Patents Bill

  • enacted



The Commerce Committee has examined the Patents Bill and recommends that it be passed with the amendments shown.


This bill seeks to repeal and replace the Patents Act 1953. The Patents Act is modelled on the now repealed United Kingdom Patents Act 1949, and has a low threshold for patentability compared with most other countries. This low threshold can lead to broader patent rights being granted in New Zealand than in other countries, which can disadvantage New Zealand businesses and consumers, as technology that may be freely available in other countries can be covered by patents in New Zealand. This can discourage innovation and inhibit growth in productivity and exports.

The proposed patents regime would align the criteria for granting a patent with international practice. The new regime would strengthen the criteria for granting a patent by introducing an “absolute novelty” standard, and examine patent applications for usefulness and the presence of an “inventive step” (that is, something not obvious to a person skilled in the art).1

Strengthening the standards would require the Intellectual Property Office of New Zealand to increase the number of patent examiners and increase the resources available for patent examination. The office operates on a cost-recovery basis. Therefore, extra costs would be recovered by increasing the fees to applicants at no additional cost to the Government.

The bill seeks to simplify the procedures for granting a patent, streamline the procedures for challenging a patent, and expand revocation procedures to allow any person, at any time, to apply to the Commissioner of Patents for a grant of patent to be revoked. This would replace the existing 12-month-after-grant limit, and is expected to be simpler and cheaper than applying to the High Court for the grant of a patent to be revoked. The ability to apply to the High Court for a revocation would, however, be retained.

The bill contains provision for patents to be re-examined by the Intellectual Property Office of New Zealand. This process could be invoked at any time after a patent application is accepted. Grounds for re-examination would be an assertion that the invention was not new or did not involve an inventive step.

Exclusions to patentability

It is not uncommon to exclude for policy reasons some inventions that would otherwise meet patent requirements. This bill would exclude the following:

  • methods of medical treatment of human beings

  • human beings, and biological processes for their generation

  • plant varieties

  • inventions whose commercial exploitation would be contrary to public order or morality.

These exclusions would reaffirm that methods of medical treatment are not patentable in New Zealand, support the Royal Commission on Genetic Modification’s recommendation to exclude human beings, and incorporate the provisions of Article 27.2 of the World Trade Organisation Agreement on Trade Related Aspects of Intellectual Property Rights.

Article 27.2 requires that it is the commercial exploitation of the invention, rather than the nature of the invention itself, that must be objectionable for this exclusion to be invoked. It is intended that this exclusion would be used infrequently, in relation to inventions where commercial exploitation was likely to be offensive to any significant section of the community, including Māori.

Plant varieties would be excluded as they are protected under the Plant Variety Rights Act 1987.

Interests of Māori

This bill seeks to provide adequate incentives for innovation and technology transfer while ensuring that the interests of Māori in their traditional knowledge and indigenous plants and animals are protected. The bill would establish a Māori Advisory Committee to advise the Commissioner (on request) whether an invention described in a patent application was derived from Māori traditional knowledge or from indigenous plants and animals. The advisory committee would advise on whether commercial exploitation of such inventions could be contrary to Māori values. The Commissioner would be required to consider the advice of the committee, but would not be bound by it.

A number of submitters referred to the Waitangi Tribunal inquiry into indigenous flora and fauna and cultural intellectual property (WAI 262), and suggested that reform of intellectual property and patent development activity should be deferred until the Tribunal released its report. We were advised that enactment of this bill would not preclude amendments as part of the Government response to the Tribunal’s report on WAI 262.

Dividing the Patent Bill

Part 5 of the bill as introduced seeks to update and modernise registration requirements, and align New Zealand’s regime with that of Australia. It does not provide for a single trans-Tasman framework for regulating patent attorneys, although such a development was signalled by the Governments of New Zealand and Australia in August 2009.

We received advice that substantial amendments to the provisions in Part 5 of the bill would be needed in order to implement a trans-Tasman framework. The timeframe for developing and implementing a single regulatory framework has yet to be agreed upon and we consider it unnecessary to delay the enactment of the rest of the Patents Bill meanwhile.

