Patent reform plans win approval

The government's proposed patent reforms will make it tougher for "soft" patents to be granted but the patent office will need to be much better resourced, patent experts say.

The government’s proposed patent reforms will make it tougher for “soft” patents to be granted but the patent office will need to be much better resourced, patent experts say.

Associate commerce minister Judith Tizard, who aims to introduce the new legislation to parliament early next year, says the criteria for granting patents will be strengthened to ensure patents are granted for “genuine innovations”. The legislation would review the 30-year-old Patent Act’s definition of “invention” and its ability to deal with new technologies, Tizard said in a press release.

The act has been under review for some time, but has come in for heavy attack in recent weeks for being too lenient. Critics point to letters sent to e-tailers by Canadian company DE Technologies, accusing retailers of patent “piracy” and demanding licensing fees of $10,000 plus royalties.

Cabinet briefing papers suggest that the commissioner of patents should be able to reject patents that, “on the balance of probabilities”, do not meet all the requirements of the Patent Act. Currently the commissioner can only reject a patent if “practically certain” the patent would not be upheld in court.

The papers also suggest that New Zealand adopt language more closely associated with Australian patent law, and that medical treatment methods should not be patentable.

IP barrister Clive Elliott says examiners will now be able to hold patent applications to a similar standard as the courts would use, meaning that fewer undeserving patents will be granted. “The system will be strengthened by making it easier to knock out obvious inventions.

A patent today can only be declined if prior art is found which exactly describes the application, Elliott says. The proposed reforms would allow examiners to decline a patent on the basis that it is an obvious merging of two or more examples of prior art. (Prior art is examples of similar systems that predate the patent and might be used to challenge it.)

“I’m all in favour of strengthening things so when a patent gets through you can say ‘this is a good patent’.”

The Intellectual Property Office of NZ would require greater resources in order to investigate patents more thoroughly. “If the minister’s serious about strengthening patents she needs to confirm the resources,” Elliott says.

John Terry, a patent lawyer at Baldwin Shelston Waters, says the patent office has lost “most of its experience” in recent years. “They’ll need to get the people who actually have the technical expertise and the legal expertise to actually challenge the applications,” he says.

Warren Hassett, a senior analyst at the Ministry of Economic Development, says IPONZ officials are investigating how to bolster the office’s resources.

“IPONZ is entirely funded from the fees it collects from applicants,” Hassett says. “There may well be a need for some increase in fees.”

Elliott says an increase in fees might be a further incentive to raise the quality of applications. “I don’t think it’s a bad thing,” he says. “It probably improves the system overall, so long as those resources are actually paid back into IPONZ.”

Ken Moon, a partner at IP specialist AJ Park, agrees IPONZ needs more than a better-funded patent office with more staff, as Australia has.

“In particular, they’re going to need staff who have computer science qualifications. Those people are going to need access to good databases to search non-patent literature.”

Moon says the proposed reforms bring New Zealand into line with all the other countries that are serious with their patent systems, “instead of perhaps being the pushover that we have been in the past”.

Amazon just one click away

The patent reforms won’t have any impact on patents that have already been granted and those that will be sealed before the law comes into effect.

Among patents that have drawn criticism are DE Technology’s, affecting NZ e-tailers, and the Amazon.com one-click patent that has drawn wide criticism abroad. The Amazon patent has been accepted by NZ examiners and is in a three-month public opposition period which ends on August 30.

Computerworld noted the Amazon patent a month ago, but at deadline the IPONZ site still showed no objections had been received.

Other controversial applications in the pipeline include two from Priceline.com, a company which sued Microsoft for patent infringement in 1999.

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