Monday, June 27, 2011

We need a hero

I said in an earlier post that the combination of free range hens and dogs wasn’t working.  We needed a hero.  My wife found him on TradeMe, the New Zealand equivalent of eBay.  We picked up our Moa rooster from some farmers in Carterton.  He was an impressive animal.  Tall and intimidating looking, but supposedly good natured.  We bought a few hens as well from the same place.

Well!  What a change!  He very quickly took control of the wayward hens.  Within minutes he was strutting around all full of bluff and bluster like a Fijian military dictator.  Bossing the hens around.  Telling them off whenever they looked like they were going to fly over the stream.

Well, that solved the problem of the terrier eating the chickens. She knew she wasn’t meant to eat them, really, but there was no way she was going to take on that rooster. All was idyllic on the farm once more.  For a while.

Then we started realising what happens when chickens love each other very much and get married – as our then 6-year old daughter put it.  They make chicken babies, or rather, fertilised eggs.  It became a kind of egg-roulette, trying to determine which eggs had blood specks (or worse) in them.  I came downstairs more than once to find my wife retching over the remnants of a half-formed baby chicken in the frying pan.

Then we figured out that we had to collect the eggs twice a day.  That way the broody chickens didn’t get a chance to keep them warm, which allows the fertilised eggs to grow into something else.

The next development came when we discovered that one of our very expensive lavender (actually more grey than lavender) Araucana chickens had craftily laid a clutch (that’s an official word for “a bunch”) of eggs.  She laid them under one of the trees in the orchard, hidden in the long grass. The eggs were a nice blue-green colour.  But how long had they been there? Did we really want to play another game of egg roulette?

So we let her hatch them… But that’s another post.

Friday, June 24, 2011

Te Tai Tokerau

Normally I wouldn’t write about political machinations in New Zealand.  They tend to be small scale petty disputes.  However, tomorrow’s by-election is a little different.  In this case there are some constitutional principles involved arising from the Treaty of Waitangi that affect how we do things here.  And this by-election is soaking up Parliamentary focus and further delaying more important legislation.  Like the Patents Bill.

Most voters in New Zealand register for an electorate known as a general electorate.  Those New Zealanders who are of Maori descent may choose to place their names on a separate electoral roll.  This map shows both the Maori electoral boundaries and the electoral boundaries used for general electorates.

In November we will each vote for one of several candidates standing in our electorate.  Some of us will have our names on a general electorate.  Some of us will have our names on a Maori electorate.

The Maori Party was formed in 2004 with the resignation of Tariana Turia from center-left party Labour.  In the last election in 2008 the Maori Party won 5 of the 7 Maori electorates.  This year the member for the Maori electorate Te Tai Tokerau, Hone Harawira, resigned from Parliament thereby forcing a by-election in his electorate.  I guess we can say he resigned.  At the time the Maori party was going through a disciplinary process to evict him.

Tomorrow’s by-election is expected to cost $500,000.  It’s a three horse race.  Hone Harawira under his new Mana Party is running against a candidate from the Maori Party and a candidate from the Labour Party.  If Harawira wins tomorrow he will probably qualify as the leader of the Mana Party, a Parliamentary party.  He will receive more funding and privileges in the run-up to the general election in November than he would as a mere independent MP.

Harawira is unpopular in most circles, to put it mildly.  It will be an interesting race to watch.  But is it the best use of Parliamentary focus, time, and taxpayer funding?

Wednesday, June 22, 2011

Gone to the dogs

Keeping a Close Eye
This year the Wairarapa hosted the New Zealand National Sheepdog Championships.  Last Saturday saw the conclusion of this annual event in Bideford near Masterton.  The local paper ran a good story on the event complete with photos.

The championships involved close to 400 triallists and 500 dogs from around the country.  I’ve never competed in this event.  Partly because I don’t have a sheepdog.  The standard is pretty high.

It’s quite impressive to watch.  Individual competitors move a small flock of sheep around a paddock in some kind of complicated pattern and into a small enclosed yard.  Their sheepdogs chase the sheep around.  The competitors tell the dogs where to chase the sheep using a complex series of whistles.

These guys make it look easy.  They seem to take it in stride when sheep become sticky (reluctant to move) or loose (run too far ahead).  We have to remember that these guys are professional competitors.  Back home on the farm the reality is very different.  I know it can be very frustrating.  I remember as a kid moving sheep around on my uncle’s central North Island sheep and cattle station.  That’s where I first learned to swear and shout.

Photo courtesy of author Prescott under Creative Commons licence.

Guest Post: Australia's Personal Property Securities Act -the impacts on IP

Thanks to Mark Hargreaves for this article.

Australia enacted the Personal Property Securities Act 2009 (PPSA) in December 2009.  The PPSA was due to come into force in May 2011, but has now been delayed until October 2011.  It puts in place a national Australian personal property securities register similar to New Zealand’s.

As in New Zealand, the PPSA impacts directly on transactions involving intellectual property (IP).  Anyone buying, selling or licensing IP assets in Australia or offering or taking them as security should review those arrangements in light of the new scheme.

How does the scheme work?

The PPSA provides for a national register of security interests over personal property (PPSR).  Holders of security interests “perfect” their security interest by registering a financing statement on the PPSR.  The PPSR is publicly searchable and contains basic details about the security interest, who it is held by, and who and what it is held over.

Security interests that are perfected take priority over other security interests subject to the specific priority rules in the PPSA.

There is a broad range of security interests that can be registered.  They are defined as "any interest or right in relation to personal property provided for by a transaction that in substance secures payment or performance of an obligation".  Security interests will be created under wide range of commercial arrangements.

Personal property is also defined broadly and includes most forms of intellectual property such as registered trade marks, patents, copyright and registered designs, but does not include know-how or trade secrets or unregistered trade mark rights.  IP licences are also included in the definition of property over which a security interest could be registered.

How does the PPSA affect IP?

In the past, security interests relating to IP were often recorded on the various IP registers (for example, patents, trade marks and designs).  However, recording an interest on these registers did not necessarily have the effect of defeating competing interests such as a subsequent bona fide purchaser of the IP without notice of the interest.

Now there will be a single national register and a means for perfecting the security interest over IP and defeating other third party claims.  Some commentators suggest this will make it easier to raise money using Australian IP assets as security although it’s not clear that this has been the effect in New Zealand since the introduction of the scheme here in 2002.  IP assets were already often included as assets secured by general security arrangements prior to the PPSA and there still remains the very real issue of valuing the IP for the purpose of raising capital against it.

Nonetheless, if you are buying IP assets or using IP to secure payments or other obligations, you will need to check the PPSR during due diligence and, in the latter case, register your interest.

Examples of relevant transactions involving IP

Apart from the obvious purchase, sale and loan transactions, a wide variety of other transactions will be relevant.

For example, a partial assignment of copyright that involves an assignment back as a means of securing payment or performance of other obligations should be registered under the PPSA.  Failure to do so may mean the IP could be validly on sold to a third party purchaser for value.

Transactions involving physical assets that are closely related to IP rights in those assets will also need attention under the Australian PPSA.  These assets might include equipment that contains embedded software or that is covered by patents.  They might also include patented pharmaceuticals.  The PPSA provides that security interests over these types of goods may also apply to the IP rights underlying them unless a contrary intention is expressed in the security agreement.  Where these physical assets are being used as security, it will be important to confirm specifically whether or not the underlying IP rights are also being secured to avoid them being included as security unintentionally.

The transfer of IP licences will also be relevant.  The PPSA provides that, where a security interest is granted over an IP licence and the IP is sold to another person with the licence still in place, then the security interest will continue to bind the new owner.  Licensors should prohibit their licensees from using the IP licence as security in any way.


The introduction of the PPSA in the Australia will be a major change for business in this part of the world.  It is also a timely reminder for New Zealand businesses to make sure their house is in order under New Zealand’s own PPSA scheme.

