Select Committee Recommends Changes to Patents Bill

After its first reading in Parliament on 5 May 2009, the Bill to replace New Zealand’s Patents Act 1953 was referred to the Commerce Select Committee to consider public submissions. The Committee received 67 written submissions from interested parties and heard the submissions of 36 parties in person. After reviewing the submissions received, the Committee released its report on 30 March 2010. The Committee recommends that the Patents Bill be passed by Parliament with a number of amendments.

Many of the amendments to the Bill recommended by the Committee will be welcomed by both patent applicants and parties who may wish to challenge a patent. The amendments recommended by the Committee will be debated in Parliament before a decision is made whether to introduce the amendments into the Patents Bill. Some of the significant changes recommended by the Committee are:

• To retain pre-grant oppositions. Under the 1953 Act, pre-grant oppositions have been a valuable tool used by businesses to attack and limit the scope of overbroad patent applications before they have an opportunity to be granted. The Patents Bill intended to replace pre-grant oppositions with a limited re-examination process which had proven to be unpopular in Australia compared with pre-grant oppositions, largely due to the exclusion of the objector from the process after a re-examination had been initiated. Parties who wish to challenge a patent will now have the option of opposing the grant of a patent at a hearing.
• The right to request a hearing before the Commissioner of Patents makes a decision that will adversely affect a person. This right exists under the 1953 Act and many patent applications that have been initially refused by the examination division of the Intellectual Property Office have been accepted following a hearing in front of an Assistant Commissioner of Patents.
• Computer software to be excluded from patentability. The Committee received many submissions concerning the patentability of computer software, which is currently patentable provided it produces a commercially useful effect. The Committee’s report states that the proposed exclusion is not intended to prohibit embedded software from being patented, that is, software which plays an integral role in the electronics it is supplied with, for example, in cars or washing machines.
• An exception from patent infringement in the case of a person who immediately before the priority date of the patent had been continuously exploiting the invention. This is to provide protection to people who wish to keep their inventions as trade secrets.
• Amending the Bill to allow New Zealand to accept the Protocol Amending the TRIPS Agreement, to Implement the Doha Declaration on the TRIPS Agreement and Public Health. Acceptance of the protocol will allow a person to export patented pharmaceuticals under a compulsory license in line with the protocol.
• The need to pay maintenance fees in order to keep a patent application pending. An applicant for a patent will also need to request examination of their patent application rather than have examination occur automatically as happens under the 1953 Act. Both of these changes are intended to act as an incentive for applicants to let patent applications become void or abandoned if they will not receive sufficient benefit from having the patent.
• Change the requirement that the claims of a patent be “fairly based” on the matter disclosed in the specification to requiring the claims be “supported” by the matter disclosed in the complete specification. For consistency, an equivalent change is proposed such that the claims must be “supported” by the disclosure of the priority application to be entitled to the priority date.
• The Committee recommends the stricter requirement of a complete specification to “disclose the invention in a manner that is clear enough and complete enough for the invention to be performed by a person skilled in the art” in place of the 1953 Act requirement that a complete specification “particularly describe the invention and the method by which it is to be performed”.
• Replacement of the duty in the Bill that an applicant must always inform the Commissioner of the search results for corresponding overseas applications with a duty to do so only if required by the Commissioner. The Committee also recommended that the proposed penalty for beaching the duty be removed, namely, the inability to amend the specification to overcome a novelty or inventive step objection arising from the existence of the information not provided.

The Committee’s report is silent on adding a provision to the Patents Bill to extend the term of a patent where commercial exploitation of a patented product, such as a pharmaceutical or agrochemical, is delayed due to the need to obtain regulatory approval.

The report of the Select Committee, together with a marked-up version of the Patents Bill, can be viewed at www.legislation.govt.nz.

ENDS

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