Signposts for software patents

The New Zealand Patents Act 2013 came into force today. Less than a week before the General Election I wasn't expecting a lot of fanfare. But there has been a lot of work done getting ready.

As the Patents Bill worked its way through the legislative process, one of the hotly debated topics was the extent to which patent protection should be available for computer-implemented inventions. These are also referred to as software patents.

So the new law is in place. What now? As I said in New Zealand bans patents for software, it's a little unclear. Have we banned software patents? Or have we banned patents for software? There is a difference.

The old law

Patent applications filed up to and including Friday 12 September will be assessed under the Patents Act 1953 (the old act). Future divisional applications and continuations, filed from those applications, will also be assessed under the old act.

The old act defines an invention as any 'manner of new manufacture'. What is patentable subject matter and what is not patentable subject matter is defined by case law and decisions of the Commissioner of Patents.

The new law

IPONZ will now look more closely at 'any claimed invention that involves or is implemented by a program running on some sort of computer'. It says so in the Patent Examination Manual published today.

Patent applications subject to the Patents Act 2013 (the new act) will still have to satisfy the 'manner of new manufacture' test. There will also be a test applied to determine whether a patent claim relates to a computer program as such. This will occur if the actual contribution made by the alleged invention lies solely in it being a computer program.

Is the contribution a computer program as such?

The Minister responsible for the new legislation gave a clear direction to the Commissioner of Patents and the New Zealand courts to apply the steps of the Aerotel test established by the English Court of Appeal. The Minister intends New Zealand practice to follow the Aerotel test, and subsequent English jurisprudence that applies the test, when considering patent applications involving computer programs.

The Patent Examination Manual refers to five 'signposts' that would indicate patentable subject matter. These five signposts were formulated in AT&T Knowledge Ventures LP, Re [2009] EWHC 343 (Pat) as:

1. whether the claimed technical effect has a technical effect on a process which is carried on outside the computer;
2. whether the claimed technical effect operates at the level of the architecture of the computer; that is to say whether the effect is produced irrespective of the data being processed or the applications being run;
3. whether the claimed technical effect results in the computer being made to operate in a new way;
4. whether there is an increase in the speed or reliability of the computer;
5. whether the perceived problem is overcome by the claimed invention as opposed to merely being circumvented.

These signposts represent 'easy wins'. If a claimed invention satisfies one of these tests then it is likely to be eligible for patent protection under the new law. So we are now a little clearer as to how IPONZ is going to handle these types of inventions. What will help a lot is some assistance from the Courts.


Photo courtesy of author Tom under Creative Commons licence.

US Court says no to patent on computer-implemented business method

The United States Supreme Court has handed down a decision that is important for all business method patent applicants. In Alice Corporation Pty. Ltd. v CLS Bank International et al the Court held that use of a generic computer does not transform an abstract idea into a patent-eligible invention.

Alice Corporation is the owner of several patents covering a business method for mitigating settlement risk. This settlement risk is the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. The claimed invention used a computer system as a third-party intermediary.

The Mayo test

The Court affirmed what it called a 'framework' from Mayo Collaborative Services v Prometheus Laboratories, Inc. It is supposed to distinguish patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts.

It involves:

1. determining whether the claims are directed to a concept that is not patent eligible; and
2. if so, determining whether any additional elements in the claims 'transform' the nature of the claims into a patent-eligible invention.

What is not patent-eligible?

The Court held that the claims were drawn to the abstract idea of intermediated settlement, the use of a third-party to mitigate settlement risk. The Court referred to Bilski v Kappos in which the Supreme Court rejected a method for hedging against the financial risk of price fluctuations.

Apparently the concept of intermediated settlement is a fundamental economic practice long prevalent in the United States system of commerce.

Alice Corporation tried to argue that the abstract ideas category is confined to preexisting, fundamental truths that exist in principle apart from any human action. The Court didn't accept that argument.

What else do you need to transform a claim?

The Court considered whether there was anything else in the claims to transform them into a patent-eligible application. The answer was no. The method claims merely required generic computer implementation and therefore failed to transform the abstract idea into a patent-eligible invention.

So what exactly does an applicant need to transform a claim? The judgement does not give clear guidance on this point. It is up to the Federal Circuit Courts to clarify these lofty directives.

There are some clues though. The decision says that the method claims do not purport to improve the functioning of the computer itself. Nor do they effect an improvement in any other technology or technical field. So it is likely that additional elements in a claim that do that will be helpful.

Could it be that we are going to see a technical effect requirement similar to Europe?

The draughtsman's art

Something else that was interesting about this case is that the Court did not distinguish between the method claims, the system claims and the computer-readable medium claims. It rejected them all.

The system and media claims were held to add nothing of substance to the underlying abstract idea in the method claims and were therefore held to be patent ineligible.

The Court reaffirmed several times that patent eligibility does not depend simply on the draughtsman's art. Putting this another way, the law of patentable subject matter is not 'like a nose of wax which may be turned and twisted in any direction'. I love the idea of my work being considered art.

The way forward

It is clear that computer-implemented inventions based on abstract ideas are not patentable in the United States. It is equally clear that mere generic computer implementation is not a cure. However, a technical effect in a claim is likely to get it over the line.

Photo courtesy of author stallio under Creative Commons licence.

Twenty years on

Last week I passed a significant milestone. I've now been an intellectual property advisor for twenty years. I think that entitles me to dwell a bit on how things used to be and how they are now.

Technology

One of the biggest changes over the last twenty years has got to be our use of technology.

Back in 1994 I had a single cathode ray tube (CRT) screen connected to a mainframe in a server room. The 'computer' was used only for accessing the firm's electronic docketing and record system. It had been written in-house and was pretty state of the art back then.

On my first day the server was down. As I was being shown around I remember seeing the computer guy in the server room. Shirt sleeves rolled up. Red faced. Looking stressed. I thought back to my recent career choice to create stuff rather than fix stuff. If ever there was a defining moment that I had made the right choice then this was it.

There were no cellphones, no smart phones, no tablets. There was internet access from a single stand-alone PC running Mosaic. We had a telex machine. We eventually encouraged clients who still sent us telexes to send urgent instructions by fax instead.

Today our firm has a Bring Your Own Device (BYOD) policy. A bewildering selection of powerful mobile devices combined with secure, web-based technology means that our attorneys are able to work from virtually anywhere.

Patentable subject matter

We have seen a gradual widening of eligible subject matter, particularly in my field. The Hughes decision in 1995 is acknowledged as a landmark case in the treatment of computer-related inventions. We were able to point to an earlier Australian decision which the new Zealand Hearing Officer adopted the test for eligible subject matter as:

'Does the invention claimed involve the production of some commercially useful effect?'.

The Haddad decision in 2000 reminded us that the term 'manner of manufacture' still implies a situation which involves some sort of interaction with a real entity, or which achieves a tangible product or result.

Surge Miyawaki in 2005 involved a method of issuing an ear tag to identify an animal in a group of animals. The applicant averted a challenge by amending the claims to include a computer database. 

The Hearing Officer in two separate applications Coppereye and Maximum Availability in 2006 concluded that a database per se can be considered as analogous to a table or spreadsheet in which data is arranged in a manner which facilitates searching and information retrieval. Claims to the database were refused.

