Ministry of Economic Development - Discussion Paper: Boundaries to Patentability

On 2 April 2002 the Ministry of Economic Development released a discussion paper on reform of the Patents Act 1953. The paper looks at how the Patents Act 1953 might be changed to take account of social and technological developments that have occurred since the Act was passed. Issues discussed include:

(a) The definition of invention;

(b) The patentability of computer software and business methods;

(c) The patentability of methods of medical treatment of humans.

Reasons for reform

The paper asserts that the criteria for granting a patent under the Patents Act 1953 (“the Act”) are not strict enough to ensure that patents are only granted for real innovations, and are out of step with the criteria applied internationally. The Act also does not address the moral and Maori issues that have arisen since it was passed.

Definition of invention

The current definition of invention is essentially the same as that in the UK legislation up until the enactment of the United Kingdom Patents Act 1977.

New technologies in areas such as biotechnology, medical treatments, computer software and business methods have tested the limits of the current definition. One issue is whether the Act should specifically state that some inventions should be excluded from patent protection. Any changes to New Zealand’s patent laws in this regard must still be consistent with Article 27 of TRIPs.

Possible options available to the Ministry are:

No change. The paper takes the view that this option is not viable, particularly as the Government has accepted the recommendation of the recent New Zealand Royal Commission on Genetic Modification that the Act include a specific exclusion of the patentability of human life.
Retain current definition, with some exclusions. The paper suggests that if this option were adopted, the Act should make it explicit that the current “judicial exclusions” are to remain - the concern is that any list of exclusions may be construed as an exhaustive list.
No definition of invention. This approach is used in the European Patent Convention and therefore the United Kingdom Patents Act 1977.
Keep current definition, with additional criteria, with or without specific exclusions. The special criteria of novelty, inventiveness and industrial applicability would be added. This is essentially the same approach as is used in the Australian Patents Act 1990. That Act also specifically excludes from patentability human beings and biological processes for their generation.
Repeal current definition and replace it with an alternative definition, with or without specific exclusions.

Maori and the Patenting of Biotechnological Inventions

The appropriateness of current intellectual property legislation from a Maori point of view has been the subject of extensive consultation previously.

In relation to the review of the Act, the paper explores the following possibilities:

(a) Providing for consultation with Maori when making decisions on patents based on traditional knowledge of indigenous genetic material;

(b) Amend the Act so that Maori have standing to seek revocation or re-examination of a patent;

(c) Examine Maori concerns on the genetic integrity of non-indigenous flora and fauna along with similar claims based on religious or cultural grounds;

(d) Adopt the recommendation of the Royal Commission to establish a Maori Consultative Committee to develop procedures for assessing applications, and to facilitate consultation with the Maori community;

(e) Pursue an amendment to the TRIPs Agreement which would allow the avoidance of cultural offence as a specific ground of exclusion. (Steps have already been taken in this regard.)

The paper also explores the idea of a sui generis system to protect traditional knowledge.

Biotechnological Patent

The current definition of a patentable invention does not specifically exclude biotechnological inventions, although IPONZ does have a practice of refusing patents that would include human beings within their scope on the grounds that these do not constitute a “method of manufacture”.

The Royal Commission on Genetic Modification suggested that the office practice be formalised in legislation and recommended that the Act be amended to specifically exclude from patentability human beings and the biological processes for their generation - in line with section 18(2) of the Australian Patents Act 1990. The New Zealand Government has agreed that this amendment should be made.

The paper suggests that a requirement that an invention be “useful” would avoid the situation of applicants obtaining patents for large numbers of gene sequences in the hope that someone who did discover a use for them would have to pay a royalty.

Plants and Patents

Despite international obligations to the contrary (the 1978 UPOV Convention), present New Zealand legislation does not prevent plant breeders from seeking both patent and plant variety right protection for the same genus or species.

The paper suggests that New Zealand either:

(a) Amend the Act to rectify this; or

(b) Ratify the 1991 UPOV Convention, which does not contain this prohibition. This would require amendment of the Plant Variety Rights Act 1987.

The future course of the Plant Variety Rights Act 1987 is the subject of a further Discussion Paper released simultaneously.

Business Methods and Software

The current definition of a patentable invention does not specifically exclude the granting of patents for business methods. Computer software, however was previously held to be unpatentable, until a landmark decision by the Commissioner of Patents in 1993. It is now patentable, provided it meets certain guidelines. New Zealand’s international obligations do not require it to grant patents for business methods or software, and the paper poses the question as to whether New Zealand should grant such patents at all.

Patents for Methods of Medical Treatment in Humans

Currently, in line with most other countries, New Zealand does not permit the patenting of methods of medical treatments of humans. The options for reform discussed in the paper are:

(a) Maintain the status quo;

(b) Allow methods of medical treatment to be patented;

(c) Allow methods of medical treatment to be patented but provide that medical practitioners who use the patented method without the patent owner’s permission would be exempt from infringement proceedings.

Stringency Test for Patentability

Finally, there is a suggestion that the current system of giving the benefit of any doubt to the applicant for a patent is too liberal, and out of step with the Australian approach. The paper suggests that a test based on the balance of probabilities would be more appropriate.

Submissions on the reform proposals close on 28 July 2002.