With Second-Tier Patent Rights in Retreat in Australia, Are They Making an ‘Advancement’ in New Zealand?

While the second-tier innovation patent may be out-of-favour with the Australian government (a late stay of execution notwithstanding), there is at least one New Zealand parliamentarian who is bold enough to stand up for the rights of incremental innovators.  Dr Parmjeet Parmar is a list member for the opposition National Party in New Zealand, who has drafted and submitted a private member’s bill titled the Patents (Advancement Patents) Amendment Bill.  The bill proposes the introduction of a new second-tier patent right which has many similarities with – and a few differences from – the Australian innovation patent, and Dr Parmar suggests that it would fill a gap in the availability of intellectual property rights in New Zealand that was widened by the enactment of the Patents Act 2013.

Generally speaking, the proposed ‘advancement patent’ would – like the innovation patent – provide for a shorter-term patent right, permit fewer claims, and feature a bifurcated system of registration and optional examination and enforceability.  Some of the major differences from the innovation patent would be:

1. terminology, i.e. ‘advancement’ rather than ‘innovation’, and ‘advancement step’ rather than ‘innovative step’;
2. maximum term, i.e. up to ten years, rather than eight years; and
3. lifecycle, i.e. an ‘advancement patent’ would be considered ‘provisional’ initially, and only have the status of ‘granted’ following examination/certification.

Reading Dr Parmar’s maiden speech in the New Zealand parliament, it is not hard to see where she finds her enthusiasm for innovators and innovation.  Born, raised and originally educated in India, she moved to be with her husband in New Zealand where she completed a PhD in biological sciences at the University of Auckland.  She subsequently worked in both academic and commercial science and research, before establishing a business manufacturing natural health products.  Clearly this is a level of hands-on experience with research, innovation, business and entrepreneurialism to which few – if any – of the politicians, bureaucrats and economists currently gunning for the Australian innovation patent can lay claim.

Many people will be surprised to see this new bill introduced in New Zealand at the same time that Australia is looking to abolish the innovation patent.  A common theme in the long gestation of the New Zealand Patents Act 2013 and the recent review of Australia’s IP arrangements by the Productivity Commission was the view, held particularly by certain economists, that for net importers of intellectual property and technology, such as Australia and New Zealand, intellectual property rights tend to be owned predominantly by foreign entities, and that it is therefore not in our interests to grant such rights improvidently, or too easily.

My own analysis of innovation patent data over a nine-year period showed that while the target community of Australian small and medium enterprises (SMEs) were indeed, by filing numbers alone, the dominant users of the system, too many of these were ‘self-filers’, who generally gain no value from their patents, while many of the largest individual users of the system are foreign entities that filed innovation patents for strategic reasons (e.g. Apple, Inc), or merely to take advantage of economic incentives in their own home countries (e.g. many Chinese companies).  While probably not enough to justify abolition – rather than improvement – of the innovation patent, this is not a great look, and is hardly a glowing endorsement of the domestic benefits of a second-tier patent system.

Considering these current concerns with the innovation patent, I decided to take the opportunity to reach out to Dr Parmar and ask her about her motivations for drafting her bill, and why she believes that a New Zealand ‘advancement patent’ would fare better than the Australian innovation patent.  She was kind enough to take the time out of her busy schedule to answer my emailed questions, and I am pleased to be able to present her views in her own words.

Q&A With Dr Parmar

Mark Summerfield: Could you comment on how your background and experience informed your desire to introduce the Patents (Advancement Patents) Amendment Bill into the New Zealand parliament, and indeed on your motivation more generally to see a second tier patent right introduced in New Zealand?

Parmjeet Parmar: I have always been naturally attracted to topics that relate to scientific research and technological advancement, this led into my background in science and business.  I am always keen to see how we can help our researchers do more with their research and then apply their findings towards a social or economic cause.

As a Member of Parliament with the experience I bring, I understand the importance of connecting new developments to entrepreneurship and economic growth.  While we do things to support more research and development we should also provide the opportunity for them to have intellectual property rights, so that with an increase in research and development spending we can see an increase in economic activity.  These things – including advancement, commercialization and generation of markets – need to be viewed in the long-term as it takes time for these steps to create a ‘notable’ difference.

I started watching this space before I became an MP when the Patents Act 1953 was being reviewed.  As we know with the Patents Act 2013 coming into effect, it has become more difficult to obtain a patent.

I believe that the advancements that do not qualify, based on the high bar, to get the standard patent should not be denied of rights to protect their intellectual property if they wish to do so.

We are a small country and a small economy but we definitely punch above our weight and we are progressing faster than the world can imagine. The view that we are the net importers of the technology can only be changed if we provide the right environment for local advancements to thrive.

We should not wait, but rather get on with providing IP rights to others that are doing great work but are going to miss out completely under the Patents Act 2013.

MS: Do you believe that a second-tier patent system in New Zealand can avoid the failings of the Australian innovation patent, and deliver greater benefits to domestic innovators and SMEs?  If so, how/why do you think this will be the case?