After due consideration, and in accordance with Standing Order 285, we resolved to transfer the provisions concerning the regulation of patent attorneys to a separate bill. This bill, which is designed to promote quality, expertise, and integrity in the profession of patent attorneys, has been renamed the Patent Attorneys Bill.

This commentary covers the key amendments that we recommend to the bill. It does not cover minor or technical amendments.

Part 1—Preliminary


Clause 2(2) provides for substantial parts of the bill to be brought into force by the Governor-General by one or more Orders in Council. This provision was intended to allow time for regulations to be made to give effect to some parts of the bill. In 1996 the Regulations Review Committee recommended that commencement of legislation by Order in Council be used in “rare and exceptional circumstances” only, as it transfers a critical power from Parliament to the Executive Council.2 In the light of this, we recommend inserting new clause 2(3) so that the parts of the Act not covered by clauses 2(1) and 2(2) would come into force on 31 December 2012.


We recommend including in clause 3 the Statement of Public Policy Objective from the explanatory note of the bill. This is an important policy objective, which should be included to clarify the intention of the legislation.

Prior art base

Clause 8, subsection 3 is an anti-self collision provision intended to deal with situations where two patent applications are filed naming the same inventor, the persons entitled to be granted the patent are the same, the second of the two applications is filed before the first is published, and the second application claims patent rights over matter described (but not claimed) in the first. Few countries have anti-self collision provisions and internationally there is little support for them. We therefore recommend deleting subsection 3.

Part 2—Patentable inventions and patent rights

Exclusions from patentability

To provide some guidance as to when commercial exploitation of an invention could be considered contrary to public order or morality, we recommend amending clause 14 by inserting a non-exhaustive list of inventions, based on Article 6 of the European Biotechnology Directive, by way of example. We would support the development of guidelines by the Intellectual Property Office of New Zealand for applying clause 14.

Patentable inventions

We recommend amending clause 15 to include computer programs among inventions that may not be patented. We received many submissions concerning the patentability of computer programs. Under the Patents Act 1953 computer programs can be patented in New Zealand provided they produce a commercially useful effect.3 Open source, or free, software has grown in popularity since the 1980s. Protecting software by patenting is inconsistent with the open source model, and its proponents oppose it. A number of submitters argued that there is no “inventive step” in software development, as “new” software invariably builds on existing software. They felt that computer software should be excluded from patent protection as software patents can stifle innovation and competition, and can be granted for trivial or existing techniques. In general we accept this position.

While the bill would provide adequate incentives for innovation, however, we are aware of New Zealand companies who have invested in a significant number of software-related inventions, involving embedded software.4 We sought advice on the approach taken in other jurisdictions such as the United Kingdom and the United States, and whether legislation that would enable “embedded software” to be patentable might be practicable. After careful consideration we concluded that developing a clear and definitive distinction between embedded and other types of software is not a simple matter; and that, for the sake of clarity, a simple approach would be best. We received advice that our recommendation to include computer programs among the inventions that may not be patented would be unlikely to prevent the granting of patents for inventions involving embedded software.

We recommend that the Intellectual Property Office of New Zealand develop guidelines for inventions containing embedded software.

Part 3—Process for obtaining grant of patent and other matters

Subpart 1—Patent applications

Clause 33 concerns divisional applications, which are patent applications containing matter from previously filed applications. We are aware of concern that the lack of time limits might allow applicants to maintain pending applications for long periods, and a view that the practice of ante-dating set out in subsections 2 and 3 would be inappropriate if new matters were added. We consider that current practice addresses these concerns adequately, and therefore recommend amending clause 33 (Divisional applications) in order to codify what is already happening. We also recommend adding a requirement to comply with any further timing requirements prescribed in the regulations.

Maintenance fees

We recommend inserting new clause 33A to require an applicant to pay a maintenance fee. Failure to do so would result in the patent application lapsing. Combined with clause 292(2), this would act as a disincentive to maintain applications for inventions people are no longer actively interested in.