Tuesday, June 21, 2011

The Treaty of Waitangi

In the late 1830’s there were about 2,000 settlers and approximately 125,000 Maori in New Zealand.  William Hobson was appointed as New Zealand counsel.  He was sent on behalf of the British Crown to obtain sovereignty over all or part of New Zealand with the consent of a sufficient number of Maori chiefs.

And so was born the second most quoted document in the history of New Zealand.  The Treaty of Waitangi was signed at Waitangi (which is why it’s called the Treaty of Waitangi) on 6 February 1840.

The Treaty was signed by Hobson, some English residents and 40-45 Maori chiefs.  The document has two texts.  One Maori and one English.  The Maori text of the Treaty was taken around the northern parts of New Zealand to obtain additional Maori signatures.  Copies were sent around the rest of the country for signing.  By the end of the year over 500 Maori had signed the Treaty.  Today the Treaty of Waitangi is on permanent display in the National Archives in Wellington.

On 21 May 1840 William Hobson proclaimed sovereignty over New Zealand’s North Island through the Treaty of Waitangi.  He claimed sovereignty over the South Island by right of discovery.

As I mentioned above, the Treaty of Waitangi has two texts.  One in Maori.  One in English.  What makes it a little difficult is that the English text is not an exact translation of the Maori text.  Boiled down to essentials, the Treaty is an agreement in which Maori gave the Crown rights to govern and to develop British settlement.  The Crown guaranteed Maori full protection of their interests and status, as well as full citizenship rights.

One of the fundamental differences between expectations is found in Article 2.  The Maori version uses the word “rangatiratanga”.  It promises to uphold the authority that tribes had always had over the lands and taonga (roughly “precious things”).

The English text is thought to emphasise property and ownership rights.  The Queen guaranteed to Maori the undisturbed possession of their properties, including their lands, forests, and fisheries, for as long as they wished to retain them.

 The Treaty of Waitangi Act 1975 established a Waitangi Tribunal.  The role of the Tribunal is to make recommendations on claims brought by Maori relating to actions or omissions of the Crown that breach promises made in the Treaty of Waitangi.

The Tribunal has authority only to make recommendations.  In most cases its recommendations do not bind the Crown.  Its process is inquisitorial rather than adversarial.  It is able to conduct its own research rather than decide a matter solely on evidence and legal arguments presented to it.

Next month we are going to see a decision issue on the 262nd claim brought before the Waitangi Tribunal.  The genesis of WAI 262 is concern at the ease with which native flora and fauna can be lost to overseas interests.  This claim puts under the spotlight the Maori rights of tino rangatiratanga (authority) and kaitiakitanga (guardianship) over indigenous flora and fauna.

It is expected to be a significant decision that will have a profound effect on our approach to intellectual property rights.

A tale of two cows

One of the most useful items of equipment I bought for our farm is a single axle trailer from Masterton.  Over the years I have used it to cart all sorts of things around the Wairarapa.  Firewood.  Trash.   Quad bikes.  Furniture.  Palm kernel.  Vacation toys.  Sand.  Mulch.  Timber. Dead stuff.  All sorts of things.

A few years ago we decided we would get some cattle.  Wouldn’t it be lovely to eat our own beef?  We met a guy in the local pub who had some cattle for sale.  I know, we are slow learners, or maybe that’s just the way that things are done ‘round here.  Come to think of it, that’s how we ended up with the ram that wasn’t.  The difference this time is that my wife and I had kind of agreed that we would get cattle.  She even came with me to look at them.

My job was to get the two cattle back to our place.  I had my own trailer and a stock crate.  The cattle were both quite small.  I had no need for a stock truck.  I could just transport them in my trailer for the 15 minute drive from Battersea to Greytown.  What could go wrong?

Well, I picked them up okay from Battersea.  The farmer had them in his yards.  There was a heifer (girl cow) and a steer (castrated boy cow).  We gave them a quick drench to get rid of any intestinal parasites and completed the paperwork for transfer of cattle.  Then it was time to head home.  The guy warned me that one of them “was a bit of a jumper” but told me how to deal with that.

Sure enough, I hadn’t even gotten out of his driveway when the heifer started looking like she was going to climb out of the trailer.  Following his instructions I slammed on my brakes.  The heifer fell back into the trailer and was suddenly more worried about staying upright than climbing out.

I got out of Battersea okay and on to the open road that connects Battersea with Greytown.  The speed limit is 100 km/h.  I was only doing around 70km/h (44mph).  I kept on eye on the cows through my rear vision mirror.  That heifer was up to something.  I just knew it.  She was sniffing around the back of the trailer.  I wasn’t too worried at first.  There was nothing back there.  Except the latch pin that held the rear door of the trailer closed.

The next time I looked in my rear vision mirror I couldn’t believe what I was seeing.  Something I never want to see again.  Flashes of hoofs and horns gradually retreating into the distance.  The heifer had nudged the latch pin out with her nose.  She had either jumped or fallen out and was rolling on the highway, slowly coming to a halt.  I stopped the car and just sat there for a minute.  The steer meanwhile jumped out to join his companion.

I will admit to a “Thelma and Louise” moment.  That realisation that you have messed up real bad.  The best thing to do might be just to keep driving.  Anyway, that thought stayed with me for less than a second.  I had to get the cows off the road.  I needed to get them into some yards so I could get them back into the trailer.

The cows really decided for me.  They shook themselves off and started trotting back along the grass verge toward the farm they had come from.  Problem solved.  I put my hazard lights on.  Rolled the window down.  Stuck my elbow out the window and tried to look nonchalant as I drove the wrong way along the highway, herding the cattle in front of me.  I think I may have even waved merrily to a few other motorists.

The farmer fell about laughing as we limped back to his yards.  Helped me load them back on to my trailer.  The heifer had some grazes from the road so we sprayed them with iodine.  I tied some netting over the top of the trailer and made sure the latch pin was tied into place.  Then it was time to go.  Again.  The farmer followed me home in his truck.  We unloaded the cows and sat with a beer while we watched them adjust to their new digs.

Cattle are amazingly resilient animals.  Within minutes they were behaving like they had always been there.  It took me much longer to get over the ordeal.

Sunday, June 19, 2011

Mystery Creek

Yesterday saw the gates close on the 43rd New Zealand National Agricultural Fieldays.  This year attracted close to 120,000 visitors to the annual 4-day event.  Every year the Mystery Creek Events Centre and the 40 hectare (99 acre) area around it is transformed into a mini-town with 1,000 exhibitors on 1,400 sites.

The website touts it as the “largest agribusiness exhibition in the Southern Hemisphere.”  I’ll take their word for that.  But the event is certainly large.  To me it sounds a little similar to what I understand of state fairs with an emphasis on agriculture.

There are competitions that help keep the interest high.  Every year there is a rural bachelor of the year competition.  This year saw the eight winners from the past eight years compete in a “best of the best” competition.  Six of the eight bachelors are off the market following their respective wins.  Competition spokesperson Jacqui Cooper says there is “some magic” with the winners of the golden gumboot: ‘They do draw the girls”.

We saw a mini-rush in the office too.  Some of our clients are exhibiting so we had a bit of work on preparing and filing patent applications prior to the event.  Always a good strategy.

Saturday, June 18, 2011

How long will my client’s patent application take to get examined?

We are often asked for status updates on patent applications we are handling in Australia and New Zealand.  Most if not all of our northern hemisphere clients maintain docketing systems that track cases through the examination process.  These systems pop up reminders at regular intervals.

We deal direct with both the Australian Patent Office (IP Australia) and the New Zealand Patent Office (IPONZ).  Looking at their websites, one gives you a straight answer and one doesn’t.


IP Australia is fairly straight up.  Applicants must file a request for examination.  IP Australia issues a direction to request examination generally between 1 and 2 years after filing.  The request for examination must be filed within 6 months of the direction.

Then it is over to IP Australia.  They tend to issue a first examination report within about 14 months from the date of filing the request for examination.  This is certainly what they aim for.  They state in their charter that they aim to achieve this 60% of the time.  Fair enough.

