New Zealand: MBIE proposes amendments to IP legislation

The Ministry of Business, Innovation and Employment (MBIE) has released a discussion paper inviting submissions on potential amendments to New Zealand's patent, trademark, and design legislation.

The full discussion paper is available at www.mbie.govt.nz. Several of the more significant proposals are discussed below.

MBIE considers that the practice of "daisy-chaining" divisional applications, which "allows an originally filed parent application to be kept pending for up to 20 years," is not in the public's interest. To address this, MBIE proposes introducing a deadline of 12 months from issuance of the first examination report in the original parent application for putting all divisional applications in order for acceptance.

It is expected that most submissions will be opposed to this change. The existing requirement for requesting examination within five years of the antedated filing date, itself not without controversy following introduction in the 2013 act, already ensures that patent applications under that act can no longer remain pending for "up to 20 years". Further restrictions may be premature.

MBIE further proposes amending the transitional provisions of the 2013 act so that divisional applications made under the 1953 act, which can continue to be daisy-chained throughout their 20-year term, will be examined under the stricter novelty inventive step and support requirements of the 2013 act.

Previous consultation on this issue suggests that submissions will likely be mixed, with local manufacturers generally supportive, but at least some practitioners opposed to the change.

MBIE proposes explicitly adopting the doctrine of exhaustion in relation to patent rights. A New Zealand patent will be of no use to a patentee in controlling further sales or parallel importation of a product originally sold with the patentee's authority (whether domestically or internationally).

Exhaustion of patent rights is yet to be tested in the New Zealand courts, but the Trade Mark and Copyright Acts already contain similar provisions.

This proposal is not expected to be overly controversial. Contractual clauses and regulatory restrictions on importation of products into New Zealand may continue to apply, and there is no proposal to add a similar provision to the Designs Act.

MBIE proposes removing the provisions for series marks, which presently allow for several marks to be filed as a single application if they differ only in non-distinctive ways. Around 50% of series marks are filed incorrectly, which indicates misunderstanding of their purpose or criteria. In order to provide greater clarity and reduce administrative costs, MBIE proposes completely removing series marks, rather than provide increased guidance, criteria, or costs. Despite facing similar filing issues, UK and Australian trade mark laws still provide for series marks. Further, given our Supreme Court's narrowing of the interpretation of "distinctive character" of a trade mark, applicants may have real cause for concern at losing the ability to file series marks.

The act currently provides a rigorous priority system, with extremely narrow options for achieving registration in the face of a blocking registration. The current exceptions of "honest concurrent use" and "other special circumstances" are interpreted so narrowly that neither allows for "prior continuous use." MBIE proposes what is considered a welcome change for many practitioners, to specifically provide an exception for "prior continuous use", similar to that under section 44(4) of the Australian Trade Marks Act 1995.

Submissions close on August 2 2019. MBIE will then seek government approval to draft an Amendment Bill and introduce it to parliament.

Ben Halberg	Thomas Huthwaite

Baldwins Intellectual PropertyLevel 15, HSBC House, 1 Queen St, Auckland 1010, New ZealandTel: +64 9 373 3137Fax: +64 9 373 2123email@baldwins.comwww.baldwins.com