These two decisions are at odds with the later Microsoft decision in 2007 in which a patentable data structure arranged and presented data in such a way that it worked in cooperation with a computer program to produce an improved and commercially useful result.

In 2007 the first New Zealand Court decision on the patentability of business methods, Cool 123, noted that a business method could be the subject of a patent application. However, where the case for obviousness seems overwhelming it is difficult to find eligible subject matter.

In 2013 IPONZ allowed a patent on a technique for providing data insurance in Hodgkiss v Monument Insurance. The Hearing Officer commented that the invention was more than a mere computerization of a known process, which suggests that the actual contribution lay in more than just a computer program.

IPONZ

Long before its relaunch as the Intellectual Property Office of New Zealand (IPONZ), the New Zealand Patent Office operated out of a six story building 15 minutes drive out of the Wellington CBD. It shared a car park with a funeral parlor and was a mere stone's throw from both a liquor store and a fast food franchise.

Patent Office staff prepared abstracts of all allowed patents and printed them on cards the size of envelopes. There were stored in IPC order. Searching consisted of identifying a set of catch words describing an invention from a hard cover book, looking up the relevant IPC classes, and flicking through the cards in the relevant classes. I remember a sign displayed prominently above the cards warning us that a misplaced card could cost a million dollars.

My firm had 5 full time staff working out of space provided by the New Zealand Patent Office in its library. We would send search instructions out to our staff by morning courier. They would send us back search results that afternoon. I was there when we installed a fax machine at the Patent Office for our searchers to use.

Exam reports were largely handwritten, at least for trade mark cases. The Patent Office had a kind of form listing every possible rejection an examiner could raise against a case. Examiners simply worked their way down the form and checked most of the boxes.

There was a late filing box. It was a kind of slot through which you could post paper documents. Every morning Patent Office staff scooped up everything posted in the slot the day before and stamped it with yesterday's filing date. There was supposed to be an automatic gate on the slot that closed the slot at midnight. Nobody wanted to test whether or not the gate technology worked. And so began the tradition of late night dashes to the late filing box.

Legislative changes

Right now we are waiting for the New Zealand Patents Act 2013 to come into force in September. Prior to that there were only relatively minor tweaks made to the New Zealand Patents Act 1953.

The Patents Amendment Act 1992 had recently enabled New Zealand to join the PCT system. The Patents Amendment Act 1994 increased patent term from 16 years to 20 years. It also removed an obscure ground of rejection for perpetual motion machines. The Patents Amendment Act 1999 broadened the definition of 'convention country'. And then there was the Patents Amendment Act 2002, which allowed 'springboarding' for the benefit of generic pharmaceuticals manufacturers.

In the late 90s the Trans-Tasman Mutual Recognition Act 1997 and the equivalent legislation in Australia recognized the role of patent attorney in each country as equivalent occupations. Registered patent attorneys in New Zealand could now apply for registration in Australia and vice versa.

What now?

It's hard to predict what the profession will look like in another 20 years. A lot will depend on the types of inventions our clients come up with, the legislative framework we operate under, and the technology we use to help us advise our clients. None of which is likely to even remotely resemble what we have today.

IPONZ consults on new patent regulations

The Intellectual Property Office of New Zealand (IPONZ) has just issued a discussion paper seeking feedback on proposed regulations and fee changes. Submissions must be made to IPONZ by 24 January 2014, although I'm aware that extensions may be available.

The New Zealand Patents Act 2013 is due to come in to force on 13 September 2014. The regulations will set out the mechanics of how New Zealand applications will be treated under the new regime. Patent applications filed before September 2014 will continue to be examined under the Patents Act 1953.

Here are some of the main changes around examination processes.

Request for examination

Patent applications under the new regime will not be examined until a request for examination is filed. The request can be made voluntarily by the applicant, following a direction from IPONZ, or can be made by a third party.

The deadline for requesting examination is likely to be 3 years from the filing date of the complete specification. For patent applications arising out of national phase entry (called treaty applications), the deadline will be 3 years from the international filing date. Where a convention application claims priority, the deadline will be calculated from the date of application in New Zealand rather than the filing date of the priority application.

Where IPONZ issues a direction to request examination, the applicant will have a two month deadline to comply. This deadline is not extendible. If the deadline is missed the application will lapse, although there might be an opportunity to restore lapsed applications.

IPONZ expects to examine patent applications relatively quickly. IPONZ anticipates issuing directions to request examination:

• within one year of the filing date of the complete specification; or
• within 6 – 12 months of the national phase entry date

If this is the case, then we would expect most requests for examination will be in response to a direction from IPONZ rather than a decision by the applicant.

Time period for placing the application in order for acceptance

IPONZ will issue a first examination report at some point following a request for examination. The first examination report starts the clock ticking for putting the application in order for acceptance (allowance).

The proposed period for placing the application in order for acceptance will be 12 months from the date of the first examination report. It's important to note that this is an acceptance deadline rather than a response deadline. Any response needs to be filed early enough to be considered by an examiner before the 12 month acceptance deadline.

IPONZ will require a response to the first examination report within 6 months. If the first response does not place the application in order for acceptance the next examination report will give a 3 month deadline to respond. There will be a one month extension available for each response deadline. In theory there is no limit to the number of examination reports that IPONZ can issue within the 12 month acceptance deadline.

There will be some situations where IPONZ will not have sufficient time to consider a response before the 12 month acceptance deadline. There might be some discretionary extensions available. But applicants may prefer not to rely on discretionary extensions.

It will be important to allow applicants to file a precautionary divisional application (continuation) in such situations. There is no mention of imposing a restriction on divisional practice. This means that no restriction is contemplated. Or perhaps no consultation on such restriction is contemplated.

Electronic case management system

IPONZ introduced a new online case management system for patents in December 2012. We are advised that uptake of the online case management system has been very high. Almost 100% of all patent applications are made online. A minority of clients use other means which requires maintaining infrastructure, processes and staff in place to receive the documentation.

IPONZ proposes to mandate use of the online case management system for all communications to and from IPONZ and filing of documents with IPONZ under the Act.

This proposal seems a little strange. IPONZ acknowledges that they cannot mandate electronic filing of national phase (treaty) applications. Last year treaty applications made up 54% of patent application filings.

And there is a handful of patent applications that are subject to secrecy orders imposed by foreign countries. The information in such patent specifications would compromise New Zealand’s security, defence or international relations if mishandled. I talk about classified applications in my post the darker side of patent protection.

Does it make sense to impose a rule on all patent applicants to file patent applications online while acknowledging that the rule doesn't apply to over half the patent applications filed in any year? Does it make sense to require patent applicants to deal with IPONZ electronically when its own systems are not secure enough for classified patent applications?

Perhaps a more sensible approach would be to pat ourselves on the back about the high uptake of the online case management system and recognise that some patent applications will continue to be handled manually.

Further steps

IPONZ has compiled a list of 40 questions on aspects of the discussion paper. They would love to hear your views by the deadline of 24 January 2014.



Photo courtesy of author Cookieater2009 under Creative Commons licence.

TPP and patentable subject matter

The Trans-Pacific Partnership (TPP) talks involve delegations from Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Right now a TPP Chief Negotiators summit is drawing to a close in Salt Lake City, Utah.

The talks are technically conducted in secret. However there seems to be a constant stream of leaked drafts and other documents. This in turn leads to a lot of comment from civil libertarians, fugitives and academics.