By examination report I mean a report that includes an assessment of the claims for:

  • Patentable subject matter
  • Novelty
  • Inventive step (Obviousness)
  • Unity of invention
  • Clarity

IP Australia quite rightly state on their website that there is “usually no benefit in finalising your patent quickly unless you need to take immediate legal action against an infringer or require a granted patent for licensing or financing negotiations”.  If you need accelerated examination you write to them and ask for it.

New Zealand

I think IPONZ makes the answer to a simple question unnecessarily complex when describing their processing timeframes.

Applications filed with a complete specification are examined within 15 working days.  These include direct (ie non-PCT) applications, divisional applications, and provisional applications where the complete-after-provisional specification has been filed.

Unlike Australia, the first examination report in New Zealand does not always include a full assessment of the claims as described above.  The full assessment is often covered in a 2nd or subsequent examination report.

There is no straight answer when it comes to PCT national phase entry applications.  Such applications are divided into technology groups of biotechnology, chemistry, mechanical and electrical.  The website tells us which applications in each of these technology groups is being examined now.  This is interesting but not what our clients want to know.  Our clients don’t want to know which applications IPONZ is examining now.  They want to know when their own applications will be examined.

I ran some numbers today on our own unexamined patent cases.  Right now 84% of unexamined patent cases were filed up to 12 months ago.  Examination times for all cases are shown in the pie chart.

Patent examination times

If my firm's data is representative of IPONZ records then IPONZ could perhaps say that they aim to exam all applications within 12 months.  This would certainly be a clearer way to advise stakeholders.

Something else that could be clarified is the accelerated examination process.  Advancement of examination can only be made for “good and substantial reasons”.  The regulations state that an applicant needs to file a statutory declaration in support of the request for advancement.

This leads to the absurd outcome that it is potentially easier to file a divisional application out of a national phase entry application to advance examination.  Divisional applications are examined within 15 days of filing as mentioned above.

Where to from here?

New Zealand is currently putting in place a new Patents Bill.  In some but not all areas this will mean greater alignment with Australia.  It is hoped that New Zealand will adopt Australia’s practical and pragmatic approach to providing advice on examination times.

Monday, June 13, 2011

The ram that wasn’t

A few years ago we decided it was time that we got some farm animals.  We had all this grass.  Why not have some nice looking sheep.  They would eat the grass and look, well, nice.

Looking back, it sure has been a steep learning curve.  We’ve had a crash course finding out about (in alphabetical order) diarrhoea, fencing, fly strike, foot rot, hay making, intestinal parasites, rotational grazing, shearing, water troughs and wool trading.

One of the decisions we made along the way was to have spring lambs frolicking in the paddocks.  Wouldn’t that be neat.  All of our sheep were ewes (girl sheep).  We needed a ram (boy sheep) to, you know, mate with them.

My wife was away somewhere for the weekend.  Can’t remember where.  And so began the tradition of my wife returning home from a weekend away to find some strange new animal at the farm.

I was having a few drinks with a friend at the Tin Hut.  It’s a classic old country pub.  It’s a few kilometres away so is more than walking distance.  They run a courtesy van and drive you home if you feel you’ve had too much to drink.  Or if you are being responsible.  Or both.

Anyway, my friend and I caught the van home.  I ended up in the back with these three women.  They had been for a night out at the pub as well.  Not sure how I got on to the subject.  But it came out that I wanted to buy a ram.  One of them had one for sale.  Done.  We shook on the deal then and there.

I went to pick him up the next morning.  He was a pet lamb who had been totally overfed by two adoring children.  I loaded him on to the trailer.  They gave him some bread to eat on the 5 minute journey home which he certainly didn’t need.  They made me promise that I wouldn’t eat him.  I forget what name they had for him.  It was some name out of Lord of the Rings.  We ended up calling him Legolas.  Which turned into Leg-o-Lamb (get it?).  Which later became just Lego.

Well, Mr Tubby wasn’t all he was cracked up to be.  They didn’t teach me at law school how to judge a ram by its scrotum.  Yes.  Who knew that his scrotum was supposed to be a "whopper".  Scrotal size indicates sperm production and hence fertility.  I was supposed to palpate his testicles inside his scrotum to make sure they felt large, firm and moved freely.   Eeeeewwwww!

It turned out that our Lego wasn’t a whopper.  He had some dangly bits but nothing useful.  It turned out he had been “fixed” and was no longer a ram.  He was a “wether” (castrated ram).  Either it was a simple mistake or I was the victim of an elaborate web of deception.

Either way he was no use to us.  But by then we had kind of become fond of him.  We decided he might be useful after all.  He was so tame (and greedy) that he would just about charge you down whenever you went near the flock.  So he would chase you for tidbits and the rest of the sheep, being sheep, would follow him wherever he went.  Sometimes nice places.  Sometimes not.  This is probably really politically incorrect, but in New Zealand we call Lego and his kind “Judas sheep”.

Guest Post: Marketing and the Rugby World Cup - a checklist for businesses

Thanks to Corinne Blumsky for this article.

There are just 88 days until the biggest sporting event New Zealand has ever hosted hits our shores. Businesses are gearing up their promotional and advertising activities to be involved with The Rugby World Cup 2011 in some way. But there are rules that need to be observed.

Checklist item #1: Be aware of MEMA

The Rugby World Cup 2011 is a declared event under the Major Events Management Act 2007 (MEMA).

MEMA is designed to protect the rights of the major event organisers and sponsors from being undermined by unauthorised commercial exploitation.

The aim of the Act is provide a clear, predictable and fair regime for dealing with ambush marketing.


Checklist item #2: Know what ambush marketing is

Ambush marketing describes the actions of businesses that seek to associate themselves with a sponsored event without paying the event organisers. MEMA specifically targets two forms of ambush marketing:

  1. Ambush marketing by association.
  2. Ambush marketing by intrusion.

Ambush marketing by association is where an advertiser misleads the public into thinking that it is an approved partner or somehow associated with the event. Association is a wide concept. It extends to implying any relationship of connection, approval, authorisation, sponsorship, or commercial arrangement with the event.

Advertising that directly refers to the major event will fall foul of this Act. So, this type of advertisement is out:




Proud to bring you the The Rugby World Cup 2011


Advertising and brand agencies can also be in breach of the Act if you designed the advertisement for your client.

Ambush marketing by intrusion involves taking advantage of the assembled audience in a specific location or location around the event stadium to promote a brand.


There are exceptions, for example MEMA does not restrict advertising by an existing business which is honestly carrying out its ordinary activities. Also if you get consent from the event organiser, then you will not be in breach of the Act.

To see the Ministry of Economic Development Guide on what you can and can’t do, follow this link.


Checklist item #3: Avoid words and emblems that are prohibited


Many words and emblems are not available for businesses to use during The Rugby World Cup 2011.

To see what emblems and words are protected and you should avoid using, follow this link

Checklist item #4: Observe clean zones, transport routes and periods


Clean zones, transport routes and period have all now been announced.


The zones and routes announced vary in size. The Eden Park clean zone and route in Auckland is extensive and the clean periods for these areas is longer than elsewhere. In contrast, the clean zone and route for Auckland’s North Shore is small and the clean periods are short.

In some cases, the clean zone is largely limited to the stadium and surrounding park land but the clean route is significant. For example, the Wellington clean route runs from the stadium, through the centre of town, all the way to the airport.


As a general rule, the clean periods are limited to the day before match day and match day. The major exception is the fifth clean period for the Eden Park clean zone and route, which is in place from 8am 5 October until 11.59pm 24 October (the quarter finals until the final).

All advertising in the zones and routes is not prohibited. If you are advertising in accordance with your ordinary honest activities the restrictions are unlikely to apply to you. But if you are thinking of doing something different you may want to seek legal advice.


  • The clean zone restrictions apply to advertising in the clean zone and advertising that can be seen from within the clean zone (if it’s not part of a business’s usual signage).
  • The clean route restrictions apply to advertising in the route only (not advertising outside the route that can be seen from within the route).
  • Honest ordinary advertising in the zones and route is unlikely to be restricted.

