Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill

I move, That the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill be now read a first time. I nominate the Commerce Committee to consider the bill. This bill amends the Patents Act 2013 and includes measures to build on Australia and New Zealand Closer Economic Relations. The Patents Act 2013 came into force on 13 September 2013 and was a significant step toward driving innovation in New Zealand. It replaced 60-year-old legislation and introduced a patent system in New Zealand that is tailored to the 21st century. Significantly, it also aligned our patent system more closely with that of Australia. In doing so, it enables measures to be taken to build on Australia and New Zealand Closer Economic Relations to further integrate trans-Tasman regulation.

Currently, most patent applications filed in New Zealand are also filed in Australia. Each application undergoes a separate examination process in each country to determine whether the application relates to a patentable invention and, therefore, whether or not a patent should be granted. Importantly, each country examines its application to determine whether the invention claimed is new, involves an inventive step, and is useful. This results in significant duplication of effort and resources to perform, essentially, the same task.

Part 1 of this bill provides for the implementation of a single patent examination process and a single examination process for Australia and New Zealand. Single, more efficient patent application and examination processes will remove duplication for both businesses and intellectual property offices of Australia and New Zealand. These processes have the potential to create significant savings for businesses and exporters needing professional advice and related services for obtaining patent protection. It will also make it easier for businesses to protect their inventions in both countries. A business will be able to prepare and file one patent application and pay one fee to either IP Australia or the Intellectual Property Office of New Zealand, granting a patent in Australia and New Zealand.

The bill allows for IP Australia and the Intellectual Property Office of New Zealand to develop work-sharing arrangements for the examination of patent applications. For example, it will enable patent applications for the same invention to be examined by a single examiner in either country. This will eliminate duplication of examination effort by IP Australia and the Intellectual Property Office of New Zealand. The process will, however, take account of differences in national patent laws and result in two separate and independent patents. Each patent would be tailored to the specific and individual laws of Australia and New Zealand.

Part 2 of the bill implements a single trans-Tasman regulatory framework for Australian and New Zealand patent attorneys. Patent attorneys are a small profession providing specialist advice to businesses on the protection and exploitation of intellectual property rights. The regulation of New Zealand patent attorneys has remained essentially unchanged for more than 60 years, and because of this the framework falls well short of modern standards for occupational regulation. With the majority of Australian and New Zealand patent attorneys being registered to practise in both countries, a single regulatory framework will mean patent attorneys will be regulated under a modern occupational regulatory framework. It will save them time and costs because they are able to practise on both sides of the Tasman, it will break down barriers to patent attorneys offering their service on a trans-Tasman basis, and it will encourage competition within the profession for the benefit of businesses that need their services.

The bill seeks to implement the framework as set out in the Arrangement between the Government of Australia and the Government of New Zealand Relating to Trans-Tasman Regulation of Patent Attorneys. The framework will include a single register of patent attorneys, maintained by IP Australia, a trans-Tasman intellectual property attorneys board to administer the qualifications regime and investigate complaints about patent attorneys, and a trans-Tasman intellectual property attorneys disciplinary tribunal to determine such complaints.

The Government has worked closely with Australia to establish the framework, and I am grateful to my Australian counterparts for their work in this area. This is a small but significant step forward for our economic relationship with an important trading partner, and it will further the creation of a seamless trans-Tasman business environment. Once again, I do thank the Australian Government for its cooperation and assistance in this endeavour, and I commend this bill to the House. Thank you.

I thank the Minister of Commerce and Consumer Affairs for his contribution and from the outset say that Labour will be supporting the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. Obviously, we want to see the detail, as is the norm, and we reserve our rights to examine that closely, but I do share with the Minister on the importance of patent protection. For those of us who have been in business, in either large or small organisations, it is evident. And one of the biggest costs—and the Minister I am sure would acknowledge this—to an innovative business with an innovative product is the ability to protect the intellectual capital and the intellectual property of that particular item. I recall talking with a patent attorney in Auckland last year very briefly who made a case that one of the biggest contributions the Government could make would be to provide assistance in some way, shape, or form—possibly resource—to assist companies to lock down that intellectual property. I think the bill’s intentions, aims, and objectives will assist in terms of streamlining and making that more efficient and, hopefully, in reducing costs.