The latest document I came across is the confidential draft treaty chapter from the Intellectual Property group. It sets out the combined positions of all the parties as they were by the end of August 2013. Assuming this document is not a complete fabrication, what are the parties saying about the sort of technology that should be eligible for patent protection?

Patentable subject matter

The text contains the provision that:

'each Party shall make patents available for any invention, whether a product or process, in all fields of technology, provided that the invention is new, involves an inventive step, and is capable of industrial application'. [Article QQ.E.1]

This provision makes sense. Those familiar with TRIPS (agreement on trade-related aspects of intellectual property rights) will see a passing similarity with TRIPS Article 27.

There is a slight divergence in policy between Australia and New Zealand. Australia would like to add that 'patents shall be available for any new uses or methods of using a known product'. New Zealand would not.

Morality

The text proposes that:

'each party may exclude from patentability inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to nature or the environment, provided that such exclusion is not made merely because the exploitation is prohibited by their law'. [Article 2].

No parties object to this statement, which is not really surprising.

New Zealand already has this provision in the Patents Act 2013 section 15. Australia has just concluded consultation on whether or not to exclude inventions from patentability where commercialization would be wholly offensive to the Australian public.

Subject matter exclusions

Most countries, with the exception of the United States, would like to exclude some subject matter from patentability.

New Zealand and Australia would like to be able to exclude:

• plants and animals other than microorganisms;
• diagnostic, therapeutic, and surgical methods for the treatment of humans or animals; and
• essentially biological processes for the production of plants or animals, other than non-biological and microbiological processes for such production.

These exclusions go beyond what is currently in section 16 of the New Zealand Patents Act 2013. The current provisions relate to humans only. Are we going to see New Zealand law amended to exclude patents for diagnostic, therapeutic and surgical method for the treatment of animals?

New Zealand wants to amend the text to require parties to 'provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof'. This makes sense. Australia and New Zealand already have separate legislation for plant varieties.

Computer programs

All parties agree that they should make patents available for any invention in all fields of technology.

One of the parties to the agreement, New Zealand, has taken the position domestically that a computer program is not an invention. Section 11 of the New Zealand Patents Act 2013 says so. The logic is that if you assume that a computer program is not an invention in the first place then you don't have to make patents available for it.

As I have said in an earlier post, New Zealand will continue to grant patents for inventions that make use of or involve a computer program. It is the underlying technical function of the code that is patentable, rather than the code itself. New Zealand will continue to allow patents for technical functions that software code causes a processor to perform. New Zealand will continue to grant patents for computer-implemented inventions.

So what do other countries think? Are software patents a huge problem elsewhere? Is New Zealand's approach the way forward that every other country will rush to adopt?

Well, Mexico proposes an exclusion for:

'diagrams, plans, rules and methods for carrying out mental processes, playing games or doing business, and mathematical methods as such; software as such; methods to present information as such; and aesthetic creations and artistic or literary works'.

You can read into that what you will. No other countries, even New Zealand, seem to want a specific exclusion for computer programs in the text of the treaty. This seems strange. If New Zealand has adopted this exclusion based on defensible sound policy, then why not join Mexico and suggest that this exclusion be included in the treaty text? Maybe the exclusion is not based on defensible sound policy.

Either the parties to the treaty (other than Mexico) have no issue with computer-implemented inventions. Or they each consider that the issue can be dealt with under their existing frameworks.

Further steps

I guess we wait and see the outcome of the next round of talks. There doesn't seem to be anything surprising or alarming in the approach of the parties to patentable subject matter. It's simply a matter of sitting back and waiting for the next leak.



Photo courtesy of author Rick Galvan under Creative Commons licence.

Black hole expenditure

We each have our own version of a black hole. In my home I'm sure there is a black hole that removes random items from my kids' LEGO sets, last season's garments from my wife's wardrobe, and random socks from my sock drawer.

The Inland Revenue Department (IRD) has yet another version of a black hole. Black hole expenditure is defined in the discussion document as:

'business expenditure that is not immediately deductible for tax purposes and also does not form part of the cost of a depreciable asset for tax purposes, and therefore cannot be deducted over time as depreciation'.

Patents and plant variety rights

There is a proposal to allow depreciation of capitalised development expenditure that:

• relates to an invention that is the subject of a patent or patent application; or
• a plant variety that is the subject of plant variety rights.

Capitalised development expenditure will be allowed to be depreciated over the legal life of the asset to which it relates.

It's good that the IRD is consulting on this issue. They seem to have forgotten about registered designs (design patents). Those who work with them know that a significant amount of R&D cost is spent on technology for which registered design protection is obtained, or at least applied for.

Unsuccessful R&D

Some capitalised development expenditure may not give rise to a valuable asset. A valuable asset here is one that is depreciable for tax purposes. Or an asset that is non-depreciable for tax purposes because it does not have a finite useful life that can be estimated with a reasonable degree of certainty (eg know how).

The discussion document outlines a proposal to allow a person a tax deduction for capitalised development expenditure they have incurred if:

• the intangible asset has been derecognised prior to it earning income;
• the person intended that the expenditure would lead to an item of depreciable intangible property; and
• no other deduction has been allowed.

Getting the incentives right

There's a risk of perverse incentives here. The discussion paper notes that:

'allowing immediate deductibility of unsuccessful capitalised development expenditure would create a perverse incentive for taxpayers not to complete marginal projects because, when the value of exploitation is low or uncertain, immediate deductability of unsuccessful capitalised development expenditure may be preferred by the taxpayer over depreciation of successful capitalised development expenditure.'

This has got to be weighed up against the greater risk that:

'businesses may be incentivised to complete projects that (ignoring tax) have been discovered to be inefficient, simply to avoid black hole treatment of sunk capital expenditure'.

My view is that abandoning inefficient projects is a prudent thing to do. It's a hard thing to do. A bit like drowning puppies. But it has to be done. I can't see any perverse incentive in doing that.

Further steps

The IRD is looking for submissions on the proposed reforms by 17 December 2013. I expect that feedback on the reforms will be largely positive from those doing R&D. Supporting business growth and innovation by changing 'black hole' tax treatment of R&D expenditure can't be a bad thing.


Photo courtesy of author Niall Kennedy under Creative Commons license.

New Zealand prepares for SAP & SEP

Intellectual property law is replete with acronyms. Commerce Minster Craig Foss recently added two more. We are now going to have a single application process (SAP) and a single examination process (SEP) for New Zealand and Australian patent applications.

The press release is a little bit tabloid in that the title 'Single trans-Tasman patent application approved' doesn't quite match the story. There is no single patent application. Merely a process for filing two applications.

A recent Cabinet paper and Regulatory Impact Statement (Cabinet paper) seeks approval to implement the SAP and the SEP for New Zealand and Australian patent applications, and to develop a bilateral arrangement between the two countries.

Single Application Process (SAP)

New Zealand and Australia are two separate countries. They have separate application processes. Under the new regime, patent applicants will continue to file separate patent applications in each country if that is what they want to do.

If the SAP goes ahead, patent applicants wanting to cover both countries will have the option of using a single SAP portal in New Zealand or Australia to file a pair of applications. The New Zealand application will be referred to the Intellectual Property Office of New Zealand (IPONZ) for examination. The Australian application will be referred to IP Australia for examination.

