It’s just a jump to the left, and a step to the right – divisional time warp proposed

The Ministry of Business, Innovation and Employment (MBIE) is seeking feedback on draft amendments to the transitional provisions of the Patents Act 2013 that have applied the validity conditions of the Patents Act 1953 to divisional applications of pending 1953 Act applications filed after the draft amendments enter into force.

The proposed amendments would apply the Patents Act 2013 higher standards for novelty, obviousness and support to such divisional applications during examination and those higher standards would be applied on a balance of probabilities basis and also apply in respect of subsequently commenced opposition, revocation or re-examination actions or requests.

Although somewhat simplified, the relevant differences between the current and preceding Patents Acts can be summarised as:

                    Patents Act 2013                               Patents Act 1953
Novelty:       Absolute (worldwide) novelty with     Local (NZ) novelty including 
                    whole of contents and a grace          disclosures available in New 
                    period for disclosures by the             Zealand via the internet, with  
                    applicant of 12-months prior to         prior claiming and a grace 
                    the filing date.                                   period of 6-months in limited 
                                                                              situations.
Inventive     Examined for and ground for             Not examined for, but a ground
Step:           opposition, revocation and                 for opposition or revocation.
                    re-examination.
Sufficiency:  Claims must be supported by the     Claims must be fairly based on 
                    matters disclosed in the complete     the matters disclosed in the
                    specification.                                      complete specification.
Evidential    Balance of probabilities.                     Benefit of the doubt goes to the 
Standard                                                                applicant.
for above:

This proposal is not new. The Discussion Paper for the Proposed Intellectual Property Laws Amendment Bill 2019 also sought to amend the transitional provisions to the Patents Act 2013 so that future divisional applications that qualify for examination under the Patents Act 1953 would have to meet the novelty, inventive step and support requirements of the 2013 Act – with that determination being made on a balance of probabilities basis.

The main justifications for this proposal being that it would reduce IPONZ operational costs and would allow New Zealand based manufacturers to be more competitive on account of not being subject to wider scope patents than their foreign based competitors.

In the 2019 discussion paper it noted there were about 770 pending divisional applications under the Patents Act 1953. However, currently there are only 81 pending applications (all divisionals) under the Patents Act 1953 from which any relevant future divisionals could be filed. Of these, only 11 are by New Zealand based applicants. The Australian sleep and respiratory device company ResMed Pty Ltd has 26, while the next highest is the USA company Regeneron Pharmaceuticals Inc with 5.

Despite there being a significant drop in the number of pending divisionals under the Patents Act 1953, MBIE considers there is need for legislative amendments that will (effectively retrospectively) apply the novelty, inventive step and support requirements under the Patents Act 2013 to the remaining pending divisionals under the Patents Act 1953.

Any future divisionals from those pending divisionals cannot have a submission date more than 20-years from the filing date of the ultimate parent application, meaning that each year some of those are ineligible for having future divisionals filed out of. As such, even if divisionals continue to be filed from the remaining pending divisionals, between now and September 2034 under the current system the number of pending divisionals that become ineligible as the basis of a future divisional during the following years is as below:

            2025  2026  2027  2028  2029  2030  2031  2032  2033  2034
               1        2        4        3        7       11      12      20      12       8

To paraphrase Churchill’s famous line: "Never was so much owed by so many to so few": This is a case of: Never has so much time been devoted to so few possible patent applications.

From the above it is not clear that there is a need for this proposal and that MBIE would do well to put its efforts into progressing the remaining issues identified in the Proposed Intellectual Property Laws Amendment Bill 2019, which we earlier discussed here. There is only a short timespan for feedback, with submissions being due by 1st April 2025.

Authors: Quinn Miller and Jim Piper

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