By Jane Calvert and Greg Lynch, Baldwin Shelston Waters

It may be of interest to scientists that there is a possible exemption from liability for patent infringement for research conducted within New Zealand.

Background - Legal Framework

New Zealand's Patents Act 1953 does not specifically exclude experimental use from patent infringement. However, the New Zealand courts have adopted such an exemption.

One of the problems with this exemption is defining what activities are considered experimental use. Two New Zealand cases have grappled with this issue and affirmed that there is a distinction between research of an experimental nature and research with a commercial advantage in mind. However, because of the limited case law there is still some uncertainty as to where this line actually falls.

The best indication on how the courts approach experimental use has come from the Court of Appeal in the 1991 case Smith Kline & French Laboratories Ltd v Attorney-General where Hardie Boys J stated:

"Doubtless experimentation will usually have an ultimate commercial objective; where it ends and infringement begins must often be a matter of degree. If the person concerned keeps his activities to himself, and does no more than further his own knowledge or skill, even though commercial advantage may be his final goal, he does not infringe. But if he goes beyond that, and uses the invention or makes it available to others, in a way that serves to advance in the actual market place, then he infringes..."

Therefore, in defining experimental use, the courts will hold any apparent experimental use that shows any advancement within the commercial sector to constitute an infringement.

An example of experimental use leading to commercial advantage

An example of experimental activities deriving a commercial advantage and therefore infringing a patent was seen in the 1984 New Zealand case of Monsanto v Stauffer Chemical Co. The patent covering the successful herbicide, glyphosate was owned by Monsanto. Stauffer conducted several field trials of Monsanto's herbicide, later called sulfasate.

Stauffer believed that sulfasate was not covered by the claims of the patent and commenced trial work within the UK and New Zealand to show the effectiveness of the compound under local climatic conditions and against indigenous weeds. These trials were also used as the first step in gaining regulatory approval under the Pesticides Act 1979.

Monsanto successfully sued for infringement. It was held that the compound sulfasate was covered by Monsanto's claims and that the field trials conferred a commercial benefit to Stauffer, by placing them in a better position to market sulfasate rather than purely expanding their knowledge.


Practical Application of the Exemption

Although New Zealand law does have an "experimental use exemption", on a practical level it is important to evaluate the particular activity/experiment on a case by case basis with particular regard to the goal to be achieved. Keeping this in mind, it is our view that an academic institution, such as a university, would not have any more success raising a defence relying on the experimental use exemption than a more commercially orientated company.

To help you in considering whether any particular research activity could be an infringement of a patent our recommended approach would be as follows:

- Firstly, determine whether there is a granted and in force patent in New Zealand covering the technology in question.

- Determine the scope of the claims of the patent.

- Consider both the method and goals of the particular activity that you have in mind in relation to the scope of the claims of the patent.

- Determine whether such activity is likely to be considered to enable you to make commercial advances in the market place or whether the research is simply going to add knowledge.

- Finally, determine whether there are any grounds to challenge the validity of the patent at issue.

In essence, the approach that we recommend is quite straightforward. However, the application of this approach may prove to be more difficult depending on the particular situation. We would be happy to provide comment on a particular situation if you require.

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

Web site: Baldwin Shelston Waters

Email: email@bsw.com

June 2001