Patents Amendment Bill

Committee of the whole House Part 1 Amendments to existing provisions CHAIRPERSON (Barbara Kuriger): Members, the House is in committee on the Patents Amendment Bill. We come first to the debate on Part 1. This is the debate on clauses 4 to 6, “Amendments to existing provisions”. The question is that Part 1 stand part. Hon RACHEL BROOKING (Labour—Dunedin) (20:16): Thank you, Madam Chair. I did outline in my second reading speech that it would be very good to have some examples from the Minister of what was going on, and I am interested in this bill. It is a very short bill. I won’t have very many questions, although that’s not because it’s short. It refers a lot to the primary legislation and it’s quite difficult to read on the face of it, and so, Minister, what I am interested in is this. I think it would be very helpful if you took us through what is going on here in Part 1. It’s only three clauses, but how does it relate, Minister, to what you’ve laid out in your second reading speech—and to what I laid out in my second reading speech, as well—which was that the test in the 1953 Patents Act is different from the test in the 2013 Patents Act, and we’re going to make the divisional applications no longer able to be attached to the 1953 patents—you can tell me if I’ve got that right or wrong. If that’s the case, what I’m interested in relation to these clauses 4, 5, and 6 is how they contribute to that story, and, if they do and how they do—I know that there are transitional provisions coming up in Part 2—what the difference in that test would be. If the Minister can give some examples of the type of application that would have got through on the 1953 test but would fail under the 2013 test. That’s what I’m really interested in. There are two things: if he can give some examples of just how this is going to play out in reality, and if he can explain just how Part 1 fits in with what he was saying and what I was saying in our second reading speeches. Thank you. Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:19): I have sought advice over ensuring that I can give the Hon Rachel Brooking an accurate example. I probably won’t be able to name companies or products, but we can name kinds of situations or scenarios to try and give her a clearer picture. There’s an example coming up that involves a feather duster, by all accounts, and we’re working on that now. I suppose, just to set some context and setting here, this is an important technical change that we’re making so that we can ensure patents are considered broadly under the same criteria, giving certainty and reducing risks and legal costs for businesses. This has its genesis back, actually, under the last administration, as you touched on, member Brooking. The 2020 Labour Cabinet pushed this through, as did the Economic Development, Science and Innovation Committee, unanimously and without amendment. We’ve got good political support for this and from this, so the reason we’re pushing this through, I suppose, is that there’s enough concern in different sectors that we do need to make sure that our patent system is fair and that patents are broadly considered under the same criteria. This is, for all intents and purposes, a five-page, highly technical bill, but one that fixes quite an anomaly that affects not many New Zealanders or businesses, but it’s an important one that we fix, as my good friend the MP for Whanganui articulated, because this is all about ensuring a good and predictable business environment so our inventors, our producers, industry, and small and large businesses can get on with the job with confidence. Hon RACHEL BROOKING (Labour—Dunedin) (20:21): Thank you. I appreciate that the Minister is waiting for the feather duster example that will demonstrate the difference between those two tests. I thank him in advance for that. The other question that was not answered is what part clauses 4, 5, and 6 play in changing the system. If he could just give a high-level explanation of the mechanisms that clause 4, 5, and 6 are doing, as compared with—I’ll ask the same question when we get to Part 2 about what’s happening in Part 2. Hon GINNY ANDERSEN (Labour) (20:22): Thank you very much, Mr Chair. I’d just like some clarification from the Minister in relation to the transitional provisions in between the two different regimes. In the regulatory impact statement, I’m aware that a number of different options were laid out for those transitional provisions, but I’d just like to highlight the point that submissions from patent attorneys and lawyers who opposed the change argued that it would be unfair to applicants who had already applied for patents under the 1953 legislation. Those submitters also indicated that they did not agree with this option, and it was causing concern that there was unfairness to apply requirements in the Patents Act 2013 to divisional patent applications under the Patents Act 1953. I would just like the Minister to speak to the position he’s leaned on in relation to those transitional provisions and see whether he would like to make any comments on the submissions that were received that raised some concerns with those transitional provisions. Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:23): Madam—Mr Chair, sorry; we’re getting into a long end of a long week, Mr Chair, my good friend. The member the Hon Ginny Andersen raises some good issues there, and, actually, I invite her to have a look the Economic Development, Science and Innovation Committee’s select committee report that was unanimously agreed. There was also that issue of perceived retrospectivity. If she goes to page 4 there, she can see that she was right. There have been submitters that have raised different issues, albeit the numbers of submitters were—we received and considered submissions from 14 interested groups and individuals. We heard oral evidence from two submitters, so it was quality not quantity, but nonetheless they raised some good issues that the select committee has focused on and dealt with. One submitter argued that the bill was retrospective and risks breaching international obligations. Well, the select committee concludes that this legislation will help align New Zealand’s international obligations with the standards now being applied equally to all applicants. There was a concern about retrospectivity and that it would disproportionately affect small inventors, universities, and start-ups. But the select committee examined this with the written submitters and with the oral presenters, worked through this, and decided that while their concerns were meaningful and interesting, they had no validity as far as the intent of this policy, so they progressed with the legislation and recommended it back to the House unchanged. SCOTT WILLIS (Green) (20:25): Thank you, Mr Chair. I’ve got a very simple question. I was inspired, actually, by my colleague in Labour Cushla Tangaere-Manuel, who talked about the farm gate closing, because one of the tools that I have used extensively is a Hayes wire strainer from Ōtūrehua. Now, I can’t remember the year in which it was invented, but it is one of those inventions that has lasted the test of time and clearly has some novelty and can be clearly defined. In Part 1, clause 5, new section 254(4), it says, “On a re-examination of the patent application and the complete specification under section 95, the grounds that a person may specify in a request for re-examination, and that the Commissioner may consider and report on, are 1 or more of the following grounds:”—and I’ll go straight to (d)—“(d) that the scope of any claim of the complete specification is not sufficiently and clearly defined or that any claim of the complete specification is not supported by the matter disclosed in the specification.” My question, really, is around how we understand that “sufficiently and clearly defined”. What does that actually mean? This is where we really need examples, and I invite the Minister to give us some examples because it’s nice to have words, but I’m just looking for how this is going to be interpreted. I can see problems. I understand the Hayes wire strainer is really easily defined as a useful tool and clearly has stood the test of time, but how is something that’s not quite so clearly defined going to be judged? What do these words actually mean? I ask as someone who has applied for a trademark previously and was successful, but I found it confusing because the words didn’t give enough clarity about what was being asked for. It would be great if the Minister could respond. Thank you. Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:28): Thank you to the member Scott Willis for his rather, I thought, unifying speech that this House needed earlier on. Thank you, Scott. You raised new section 254, the amendment via clause 5, and the effect of this, and you talk on new subsections (4) and (5). The overall effect of this is that some grounds for re-examination of a patent granted under the 2013 Act will also apply to a patent granted under the 1953 Act, in respect of a divisional application, if the application was filed on or after the date on which the bill comes into force and given a date before 13 September 2014. That is the that is the rationale largely behind those new subsections in section 245, amended by clause 5. SUZE REDMAYNE (Junior Whip—National) (20:29): I move, That debate on this question now close. Hon RACHEL BROOKING (Labour—Dunedin) (20:29): I’ve been promised some explanation, some example, that apparently is going involve a feather duster, and I have not had it yet, and I’m on tenterhooks here, Minister—on tenterhooks. CHAIRPERSON (Teanau Tuiono): Give her the feather duster, Minister. Here we go. Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:29): I was trying to avoid the feather duster example, but the officials have written it out in longhand here, Rachel, and I’m happy to hand it to you. On your next flight to Dunedin, you can see if you can make sense of it—probably better than me. But let me read it out verbatim, and if you can’t make sense of it, you’re going to have to talk in the lobbies with our officials. Here it is, the Hon Rachel Brooking: “Say I am the manufacturer of a feather duster, and my competitor puts in an application for patents for a feather end”—that’s the feather end, isn’t it?