PP: To draft my Bill, I started comparing the use of such a system in different countries.  Around 55 countries have some form of second-tier patent system.  So, while studying what kind of second-tier system is working well in other countries I paid keen attention to Australia’s Innovation Patent system given its reasons for being in the news.  I took all the learnings from Australia into account when I drafted my Bill and as you can see, some of the issues Australia identified to make the system work better are included in my Bill.

I believe we do need a second-tier patent system and the timing and opportunity for us to have this conversation – provided through my Members’ Bill – is perfect.  The Patents Act 2013 has created a gap which we should fill as soon as possible to provide the confidence that might have been lost amongst small businesses that were and are making small incremental advances.  It is necessary that we learn from what did and didn’t work in other countries and apply that in the law to New Zealand’s unique environment.

MS: Could you comment on your intentions in introducing differences from the Australian innovation patent system in your proposed legislation?

PP: I want to make sure that my Bill, following so many other countries with such a system, is based on learnings from other countries.

There are different names for such a second-tier patent system in different countries and I personally found that some titles did not make sense to the average person walking down the street.  Then the obvious reference point was to see what Australia had named their system, ‘Innovation’ – it is a very wide term and does make sense, but I decided it to be called ‘Advancement’ to create a better understanding of what a second-tier patent system can be applied to.  I wanted to create a specificity that would allow people to understand the importance of protecting their IP and subsequently realise that it is a big issue.

The maximum term in my Bill is to allow as much of an opportunity to allow commercialization of the patent.  We being a small country, it can take some time for the commercial sector to find funds or the research sector to attract interest from other companies to commercialise the product.

I have also included that the term ‘advancement patent’ should be used only once the patent has been examined to give certainty and clarity with a clear timeline for its examination.

MS: Could you comment on the process you bill must go through, the degree of support that it may enjoy among government and other MPs, and your views on its overall prospects of success?

PP: I will need the support of other parties to get it through various readings.  I am hoping that the first reading of my Bill will be sometime during the month of May. So, from now on to that point I will be very busy lobbying for support from other parties.  The current coalition Government has a hefty goal of increasing research and development spending to two per cent of the GDP in 10 years.  While we want to encourage more and more investment in research and development, it is important we provide other mechanisms that will assist us in providing the necessary support to hard-working kiwi innovators.  I believe my Bill will not only help with owners of the advancement having the opportunity to commercialise their advancement, but will also drive investment in research and development from the business sector.  I hope that the Government parties will take a bipartisan approach on this issue and support it in the first reading so that we can work together with the sector on this Bill in the committee stage to bring it back in the house to have the Bill passed.

MS: Finally, is there anything else you would like to communicate to Patentology readers about this bill, or about the innovation system in New Zealand more generally?

PP: As my Bill was lodged only recently, I was in the process of sending out information about my Bill to patent attorneys in New Zealand, but I have been very lucky for it (my second Bill) to be drawn last week.  I am now in the process of changing the communication to inform them that my Bill has already been drawn.  It will be great to hear back from various people interested in and working in the IP field along with our entrepreneurs.  I have received some positive feedback about my idea and the Bill regarding the need to have a second-tier patent system in New Zealand and one of the attorneys actually recently sent me a message saying – yes we do need an improved version – and that is what my Bill is providing, an improved version.

I urge patent attorneys to emphasise the importance of this system to various parties in Government and I will be seeking cross party support for this Bill.  If this Bill passes first reading, it would allow interested individuals, businesses, organisations or association to come and present their viewpoint during the select committee stage.

Conclusion – Now is the Time to Support Dr Parmar

New Zealand has an interesting – and very fair and open – system for consideration of Members’ bills (i.e. those introduced by members of parliament who are not Ministers).  Every second Wednesday the parliament devotes time to debate of Members’ bills.  A minimum of eight Members’ bills awaiting first reading should be on the Order Paper on each of these days, and when a space on the Order Paper becomes available, a ballot is held to decide which Member's bill will be introduced.  Last Thursday, 5 April 2018, the Patents (Advancement Patents) Amendment Bill had the good fortune to be drawn in such a ballot.

As Dr Parmar has noted, she is hopeful that the bill will now come up for debate on a Wednesday in May.  It must pass this ‘first reading’ (i.e. receive the support of majority of MPs) in order to proceed to the next stage, which is consideration by a Select Committee.  It is at this Committee stage where the real merits of the proposed legislation can be considered, and the community consulted.  Accordingly, regardless of one’s personal views on the benefits or otherwise of a second-tier patent system in New Zealand, the only way the wider community can have an opportunity to participate in this conversation is for the bill to pass its first reading.

It would be inconsistent for the patent attorneys and innovators who have been lobbying to retain the innovation patent system in Australia not to take this opportunity to support progress of the ‘advancement patent’ bill to the next stage in New Zealand.  Indeed, a failure of the bill to move forward might be regarded as an endorsement by the New Zealand parliament of the Australian government’s plans to abolish the innovation patent.

Dr Parmar’s contact details can be found on her parliamentary web page.  She seemed pleased to hear from me, and I am sure she would be delighted to hear from supporters in the trans-Tasman – and wider – community, and to provide information on how to help her to move the bill forward.

Tags: Innovation patent, Innovation policy, Law reform, New Zealand, Public policy