New Zealand Patents Act 2013

It has been a long time coming, but finally New Zealand has a new Patents Act. The Patents Act 2013 received Royal assent on 13 September 2013. While a few administrative provisions took immediate effect, the majority of the provisions are not expected to take effect until 13 September 2014. Patent applications or national phase entries made before the new provisions take effect will remain subject to the current Patents Act.

Supporting Regulations for the new Act are not expected until mid-2014.

There are a lot of changes made by the new Act, some of the more interesting ones are as follows:

- an expansion of the prior art base applicable for assessing novelty and inventive step

- increasing the applicable grounds for examination with a higher standard being on ‘balance of probabilities’ (previously ‘benefit of doubt’)

- an invention must be ‘useful’ by having ‘a specific, substantial and credible utility’

- complete specifications must disclose ‘best method’ and the invention in a ‘clear and complete enough manner’ to be performed by a person skilled in the art

- claims to be ‘clear and concise’ and ‘supported by matter’ disclosed in the complete specification
express exclusions from patentability

• contrary to public order or morality (e.g. cloning of human beings, commercial use of human embryos, modifying germ line genetic identity of animals likely to cause suffering without substantial medical benefit)
• human beings and biological processes for their generation
• methods of medical treatment of humans by surgery or therapy
• methods of diagnosis practiced on humans
• ‘computer programs as such’

- re-examinations available on all grounds between post-acceptance/pre-grant period for patent applications and at any stage after grant for granted patents

- post-acceptance/pre-grant opposition available on all grounds

- revocation of granted patents available before Patent Office or Court

- no extensions of patent term are available

- particular exclusions to infringement provided for seeking regulatory approval, prior use and experimental research


It has to be said that there is significant borrowing and influence from European patent law, particularly in respect to the substantive patentability tests and the use of particular exclusions. The computer programs exclusion was a particular sticking point in the lead up to the new Act and contributed to quite a few years delay. The fact that it is ‘computer programs as such’ smells very strongly of the European influence and it will be interesting to see how this develops given that the European development has not resulted in a blanket ban on software implemented inventions. Similarly, it will be interesting to see if New Zealand examiners adopt a European style approach to assessing inventive step, given that until now inventive step was not an examinable criterion.

The new Patents Act also introduces a Maori advisory committee who will have the power to veto inventions which, if commercially exploited in New Zealand, would be offensive to the indigenous culture. Similar powers have existed under the New Zealand Trade Mark law and appear to have worked very effectively and practically.

All in all, the new Act significantly raises the patentability standard in New Zealand, albeit to a standard more consistent with other countries. Until the new provisions come into force, the lesser standard of the current patent law applies. Hence, to take advantage of the current law, it may be worth considering filing or entering national phase in New Zealand early.



by Simon Ellis

Latest WIPO Innovation Data Shows Australia is Lagging

Recently I attended the World Intellectual Property Organisation (WIPO) information roadshow, where WIPO officials updated us on their latest international IP statistics.

Firstly, overall PCT patent applications continue to grow strongly, after a brief setback in 2008-2010 due to the GFC, etc.

Australia ranks as the 14th most common source of PCT applications, with the U.S. and Japan the most common. China is now ranked fourth, just behind Germany.

The U.S. is still the most popular place to file national patent applications out of the PCT. China is now the third most popular place to file patent applications, moving past Japan. Relatively strong growth in patent applications is still being experienced in the USA, India, Brazil and Russia all growing at >7% over 2010-2011. However, interest in filing patent applications in Australia has declined in the same period.

Most interestingly, there are now two Chinese companies in the top four individual filers of PCT applications, with ZTE Corporation remaining way out in front as the top filer for 2012:
1. ZTE Corporation—CN (3906)*
2. Panasonic—JP (2951)
3. Sharp—JP (2001)
4. Huawei—CN (1801)
5. Bosch—DE (1775)
6. Toyota—JP (1652)
7. Qualcomm—US (1305)
8. Siemens—DE (1272)
9. Philips—NL (1230)
10. Ericsson—SE (1197)
11. LG Electronics—KR (1094)
12. Mitsubishi Electric—JP (1042)
13. NEC—JP (999)
14. Fujifilm Corporation (891)
15. Hitachi—JP (745)
16. Samsung Electronics—KR (683)
17. Fujitsu—JP (671)
18. Nokia—FI (670)
19. BASF—DE (644)
20. Intel—US (640)

In all, the PCT system continues to grow strongly overall, with the USA and Europe leading but with the developing economies making up ground. Australia remains a middling player in the global IP market, and appears to be gradually losing ground since 2008.

by Adam Hyland

ACIP Releases Options Paper on Review of the Innovation Patent System

In a previous blog, we reported that ACIP had initiated a review of the innovation patent system.