One of the benefits of the SAP stated in the Cabinet paper is cost savings to applicants. The information required to file the pair of applications will only need to be provided once [para 99]. We are told that this will provide data entry time savings to patent attorneys which may result in cost savings to applicants through reduced patent attorney fees [para 100].

There will be set-up costs and ongoing administrative costs that are not quantifiable [para 101]. Taxpayers are reassured that these costs are going to be recovered through increased patent application fees. Details of fee increases are not yet available, but are an important factor in whether or not there are in fact cost savings to applicants.

Single Examination Process (SEP)

If implemented, the SEP will see corresponding applications referred to a single patent examiner who will examine both applications simultaneously. The examiner could be based in either New Zealand or Australia [para 26]. The applicant does not choose. The examiner assigned to a pair of applications will be determined by agreement between IP Australia and IPONZ [Recommendations #3).

The SEP ends when the pair of applications has been accepted or refused [para 27]. All processes following acceptance or refusal (including grant) will be handled separately by each office. Hence there will still be separate New Zealand and Australian patents granted.

The Pilot Programme

The SAP is likely to be rolled out in 2015. An SEP pilot program will run for 18-24 months once the SAP is implemented. The SEP pilot program will then be subject to a review to determine whether it is worthwhile to implement fully. We will then be either fully implementing SEP or pulling the plug.

We haven't been told how corresponding applications will be selected for the SEP pilot program. The Cabinet paper states that the pilot program will involve 'a small number of corresponding applications' [128] and that it will run long enough to 'ensure that there are sufficient applications processed to provide meaningful information' [129].

There is no detail available yet about the selection criteria that will be applied to pairs of patent applications in order to enter the SEP. Will patent applicants elect to enter the SEP? Or will SEP be imposed on them? Is filing under SAP a pre-requisite for entry into the SAP? Or are they independent?

The legislation proposed empowers IP Australia and IPONZ to proceed without applicant consent. I guess it will depend on the level of interest in SEP. If there is not a large uptake then pairs of applications will be placed in the SEP program against the wishes of applicants.

Observations

About one third of Australian patent applications have a corresponding application in New Zealand. Examination timeframes in Australia are longer than those in New Zealand. IP Australia will be able to utilise IPONZ examination resources 'to ensure operational efficiencies can be maintained at least over the medium term' [para 31].

So which cases will IP Australia offload to IPONZ?

The New Zealand Patents Act 2013 will impose a change in examination to include examination for inventive step as well as novelty. IPONZ examiners will require significant training to examine patent applications under the new legislation [para 34]. This would suggest that suitable candidates for SEP would be 'easy cases', national phase entries with no inventive step issues.

As noted in the Cabinet paper, there will be significant differences between New Zealand and Australia on the criteria for granting a patent. The New Zealand Act contains legislative exclusions for methods of medical treatment, methods of diagnosis and computer programs. The claims in each of a pair of patent applications may be completely different.

I always thought that the invention is defined by the claims. A pair of applications with different claim sets relate to a different inventions. This would suggest that suitable pairs of applications are ones that claim subject matter in chemical, mechanical and electrical art areas that do not fall within New Zealand's excluded categories.

A further point to consider is that IPONZ views the SEP as an opportunity to leverage off IP Australia's examination experiences. This in turn will make it easier to bring IPONZ examiners up to the requisite standard for examining patent applications [para 113]. IPONZ intends to hire new examiners to deal with increased work volumes [para 118].

Patent applicants with a pair of applications will need to weigh up the benefits of entering the SEP program against the risk that their patent applications will be used to train IPONZ examiners. I can certainly see the benefit for IP Australia and IPONZ of SEP. It is the advantage for patent applicants that is not immediately clear to me. The SEP pilot program will be an interesting one to watch.



Photo courtesy of author Garfield Anderssen under Creative Commons license.

New Zealand bans patents for software

The New Zealand Government recently put in place a new Patents Act. One of the hotly debated topics was the extent to which patent protection should be available for computer-implemented inventions. These types of inventions are often referred to in mainstream media and anti-patent communities as "software patents".

So have we banned software patents? Or have we banned patents for software? There is a difference. The reporting so far on the new law is a little unclear.

The Washington Post reported that "New Zealand voted to ban software patents". Another post on ZDNet announced that New Zealand has "passed a new Patents Bill that will effectively outlaw software patents".

The Wall Street Journal reports that New Zealand will no longer grant patents for software. World Intellectual Property Review dismisses media outlets that  have reported the changes to the bill as an outright ban on patenting software. FOSSpatents acknowledges that the "movement pushing for abolition [of software patents is declaring] victory, that's not only inaccurate but also an irresponsible thing to do".

Despite conflicting opinions on the issue, one simple fact remains - New Zealand will continue to grant patents for inventions that make use of or involve a computer program.

The current law

Until the new law comes into force, inventions will be assessed under the Patents Act 1953 (the old act). The old act defines an invention as any "manner of new manufacture". What is patentable subject matter and what is not patentable subject matter is defined by case law and decisions of the Commissioner of Patents.

The Hughes Aircraft Company decision established the appropriate test for patentable subject matter in 1995 as: … whether each of the claims define a method which, either directly or by clear implication, embodies a commercially useful effect.

The Haddad decision held that the term "manner of new manufacture" implies a situation which involves some sort of interaction with a real entity or which achieves a tangible product or result.

A blanket exclusion

A draft Patents Bill was released for public consultation nearly 10 years ago in December 2004. It did not restrict or exclude patents for computer-implemented inventions. A new government introduced the Patents Bill to Parliament in July 2008.

The Patents Bill was referred to the parliamentary Commerce Select Committee which then called for submissions. Many of the submitters were from the New Zealand Open Source Society (NZOSS) or their supporters who wanted an exclusion for computer programs. What followed would later be acknowledged in Parliament as a departure from the "formatted process".

Many submissions urged a consistency of approach with other markets. The NZOSS for example suggested that "New Zealand could follow the European lead in patent law".

The committee published a revised Patents Bill in March 2010. The revised bill included new clause 15 (3A) simply reading "a computer program is not a patentable invention".

The view of government officials was that the committee intended this to be interpreted similarly to the interpretation of similar exclusions in the legislation of other countries, in particular the United Kingdom and other European members. This would allow computer programs to be patented if they produce a "technical effect".

There was understandable concern that the wording proposed by the committee did not clearly express the committee's intention. There was also concern that the courts would not interpret the restriction in the manner intended by the committee.

It is no surprise to see the most vocal supporters of the controversial clause acknowledge in Parliament that the new law is better of without it.

The 'as such' restriction

The government introduced supplementary order paper SOP 120 to better align the proposed wording of the exclusion with:

• the intention of the committee
• New Zealand's international obligations
• overseas precedents.

The new clause had a European look about it as it excluded computer programs "as such". There was some concern from some of those submitters who had asked the Commerce Select Committee for an exclusion for computer programs. In order to address these concerns the government introduced supplementary order paper SOP 237. New clause 10A deals with computer programs.

Interpretation of the new restriction

As I said in the World Intellectual Property Review,

“Minister Foss has given a clear direction to the Commissioner of Patents and the New Zealand courts to apply the steps of the Aerotel test established by the English Court of Appeal. The Minister intends New Zealand practice to follow the Aerotel test, and subsequent English jurisprudence that applies the test, when considering patent applications involving computer programs".

