TPP delivers patent term extension and 12-month grace period for New Zealand

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Background

The Trans-Pacific Partnership, a US-lead trade deal covering 40% of the world’s economy, was negotiated in 2015 by 12 countries including the US, Canada, Mexico, Japan, Australia and New Zealand.

The aim of the TPP was to strengthen economic ties and boost growth between the member countries, including by reducing trade tariffs.

The deal was a key part of Barack Obama’s Asia policy, yet within the first few days of his presidency Donald Trump pulled out of the deal, criticizing the TPP as being a potential disaster for the US economy.

In March 2018, the TPP countries proceeded without the US to sign a new free-trade deal called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.  The agreement, ratified on 31 October 2018 by Canada, Mexico, New Zealand, Australia, Singapore and Japan, will come into force on 30 December 2018.  The remaining 5 TPP countries are yet to join the CPATPP.

More background on the CPATPP and the benefits to New Zealand can be found here.

Changes to New Zealand’s Intellectual Property law

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership is being introduced into New Zealand law on 30 December 2018 by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act.

The CPATPP Amendment Act amends 10 New Zealand Acts including the Copyright Act 1994, Patents Act 2013 and Trade Marks Act 2002.  Amendments to the Patents Act are discussed below, while amendments to the Copyright Act and the Trade Marks Act will be addressed in separate communications.

Amendments to New Zealand Patents Act

Introduction of a 12-month Grace Period

Currently for an invention to be patentable in New Zealand it must be novel, i.e. not known to the public before the patent application is filed.

A non-confidential disclosure prior to filing an application can therefore leave a patent subsequently granted on the application invalid, since following the disclosure the invention is no longer new.  There are some limited exceptions to this rule, however, these exceptions apply only in very specific circumstances.

By amendment under the CPATPP Amendment Act, from 30 December 2018, a public disclosure by the inventor (or applicant deriving title from the inventor) will not prevent valid patent protection in New Zealand if a complete patent application is filed within 12-months of the disclosure.  This aligns New Zealand’s patent system with other countries such as the US and Australia which already have 12-month grace period in place.

Good News…

The addition of a 12-month grace period to New Zealand’s patent system is good news, especially for individual and SME patent applicants.  It is not uncommon for an individual or start up business new to the patent process to not realise the importance of keeping an invention confidential at least until a first patent application is filed.

The new 12-month grace period provision will allow valid patent protection to be sought in New Zealand even when there has been a non-confidential disclosure.  Typical non-confidential disclosures include offers for sale, marketing, and public use and display of the invention.

But Be Aware – if you want international protection in multiple markets

In many jurisdictions, most notably China and Europe, a patent application must be filed before disclosure has occurred anywhere in the world – i.e. there is no grace period.

The 12-month grace period provision should therefore only be relied on as a last resort or fall-back option when there has been an inadvertent disclosure, or disclosure is necessary for some commercial reason. In general, professional advice should be sought before intentionally relying on the grace period provision.

Patent term extension

Currently the maximum term of a patent is 20 years, subject to payment of annual renewal fees.

From 30 December 2018 it will be possible for a patent owner to request an extension of the 20-year patent term due to an unreasonable delay by the Patent Office in granting a patent.  A patent term extension will be given if:

the patent was granted more than 5 years after the filing date of the complete application on which the patent was granted, and
more than 3 years after the date on which examination of the application was requested by the applicant.

These time periods are reduced by delays which occurred outside the control of the patent office.

Extensions are not automatic

The applicant must request an extension during the term of the patent and the maximum extension available is 2 years.

From 30 December 2018 further provisions relating to patent term extension specifically for patented pharmaceutical substances will also come into force. Extension of term for patents relating to pharmaceutical substances will be available when the patent term has been unreasonably curtailed as a result of delays in the marketing approval process under the Medicines Act 1981.

Conclusion

A general patent term extension and a 12-month grace period are positive additions to New Zealand’s patent system benefiting applicants.  The inclusion of a 12-month grace period is particularly beneficial for individuals and small enterprises who generally have a higher risk for inadvertent disclosure or are more likely to want to disclose prior to filing a patent application.

Caution should be exercised however if wishing to rely on the grace period provision, and an overseas filing strategy should be determined to understand the impact of an early disclosure on patent protection in other countries.

The above information provides a general overview of the changes to New Zealand’s patent system under the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.  Please contact us for more detailed information relating to the changes to New Zealand’s intellectual property legislation being introduced by the CPATPP.