We considered whether any incentives should be provided to encourage the challenging of the grant of patents, through either a higher scale of costs or a period of exclusivity (regarding use of the invention) for any person who succeeded in overturning a patent. This is a significant matter, and after due consideration, we have concluded that it should be dealt with separately as a policy issue.

Subpart 2—Specifications

Clause 37 would require every complete specification to “particularly describe the invention and the method by which it is to be performed”. This provision is carried over from the Patents Act 1953, and was copied from the (now repealed) United Kingdom Patents Act 1949. No other major jurisdictions use this standard. Therefore, we recommend amending clause 37 (Contents of complete specification) by replacing “particularly describe the invention and the method by which it is to be performed” with the stricter requirement 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”.

We also recommend amending clause 37 to require that claims for an invention be “supported” by the description, replacing the current “fair basis” requirement. These proposed amendments are based on the wording of sections 14(3) and 14(5) of the United Kingdom Patents Act 1977.

Subpart 4—Convention applications

We also recommend amending clause 50(3) so that convention applicants would be required to file certain documents only at the request of the Commissioner.

Subpart 5—Priority dates

For the sake of consistency, we recommend amending clauses 57 and 58 by replacing reference to an “application for protection” with reference to a “basic application” as defined in clause 5; and replacing the term “fairly based” with “supported”, which we also recommend be done in clause 37. We further recommend amending clause 58 to make it clear that the filing date may be the filing date in New Zealand or a convention country.

We recommend inserting new clause 59A to allow the Commissioner to direct that a patent application or specification be treated as having been filed on the same date as a corresponding document for another application. This would replace clause 107, and would also cover opposition and re-examination proceedings where it was found that the nominated person or patentee in respect of the other application was not entitled to the patent.

Subpart 6—Examination

The bill as introduced would require all patent applications to be examined, including those that applicants no longer wished to pursue. Allowing the Commissioner to examine an application only when requested to do so by the applicant would serve the bill’s purpose of updating and simplifying the administrative aspects of the patent regime. We therefore recommend inserting new clause 59B (Request for examination). To facilitate the efficient management of patent examiners’ workloads, we also recommend empowering the Commissioner to direct applicants to request an examination.5

We recommend amending clause 60 by replacing “to the best of the Commissioner’s knowledge” with “on the balance of probabilities”. This would be consistent with clause 70 (Acceptance of complete specification). For the sake of consistency, we also recommend that the matters upon which the Commissioner must report under clause 60 be consistent with clause 70.

We recommend amending clause 62 (Applicants must act by deadline if deadline set by Commissioner) to ensure that applicants “must” make a substantive response, rather than take “reasonable steps to ensure that the response is a substantive response”, which is vague and unclear.

We recommend amending clause 65 (Duty to inform Commissioner of search results) so that the submission of search reports would not be compulsory, but at the request of the Commissioner. This would further simplify the administration of the patent regime.

Subpart 7—Acceptance and publication

The purpose of clause 67 is to allow applications to lapse if certain requirements are not complied with or satisfied within a prescribed period. For example, an applicant might fail to respond to a request from the Commissioner to submit a search result. We recommend amending clause 67 to clarify this purpose by inserting new subsection 1(ab) and deleting clause 66 which would no longer be necessary.

Clause 68 is intended to allow the Courts to extend the prescribed period for putting a patent application in order for acceptance if an appeal is pending. We recommend clarifying the intent of clause 68, and its relationship with clause 261 (Appeals of decisions of Commissioner).

We recommend deleting reference to a form in clause 76(2). Patents can be filed electronically and a “form”, in the conventional sense of paper copy, may not exist.

We recommend inserting new paragraph 76(1)(ab) to allow the confidentiality obligations incumbent on the Commissioner to be imposed on every person who is provided with documents by the Commissioner.