—“that is pink or purple, and, secondly, a handle with a hole to hang it on a hook.”, so we’ve got two components there. “Clearly, these inventions should not get a patent, but it might under the old rules from 1953. As a feather duster manufacturer, I have to either stop manufacturing feather dusters”—and I think feather dusters are making a comeback tonight; Dr David Wilson’s thinking his never disappeared. “As a feather duster manufacturer, I have to either stop manufacturing my product or take a risk that I will be in breach of a patent.” Here ends the lesson. CHAIRPERSON (Teanau Tuiono): Such enlightenment for a Saturday night. Hon RACHEL BROOKING (Labour—Dunedin) (20:31): Thank you for reading out the advice handed to you by officials who are here, ladies and gentlemen watching Parliament TV, at 8.30 on a Saturday night. I appreciate their good service to us all. Thank you for what you’re doing there. But the feather duster example would suggest that the 1953 threshold to get a patent is exceptionally low if there is a suggestion that a feather duster with a hole in the handle—and I can see the officials nodding. If that is your point that it’s a very, very low threshold, then I take that and I thank the officials for providing the Minister with an example. My last question is a repeat, but it is a plea for the Minister, if he could just take us through clauses 4, 5, and 6 and explain how they fit in the mechanics of this change. We’re requiring that those associated applications, the divisional applications, have to now apply the 2013 rules or tests—they’ve got to match the 2013 legislation, rather than the 1953 legislation. Can he just explain how those clauses do what we have all been talking about? I realise the bill might not have been with the Minister for a long time, but if he could just take us through that, I think that would be useful. I’m done. Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:33): I’m tempted, because the Hon Rachel Brooking was probably in the Cabinet committee when this came through, and so she might know more feather duster examples than I do in the machinations and mechanics of this bill. But she is right to say that, clearly, the bar in the scenario that I articulated—the feather duster example—is a pretty low bar that we now need to fix. I suppose I go back to the whole purpose of this bill. The introduction line in the explanatory note is “to amend the Patents Act 2013 … to apply stricter criteria for the grant of divisional applications filed under the Patents Act 1953”. This is about tightening up the criteria. As far as clauses 4, 5, and 6—and as you have so beautifully reminded us all, our wonderful officials here are sitting here on a Saturday night at 8.35 p.m.—rather than read chapter and verse, as much as I know Carl Bates is looking forward to it, I point to you, the Hon Rachel Brooking, to go back to this five-page bill and to read the amendments that the bill achieves. Read clause 4, clause 5, and clause 6, pages 2 and 3, where it articulates what those amendments—3, 4, 5, and 6—are trying to achieve. Hon GINNY ANDERSEN (Labour) (20:35): Thank you very much, Mr Chair. I just had a question in relation to the changes that—a problem actually came up with the Trade Marks Act 2002. The clear problem that’s been identified that this bill seeks to remedy is that many series of trademark applications are, in fact, being filed incorrectly. It’s an interesting fact that around 50 percent of series trademark applications are actually incorrectly filed. That’s either because the applicant does not fully understand what the criteria are that they need to meet, or, in some cases, to place a strategic hold on a suite of trademarks. In fact, there’s been some commentary in the regulatory impact analysis that this issue may be exacerbated by the fact that an application fee for a series of trademarks is the same for a single trademark and therefore there are no limits on the number of marks permitted in a series. This is particularly an issue in the fact that we are now in an age where, very often, we are seeing an item that has been potentially patented and is marked and you’re getting something very, very similar to it, because of the internet and the rapid ability of someone to go into a shop, take a photograph of a particular thing that’s patented, and then to replicate that, but do a slight difference. The whole point in terms of families of trademarks is important to get right in this bill, given the changed environment that we currently operate in. I would be really interested to hear from the Minister if he thinks where we’ve arrived in this bill in relation to series of trademarks—so that people understand at home if they’re tuning in on a Saturday night, and I’m sure there’s at least one person out there, the really good example given in here is where it’s got FLORINA marmalade or FLORINA jam. There’s a series under that that are using that name. Is the Minister is able to give certainty that the changes made in this legislation that seek to rectify some of the problems that the Trade Marks Act 2002 had with it—in particular, to the filing of incorrect applications and the uncertainty that that imposes? Does he think that that 50 percent mark—under previous legislation, 50 percent of those families of trademarks being incorrectly applied for. Is he confident that the legislative changes we’re debating tonight will rectify that problem that we’ve seen in the past? Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:38): Talking trademarks is well outside the scope of a very, very narrow Patents Amendment Bill. The bill, again, will adjust the 2013 Act so that the 53 Act applications—i.e., in the 60 years between 1953 and 2013—will be examined in broadly the same way as the 2013 Act applications. This is a very narrowly scoped bill. We’ve saved the best for last here in our Budget urgency. As you can see, the public interest is relatively limited—14 written submissions; two oral submissions. Some sectors are looking at this with interest, but it’s well beyond the wider discussion of the likes of trademarks. But the member the Hon Ginny Andersen can be assured that this is just one of a number of intellectual property (IP) law changes that we are going to progress, if not this term, then in our second, third, fourth, or fifth term, as an administration. We recognise that Dr Hamish Campbell is a real-life scientist. He recognises the importance of such work, and we recognise the importance of IP laws for business, for academics, for inventors, for plant breeders, and for exporters. So, again, as I started, I say that this is just such a narrow piece of legislation that affects very few but it’s important that we get it right 13 years on from the amendment statute. The Labour Cabinet had it in 2020 and a member from the Labour Party said, “Oh, but that was a very busy year.” We all know what happened in 2020 but, I put it to them, there were roughly a thousand days between then and the election to sort it out. They didn’t sort it out. The coalition Government is sorting it out. Dr HAMISH CAMPBELL (National—Ilam) (20:40): I move, That debate on this question now close. CHAIRPERSON (Greg O'Connor): Just to give members some clarification—relatively short points at this stage. Hon RACHEL BROOKING (Labour—Dunedin) (20:41): Thank you, Mr Chair, and I am—because I thought we could have had a very short committee stage. I was asking the Minister for some clarity about the mechanisms in this bill—a short bill with not many clauses. Instead, we keep getting political attacks by him and some high-level policy that nobody disagrees with. We’re all in agreement about the high-level policy, but what we’re asking about is how these clauses work. And the Minister keeps saying, “Well, just read the material in the bill. Well, his job is to answer questions and to get it into Hansard and I can count four advisers behind him as well who are here to help. So is the mechanism in clause 4—I don’t have my glasses on, sorry, so I wasn’t entirely sure. So clause 4—the point here I think, and the Minister can confirm this, is that where a 1953 patent—no, sorry. It sets out the defence for a patent infringement claim relating to prior use of the invention. So what’s happening here is there’s a change so the defence continues to not apply to any patent resulting from a divisional application treated as made under the 1953 Act. So where somebody needs to use that defence, which is, “I was allowed to use the feather duster because my hole in the handle was not in breach of anything.”, then that remains. Is that what the mechanism here is in clause 4? And then can the Minister explain what thing is happening in clauses 5 and 6? TANGI UTIKERE (Labour—Palmerston North) (20:43): Thank you, Mr Chair. I want to ask the Minister a question that relates to clauses 5, 3, and 6. There is a term in there that is utilised and it relates to the use of a fresh patent application. Now, it may be that there needs to be a tenuous link between what is currently in the system and what had come previously, because it seems to me that, particularly with clause 5, that relates to the re-examination part of the application. Why is it that that can’t be defined in any other way—for example, a new application or an updated application? Why is it that that term is used? Very short question. I’d appreciate a short answer. CUSHLA TANGAERE-MANUEL (Labour—Ikaroa-Rāwhiti) (20:44): Thank you, Mr Chair. Tēnā koe e te Minita. I will keep this brief. I know we had a bit of a laugh about the story about what I believed was my grandfather’s invention—my great-grandfather’s, actually. And you know what? He was born in the early 1900s, so for all we know, it could in fact have been his invention. But the question for the Minister tonight is a brief one. How will this bill help people understand, or protect people, but, mostly, help them understand that what they believe is genuinely their own invention is their own invention or innovation versus a breach of someone else’s patent? Hon RACHEL BROOKING (Labour—Dunedin) (20:44): Thank you, Mr Chair. I’m moving on to clause 5 and again asking about the mechanisms of this bill. This clause relates to the transitional provisions, and is this the clause that is saying, “Well, now that the 2013 grounds will now apply, therefore the mischief is fixed.”