Further to the review, ACIP have now issued an options paper and have invited public submissions on the paper by 4 October 2013. The options paper can be viewed here.

At its heart, the innovation patent system offers a second-tier patent enforcement regime to the standard patent system. The innovation patent requires the satisfaction of an 'innovation step' test, which is considered and intended to be a lower threshold than the 'inventive step' test required for a standard patent. The trade-off for this lower threshold test being that the maximum term of an innovation patent is less than that for a standard patent – 8 years as opposed to 20 years. However, there have been criticisms that, while for a shorter term, the innovation patent offers the same level of infringement enforcement as a standard patent, although is much harder to counter due to its lower validity threshold requirements.

The innovation patent has been criticised as being overly generous to patent owners and open to abuse. The innovation patent is much more encompassing in terms of what subject matter it can provide patent protection for when compared with other second-tier patent mechanisms offered in some other countries (notably utility models provided in Germany, China, Japan and Korea).

In recent changes, the inventive step threshold for standard patents was raised in the ‘Raising the Bar’ amendments to the Patents Act. As a consequence, there is now a perception that the gap between the inventive step test and the innovative step test has widened.

The paper points to a variety of options available to consider. Interesting proposals are mentioned around possible limitations upon the monopoly afforded to the owner of an innovation patent or a reduction to the available remedies for infringement of an innovation patent.

The option which has generated most support is in somehow raising the innovative step threshold. However, opinions vary on what that should be or how it could be implemented, if the innovative step is still to be a lower threshold than the inventive step. There have been suggestions that the innovative step should just be the same as inventive step. Fortunately, ACIP have remarked that this would present a ludicrous outcome and would make the innovation patent a redundant system, in which case it would be more viable to simply abolish the innovation patent system.

ACIP intends to finalise and present its recommendations to the Australian Government later this year. It will be interesting to see what they do come up with. Having said that, regardless of the final recommendations, it is up to the Government as to whether anything is done and they have been dismissive in the past.

by Simon Ellis

Islamic Republic of Iran becomes the Latest Contracting State to the PCT

On 4 July 2013, the Islamic Republic of Iran became the latest addition as a PCT Contracting State. The PCT will come into force for Iran from 4 October 2013. This brings the current total of countries applicable to the PCT system to 148.

Earlier this year, Saudi Arabia also became a PCT Contracting State and will become bound on 3 August 2013.

Hopefully, we are seeing a trend in the so-called Gulf States to join the PCT system.

All full list of PCT Contracting States is available here:
http://www.wipo.int/pct/en/pct_contracting_states.html


by Simon Ellis

U.S. Supreme Court hand down Myriad Genetics decision

The U.S. Supreme Court has handed down its unanimous decision today in relation to the patentability of naturally occurring DNA sequences. It has determined that merely isolating and determining the functions of a naturally occurring DNA sequence does not entitle the discoverer to a patent on that sequence. However, application and derivatives of that sequence, for example cDNA, are patentable subject matter.

In my humble opinion, the court has got this completely right. Merely isolating something from nature is not invention, although there is a level of case law which suggests that it is, in relation to pharmaceuticals. This case has significant implications in other areas of technology, for example for patents on any naturally occurring but isolated substances. Unless a ‘non-naturally occurring manufacture or composition of matter’ is brought into existence, there is no patentable subject matter.

This case was specifically concerned with patents around, inter alia, the BRCA1 and BRCA2 genes which indicate an increased risk of breast and ovarian cancer.

The court went to some lengths to be clear that they has no decided anything about non-naturally occurring DNA sequences, nor about methods for sequencing, nor about applications of the newly discovered knowledge. This case concerned the patents directed to the cDNA and DNA per se.

For those interested, the full decision is available here:
http://www.supremecourt.gov/opinions/12pdf/12-398_8njq.pdf

The equivalent Australian case found for Myriad at first instance, and is currently on appeal to the Full Court of the Federal Court.


by Peter Franke

The Bar Has Risen

Following from our previous blog posts on the ‘Raising the Bar’ legislation, you will be aware that the commencement date has passed for the various changes to patentability (and other) requirements in Australia. If you did not request examination before 15 April 2013,  your Australian patent application(s) will now be subject to the new and generally more stringent validity requirements.

IP Australia have received an avalanche of patent applications and examination requests in the weeks leading up to the change; estimated to be a normal year’s worth of requests in the month before the deadline. We suspect that this spike in activity will substantially affect the internal examination queue at IP Australia, resulting in longer delays before examination reports are issued.

Inventive Step Present, but Innovative Step Not?

The innovation patent is typically thought of as necessarily requiring a lower or lesser differentiation from the prior art (innovative step) than that required for the standard patent (inventive step). However, a recent case decided by the Federal Court of Australia shows that it is possible for virtually identical innovation and standard patent applications to be (respectively) rejected for lack of innovative step and found to have an inventive step.