The Intellectual Property Office of New Zealand (IPONZ) will apply the Aerotel test, at least initially. Subsequent English jurisprudence will also assist us. The UK courts for example have allowed patents for a computer programmed to work better (Symbian), a better way of designing drill bits (Halliburton), a technique for monitoring the content of electronic communications (Protecting Kids the World Over), and organisation of touch screen devices (HTC Europe v Apple).

A ban on software patents?

So, the question remains, have we banned software patents? Or have we banned patents for software? There is still some confusion on this issue.

Nowhere is this more evident than in the final Parliamentary debates. There was an observation made that software code is a mathematical algorithm, like a phrase in a book or a piece of music. I have seen similar sentiments echoed within anti-patent communities.

This is an interesting observation, but it has nothing to do with patent law.

As I said in the Wall Street Journal,

“The way that I look at it, is a computer program and a processor are just raw materials like plastic, like wire, like wood and you are not patenting raw materials but you are patenting what you’ve made with those materials”.

It is the underlying technical function of the code that is patentable, rather than the code itself. That was always the case with the old law. That will continue to be the case with the new law. New Zealand will continue to allow patents for technical functions that software code causes a processor to perform. We will continue to grant patents for computer-implemented inventions.

So when we talk about software patents, if we actually mean computer-implemented inventions, we haven't banned them at all.

Photo courtesy of author opensource.com under Creative Commons licence.

The halftime report

Is it July already? It's time to reflect on which PatentBuff posts published this year have been most popular. There's a real range here.

Once again, patent law reform and regulation of the patent profession are hot topics. Also up there are examples of case law on the patentability of software and business methods in the United States, Canada, Australia and New Zealand. Copyright has also been in the spotlight with our three strikes law and our ban on parallel imports of films.

Pitney Bowes denied printing patent: Is printing information on a mail piece a patentable invention? Or is it an unpatentable abstract concept? The United States Patent Trial and Appeal Board found that this type of subject matter is patent eligible but in this case was obvious.

Brave new patent law: In January this year the Patents Bill jumped to Number 2 on the Order Paper. My optimistic predictions were that the Committee of the whole House would consider the bill within the next few weeks. I was wrong. We all were. I don't make those sort of predictions any more.

The last of the patent attorneys: Patent attorneys are a rare breed in New Zealand. Under a new regulatory framework announced this year we are going to become even scarcer. Or maybe we are simply going to see fewer registered patent attorneys who do not do patent attorney work.

Research Affiliates and the unpatentable index: A judgment from the Federal Court of Australia sets out some new approaches to assessing subject matter eligibility for business method claims. These approaches are based on the product of the claimed method, the description of that method in the body of the specification, and the extent of computer implementation.

Canada's purposive proposal: A few years ago the Canadian Federal Court of Appeal issued a decision involving Amazon.com and the company's 'one-click' patent application. As a result of the decision, the Canadian Intellectual Property Office (CIPO) has put in place a new approach for computer-implemented inventions.

Ten years on: This year I passed a significant milestone. I have spent ten years as an equity partner in an IP law firm. So what's changed over the last decade? My take on social networking, communication, virtual law firms, alternate business models, and the multi-generational workforce.

The national phase workaround: New Zealand is in the process of overhauling 60-year old legislation. The new Patents Bill is intended to create a balanced patent system that will protect inventions and encourage innovation. One of the challenges imposed on the Intellectual Property Office of New Zealand (IPONZ) is to put in place a new computer system that will handle both sets of laws seamlessly. IPONZ has been providing workarounds to address the inevitable glitches in their system. One glitch is that the new system is unable to handle cases in which an applicant wishes to enter national phase before publication of the international specification.

Curtains for the Cinema: New Zealand has a way of preventing cinemas from having to compete with different formats such as DVD, Blu-Ray, Pay-Per-View or Free-To-Air. The Copyright Act bans parallel importation of films into New Zealand for nine months from the international release date. Government officials are likely to recommend removal of this mechanism. Does this mean curtains for the cinema?

Insurance method patent okay says IPONZ: In a decision published this year, the Intellectual Property Office of New Zealand (IPONZ) allowed a patent on a technique for providing data insurance. How would this invention be treated if it had been considered under the proposed law that will introduce a European-style "as such" restriction on the patentability of computer programs?

Copyright Tribunal takes Man Down: This year the music industry won its first copyright case under the New Zealand three strikes law. A Rihanna fan has been rapped over the knuckles for unlawfully downloading Man Down. What is interesting about this decision is that we now have a sense of what sort of monetary penalties an unsuccessful Respondent will have to pay.

Photo courtesy of author DragonWoman under Creative Commons licence.

Beware the moonlighting bureaucrat

In my last post I posed the question of whether we would see New Zealand patent examiners moonlighting as patent attorneys. This idea is not as far-fetched as it sounds. Consider the following example. I am not making any of this up.

The applicant

A few years ago an inventor in a rural New Zealand town came up with an invention for a spray tank assembly for an all terrain vehicle (ATV). He prepared and filed a patent application in New Zealand through a reputable patent attorney firm.

The inventor had a year within which to decide where to file further patent applications for his invention. The records show that he filed a PCT international application with the Intellectual Property Office of New Zealand (IPONZ).

There was obviously a change in advisor at some point between the filing dates of the New Zealand application and the PCT application. The inventor named someone else as address for correspondence on the PCT Request form.

The application

We can quickly see where things start going wrong. The PCT Request form lists a total of 21 pages filed. These include 3 request pages, 11 description pages, and 7 drawings pages. No claims pages. No abstract page.

WIPO published the PCT application with the International Search Report (ISR) attached. The international examiner managed to produce some prior art even though there were no claims to search.

The examiner noted in the International Preliminary Report on Patentability (IPRP) that '[t]here is no suitable claim on which I can base a search or opinion'. In fact, the examiner went on to state that 'the application has no claims'.

The PCT application has lapsed. Because the PCT application was published there is no scope for the inventor to secure patent protection for the invention described in the published application. Anywhere.

So who would encourage an inventor to file a PCT patent application with no claims? The inventor has forked out several thousand dollars in PCT patent office fees and now has nothing to show for it.

The advisor

Various publications describe the advisor as an IP strategist, one of the world's leading intellectual property experts, and an industry expert. There is no record of the advisor ever appearing on the New Zealand Patent Attorney Register.

The advisor authored a document while under contract to IPONZ to 'explore the viability of a support and advisory service for SMEs'. One of the proposals in the document, if implemented, would see IPONZ offer through its website:

• IP search;
• designs search and commentary;
• patentability search;
• patent validity search; and
• freedom to operate search (all IP).

IPONZ made it clear that the views expressed, and any findings outlined, in the report are those of the author and not IPONZ. As far as I know, IPONZ has not implemented any of the above options.

What now?

There are quite a few observations we can make here. One is that a PCT patent specification should have claims. Most patent attorneys know that. Some IP strategists and leading intellectual property experts do not.

It is important when engaging an IP advisor to reassure yourself that they know what they are doing. Especially if they are a moonlighting bureaucrat. The advice may be cheap or even free. But what if it means losing potentially valuable IP rights forever? I guess it really is a case of getting what you pay for.

Photo courtesy of author Nick. K. under Creative Commons licence.

