17 July 2016

A Single Trans-Tasman Patent Application and Examination Process? NZ Committee Says ‘No’!

Single EnvelopeA joint Australia-New Zealand proposal for a unified patent application and examination process – once hailed by both governments as a boon for local innovators and a ‘world first’ in patent cooperation – appears likely to be dead-in-the-water, following a scathing report issued last week by the New Zealand Parliament’s Commerce Committee.

The idea behind the proposed single application process (SAP), and single examination process (SEP), was simple – to allow applicants wanting to obtain patents in both Australia and New Zealand to file one common application which would be subject to search and examination by an examiner either at IP Australia or at the Intellectual Property Office of New Zealand (IPONZ).  It was not proposed that the patent laws in the two countries would be merged, but rather that examiners would be trained to apply the laws of both countries, resulting in two separate patents being granted.

Despite various hold-ups (see below for more details), it had appeared that the New Zealand government remained keen on the SAP/SEP proposals, with implementing legislation being included in the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill, which was introduced into parliament on 3 November 2015.  However, this aspect of the legislation has been roundly rejected by the Commerce Committee, which is comprised of members from both sides of politics. 

The majority of the Committee (including members from the governing National Party) concluded that the purported benefits of the SAP and SEP mechanisms either do not exist, or are outweighed by the costs.  The opposition Labour Party Committee members have gone further still, in a separate ‘minority view’, calling the legislation ‘badly drafted’, and a waste of taxpayers’ money, while describing themselves as ‘bemused at the dexterity required by the Government to justify a complete reversal of its original position.’

The New Zealand Parliament is not bound to accept the Commerce Committee’s recommendation that the SAP and SEP provisions be deleted from the legislation when it comes up for further debate.  However, it looks very much as if any remaining supporters of the initiative will find themselves in the minority when the time arrives for a vote to be taken.

At the same time, however, the Commerce Committee has not recommended any substantive changes to provisions intended to introduce a joint Australia-New Zealand regulatory regime for patent attorneys, which will make New Zealand attorneys subject to essentially the same regulations and disciplinary proceedings as already apply to Australian attorneys.

The History of the SAP/SEP Initiative

The SAP/SEP initiative was first announced by (then) Australian Prime Minister Julia Gillard and (still) New Zealand Prime Minister John Key in February 2011.  Since then, efforts to bring the concept to reality have been, to put it bluntly, somewhat shambolic.  An enthusiastic joint government announcement in July 2011 set out an ambitious timetable for implementation: an initial ‘work-sharing’ program between IP Australia and IPONZ examiners, followed by a single application mechanism in early 2013, and a single examination process by June 2014. 

Despite slow progress (due, in large part, to delays in passage and implementation of New Zealand’s Patents Act 2013), the New Zealand Government remained enthusiastic about the SAP/SEP project, approving its implementation in October 2013.  At that stage, the proposed implementation timetable was as follows:
  1. IPONZ and IP Australia to finalise the required operational and administrative infrastructure by the end of 2014 (did not happen);
  2. the SAP to go live in early 2015, i.e. around six months after the Patents Act 2013 enters into force, at which time an SEP pilot program will also commence (did not happen);
  3. around 18 months later, i.e. in mid-to-late-2016, a review of SEP pilot program and public consultation to be conducted (is not happening); and
  4. in 2017 Cabinet approval to be sought to determine whether to fully rollout the SEP (will not happen).

Why the SAP/SEP Proposals Were Rejected

After receiving submissions from stakeholders – which appear to have been uniformly negative – the Commerce Committee majority have concluded that the SAP and SEP processes are undesirable and unnecessary.  Their reasons include:
  1. lack of benefits to applicants and attorneys – minimal cost savings from SAP, and no real savings from SEP because applicants would still be required to address separate objections under the different laws of each country;
  2. increased administrative costs to New Zealand businesses – higher IPONZ application and examination fees;
  3. significant costs would be incurred in implementation and maintenance of IT infrastructure, and in initial and ongoing examiner training; and
  4. any additional work-sharing benefits would be minor or non-existent, in view of existing use of available foreign search and examination results, as well as the availability of more formal mechanisms, such as Patent Prosecution Highway (PPH) programs.
The Committee also noted that applicants may avoid using SAP and SEP for commercial reasons, and that the development of shared IT infrastructure, such as WIPO’s ePCT filing platform, may deliver many of the potential benefits of the SAP at a lower cost to IPONZ.

In short, the Committee found that SAP and SEP have little to recommend them.  And, while I have already noted that the Labour minority view was particularly critical, even the majority view –  presumably endorsed by the government members of the Committee – was less than flattering in its assessment of the process:

We consider that there was a lack of consultation with patent attorneys and the rest of the industry before the development and proposal of these enabling provisions. Moreover, we consider that quantification of likely costs—that is, the costs of developing and implementing these processes, and the compliance costs to the industry and patent applicants—was inadequate.