Delnorth Pty Ltd v Commissioner of Patents [2013] FCA 165 was an appeal from a decision of IP Australia to revoke a granted standard patent following re-examination based on a number of prior art documents. These documents had not been considered during original examination, but had emerged later. They had also been considered during litigation of a separate Delnorth innovation patent having practically identical claims to the standard patent. Some of the innovation patent claims had been revoked by the Federal Court for lack of innovative step on by comparison with the same prior art.

A key difference between the legislation regarding ‘innovative step’ and ‘inventive step’ was that for any prior art document to be used in an assessment of inventive step, it had to pass three specific hurdles: that it would have been ‘ascertained’, ‘understood’ and ‘regarded as relevant’ by the patent addressee; while no such hurdles were applicable to inventive step.

In this case, some of the key prior art documents that were used to invalidate the innovation patent did not clear those hurdles, and so were excluded from the inventive step assessment. The judge made this decision on the basis that there was not convincing evidence that those documents would definitely have been looked for, nor that they would then have been found, by the patent addressee.

It has not been common for documents to be excluded in this way, as evidence is usually presented that the prior art documents will meet those requirements. However, when the technical field of a patent is fairly ‘low-tech’ (in this case it related to roadside posts) the possibility remains that a general lack of patent searching or patent awareness (or a lack of evidence of this) in an industry could lead to the exclusion of prior art used in assessing novelty from the assessment of inventiveness.

It should be noted that those ‘hurdles’ have now been removed from the Patents Act 1990; all applications coming under the post-‘Raising the Bar’ legislation will face a potentially tougher assessment of inventiveness. However, the old standards will still apply to a vast number of patents and applications existing and sent for examination prior to 15 April 2013.

by Adam Hyland

The U.S. Implementation of The Hague Agreement on Industrial Designs

In all the hype and profile of the changes introduced to U.S. patent laws by the America Invents Act, it has been easy to overlook another significant change that occurred in the U.S. with the signing of the Patent Laws Treaties (PLT) Implementation Act in December 2012 and, in particular, the sections pertaining to the implementation of The Hague Agreement. These sections are expected to become effective sometime in 2013.

The Hague Agreement relates to an international system for designs. In the U.S., legislation governing the protection of designs is provided within the U.S. patent legislation. The Hague system, administered by the World Intellectual Property Office (WIPO), is a procedural system that facilitates seeking design protection in multiple member countries through the filing of a single application. Whether design protection in each country is conferred remains at the discretion of the intellectual property office of each country. However, the purported benefits of the system come from the centralised filing approach. The Hague system can be readily compared to what the PCT system is to patents and to what the Madrid system is to trade marks.

Historically, the Hague system has suffered from a number of issues which has detracted from the potential benefits of using the system. A main issue is that, compared with the PCT system or Madrid system, the number of member countries is relatively small and the geographical spread of member countries is quite limited, notably to European and African countries. Hence, as an ‘international’ system it lacks a true international coverage.

There have been a few inherent sticking points to the Hague system which has hindered the attraction for countries to consider joining up. A main hurdle concerned an incompatibility between two schools of design regimes which exist in different countries. A number of countries adopt a fairly European–type of regime in which design protection is conferred without any form of substantive examination. The Hague system was originally conceived for this non-examination regime. Other significant countries (which include the U.S.) require a design to be subjected to substantive examination before protection can be conferred. The Hague system did not prove compatible for such examination regimes. However, in 1999, the Geneva Act amended the Hague system to make the system compatible to countries which adopt the examination regime.

Another flaw in the Hague system concerns the fact that member countries may (and, in fact, do) have different and incompatible formal requirements concerning the drawings that form the main basis of any design application. For example, some countries allow the use of ‘ghost’ lines (used to disclaim aspects of the design) while other countries forbid the practice; some countries allow and encourage the use of shading, while other counties forbid shading. In a centralised filing system, where only one set of drawings is submitted, how is this set of drawings able to satisfy the conflicting requirements of all the countries? Until a practical harmonisation of design practice is achieved, this remains a key flaw in the Hague system.

The fact that the U.S. has taken the step of effecting law change to adopt The Hague Agreement, it can be speculated that design law and practice is likely to be the hot topic for international change and harmonisation. Having a country as significant as the U.S. become a member country of the Hague system is likely to cause a number of other countries to consider following suit. The attraction to joining the Hague system would inevitably lead to a desire for international design harmonisation and change to make the Hague system effective.

One hopes that the U.S. has possibly instigated the seeds for international change towards harmonisation in design law and practice with the growth of membership of a consequentially effective Hague Agreement. Companies that do require design protection in multiple countries would find the benefits of being a user of an effective Hague system would be significant.


by Simon Ellis