For the clean zones, transport route maps and periods for your operating region, follow this link.


The key is to know the rules so you can work within them.


Sunday, June 12, 2011

War on birds

New Zealanders are often thought of as placid and calm.  We don’t get riled up much.  But when we do, the results are quite extraordinary.  JR’s Orchards, located just out of Greytown, is the region’s largest pipfruit grower and packhouse.

Since 2003 the owner John Van Vliet has employed 2 full time shooters.  They worked 7 days a week during the picking season shooting starlings presumably with shotguns.  They literally could not keep up with the swarms of starlings that would come to feed on John’s fruit.

In 2005 he tried what is known as a “molasses attack”.  He planned to use a helicopter to saturate the starling roost at Taumata Island, in rural Carterton, with a molasses spray to make the birds fall to the ground where they could be killed.  It failed when the birds flew off when the helicopter approached.

In 2007 he declared war.  He arranged for an explosives company to set off a massive explosion at Moroa.  It was effectively a napalm bomb.  The trees in which the birds were roosting were momentarily engulfed by a fireball that left thousands of birds either killed or maimed.  Visitors winding their way back home to Wellington over the Rimutaka hill would later report a huge fireball rise above the valley they had just left.

There was a bit of a fuss in the next few weeks as you can imagine.  The explosion left thousands of maimed starlings unable to fly.  The ones that didn’t fall to predators or run over on our roads literally starved to death.  Neighbours of the property were picking up dead and dying birds for days after.

A Wellington Regional Council senior biosecurity officer, the Wairarapa Society for the Prevention of Cruelty to Animals president, and a gallery owner specialising in bird art were all quoted in the media as being concerned.  I understand the incident also made international headlines.

Well, the story has a happy ending.  I understand the orchardist has invested in nets for his trees to keep the birds out.

The case of the disappearing hens

I said earlier that hens have an amazing genetic memory.  Our hens knew how to scratch and peck the ground without ever having seen it.  So they do learn stuff.  But it takes them several generations.  I guess it is called natural selection.

Back then we had two dogs.  Daisy was a “terrier cross”.  She died November last year which is why I’m talking about her in the past tense.  We’re not quite sure how else to describe her.  Her dad was a wire haired terrier/fox terrier cross.  Her mum was like no other dog I’ve ever seen.  The result was a high energy mutt with a stumpy furry body and long skinny legs.  Think Hairy Maclary who is a famous character in a series of children’s books in New Zealand.

Angel is a big clumsy slightly dumb harlequin Great Dane.  Looks great as an extra in Lady Gaga’s Pokerface (apparently).  But she’s a little neurotic (think Scooby Doo) and tends to follow us around the house.  Which would be fine if she was a little smaller.  But she’s 65kg and hence a little hard to navigate around.  Her sheer size does have some benefits.  Our visitors are greeted by the sight of our hound looking straight into their car window.  It’s funny, we don’t seem to get as many door knockers as we used to.

Anyway, that’s a short introduction to the dogs.  They made quite an odd pair.  The brains and the brawn.  If you were a hen would you cross a stream AND a fence to play with two canines straight out of a B-grade mobster movie?

Apparently some of them did.  They kept disappearing.  We knew who the culprits were.  The dogs weren’t very good at covering their tracks.  Or maybe they were pleased with their work.  Maybe they were just doing what they were supposed to be doing.  Keeping the hens out of the garden.

It got to the point where the dogs would meet us by the front door.  Angel (the big dumb one) had a chicken wing sticking out the side of her mouth.  Feathers still on it.  Probably caught by Daisy (the evil mastermind) then passed to Angel when she saw us coming.

This combination of free range hens and dogs wasn’t working.  What to do?

Friday, June 10, 2011

Innovators reject software patent exclusion

The Commerce Select Committee’s proposal to exclude patents for software innovation has been firmly rejected by a convincing majority of submissions on the draft guidelines. Yesterday the Ministry of Economic Development published the 36 submissions that it received in response to the only publicly notified consultation on the issue. Very few offered any support for the current proposal, and most want clause 15(3A) to be deleted.

In our last article, titled “Fog warning on computer-implemented inventions", we said that the proposed new exclusion to patentability of computer programs goes against the trend and will leave inventors in a fog of uncertainty.

Now that the proposal has been opened up to a level of public scrutiny for the first time, it appears to have hit a wall.  In a clarion call to lawmakers, New Zealand innovators have condemned not only the guidelines themselves but also the proposed legislative framework – clause 15(3A) of the Patents Bill – within which the guidelines were supposed to operate.

Most of those who lobbied lawmakers to reduce protections for software innovation came from creators and users of “open source” software.

It is now clear that not all open source creators and users were represented accurately during the Select Committee submissions.  One such party is Intel Corporation.  It needs no introduction, but nevertheless states its position as a corporation that “supports and uses and distributes open source extensively and is a leader in the open source movement”.  Intel makes its position very clear.  It states, for example:

  • “While many object to the patentability of software, few consider what this means”.
  • “Banning patentability of software leads to what can frankly only be labeled as absurd results.”
  • “Those who oppose the patentability of software have allowed their prejudices to get the better of their good judgement.”
  • “[They] fail to understand that the same level of inventiveness can be applied to software as in any other invention.”
  • “[W]e do not find any merit in the arguments that … patent protection of computer programs will stifle the development of open source.”

Many of us have made these observations many times over the last few years.  We are encouraged to see the same arguments put forward by a prominent open source organisation.

Let’s hear from the innovators
The Ministry of Economic Development discouraged submissions on the topic of patents for software innovation.  It stated that “[i]n releasing the draft guidelines for comment, it is not intended to re-open the debate regarding the patentability of computer programs, or whether an amendment should be made to clause 15(3A)”.  In making this statement, MED appeared to suggest that it may have been attempting to prevent any debate on the issue, despite the flawed process that had led to the introduction of clause 15(3A) in the first place.

None of the New Zealand companies who made submissions on the guidelines had anything positive to say about them.  Some reluctantly confined themselves to comments on the guidelines themselves, as directed by MED.  Others took the opportunity to question the legislative framework under which the guideline is intended to operate.

Airways Corporation of New Zealand Limited (Airways Corporation) is “disappointed to see clause 15(3A) included”.  Airways Corporation states that the “New Zealand Commerce Select Committee may have applied a very short sighted approach to the question of patentability of computer software in New Zealand”.  It goes on to state:

“Many of the systems we develop require five or more years of considerable research and development and an investment which runs into the millions of dollars to see the systems through from initial concept to a commercial product … Patent protection is important to enable us to realise the benefits of our investment, both in New Zealand and overseas.  Inadequate patent protection in New Zealand is a significant risk for our business because it allows overseas competitors to locate part of their operations here.”

Air New Zealand together with Crown Research Institutes Plant and Food Research Limited and Geological and Nuclear Science Limited all point to an inconsistency between the proposed legislative exclusion, the intentions of the Commerce Select Committee, and the guidelines.  All asked for legislative alignment with Australia, the United States, or Europe.

Thermal Chemistry Limited is another organisation that is concerned about proposed clause 15(3A).  It states that it is “undertaking a process to develop and commercialise our expertise as specialist instrumentation for use in power station environments.  This will consist of hardware devices and corresponding computer programs that will execute on those devices.”

Thermal Chemistry concludes by stating that if section 15(3A) and any resulting guidelines mean that inventions such as theirs would be excluded from patent protection, then it opposes the enactment of this law.

Auckland UniServices says that “a growing percentage of [new patent applications] involve software in one way or another”, and that, “the potential for patent protection around these applications can be the deciding factor in capturing new investment or licences.”

Fisher & Paykel Appliances notes that the lawmakers “had not received any evidence of economic harm” from the current law which allows patenting of inventions involving software.

Industry organisations are concerned
An unexpected but positive development to come out of this law reform process was the formation of an informal Technology Interest Group.  In its submission on the guidelines, the Technology Interest Group states that it is a group made up of small, medium and large businesses that are New Zealand owned and operated.  Most of the members use patents and all members want the choice to use patents.  Members wish to be protected from those who have responded with hostility towards different opinions on this topic.