A trans-Tasman approach to patent examination

Two years ago the New Zealand and Australian Governments announced a faster, cheaper and more streamlined trans-Tasman process for securing patent rights in New Zealand and Australia. A single patent application and examination process for both countries, we were told, will remove duplication, drive efficiencies and reduce costs.

Further details of the plan have now emerged with the introduction into the Australian Parliament of the Intellectual Property Laws Amendment Bill 2013. Here is my take on the main changes.

The Moonlighting Examiner

Patent examiners are in a privileged position when it comes to inventions. They get to see a lot of sensitive material before it is publicly available. In New Zealand we have section 6(3) of the Patents Act 1953 that says:

[e]very officer and employee of the Patent Office commits an offence, and shall be liable on summary conviction to a fine not exceeding 20 pounds, if, outside the scope of his official duties, he drafts or prepares a specification or drawing or any part of a specification or drawing or makes a search of the records of the Patent Office for the use or information of any applicant or intending applicant for a patent under this Act.

The explanatory note says that the equivalent provision in Australia, section 185, is outdated and no longer required. We are told that such conduct would breach the APS Code of Conduct in the Public Service Act 1999, and could be dealt with appropriately under that Act.

The Bill will remove the Australian provision. It will be interesting to see if similar changes are made to the New Zealand Act. It is not uncommon for New Zealand examiners to qualify as New Zealand patent attorneys while working at IPONZ. Some continue to work at IPONZ after qualification. Will we see New Zealand patent examiners moonlighting as patent attorneys?

The Electronic Mailbox

At the moment an address for service must be a physical or postal address in Australia, and the permitted means of service are by post or personal delivery to that address.

Revised section 221(1) will permit an address in Australia or New Zealand to be an address for service of documents. Presumably a patent applicant will be able to maintain separate addresses in each country if that is what the applicant wants.

It looks like we will be sticking with post or personal delivery for now. But there is a specific provision to allow an electronic address to be an address for service in Australia or in New Zealand. New section 221(2) says that 'an address includes a reference to an electronic address'.

The question of whether a particular electronic address is in Australia or in New Zealand is to be 'determined in accordance with the regulations', according to new sections 221(3) and 221(4).

That will be an interesting one to watch.

The New Zealand Delegate

Patent examiners are usually referred to as 'examiners' for those of us in the profession and 'advisors' for those working at the Intellectual Property Office of New Zealand (IPONZ). The Bill introduces a couple of new labels. A 'New Zealand patents official' administers New Zealand patent law. A 'New Zealand delegate' is a New Zealand patents official 'to whom the Australian Commissioner delegates powers and functions under the Patents Act'.

A patent examiner in his/her role as a New Zealand delegate will be able to examine Australian patent applications while resident in New Zealand. There will be some teething problems. The Bill contains some provisions to deal with these.

A New Zealand delegate must, if so required, exercise a delegated power or perform a delegated function under the direction or supervision of the Commissioner or an employee in the Patent Office specified in an instrument of delegation. This will ensure that New Zealand delegates can be given appropriate guidance by Australian patents officials.

There may also be situations where an error or omission by a New Zealand delegate of the Australian Commissioner causes a deadline to be overlooked. There are new subsections to permit the Australian Commissioner to extend the time for doing a relevant act if the relevant act or the error or omission took place in New Zealand.

Protection of New Zealand Delegates

New section 20(3) will give New Zealand examiners immunity from liability in case they mess up examination of an Australian patent application. The example given in the explanatory note is where:

a New Zealand delegate of the Australian Commissioner does not accept an application for grant of a patent when examining it, owing to a mistaken understanding of the invention being claimed. Later on, a Deputy Commissioner in Australia hears the applicant and accepts the application. The applicant is inconvenienced by the delay in the grant of the patent. It is immaterial that the New Zealand delegate‘s decision is made in New Zealand: the New Zealand delegate will have the same immunity in Australia as an Australian delegate.

I expect that this limitation of liability would apply equally where a New Zealand examiner has a mistaken understanding of Australian law and practice.

The One-Stop Shop

New section 214(2) will allow applicants to file 'prescribed documents' required for Australian patent applications with one of the specified New Zealand patents officials. This will save applicants having to file the same document in both Australia and New Zealand. One example given is where an applicant applies for grant of a patent for the same invention in each country.

There are time differences between the two countries. What time is an Australian document filed in New Zealand deemed to have been filed? All we know from new section 214(3) is that the time will be 'ascertained in accordance with the regulations'. There is a hint in the explanatory note that the time of filing an Australian document with the New Zealand patents officials will be deemed to be the time in Canberra, Australia.

Currency trading

New section 227(6) says that a fee required for an Australian patent or application can be paid in New Zealand currency to a New Zealand patents official instead. An example is where a patent applicant files both New Zealand and Australian patents with the New Zealand Commissioner. The applicant would be able to pay the New Zealand filing fee for the New Zealand patent application and 'the New Zealand dollar amount' of the Australian filing fee.

Similarly, there will be provisions for fees required for a New Zealand patent or patent application to be paid in Australian currency to IP Australia.

So how is the New Zealand dollar amount of an Australian fee, or the Australian dollar amount of a New Zealand fee, going to be calculated? Again, the details are being left to the regulations.

New section 226(7) says that 'the amount of the fee in New Zealand currency is to be ascertained in accordance with the regulations'. Senior officials in IP Australia and the New Zealand Ministry of Business Innovation & Employment are going to establish an instrument for setting these amounts.

What will probably happen is that IP Australia will maintain a schedule of Australian fees and Australian dollar amounts of New Zealand fees. IPONZ will maintain a schedule of New Zealand fees and New Zealand dollar amounts of Australian fees.

New Zealand and Australia have separate currencies with floating exchange rates that are independent of each other. I expect a few canny applicants will select the country in which they pay patent office fees based on the exchange rate of the day. Will this turn patent applicants into amateur currency traders?

Perhaps the proponents of this regime are right. Maybe it will reduce costs for applicants and other users of the patent system.

Further steps

The Bill that will enable this regime still needs to go through due Parliamentary process. Once through we should start seeing some regulations coming out of Australia setting out in more detail how this regime is going to work in practice.

In the meantime you can read further details about the process, a less than complimentary report on the proposed regime, and a joint study by the Productivity Commissions of both countries.

Photo courtesy of author Garfield Anderssen under Creative Commons license.

Insurance method patent okay says IPONZ

In a decision published recently, the Intellectual Property Office of New Zealand (IPONZ) allowed a patent on a technique for providing data insurance.

It has been standard practice for some time to make periodic backup copies of stored data to mitigate financial and similar harm caused by data loss. However, there are some problems with existing techniques.

New Zealand patent 563320 recognises that costs are incurred in retrieving data from a remote location's backup copy and transferring it back to the original site. A further problem is where the backup copy may not be current, may have been damaged or corrupted, or may never have been created properly in the first place.

In Hodgkiss et al v Monument Insurance (NZ) Limited [2013] NZIPOPAT 8 (8 April 2013), the opponent Monument Insurance failed to persuade the Hearing Officer that the patent claims did not relate to an invention.