Meanwhile, In Australia...

On the Australian side, legislation to enable the SAP and SEP to go ahead had been included in the Intellectual Property Laws Amendment Bill 2013, which was introduced in the House of Representatives on 30 May 2013, passed without amendment on 25 June 2013, and moved rapidly to the Senate, where it received its first and second readings (again without amendment) on 28 June 2013.  However, on 4 August 2013 a Federal election was called, resulting in the lapsing of all pending legislation

The relevant provisions were reintroduced on 19 March 2014, in the Intellectual Property Laws Amendment Bill 2014, which was signed into law on 25 February 2016.  If they ever come into effect, they will permit documents to be filed with either IP Australia or IPONZ, and enable the Australian Commissioner of Patents to delegate her powers to New Zealand patent officers.

However, the Australian Government has hedged its bets with this legislation.  The SAP and SEP changes will only be incorporated into the Patents Act 1990 if a commencement date is expressly proclaimed prior to 25 February 2018, otherwise they will lapse.  At this point, I am not expecting any proclamation to occur!

Trans-Tasman Patent Attorneys Still On The Cards

On a more positive note for the New Zealand (and Australian) government, provisions to introduce a single trans-Tasman system for registration and regulation of the patent attorney profession have been supported by the Commerce Committee.  Reading the Committee’s report, however, it appears that submissions on this aspect of the legislation were also largely negative.  Frankly, I am not at all surprised by this – I have written before about the way in which this proposed change was ‘sprung’ on the New Zealand profession, and I can fully understand why it is of concern to them.

So why does the Commerce Committee favour a trans-Tasman attorney profession, but not a trans-Tasman application and examination regime?  Well, the short answer may be that it will relieve the New Zealand government of much responsibility for regulation of the profession.  At present, Australian patent attorneys are subject to a much more structured regulatory regime than our New Zealand counterparts, which includes disciplinary procedures and formal requirements for continuing professional education.  There are perfectly sound historical reasons why a similar regime has not previously been introduced in New Zealand.  The upshot of this, however, is that New Zealand is something of an outlier among comparable jurisdictions (including Australia, the US and the UK) in not having specific regulatory and disciplinary arrangements for patent attorneys.

The Committee majority does not explicitly mention the joint regulatory regime provisions, on the basis that it is not recommending any substantive amendment.  The Labour minority has this to say about them:

The joint registration regime with Australia for patent attorneys received significant opposition from submitters on the grounds that it would impact on competitiveness of New Zealand patent attorneys, possibly increase costs to qualify as a patent attorney in New Zealand, and result in a lack of a level playing field with Australian patent attorneys. The proposed regime was based upon the existing Australian process.

Labour has taken into account these concerns from the patent attorneys but on balance believes that a joint registration regime is likely to ultimately benefit innovation businesses in New Zealand.

One way to interpret this may be: ‘the patent attorneys do not like this, but we think it is in the interests of their clients that they be more strictly regulated.’  In principle, I think this is actually true.  In practice, however, there is little evidence to suggest that there are any significant issues with the New Zealand profession necessitating urgent reform.

Conclusion – Not An Idea Whose Time Has Come!

IP Australia was quick to publish a statement on the New Zealand Commerce Committee’s recommendation, stating that it ‘is now awaiting a decision on the recommendation from the New Zealand Government’.

In my opinion, it is almost certain that the decision will be to accept the recommendation, putting an end to the SAP and SEP proposals.  This is unfortunate for those people within IP Australia, and elsewhere, who have no doubt worked hard on these effeorts over the past few years.  But I do not find it very surprising.

IP Australia achieved a great triumph with passage of the Raising the Bar reforms, with full support from both sides of politics.  Where governments had previously failed to secure bipartisan support for necessary changes bringing Australian patent law into line with those of our major trading partners, IP Australia succeeded through a program of extensive consultation and education. 

Since then, however, it does not seem to have been able to replicate that success.  Proposed reforms to ‘Crown use’ and ‘compulsory licensing’ provisions had to be watered down, and now the SAP/SEP proposals appear to be in tatters.  The big difference, in my view, has been in the level – and success – of consultation.  By the time the legislation was drafted, support for Raising the Bar was nearly universal across all stakeholders, and was certainly bipartisan within the Australian parliament. 

The same cannot be said for subsequent proposals, which have been dogged by continuing opposition from a significant proportion of stakeholders, as well as the vagaries of time and political tide.  A single patent application and examination process for Australia and New Zealand is not an idea whose time has come.  Indeed, when I really stop and think about it, it does not make much sense at all, for all the reasons identified by the New Zealand Commerce Committee.


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