We recommend amending clause 77 (Effect of publication of complete specification) to clarify that proceedings may only be brought when all elements have been met, including the requirement that an alleged infringing act would infringe both the patent as granted and a claim of the complete specification in the form that it was immediately before it became open to public inspection.

Subpart 9—Assertions by third parties and re-examinations

The Patents Act 1953 allows third parties to oppose the grant of a patent, in what is known as pre-grant opposition, in the three-month period between acceptance of a patent application and the grant of the patent. The bill as introduced does not make provision for pre-grant opposition. Instead, it proposes strengthening the standards of the patents regime, and would provide for a re-examination process that could be invoked at any time after a patent application had been accepted.

Many submitters favoured pre-grant opposition, and argued that it allows New Zealand businesses to limit the scope of troublesome international applications; and that an opposition mechanism allows overly broad patent claims to be narrowed, preventing patent owners from wrongfully asserting invalid rights, and thus reducing costs and disruption to businesses.

We consider that there is merit in maintaining a modified form of pre-grant opposition, and recommend amending subpart 9 by inserting new clauses that would enable third parties to oppose a patent before it was granted. Amending subpart 9 thus would require a number of consequential amendments, including inserting new clause 89A (Relationship between re-examination and other proceedings), amending clause 93 (When patent must be granted), and inserting new clause 181A (Request or claim may not be considered in certain circumstances). We recommend that these, and other, amendments be made where necessary.

We think that the grounds on which third parties can oppose a patent being granted, request that a grant of patent be re-examined, or request that a patent be revoked should be consistent, and recommend amending the appropriate clauses of this bill to achieve this. It would also be necessary for the Intellectual Property Office of New Zealand to develop re-examination guidelines.

Subpart 10—Grant of patent

If an invention is improved or modified, it is possible to apply for a patent of addition. This provides protection for improvements or modifications which, relative to publication or use of the previous invention, may be deemed to lack an inventive step. We recommend amending clause 98 (Patents of addition) to allow such an application to be made by a person authorised by the applicant or patentee of the main invention. This would be consistent with the move from a “right to apply” approach to a “right to grant” approach.

We recommend amending clause 101 to make it clear that a patent of addition would also lapse if the patent for the main invention lapsed through non-payment of a renewal fee.

Subpart 11—Revocation and surrender of patents

The bill would allow three processes for challenging a patent application or patent: opposition (pre-grant opposition), re-examination, and revocation. This might lead to people re-litigating issues previously dealt with in other proceedings. To prevent this, we recommend inserting new clause 89A subsections (4) and (5), and amending clause 105 to allow the Commissioner to refuse to consider an application for revocation or re-examination, if the issues raised are the same (or substantially the same) as those argued before the Commissioner or the Court in previous opposition, re-examination, or revocation proceedings. We received advice that this would not prevent an application for revocation being brought before the Court.

Part 4—Infringement, other patent proceedings, and matters affecting patent ownership

Subpart 1—Infringement proceedings

Prior use rights provide protection for people or companies who wish to protect their inventions as trade secrets. We recommend inserting new clause 138A (No infringement for prior use of invention) which would allow them to continue using an invention, even if another person or company obtained a patent for the invention, without being subject to infringement action. Prior use rights would only apply to patents if the relevant patent applications were made after the commencement of the bill or subject to the bill under the transitional provisions.

Subpart 2—Declarations of non-infringement

We recommend amending clauses 151 and 152 to clarify who may apply for a declaration, and what conditions must be satisfied before a declaration can be made. This would enable people considering, or already exploiting, an invention to take pre-emptive action to avoid future patent infringement action.

Subpart 3

We recommend deleting clauses 155 to 157 and replacing them with new clause 141A (Right to bring infringement proceeding if registrable assignment or licence has occurred). This would protect infringement actions from being too easily defeated by a technicality, while ensuring that there were appropriate incentives for people to register assignments and licences.

Subpart 5—Compulsory licenses

We recommend amending subpart 5 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 would allow a person to export patented pharmaceuticals under a compulsory license in line with the protocol. The protocol seeks to assist countries, particularly developing countries, which are facing serious public health problems and have little or no capacity to manufacture pharmaceuticals.

