New Bill imposes stricter conditions for granting patents

The long overdue legislation to replace the New Zealand Patents Act 1953 was finally  introduced to Parliament last month and will be referred to a select committee, after its first reading.

For businesses the Patents Bill 2008 makes significant changes to the longstanding Act, most notably imposing stricter requirements for the grant of a patent.

In general, The Bill will be welcomed as it brings New Zealand’s patent law into line with many of our trading partners. While under current law a business could theoretically have a patent granted in New Zealand that would not be valid in other countries, with the stricter requirements of the Bill, a granted patent is more likely to have validity. The Bill does not however affect what may be patented under the laws of other countries nor should it impact businesses with a current patent.

Some of the key stricter requirements include:

• Patent applicants will no longer be given the “benefit of the doubt” in the process of deciding if a claimed invention is patentable. This will be replaced with the tougher test of satisfying the Commissioner of Patents that on the “balance of probabilities” an invention is patentable. 
• Absolute novelty will be required, meaning that novelty will be destroyed by written or oral description or use anywhere in the world rather than just the current requirement for novelty in New Zealand.
• The Commissioner of Patents will be able to refuse a patent application on the ground that the claimed invention does not involve an inventive step.  In other words, the patent will be refused if it is obvious to a person skilled in the relevant field.  Currently, obviousness is a ground for opposition or revocation of a granted patent, but not a criterion for consideration by the Commissioner of Patents.
• A patent application will also be examined for usefulness, with an invention needing to have a specific, credible, and substantial utility to receive a grant.  This is similar to requirements in other countries including the United States’ “utility” and Europe’s “industrial application” requirements.  It’s likely that the main reason for introducing the requirement in New Zealand stems from a fear of overly broad patents being granted for genetic material without the applicant demonstrating a particular use.
  

The Bill also excludes specific subject matter from patentability, including methods for the medical treatment of humans by surgery or therapy and methods of diagnosis practiced on human beings. Plant Varieties will be also excluded from patentability, but will still be protectable under the Plant Variety Rights Act 1987.

Another significant change is the introduction of a Maori Advisory Committee. It’s main function will be to advise the Commissioner as to whether an invention is derived from Maori traditional knowledge or from indigenous plants and animals and if so whether the commercial exploitation of the invention is likely to be contrary to Maori values.  The Trade Marks Act 2002 also provides for a Maori Advisory Committee to advise the Commissioner of Trade Marks on whether a proposed use or registration of a trade mark derived from a Maori text or image is likely to be offensive to Maori. However, these committees do not have the power to revoke or oppose patents or trademarks that have already been registered.

The Bill removes pre-grant oppositions which give competitors an opportunity to oppose a patent application before it is granted. Instead, opponents will be able to request re-examination of a patent (without a hearing) before or after grant and will have the opportunity to revoke a granted patent before the Intellectual Property Office of New Zealand.

With the extra power the Commissioner of Patents will have to refuse patent applications, it is possible that applications that would be granted under the present Patents Act 1953 won’t make it under the new Bill.  However, the Bill does provide for appeals to the court over the Commissioner’s decisions.

In general the task of interpreting patent claims, and assessing novelty and inventiveness, is not always straight forward. In many cases, different results have been obtained from different tribunals and courts - at the expense of the applicant.

So, considering the substantial changes that will come about as a result of the Bill, it is advisable to seek advice early in the development of any new product or process.

The Bill will go through the normal legislative processes, including opportunities for oral and written submissions, over the next few months. The Select Committee will then recommend changes to be debated in Parliament. The Bill will not become law until after it has been passed by Parliament, which is not likely to occur until 2009 due to the upcoming General Election.

By Rachelle Beale and Margaret Doucas.  An edited version of this article appeared in The Press, Christchurch, on 11 August 2008.