. Is that what clause 5 is doing? Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:45): Thank you, Mr Chair. To the honourable member Rachel Brooking, I say she was right to say that I had four officials behind me, and this is their conclusive comment that I will read for her benefit as far as trying to get some clarity, particularly pertaining to clause 4. It basically says that if you were already using or clearly committed to using the invention before the patent’s priority date, then you can keep doing so without infringing. But the defence doesn’t apply to the 1953 divisionals. Clause 4, as the member alluded to, maintains that for the divisionals to which new section 258A would apply. Hon GINNY ANDERSEN (Labour) (20:46): Thank you very much, Mr Chair. I have a question in relation to the current transitional provisions for divisional patent applications which, potentially, could disadvantage some, and that was what came through from submitters as well. And in relation to a solution to the potential disadvantage for those transitional provisions for divisional patent applications, one of the proposed options is to provide for an anti - self-collision provision. I think that sounds like a good thing—something you could have had in a coalition agreement; could have saved us a lot of time. But I’d really be interested to hear from the Minister particularly around the option for the provision of an anti - self-collision provision. This option involves providing that a divisional patent application cannot form part of the prior art base for its parent application and vice versa; the so-called anti - self-collision provision also applies. The prior art base is the material that can be used to determine whether or not the invention claimed in a patent application is new or innovative or adding something additional. If the invention is not new or adding something different, no patent can be granted on the application. So this is an approach that is simple and it should no doubt have what is intended by this to avoid having those situations. It has been outlined in the regulatory impact statement that for this reason that option has been preferred. It does depend on the court adopting a particular interpretation of the provision, but I would be really interested to understand the Minister’s views on the ability of an anti - self-collision provision to specifically provide for those transitional provisions for the divisional patent application that could potentially be disadvantaged. Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (20:48): Such a move, I’m reliably informed, would take us well outside the international practised norms and subsequently challenge our ability, which we are partly achieving here, to align with our international standards and obligations. MILES ANDERSON (National—Waitaki) (20:48): I move, That debate on this question now close. A party vote was called for on the question, That debate on this question now close. Ayes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Noes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Motion agreed to. fCHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(4)(e) “that the patent application has remained pending for an unreasonable period” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(4)(e) “that the divisional application is not materially distinct from the parent application” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(4)(e) “that the divisional application was filed more than 10 years after the parent application” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(4)(e) “that the divisional application is inconsistent with the purpose of section 258A” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(4)(e) “that the divisional application constitutes an abuse of the transitional arrangements” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(5)(e) “that the patent application has remained pending for an unreasonable period” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(5)(e) “that the divisional application is not materially distinct from the parent application” be agreed to. A party vote was called for on the question, That the amendment be agreed to. Ayes 33 New Zealand Labour 21; Green Party of Aotearoa New Zealand 10; Ferris; Kapa-Kingi. Noes 67 New Zealand National 48; ACT New Zealand 11; New Zealand First 8. Amendment not agreed to. CHAIRPERSON (Greg O'Connor): The question is that Arena Williams’ tabled amendment to clause 5 inserting new section 254(5)(e) “that the divisional application constitutes an abuse of the transitional arrangements” be agreed to. Amendment not agreed to. Part 1 agreed to.