub-title of this paper is “Boundaries to Patentability”. Many of the issues covered in it are of importance to those working in innovated technology areas.

The main discussion areas are:

Definition of Invention

Mâori and the Patenting of Bio-Technology Inventions

Patentability of Biotechnology Inventions

Patentability of Business Methods and Software

Patents for Methods of Medical Treatments of Humans

Stringency Test for Patentability

While some of these issues, in particular the patenting of biotechnology inventions and Mâori concerns on this area, have already received media attention, for those whose businesses have an international focus, the chapter on stringency tests for patentability is of particular interest.

Test for Patentability
In virtually all countries, a patent application is subject to an examination process prior to a patent being granted. The nature of examination varies widely, from countries such as South Africa, where examination is to form only, to European nations, where a fairly rigorous examination of the subject matter occurs.

Two important aspects are examination for novelty (the invention for which protection is sought must be new) and examination for inventive step (the invention must involve an inventive step if, having regard to the prior art, it is not obvious to a person skilled in the art).

The United States of America, Europe, Australia and many of our other major trading partners examine patent applications for these two aspects.

New Zealand is one of the few remaining countries applying a local novelty standard. This means any earlier publication (or use) of the same or similar idea or invention must have occurred in New Zealand before the filing date of the patent application to form part of the “prior art”.

The huge advances in access to information since 1953 mean that restricting the prior art base to publication in New Zealand verges on the ridiculous.

The first two stages of the review proposed publications available anywhere in the world before the filing date of the patent application would form the prior art base upon which novelty of an invention would be determined.

The discussion paper confirms this broader novelty test will be incorporated into the new legislation. This is an essential change if New Zealand is to have any credibility in the international market place.

The current law does not allow for the subject matter of a New Zealand patent application to be examined for inventive step, however the discussion paper confirms that it too will be incorporated into the new legislation.

While some may argue that inventive step should continue to be considered by the courts, examination for inventive step is the international standard New Zealand must strive for.

Raising the Standard
Under present national law the Intellectual Property Office of New Zealand ("IPONZ") can only refuse to grant a patent where on no reasonable ground it could be said to be eligible for patent protection. The standard is therefore low, and is not helped by the current local novelty test and lack of examination for inventive step.

The scope of many patents granted in New Zealand is broader than their counterparts in Europe and elsewhere. In some cases the patent protection achieved in New Zealand is clearly broader than the contribution the patentee has made to the art, requiring competitors to become involved in expensive litigation to remedy the situation.

While the changes in the novelty and inventive step criteria referred to above will go some way toward overcoming these problems, the overall approach to be taken by the IPONZ examiners when examining an application prior to grant of a patent is of considerable importance.

At present, the benefit of any doubt is given to the applicant, but a more stringent test could well be appropriate in New Zealand.

A higher standard, while possibly raising the cost of patent protection, will bring New Zealand into line with other countries.

Conclusion
The discussion paper makes much of the fact that most patents granted in New Zealand are owned by overseas companies or individuals and includes that comment that "most of the benefits of New Zealand’s patent system flow overseas".

However, this fails to account for the economic activity generated in New Zealand by importation of technology as the result of the New Zealand patent system. It also fails to recognise the benefits New Zealand traders enjoy through the patent protection provided to them in other countries.

New Zealand’s economy operates in the international market place and our policy and law must reflect this.

This is a general summary only and should not be taken as a substitute for specific advice.

Baldwin Shelston Waters
Email email@bsw.com
Web site: Baldwin Shelston Waters