The Technology Interest Group urges the government to “go back to the drawing board”, both in the guidelines and the underlying legislation.  Introducing clause 15(3A) would be a reversal of the current law and would put NZ out of step with our major trading partners.

The Technology Interest Group strongly encourages the government to develop clear guidelines and supporting legislation that can be applied predictably and be respected by the courts in New Zealand.  The law should be fully consistent with the Australian rules on the patentability of inventions involving computer programs to further a Single Economic Market.

BusinessNZ encourages a “big-picture” assessment.  Policymakers are urged to take a step back and ask a series of related questions.  These include:

  • Is there a problem in New Zealand with current regulatory settings (i.e., are there significant issues of “market failure” which need to be addressed)?
  • If there is a problem, is the problem significant? 
  • What are the costs and benefits (including unintended costs) of any proposed changes outlined in the document?
  • What are the potential options for improving outcomes which don’t impose significant costs (e.g., by educating market participants)?

BusinessNZ articulates clearly why many submitters did not participate in the Select Committee submissions.  It states:

“[T]here appears to be a serious discrepancy between what many submitters either favoured or expected the Government to do, and what has actually transpired in the revised Bill.  While we have no problem with rigorous policy debate that can lead to changes of direction if signalled early enough, with strong justification/evidence, there comes a point where certain policy views become, for want of a better term, naturally embedded during the process because they will produce sound policy outcomes, almost universally agreed on.  Therefore, such views remain untouched during the later stages of the consultation process.”

This explains why clause 15(3A) came as a surprise to many stakeholders when it was included as a late change in the bill.  For many of us the patentability of computer-related inventions had become naturally embedded.

Other industry groups, for example, the NZICT Group and the Business Software Alliance, urge the government to delete clause 15(3A) in the Patents Bill before it becomes law.

The guidelines have even drawn criticism from the European Union.  The Directorate General Trade of the European Union questions the selective use of UK patent law in the guidelines.  The European Union points out that “UK patent law is aligned on the European Patent Convention, and that the EPO’s abundant case law may thus also be relied on, in addition to UK case law, when interpreting NZ patent law”.

Patent attorneys restate their views
The New Zealand Institute of Patent Attorneys (NZIPA), the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) and the International Federation of Intellectual Property Attorneys (FICPI)  all made submissions on the guidelines.  All were critical of the guidelines and the legislative framework under which the guidelines are intended to operate.

Most patent attorney firms and sole traders made submissions along similar lines.

Where to from here?
It is a matter of common sense that we can only stumble around in the fog for a finite time before we eventually hit something.  With the overwhelming rejection of clause 15(3A) and the draft guidelines,  it will be interesting to see whether lawmakers insist on passing into law a provision that no one asked for, and no one seems to be able to explain with any certainty.

In a further twist, the Ministry of Economic Development has confirmed that it has not conducted an economic assessment in respect of the proposed exclusion and that it has not sought formal legal advice on the international law implications of the exclusion.

The Ministry states that it had limited time to consider and provide advice, and instead relied on “existing economic and legal frameworks applied to the Bill”.  This is extraordinary when it is considered that this Bill has been under review for over two decades.  This is not to imply any criticism of MED in not seeking appropriate advice.  It is simply recognition that the late insertion of clause 15(3A) surprised MED as much as anyone else.

The Bill is currently waiting for a second reading.  We are unlikely to see any movement on it any time soon.  We have an election date of 26 November 2011.  The Minister who is responsible for this Bill and who endorsed the Select Committee’s recommendation has announced his retirement effective in November.

It is likely that the Patents Bill will undergo further revisions under the next Government before becoming law.

Guest Post: Raising the Bar in Australia

Thanks to Alana Long for this article.

The Australian Government has recently released a draft Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (the Bill).  The Bill is designed to strengthen and improve Australia’s IP system.

Major changes surround oppositions, customs, relief, the expanded jurisdiction of the Federal Magistrates Court and client privilege. The amendments are discussed below.


A number of amendments are proposed to streamline the trade mark opposition process. Individuals and small businesses with limited opposition experience are the motivation for these proposed changes.

First, the Trade Marks Office (not the Opponent) is to serve a copy of the Notice of Opposition on the Applicant. This will give the Office greater control over ensuring that the Notice of Opposition is provided to the Applicant in a timely manner.

A requirement is introduced to file a Statement of Particulars of the grounds of opposition on which the Opponent intends to rely. The purpose of this amendment is to help focus oppositions earlier, reduce costs and any unnecessary effort on the part of the applicant in responding to grounds no longer relied on. The particulars will be required to be filed within one month of filing the Notice of Opposition. The Statement of Grounds and Particulars will only be able to be amended in limited circumstances.

A further amendment requires the Applicant to file a Notice of its intention to Defend the opposed application. There will be no fee associated with filing the notice and an extension of time to file the notice will be available.  The penalty for not filing a notice will be the application lapsing. This amendment anticipates the resolution of uncontested oppositions much sooner and with significantly less effort on the part of the opponent. Currently the second step in the opposition process is for the opponent to file their evidence.

A power is provided to the Registrar to dismiss a trade mark opposition in prescribed circumstances. Among other things, this will provide a mechanism to dismiss an opposition where the opponent does not comply with their obligation to file a statement of grounds and particulars. The exact circumstances in which the power is available will be prescribed in the regulations.


The memorandum accompanying the Bill explains that loopholes in the current border protection scheme enable importers of counterfeit or pirated goods to avoid prosecution and still retain the goods. Amendments are made to address this and other related problems.

The Customs CEO will be able to provide the objector (the trade mark owner lodging the notice of objection) information about the exporter as well as the importer. Extending the information provided to include the exporter or consignor will assist trade mark owners in identifying the source of infringement and repeat offenders. A power is also provided for the Customs CEO to grant inspection or release of sample goods. This amendment is intended to align with the Copyright Act 1968 (the Copyright Act) which currently includes an inspection provision.

A new “claim for return” scheme is introduced to ensure designated owners cannot reclaim seized goods if they make themselves uncontactable to avoid infringement proceedings. Firstly, the objector will receive information to identify and contact the importer. The Customs CEO will notify the objector of a claim for release of seized goods, if one is made. if no claim for release is made within the claim period, the seized goods are forfeited to the Commonwealth.  The Customs CEO also has discretion to accept a late claim for release of seized goods.

Reference is made in the memorandum to the noticeably lower maximum penalties for trade mark offences than the penalties for similar offences in the Copyright Act. An amendment is proposed to raise the maximum penalties for indictable offences to align with similar offences in the Copyright Act.

A number of additional amendments are also proposed to align with similar amendments to the Copyright Act.


The Court is to be given discretion to award additional damages for flagrant trade mark infringement.  Additional damages are already available for flagrant infringement of patents, registered designs and copyright.

Federal Magistrates Court (FMC)

The jurisdiction of the FMC is to be expanded to hear trade mark matters. The FMC will have the same jurisdiction to hear appeals against decisions, directions and orders of the Registrar like the Federal Court of Australia.


Communications with foreign trade mark attorneys are to receive the same privilege as those of Australian attorneys.

Submission on the Bill closed on 4 April 2011.

Wednesday, June 8, 2011

The man on the telly

It looks like our securities law in New Zealand is under review.  The Government is going to release some draft legislation for consultation in August.  Anyone who makes misleading statements in advertising or in a product disclosure statement will be liable for a penalty of up to NZ$1 million, plus compensation.

The legislation is aimed at high-profile “celebrity” New Zealanders who make false or misleading statements on behalf of providers of regulated financial products or services.

Apparently there are people in New Zealand who will invest in whatever the man on the telly suggests.  A former newsreader, a former cricketer, and a former rugby player all endorsed respective finance companies that later failed owing investors millions of dollars.