Subpart 6—Crown use of inventions

We recommend amending, where appropriate, subpart 6 to make inventions whose patent applications are pending available for Crown use. This would bring New Zealand’s patent legislation into line with that of Australia.

Part 6—Administrative and miscellaneous provisions

Subpart 2—General provisions on proceedings of Commissioner

We recommend inserting new clause 255A, which would give people adversely affected the right to be heard before the Commissioner makes a final decision. There would be two exceptions to its application: the power to direct applicants to request an examination under new clause 59B (Request for examination), and a person to whom new clause 92A applies (A person who requests re-examination has no right to participate further in re-examination proceedings).

To achieve consistency with High Court rules, we recommend amending clause 259 to allow the Commissioner to award indemnity costs. For this reason, we also recommend amending clause 260, which relates to the Commissioner’s ability to require security for costs if he or she considers that a party would be unable to meet the costs of another party if required to; and, where appropriate, amending clauses 261 to 264, which relate to appeals against the Commissioner’s decisions.

Subpart 3—Establishment and operation of administrative bodies for patents

Clause 270 would require the Commissioner to submit an annual report to the Minister no later than 30 September of each year, and the Minister to present the annual report to the House within six sitting days of receiving it. Section 44(1) of the Public Finance Act 1989 supersedes these reporting requirements.6 We therefore recommend deleting this clause and equivalent provisions in the Designs Act 1953 and the Trade Marks Act 2002.

Subpart 4—Other miscellaneous provisions

Clause 281(2) would allow the Commissioner to require an individual to confirm whether an agent is authorised to apply, on their behalf, for an extension of a time limit for certain filing requirements or for delivery failures. We received advice that the purpose of this clause, which has been carried over from the Patents Act 1953, is unknown, and therefore recommend deleting it.

Subpart 5—Regulations

We recommend amending clause 292 to allow provision for maintenance and renewal fees. This would allow the Crown to recover a share of the overall costs incurred by the Commissioner in performing his or her duties. Such fees would also encourage applicants who had lost interest to let their applications lapse, and encourage patent owners to not renew patents they were no longer exploiting or deriving any benefit from.

Subpart 6—Repeals, amendments, validation, and saving and transitional provisions

We recommend amending clause 297 to clarify that the Patents (United States of America) Regulations 1956 would continue to apply despite any inconsistency with the provisions of the bill.


Committee process

The Patents Bill was introduced during the 48th Parliament on 9 July 2008, and was reinstated in the 49th Parliament on 9 December 2008. It was referred to the committee on 5 May 2009. The closing date for submissions was 2 July 2009. We received and considered 67 submissions from interested groups and individuals. We heard 36 submissions. On 18 February 2010 the committee decided to divide the bill.

We received advice from the Ministry of Economic Development. The Regulations Review Committee reported to the committee on the powers contained in clause 2(2).

Committee membership

Hon Lianne Dalziel (Chairperson)

John Boscawen

Charles Chauvel (until 14 October 2009); (from 18 November 2009)

David Clendon (from 25 November 2009)

Clare Curran

Te Ururoa Flavell

Jo Goodhew (until 24 June 2009)

Raymond Huo (from 14 October 2009 until 18 November 2009)

Melissa Lee

Peseta Sam Lotu-Iiga

Katrina Shanks

Jonathan Young (from 24 June 2009)

  • 1   See clause 7.

  • 2   Regulations Review Committee, Investigation into the Commencement of Legislation by Order in Council, 1996, I.16K.

  • 3   Under the Patents Act 1953 mathematical algorithms as such are not patentable. They may be patented under the Patents Act when used in a computer, so long as they produce a commercially useful effect.

  • 4   Embedded software is computer software which plays an integral role in the electronics it is supplied with (e.g. cars, pacemakers, telephones, and washing machines).

  • 5  See new clause 59B(2).

  • 6   The Commissioner’s report is included in the annual report of the Ministry of Economic Development.