21 February 2011

Australia and New Zealand – Two Laws, One Patent Examination?

On 16 February 2011 Australian Prime Minster Julia Gillard and New Zealand Prime Minister John Key held a press conference at which they signed a new ‘investment protocol’ as part of the ongoing Trans Tasman Single Economic Market (SEM) program.

The press conference included the announcement of a project to reduce the duplication of work  in the Australian and New Zealand patent offices in the case of patent applications filed in both countries. 

Under so-called ‘Integrated Patent Examination’, applications filed in both countries would be reviewed by a single examiner from either IP Australia or the New Zealand Intellectual Property Office (IPONZ).  Apparently most applications filed in New Zealand are also filed in Australia – although in our experience the converse is not true – so there is certainly scope in this proposal to substantially reduce the workload in IPONZ.

Notably, it is not being proposed that Australian and New Zealand patent laws be fully harmonised, or that a single ‘ANZ Patent’ would be issued.  Ultimately, there will still be two distinct patents which would need to be separately enforced under the respective laws of the two countries.

The single examination process is expected to be fully in place within three years.

HOW WILL INTEGRATED EXAMINATION WORK?

According to a fact sheet jointly issued by IP Australia and IPONZ:

Patent applications filed in both Australia and New Zealand for the same invention will be examined by one examiner located in either country.
Examiners will grant or refuse applications under each country’s law. It will not be necessary for our laws to be identical.
There will be no disadvantage to innovators in either country.  Australia and New Zealand will operate as one integrated patent examination entity in practice – not in law.  Both countries will retain flexibility to implement legislation and policies.

Integrated Examination will be implemented in two stages.  Initially, examiners at IP Australia and IPONZ will ‘rely on each other’s work’, which we take to mean that if one office has already conducted a search and examination, the other office will then use this as the basis for its own examination of the corresponding application.  In this stage, therefore, there will be a reduction, rather than elimination, of duplication.

Once examiners on both sides of the Tasman Sea have developed sufficient confidence with each other’s work – and, presumably, familiarity with each other laws – the full Integrated Examination process will be implemented.  As noted above, the projected timeframe for this is around three years.

SO WHAT COULD GO WRONG?

This all sounds like a great initiative, with the potential to make more effective use of the aggregate examining corps at IP Australia and IPONZ, but it is not without its potential problems and pitfalls, which will need to be ironed out during the first stage of the project.

The following are just a few issues that have occurred to us immediately.  There may be others.

Timing of Examination
The efficiency of the proposal is based on an assumption that corresponding Australian and New Zealand applications are examined simultaneously, by a single examiner.

As the law presently stands, all New Zealand patent applications are automatically examined, in their turn.  Australian patent applications, however, are only examined after the applicant files a formal request (and pays an associated fee).  This normally occurs in response to the Commissioner issuing a Direction to request examination, which can be four years or more from the filing date.  In the meantime, any corresponding New Zealand application has typically been examined.

For simultaneous examination to be practical, the procedures in the two countries will need to be synchronised.  In this context, it is interesting that one of the changes to the New Zealand Patents Bill recommended by the Commerce Committee – other than an exclusion for computer programs (see earlier article here) – was the addition of a new clause 59B, which would empower the Commissioner to require the filing of an examination request, and provide for the issue of directions to request examination.  The details, including relevant time periods and deadlines, are left to the Regulations, which could readily be drafted to coincide with the Australian provisions.

Training
Clearly, examiners working with Integrated Examination will need to be familiar with the relevant law and practice of both countries.  While there will be much substantive work in common (e.g. searching, assessment of novelty), there are also numerous subtle, and no-so-subtle, differences (e.g. assessment of inventive step).  This may substantially increase the amount of training and experience required for an examiner to become capable of providing quality examination of both Australian and New Zealand applications.

Despite assurances that the two countries will remain free to implement their own laws and policies, it is apparent that the additional training burden will be minimised if the laws in Australia and New Zealand are substantially harmonised.

Patentable Subject Matter
The most fundamental test that must be applied by a patent examiner is to determine whether a claimed invention falls within the scope of patentable subject matter, i.e. is it the kind of thing for which patents may be granted, or is it excluded, for example on the grounds that it is an abstract idea, or a mere scheme?

Presently, the laws of Australia and New Zealand on this issue are essentially harmonised.  Both countries have maintained the approach of defining patentable subject matter by reference to the term ‘manner of manufacture’, which appears in the very first UK patents act, the Statute of Monopolies 1623.  Retaining this definition has enabled the courts to interpret it in light of new developments in technology, which has proven to be an effective and adaptable approach.  Australian court decisions relating to the interpretation of the ‘manner of manufacture’ requirement are frequently cited in New Zealand.

However, recent developments suggest, if anything, a potential for divergence in this area.  New Zealand appears likely to implement an exclusion for ‘computer programs’, complete with complex guidelines on its interpretation.  (See our earlier article here.)

Meanwhile, last week’s ACIP Report on its review of patentable subject matter recommended that Australia codify the current test.  If this goes ahead, it will create a situation in which the tests in the two countries may diverge over time.  (See our earlier article here.)

CONCLUSION

With both Australia and New Zealand currently in the process of updating their patent laws (New Zealand via new legislation, and Australia through IP Australia’s reform program) this is either the best of times, or the worst of times to implement Integrated  Examination.  On the one hand, it provides an opportunity to train all examiners in the application of the new/amended laws.  On the other hand, every Examiner will be learning new law and practice for two different countries, which is a lot of information to take in!

We will watch this initiative with interest.

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