The devil is going to be in the detail.  What do we mean by “endorsement”?  What do we mean by “false statement”?  I’m really curious to see how we will define “celebrity”.  The definition might even include a 16 year old sheep called Shrek who died this week.  Perhaps this blogger had better make it clear that he has no intention of endorsing finance companies.

Just in case.

Which way does the water go?

I’ve just had my first question from one of my blog readers.  Was it about the new restoration provisions for lapsed design patents?  Was it about New Zealand’s status on Madrid Protocol accession?  Did it involve the latest on inventor ownership of inventions?


Which way does the water circle when you flush the toilet in the southern hemisphere.


What the reader is getting at is how much effect does the rotation of the Earth have on the outflow of water through a central aperture.  If a vortex appears, does it rotate in a clockwise or an anti-clockwise direction?  There is a perception that water rotates in a clockwise direction in the southern hemisphere and anti-clockwise in the northern hemisphere.

Well, I think I’ve just found my personal boundaries for this blog.  I didn’t try the toilet but did manage to fill a funnel with water.  I got it spinning clockwise then anti-clockwise as you can see in the embedded movie.  The black floaty bits are cloves.

So presumably the water volume is too small to be affected in a meaningful way by rotation of the Earth.

Tuesday, June 7, 2011

Australian Govt likes ADR mechanisms for IP disputes

In a press release last week, the Australian Government released its response to a report by the Advisory Council on Intellectual Property (ACIP).  In 2006 it asked ACIP to “inquire and report on issues relating to post-grant patent enforcement strategies to benefit the Australian economy by assisting patentees to effectively enforce their patent rights”.  The Minister released the final ACIP report titled “Post-Grant Patent Enforcement Strategies” on 19 February 2010.

The Government likes the idea of alternative dispute resolution (ADR) mechanisms.  But it thinks someone else should run them.  It will provide a list of ADR providers who know what an intellectual property right is.

It was felt that ADR mechanisms can provide significantly quicker and cheaper avenues for enforcing patent rights.  However, the Government considers that it is not appropriate for IP Australia, as a regulatory agency, to provide post-grant mediation services.

The Government pointed to established organisations such as the LEADR, the Association of Dispute Resolvers, and the National Alternative Dispute Resolution Advisory Council.  IP Australia will compile a list of ADR organisations with expertise in intellectual property rights.

In addition to a list of ADR organisations, IP Australia will also provide:

  • scope of protection provided by different IP rights
  • role of IP rights owners, attorneys and IP lawyers
  • court processes
  • typical costs
  • potential outcomes.

The Government rejects ACIPs recommendations to establish a formal structure such as an IP Dispute Resolution Centre incorporating a Patent Tribunal.  The range of effective measures promised in the press release appear to be limited to better marketing of existing ADR mechanisms.

Monday, June 6, 2011

Queen’s birthday

One of the benefits of being a constitutional monarchy is that we have an annual public holiday.  Today we celebrate the birthday of Queen Elizabeth II.  Her actual birthday is 21 April.  But let’s not let facts get in the way of our right to choose when we have our holidays.  We celebrate it on the first Monday in June.

Like most New Zealanders I woke to my usual alarm which in my case is 5:15am.  The initial relief of realising I did not have to go to work today quickly gave way to irritation that I had forgotten, again, to turn my alarm off.

For many of us it is a stark reminder that we are well on our way into winter.  There are no more statutory holidays for the next four bleak winter months until Labour Day on the fourth Monday in October.

It is perhaps time to look at the relevance of the British Monarchy to New Zealand society.  Personally I think we are pretty much left to govern our own nation without undue influence from abroad.  Whether we become a republic or whether we remain a monarchy will not really affect the day-to-day running of our country.  The issue is an emotional issue rather than a practical issue for many New Zealanders.

New Zealand is a sovereign independent unitary State with a constitutional monarchy as I mentioned above.  The basic constitutional framework is set out in the Constitution Act 1986.  Section 2 of this Act proclaims the Sovereign as the Head of State of New Zealand.  The Governor-General is appointed by the Sovereign and is the Sovereign’s representative in New Zealand.

Legislation in New Zealand does not become law until the Governor-General approves it.  Section 16 of the Act provides that Bills passing through our unicameral Parliament do not become law until the Governor-General assents to it.  In practice, the Governor-General will only exercise his or her power to refuse assent to Bills on ministerial advice.

One power of the Governor-General of more interest is the power to dissolve Parliament.  In 1996 we had our first general election under the MMP (Mixed Member Proportional) system.  It’s a voting system based on the German model where each voter gets two votes, one for a candidate in his or her local electorate, and one for the party of his or her choice, chosen from those registered parties who have nominated a party list of members.

From my point of view the effect of MMP is that post election we end up with a centre left and a centre right party.  Neither has enough votes to govern alone.  So each one tries to string together a majority from a handful of minor parties.  It’s no small task.  The platforms of minor parties include indigenous sovereignty, libertarianism, anti-immigration, environmental activism, and fundamentalist Christian.  And that’s just the minor parties.  There are still more independents who have fallen out with their former parties.

Most of the post-election agreements take the form of formal coalitions or informal “got your back” agreements to support the ruling party on confidence and supply.  If the parties can’t sort it out within a reasonable timeframe then the Governor-General can step in and dissolve Parliament.  The mere fact that we have that provision is a good incentive to the parties to sort it out themselves.

The Governor-General also has the power to appoint ministers and judges, issue writs for elections and bestow honours.  It wouldn’t really matter whether these powers are carried out by the Governor-General as the Queen’s representative or by someone else.

In summary I don’t think the monarchy has much effect on our daily lives at all.  I suspect many New Zealanders are emotionally attached to Queen Elizabeth II.  This does not mean we are necessarily a country of royalists.  We just like the current Queen.  Many of us enjoyed watching the royal wedding of Prince William.  I think that wedding can only have increased the popularity of the monarchy among the younger generation.

We are unlikely to become a republic anytime soon.

Sunday, June 5, 2011

Glory Licensing and patentable subject matter

The United States District Court of New Jersey recently issued an opinion in Glory Licensing LLC v Toys “R” Us, Inc, Case No. 2-09-cv-04252 (D.N.J. May 16, 2011).  The Plaintiff Glory Licensing LLC  (Glory) brought action alleging three counts of patent infringement.  The defendant Toys “R” Us (TRU) successfully argued that the patents were invalid as they were directed to abstract ideas.  The Court dismissed the infringement action for failure to state a claim.

The Glory patents

Glory is the owner of three US patents 7,570,383 (the ‘383 patent), 7,619,768 (the ‘768 patent) and 7,672, 007 (the ‘007 patent).  The Glory patents protect a system for processing information from a template file to an application program using “content instructions” and “customizable transmission format instructions” on a programmed computer.

Claim 1 of the ‘383 patent, for example, reads:

A method of processing information on a first computer system comprising at least one computer, which comprises:

  • receiving a file by transmission from another computer system external to said first computer system and automatically displaying said file on a computer display as a template;
  • automatically selecting and extracting information from said file according to content instructions;
  • providing utilities capable of automatically routing the extracted information as input information to an unrestricted diversity of application programs according to customizable transmission format instructions tailored to enable correct processing of the input information by any application program that requires said input information;
  • transmitting said input information to each application program requiring said input information; and
  • automatically processing said input information by said each application program.

Validity of the Glory patents

Section 101, Title 35 provides that “[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title”.  Three specific exceptions to patentability include laws of nature, physical phenomena and abstract ideas.

TRU argued that the Glory patents were invalid because they claim abstract ideas.

Machine or apparatus

Glory argued that their claims were patentable because they were tied to a particular machine or apparatus.  Glory said that the claims include a “first computer system”, on which the content instructions and customizable transmission format instructions are programmed and operate.

The Court observed that simply the use of a programmed computer is not sufficient to satisfy the machine or apparatus prong of the test.  Reciting a programmed computer in the claim does not tie the process claim to a particular machine.

Glory attempted to point to something specific in the claim language by the use of “content instructions” and “customizable transmission format instructions”.  The Court observed that the patent specifications contained no information that defines these generic terms, sheds any light on what the instructions entail, nor who programs them according to what specifications.