The patent claims

Claim 1 of the patent application reads as follows:

1. A computer-implemented method for providing data insurance, comprising: 

storing by a first processing device, data of a third entity on a storage medium of the third entity; 

creating an agreement between a first entity and a second entity to provide data protection service to a third entity, wherein the first entity arranges for a data protection service to be provided by the second entity for the third entity’s data stored on a storage medium of the third entity; 

creating an insurance agreement between the first entity and the third entity, because the data of the third entity was stored on the storage medium of the third entity, that authorizes the third entity to use the data protection service provided by the second entity for the third entity’s data stored on the storage medium of the third entity without charging the third entity for use of the data protection service provided by the second entity; 

storing, by a second processing device, an electronic backup copy of the third entity’s data, as required by the data protection service agreement, on a storage medium of the second entity such that the electronic backup copy of the third entity’s data stored on the storage medium of the second entity is insured against loss according to the insurance agreements; and 

upon loss of the data stored on the storage medium of the third entity, providing the backup copy of data from the second entity to the third entity in an attempt to restore the third entity’s data; and 

providing compensation from the first entity to the second entity for the data protection services.

Independent claims 12 and 22 are of a similar breadth, directed to a data loss mitigation tool and an insurance system respectively.

Is it an invention?

The Hearing Officer considered whether the invention claimed is a manner of manufacture within the definition of 'invention' in section 2 of the New Zealand Patents Act 1953.

The High Court of Australia in National Research Development Corporation v Commissioner of Patents ("NRDC") [1959] HCA 67; (1959) 102 CLR 252 (16 December 1959) established a patentability requirement of ‘a mode or manner of achieving an end result which is an artificially created state of affairs of utility in the fields of economic endeavour’.

The Hearing Officer noted at [35] that Patent Office decisions in New Zealand have followed NRDC to:

allow many different claims to inventions which do not fall easily within the scope of the ordinary meaning of 'manufacture', including allowing claims to 'computer-implemented' methods in a number of applications.

The appropriate test, as set out in the Hughes Aircraft decision is:

...whether each of the claims define a method which, either directly or by clear implication, embodies a commercially useful effect.

The Hearing Officer referred to Haddad's Application which clarified that:

the term [manner of manufacture] still implies a situation which involves some sort of interaction with a real entity ... or which achieves a tangible product or result.

At [47] it was noted about the patent under consideration that:

there appears to be a resulting effect which appears to fall within guidance given by ... the Assistant Commissioner's decisions in Hughes Aircraft and Haddad.

A further point of interest was a response to one of the opponent's arguments. The opponent submitted at [43] that mere computer implementation of a contracting process cannot confer patentability, relying on the Cool 123 decision. That decision notes that:

...it seems to me that it cannot be an 'invention' or 'manner of manufacture' to replace the previously conventional means (telephone, email or post) by the known SMS technology whose known properties or characteristics make it suitable for this use.

The Hearing Officer found at [44] that he wasn't persuaded that the present invention amounts to mere computerisation of a known process.

What next?

This invention was assessed under the current patent regime. There is currently a proposal to change New Zealand patent law to introduce a European-style "as such" restriction on the patentability of computer programs.

Under clause 10A of the proposed law a claim in a patent or an application relates to a computer program as such 'if the actual contribution made by the alleged invention lies solely in it being a computer program'.

So how would this invention be treated if it had been considered under the proposed law?

The Hearing Officer's comments give an interesting clue. The statement that this invention is more than a mere computerisation of a known process suggests that the actual contribution lies in more than just a computer program. It is therefore likely that this invention, and other inventions of this nature, would be patentable under the new law as well.

Maintaining a global patent portfolio

Building a strategic patent portfolio requires tough decisions to be made all the time. In which countries do I file patent applications? Which patent applications should I abandon? Which issued patents should I maintain?

In a previous post I outlined one corporate strategy. You view country selections as a set of buckets that are grouped to define the different business approaches to the countries in each bucket.

Another corporate approach is to apply tools from optimisation theory to patent lifecycle decisions. There are four specific factors that must be considered in order to optimise a patent portfolio across various countries. These are:

• geographic importance
• strength of the existing portfolio
• diversity across technology areas
• filing/management costs.

Each of these factors are assigned specific parameters or weights that are then used as inputs to an optimisation model.

Importance of geographic region

Factors to consider within a geographic region are the proliferation of relevant products, strength of the IP regime, and regional holes.

A patent applicant should seek protection in countries most relevant to its products and technologies. It is therefore important to file patent applications in all geographic regions where infringing products are made, used or sold.

In order to prioritise individual countries it is important to consider:

• expected revenue in a country for the relevant products;
• whether a country is a major manufacturing centre for relevant products;
• whether a country is an import/export centre for relevant products.

The strength of the IP regime within each country is important. There is more value in securing patent protection in a country with a strong IP regime than securing patent protection in a country with a weaker regime.

There are a few ranking engines around that rank IP regimes of various countries based on factors such as legal enforcement, judiciary independence, average length of litigation, and so on. Examples include the Global Intellectual Property Index (GIPI) and the Intellectual Property Rights Index (IPRI).

Another factor in country selection is whether a country is helping a company fill a gap in a particular region where it has no protection otherwise. These gaps are known as regional holes.

Countries are assigned relative weights to reflect relative importance in the above areas.

Strength of the existing portfolio

It's important to consider the strength, in the sense of size and value, of the portfolio that already exists in a jurisdiction. Consider a case where a company has many patents in Country A but only a few in Country B. The marginal value of an additional patent filed in Country B is potentially higher than in Country A.

Diversity across technology areas

The most fundamental and valuable inventions in any given technology area are typically protected early on. Different elements of the technology are invented as the technology evolves. Companies need to recognise such trends and ensure there are no time gaps in their portfolio holdings for any technology area.

Cost of obtaining patents

The cost of obtaining patents varies across countries, although the cost does tend to follow the same general pattern. There is the initial cost of preparing the patent specification. Following initial drafting, there are the following cost steps in each country:

• Filing - cost of filing the application including professional fees, Patent Office fees and translation costs
• Prosecution - cost associated with examination reports that must be dealt with to secure grant.
• Granting - cost payable to Patent Office for granting a patent
• Annuities - fees paid to Patent Offices periodically to keep a patent or patent application alive

In most countries the cost of prosecution is much higher than during any other phase in the patent's lifetime. This is also the time when the uncertainty associated with a patent's value is also the highest. The prosecution stage is a good time to assess whether continuing with a patent application in a given country is worthwhile.

The optimisation model

Having considered and assigned weights to geographic importance, strength of the existing portfolio, diversity across technology areas and filing/management costs, a company is then in a position to formulate and solve an optimisation problem.

Each company will have its own optimisation model. However this is defined, the process provides a company with a rational and objective approach to the strategic management of patent portfolios.


Photo courtesy of author Benjamin Bunch under Creative Commons licence.

Ten years on

Last week I passed a significant milestone. I suddenly realised that I have spent ten years as an equity partner in an IP law firm. So what's changed over the last decade?

Social networking

One of the most significant changes is the emergence of social media tools. It seems strange to think back to a time when my LinkedIn and Twitter accounts and this blog were not part of my daily professional life.

The accessibility of social media means that good content reaches across geographic and industry sectors in a way that I could not have anticipated. It is not a substitute for traditional channels of communication. It is simply a set of tools that increases the reach of a good message. It also helps to raise a professional profile.