The Court held that the Glory patents were not tied to a particular machine or apparatus and therefore did not satisfy the machine prong of the “machine or transformation test”.


To satisfy the transformation prong of the machine of transformation test, Glory needed to show that its claimed processes transformed an article into a different state or thing.  The transformation needed to be central to the purpose of the claimed process.

The Glory patents claimed processes involving the extraction of information entered into and stored in a document or file and the formatting and transmission of that information to an application program.

The Court observed that the claims in the Glory patents are directed to a “mere transfer” of data from an electronic or hard copy document to an application program.  There was no transformation of the data.  The data was simply transferred from one format to another format.  The data itself remained the same.


The Court held that the Glory patents were addressed to abstract ideas and therefore invalid.  The infringement action was dismissed for failure to state a claim.  It will be interesting to see what happens on appeal.

Saturday, June 4, 2011


We had made our decision to keep hens.  Now we had to decide where to get them from.  And what types.  Some are better at laying eggs.  Some are better for eating.  And some are okay for both.  We did a little bit of research.  There is a Wairarapa Poultry and Pigeon Club.  I think they used to call themselves the Poultry and Pigeon Fanciers Club.  They dropped the “fanciers”.  Good move I thought.

Well, we attended a few chicken shows.  All a bit bewildering really.  There were big ones.  Little ones.  Coloured ones.  Brown ones.  The only things they all seemed to have in common were sharp beaks, beady eyes and scaly clawed feet.  Do we really want to go ahead with this?

There is a guy up the road who runs a battery hen farm.  He has a sign outside his gate that says “fresh eggs”.  He also has a sign that says “dressed poultry”.  The kids think this is like fancy dress.  I know different.  I think.

The thing about hens is that they have a life cycle.  This guy makes his money from the eggs they produce.  Hens have a productive window in which you make more money from their eggs than it costs you to feed them.  As they get older their egg production drops off.  This is when I think they transition from the “fresh eggs” banner to the “dressed poultry” banner.

I turned up with a couple of cardboard boxes.  We walked into one end of this huge barn.  He has certainly done this before.  He reached in to seemingly random cages and grabbed birds by their feet.  There was a whole lot of squawking and flapping.  He held each bird upside down so it couldn’t reach up and peck him.  Put each one in one of my cardboard boxes.

They weren’t very expensive.  I think it was $5 each.  I might have haggled him down and ended up with 6 birds for $25.  Not sure.

We got our new girls home and shut them up in the coop for a few days so they would know where their new home was.  Then we opened the door and let them out one morning.  Hens have an amazing genetic memory.  These girls had never seen sky before.  Never felt the ground under their scaly clawed feet.  Within minutes they were scratching and pecking the ground and having dust paths like professionals.

Friday, June 3, 2011

Guest Post: DIY trade marks

Thanks to Corinne Blumsky for this article.

Doing it yourself is part of the kiwi psyche. Did you know you can protect your brand by filing a trade mark application yourself?  Sounds easy!  But there are some issues you need to be aware of before you go down that path.
Make sure your brand is available for you to use and register. Before you invest in developing a new brand, do a thorough search of what currently exists – the risk of not doing so can be very expensive.
Do a search of all the trade mark records and of the marketplace.  The aim is to determine what brands are already in use, applied for or registered.  You can then decide whether your new brand is too close to what is already.  Clearing a brand can be complex.  It requires time and lateral thinking.  It is also helpful to have a level of familiarity with the databases you are searching.

To do a search, you need to be clear about what your brand is (ie. all its various elements so you can search all of those) AND understand what your business does (ie. what products or services you provide).

Critical issue

When a new brand is created the most critical issue is ensuring that it is available for use and in particular will not contravene any existing third party rights in the same or a similar trade mark.

However, this is often where problems occur.  For example, one business had searched for the prefix of the brand they were interested in.  They found numerous trade marks beginning with the same prefix but somehow missed the exact trade mark!  That business went on to produce catalogues and labels based on their understanding that the trade mark had been cleared for their use. They only relaised they had a problem when they received a letter from a firm of solicitors pointing out that their use infringed another’s trade mark.  Not only did they have to re-label their goods, they also had to select a new (properly cleared) trade mark.

Another business searched the exact trade mark they were interested in.  They found the exact trade mark but in a different class to the class they knew their goods were classified in. Trade marks can be classified in 45 classes.  Classes 1 to 34 cover products; classes 35 to 45 cover services.  Again, they proceeded to use the trade mark until they also received a solicitors’ letter asking them to stop.  They were infringing the rights granted under the trade mark they had, in fact, found. What they had not considered was the similarity of the goods. You can infringe another’s trade mark even if you provide different goods or services that are in a different class – similarity can be enough.

So how do you try to avoid this happening? The criteria you select for each brand you search for will depend on a number of factors.   These include the nature of the trade mark, the presentation of the trade mark, the goods or services or both on which it will be used, as well as the country and database being searched.

A number of countries offer online trade mark databases.  The methodology for entering trade marks onto a database differs from database to database. You need to be familiar with this to have any chance of finding potentially relevant trade marks.

It is also important to note that trade mark rights are territorial in nature. If you intend to export goods from New Zealand, then you should also clear your trade mark for use in each of the countries where you will use your trade mark.

Too often a business that chooses to undertake their own trade mark clearance search often goes no further than entering the exact trade mark as the search criteria.  While on occasion you may locate an exact trade mark, it gives no clue as to whether there is a similar trade mark lurking on the database or is in use.   This is important to bear in mind as New Zealand, like a number of other countries, has infringement laws that extend to cover ‘similar’ trade marks.

Right approach

Take the right approach when filing your own trade mark applications.  Internet technology has made it possible for many trade marks offices around the world to provide filing facilities online.

With the introduction of online filing, there has been a worldwide trend of businesses filing their own trade mark applications. Objections are often raised by examiners during the examination process against a significant proportion of trade mark applications filed. These objections need to be responded to if the application is to progress.  The nature of objections raised range from typographical errors, to incorrect classifications of goods and services, the raising of similar trade marks already on the register, and registrability issues.  Often the business is not familiar with trade mark regulations, case law and the various practices of each country to be able to respond adequately.  Seeking specialist help at this stage can often be expensive and could quite likely have been avoided if engaged at the outset.

If you do need help, it is best to approach a qualified attorney.  While trade mark examiners can seem helpful, they are not qualified to give advice and in many cases are not authorised to do so. Unlike specialist attorneys, examiners are not familiar with the range of factors which need to be considered when registering a trade mark. By accepting suggestions offered by examiners, you may be unnecessarily limiting your rights.
Too often, applications are filed with some or all of the following issues.
  • The goods or services are too narrowly defined
  • The goods or services are wrongly classified
  • The trade mark to be registered includes non-essential features
  • The owner is not correctly identified.
Unfortunately, the limitations of a trade mark registration might not be exposed until the business wishes to rely on the registration to prevent a third party from using either the same or a similar trade mark. It is too late at this stage to learn that a registration does not cover the goods or services intended.  Also, the limitation of a trade mark is unlikely to come to light until international registrations are sought relying on the first filed application.  Again, it can be too late to take remedial action at this stage.

While it may appear straightforward to file an application online, you must know what you are doing in order to achieve the best possible trade mark protection available. You may be tempted to give it go, but you need to be aware that there could be risks with doing so.

Trade mark renewal

Once a trade mark is registered, you need to renew it every 10 years to keep it current.  You can do this online in New Zealand and in a number of other countries.  Some countries also require you to file evidence that you are using your trade mark in order to keep it.

Meeting renewal dates and managing evidence requirements needs processes and systems—especially if you have more than one brand in your portfolio.  A lot can happen in 10 years, such as a move of location, which could mean that you miss the renewal reminders.

In summary, DIY trade mark registration and renewal is available to all businesses. However, if you are not familiar with the process, law and practices it may be safer to seek specialist advice at the outset.