Social media has also changed the way that we use traditional channels of communication. At some point in the last few years I stopped getting my news from the traditional morning newspaper. I now look to social media, online publications and RSS feeds for anything that might be newsworthy.

A few years ago it was seen as rude to peck away at a smartphone during a presentation. Now it is almost encouraged. The emergence of live tweeting means that many of our key messages in presentations are designed to be shared in 140 character tweets by the audience.

Communication

Ten years ago our preferred channel for time-sensitive communication with our clients was the fax machine. Before that it was the telex. At some point over the last ten years our default channel for most clients changed to email. Other clients contact us by SMS text message, social media direct message, through our website or through sophisticated secure portals.

I guess we are still providing the same practical plain English advice we always have. It's just that the channels are different now.

Our interactions with the Intellectual Property Office of New Zealand (IPONZ) have changed too. It seems strange to think that ten years ago there was a late filing box in an industrial area on the outskirts of Wellington city. We used it to physically file time-sensitive applications and correspondence once the Intellectual Property Office of New Zealand (IPONZ) closed its doors for the day.

Most of our correspondence with IPONZ now is electronic. We still exchange physical documents but this tends to be the exception rather than the rule. Sometimes IPONZ systems are down. Sometimes the material in the documents is too sensitive or too large for IPONZ networks.

Virtual law firms

There is a trend in many professional service industries to work remotely from home or a virtual law office. The perceived benefit is to permit flexible work hours and foster a better work/life balance. Where you need to recruit specialist staff it can also widen the pool of available candidates.

Some of our work is now done out of the office on smartphones and tablets. However, most of our work continues to be done in a physical office surrounded by real workmates.

There hasn't been a big move here toward virtual law firms or working remotely from home. Maybe this is because our work/life balance is already pretty good. Maybe it is because our physical offices in Auckland, Wellington and Sydney are in desirable metropolitan areas where talent wants to live.

Alternate models

Patent attorney firms still have a monopoly on core patent attorney services. Section 103 of the Patents Act 1953 says that only patent attorneys can

• apply for or obtain patents in New Zealand or elsewhere;
• prepare specifications or other documents for the purposes of this Act or of the patent law of any country; and
• to give advice other than of a scientific or technicial nature as to the validity of patents or their infringement.

Clients are able to seek assistance in other areas of the intellectual property field from professionals who are neither patent attorneys nor lawyers. Searching, filing, renewals management and commercialisation are examples.

Even Patent Offices are getting involved. IPONZ for example ran an SME Pilot Programme providing free services to the public. The intention was to provide

'an IP audit tool, pre-application searches, competitor profiles, information on licences and licensing, guide to international best practice, assistance with the on-line application process and model agreements [and] ... confidential consultation'.

Some of these organisations provide a useful cost effective service and have a place in New Zealand's innovation framework. Some do not. It is important for clients to know exactly what they getting and what they are not getting. And what remedy is available when things go wrong.

Multi-generational workforce

We have always had a multi-generational workforce. A healthy workplace has younger people joining and older people leaving what is essentially an otherwise stable environment.

Over the last 10 years we have seen our traditionalists (born 1927-1945) and baby boomers (born 1946-1964) give way to Generation X (born 1965-1980) and Generation Y (born 1981-1990). Pretty soon we will have Generation Z (born 1991-2012) knocking on our doors.

Each new generation of workers brings with them a different perspective on professional life, giving rise to new workforce dynamics and challenges. Bring it on.


Photo courtesy of author erin m under Creative Commons licence.

The last of the patent attorneys

Patent attorneys are a rare breed in New Zealand. Under a new regulatory framework announced this week we are going to become even scarcer. Or maybe we are simply going to see fewer registered patent attorneys who do not do patent attorney work.

The Governments of Australia and New Zealand have announced an arrangement to give effect to a joint regulatory framework for patent attorneys to register and practice between Australia and New Zealand. The two governments are pursuing a Single Economic Market (SEM) agenda which aims to create a seamless trans-Tasman business environment.

The patent attorney profession is a small profession. Regulation of this profession is seen as low hanging fruit to demonstrate progress toward stronger relationships between Australia and New Zealand.

Patent Attorney Services

Under the new regime only registered patent attorneys will be able to provide 'patent attorney services' in Australia and New Zealand. The term 'patent attorney services' means the undertaking of any of the following services in Australia or New Zealand for gain-

• applying for or obtaining a patent in Australia or New Zealand or elsewhere on behalf of another person;
• preparing or amending specifications or other documents for the purposes of the patent law of Australia, New Zealand or any other country on behalf of another person; and
• giving advice other than of a scientific or technical nature as to the validity of patents or their infringement.

A patent attorney wishing to practice in Australia or New Zealand must be registered on a single register. There will no longer be separate registers for Australian patent attorneys and New Zealand patent attorneys.

We are not sure what the new register is going to be called yet. One name floating around is a 'trans-Tasman register', an obscure reference to the Tasman sea that separates the two countries.

Employment requirements

Under the current New Zealand system a prospective patent attorney needs three years employment by a patent attorney in New Zealand or by the Intellectual Property Office of New Zealand (IPONZ). It is not uncommon for New Zealand patent examiners to seek registration as a patent attorney.

The new regime requires a minimum of 2 years employment in a position or positions providing experience in:

• searching patent records;
• preparation, filing and prosecution of patent applications;
• drafting of patent specifications; and
• providing advice on interpretation, infringement and validity.

Employment by IPONZ may satisfy some but not all of the new employment requirements. We are therefore likely to see IPONZ producing fewer registered patent attorneys.

Academic qualification

Academic requirements in New Zealand are dictated by market forces rather than legislation. Registered patent attorneys who provide patent attorney services generally have a technical qualification.

Under the new regime there will be a legislative requirement to hold a tertiary qualification in a field of technology that contains potentially patentable subject matter.

New Zealand practitioners who do not provide patent attorney services (for example trade mark practitioners) do not usually hold technical degrees. Nevertheless, these practioners historically sought qualification as a registered patent attorney for career advancement. For example, in order to join a New Zealand patent attorney partnership you need to be a registered patent attorney yourself.

Under the new regime we will see fewer trade mark practioners qualify as patent attorneys due to the new academic qualification requirement.

Non-resident attorneys

There is no residency requirement for New Zealand patent attorneys. The New Zealand Patent Attorney Register shows that there are New Zealand patent attorneys resident not only in New Zealand but Australia, Germany, Hong Kong, Ireland, Singapore, Switzerland, the United Kingdom and the United States.

Most of these patent attorneys are New Zealand citizens who have worked for a patent attorney firm in New Zealand for the requisite 3 years before heading overseas.

There is no proposal to introduce a residency requirement in the new regime. However, there is a need to ensure that patent attorneys are properly trained by patent attorneys in Australia or New Zealand. It is possible that we will see a requirement for employment by a patent attorney in Australia or New Zealand. This is what is already in place in New Zealand.

What next?

It is difficult to predict when this framework will come into effect. The regulation of the profession is covered in the Patent Attorneys Bill which was divided out of the Patents Bill. The regulatory framework provisions were pulled out of the Patents Bill so that the Patents Bill would not be held up.

Ironically, we are now waiting for the Patents Bill to proceed before we can implement the legislation necessary for the regulatory framework. It is likely that we will see an amendment to the New Zealand Patents Bill to add the regulatory framework provisions back in.