Thursday, June 2, 2011

Guest Post: New Zealand makes way for new Copyright Act in September

Thanks to Simon Fogarty for this article.

The Copyright (Infringing File Sharing) Amendment Act 2011 comes into force on 1 September 2011. This controversial legislation was designed to give copyright rights holders a fast and cheap method to stop unauthorised file sharing over the internet.

The Act creates a procedure for a rights holder to object to unlawful file sharing.  A rights holder must:

  • establish that a party has made an unauthorised copy of a copyright work; and
  • identify the computer’s internet address (IP address) that the party downloaded the file to.

The rights holder can then ask the internet service provider (ISP) responsible for the IP address to send an infringement notice to the account holder.

Infringement notices come in three forms: detection, warning, and enforcement notices. Put simply, if a person infringes copyright then, on a request from the rights holder, the ISP must send the account holder a detection notice. If the same person infringes the same rights holder’s copyright again, then, on request, the ISP must send a warning notice to the account holder. A third infringement of the same rights holder’s copyright will lead to the final notice, an infringement notice, being sent to the account holder.

After a rights holder issues an enforcement notice it can apply to the Copyright Tribunal for an award of damages against the account holder of up to $15,000. The Copyright Tribunal must make an award of damages against the account holder if it finds there is infringement. The only exception to this rule is where it would be manifestly unjust to make an award against the account holder.

The most contentious part of the legislation is a provision that will allow a rights holder to apply to the District Court for an order to suspend the account holder’s internet account. However, this provision is not coming into force on 1 September. Instead, the system will be reviewed after two years to determine if the damages awards are acting as a sufficient penalty. If the awards are not deterring infringements, then the provision allowing the District Court to suspend the account will come into force.

ISPs that allocate IP addresses, now face the burden of putting systems in place before 1 September so that they can comply with their obligations under the Act. This will come at a significant cost, which the ISPs will have to bear. However, the rights holders will be required to pay a fee for every infringement notice that they ask an ISP to send. The fees are yet to be decided.

Critics of the system say that we do not need it and that it will not be effective, especially against serious pirates. Regardless of the validity of those criticisms the legislation will come into force on 1 September 2011.

In May, the Ministry of Economic Development (MED) asked for submissions on the proposed regulations. The deadline for filing submissions has passed. MED must now draft the regulations. Once that is done, it will be a matter of waiting to see whether the system is effective and helps to curb online piracy.

Guest Post: Update on Amazon's '1-click' patent application in Australia

Thanks to Sarah Barclay for this article.

Back in 1997, Amazon filed a patent application for an online shopping system, which has come to be known as the '1-click' system.  When Amazon filed their patent application, online shopping was still new technology.

As explained in Amazon’s application, online shopping had practical limitations.  Most consumers were very cautious when giving sensitive financial information.  Also, consumers needed to enter a lot of information into online forms.

The solution to these problems was the ‘1-click’ ordering system.  The ‘1-click’ ordering system allowed a consumer to perform a single action that would start a process in which a consumer’s details are retrieved, an order is placed, and a payment is completed, without the consumer taking any further steps.

Patent applications were filed in various countries, including Australia.  The Australian application was examined and accepted for grant by the Australian patent office in 2003.  Telstra filed a notice of opposition, which started an opposition proceeding that lasted for close to eight years [1].

What is a ‘single action’?

A pivotal issue considered in the opposition was the meaning of the term ‘single action’, which was a feature required by the claims.  Telstra argued that this term was unclear because  it included within its scope more than one action, and should be qualified by the word ‘only’.

After referring to dictionaries and the specification, the hearing officer decided that the term ‘single action’ was not ambiguous.  The specification disclosed many ways in which the ‘action’ might be implemented.  The Hearing Officer decided that a single action refers to a single event and that the event might involve more than one physical ‘action’, for example, a double-click.  He considered that the term ‘only’ was redundant and would not change the meaning of ‘single action’.

Novelty and inventive step

Telstra alleged that the Amazon claims were anticipated by five prior disclosures.  After consideration, the Hearing Officer found that only one disclosure, a patent application belonging to Telstra, anticipated some of the claims.

Telstra also argued that the claims did not involve an inventive step.  At the time the application was filed in Australia, a claimed invention will lack an inventive step if it is obvious in the light of:

(a) common general knowledge; or
(b) common general knowledge considered together with information in a single document or through doing a single act [2].

As the Hearing Officer pointed out, we need to remember that the Amazon ‘1-click’ ordering system dates back to the filing of the first patent application in 1997.  The inventiveness of the system is assessed at that date.  The fact that the system may have been considered obvious just a few years after that date is of no significance.

The Hearing Officer decided that the only feature of claim 1 that was not part of the common general knowledge was the feature of placing an order via a ‘single action’.  However, he considered that was an obvious solution to the problem of reducing the number of steps.

But when the invention was limited to using browser cookies, the claims were found to be valid.  That was because there was no clear teaching or suggestion of using cookies in any of the prior art.  There also was not any satisfactory evidence that the skilled person would have considered this to be an obvious approach at the time.

Amazon was allowed 60 days to propose suitable amendments because the application contained patentable subject matter.  Therefore, although Telstra’s opposition was successful, it seems likely that Amazon will be able to amend the claims and have a patent granted for their ‘1-click’ system.

Allowability of software and computer implemented inventions

Recently, there has been a lot of debate about whether software and computer implemented inventions should be allowed patent protection.  An interesting aspect of this opposition was that the subject matter of Amazon’s application was not questioned.  Telstra did not pursue the ground of opposition that the claims were not a manner of manufacture.  Rather, the opposition focused on clarity, novelty and inventiveness, just as it would for other fields of technology.


[1] Telstra Corporation Limited v, Inc. 2011 APO 28 (9 May 2011).

[2] PATENTS ACT 1990, section 7.

Guest Post: New Zealand's limited partnerships regime - combining limited liability and tax benefits

Thanks to Scott Yorke for this article.

Limited partnerships (LPs) are commonplace in many countries, but have only been available in New Zealand since 2008. However, we are seeing more and more companies adopt LP structures in the technology sector, including software businesses and franchise owners. The flow-through tax status of the LP, combined with its limited liability and confidentiality features, makes LPs an attractive structure for many new business ventures.  So how does it work?

An LP is an entity that combines the limited liability advantages of a company with the tax and confidentiality advantages more typically associated with a partnership. LPs are particularly suited to investment funds, but can also be effective structures for small start-up companies that expect to make substantial losses early on.

Like a company, an LP is a legal entity that exists separately from its owners. Contracts may be entered into in the name of the LP, and an LP may hold property in its own name. The limited liability protection available to the LP means that if limited partners are not involved in management of the LP their liability will be limited to the amount of their capital contributions. Because the LP has separate legal personality, there is no technical dissolution of the partnership when partners exit.

Like a general partnership under New Zealand tax law, an LP is transparent for tax purposes. Any losses or gains from the LP flow through (on a pre-tax basis) and are attributed directly to the partners to the extent of their economic interest in the LP. This is commonly known as “flow through” tax status. This tax status is what makes LPs so attractive to many investors.

An LP must have at least one general partner and one limited partner. Any person (including a company or another LP) may be a partner of an LP, but a person cannot be both a general partner and limited partner of the same LP at the same time.

The general partner is responsible for day-to-day management of the LP and has authority to bind the LP. The general partner has a “residual liability”. This means that the general partner is liable for the debts and obligations of the LP, but only if the LP is unable to meet them itself.

Limited partners are usually passive investors in the LP, and their details are kept confidential. They should not take part in the management of the LP if they wish to retain limited liability. However, they may participate in certain “safe harbour” activities. The distinction between managing the LP and taking part in safe harbour practices can often be difficult to draw, particularly with start-up LPs.  For this reason, the general partner will often be set up as a company to manage the affairs of the LP, with limited partners taking shares in that company.

Every LP must have a limited partnership agreement. This agreement documents how the LP is to be administered and what the rights and obligations of the partners are. The agreement is not a public document.
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