If you look at it in its most very basic form, if you cannot protect the intellectual property—you cannot afford to take out effective patents that are wide-ranging and global, which are extremely costly—then the truth is, whether you are a large company or a small company, somebody is going to eat your lunch. Somebody is going to steal that intellectual property, and for many innovators in New Zealand there are a couple of emotions that occur. You want angel seed funding but you do not want to give away the business, or you do not want to tell anybody about the product because you are scared someone will come along and replicate it or steal the idea. And there are those jurisdictions in large countries around the world that are pretty prolific, you would have to say, in identifying products, replicating them, rushing them back into market, and, effectively, destroying the business of origin that actually came up with that idea or that product.

I commend the Minister for this bill. It will go some way to assisting those businesses, especially those businesses as our relationship with Australia, as the Minister has said, grows closer and closer, at least commercially. The ease of doing business and alignment of business rules and regulations; this is just another layer. We have done it in law, we have done it with banking, we have done it with accountancy, and this is another layer where we can assist those businesses that are commercially operating with if not our largest then one of our largest trading partners. I think the bill has been widely consulted. I think I would be surprised if there was not a large degree of buy-in from the sector. However, I am sure there are aspects of this bill where those who are submitting to the select committee will be able to make some positive suggestions to improve it. I say to the Minister: this is a good effort. This is far more straightforward than his venturing into the world of cartels where—as he crawls under the desk—we have some very interesting proposals around why we should not be aligned with jurisdictions like Canada, like Australia, and like the UK in terms of imprisonable offences for cartel behaviour.

In this bill the Minister makes the case and says we should be closer aligned with one of our biggest trading partners in terms of the regime around patents, and I agree with him. Not a few weeks ago he was sliced apart by Guyon Espiner on Morning Report when trying to make a case for the reverse. So I say to the Minister: we are not here to talk about that bill. That bit of fun and that bit of theatre will come later. But I say to the Minister: there is a little bit of inconsistency here, you know? Tonight it is going to be consistent with Australia and our trading partners, but in terms of cartel behaviour, where people’s livelihoods can be seriously destroyed—not only those in business but those impacted by that cartel behaviour—it is: “Oh, no, we don’t want to line up with the UK, all that jurisprudence. We don’t want to line up with Canada. We don’t want to line up with the US. We don’t want to line up with our Australian cousins.”

💬 Mr DEPUTY SPEAKER: However, we are talking about this bill.

Indeed. “We are going to go out there as sort of frontiersmen and women and strike our own way in the world and do something completely different.” So I just take the opportunity, given your comments, Mr Deputy Speaker, to counsel the Minister that before the next bill gets to the House, he may want to have a bit of a rethink and somehow take some advice from the whip or others and allow consistency of argument to actually win through.

So, in essence, as I say, we support this bill. As the Minister said, I do not think it will turn the lights on in the communities at home and it will not be front page news, but I agree with him that this is of critical importance to businesses if they want to protect their innovation. There is nothing worse than seeing the look on an entrepreneur’s face when they have invested time, money, and their own sweat into developing an idea and a product, only to see that torn asunder and taken away by somebody who counterfeits it, or somebody who just simply gets there before that entrepreneur could get it to market. Because in many cases—in fact, I would argue, with small business, in most cases—they simply have not had the resources or the expertise, because this is heavy-duty law, to take out patents in multiple jurisdictions. That requires a level of international legal skill that, to be fair, most business folk would not have, and the costs of doing that in varying jurisdictions are prohibitive. There is nothing worse than seeing the look on the entrepreneur’s face as that innovative product is basically stolen from under them, so I commend the Government for this.

I will be interested in the various views that are put up before the select committee. There does not seem, on the outset of this, to be a lot of downside in it. I would be very interested in what sorts of costs are going to accrue or be passed on in the trans-Tasman agency to those taking out patent protection. I would be interested to know whether those costs would increase—hopefully, they would decrease; intuitively, you would think so—but I am sure submitters and others who will be interested in this piece of legislation will want to know at its essence whether this will facilitate easier and cheaper ways to gain patent protection for those products, for that intellectual property, and for those innovative ideas. We are sort of the old No. 8 gauge wire country. That has translated, in the 21st century, into being top-quality world innovators. The globe is littered with New Zealanders who come up with the bright idea: the solution to problems that others, with more money and more experts, have not been able to conquer.

So I would support this bill. We will look at the detail of it. I think it is a very good piece of work by the new Minister of Commerce and Consumer Affairs, and I just pray that in his other work with other pieces of legislation, i.e., the Commerce (Cartels and Other Matters) Amendment Bill, he still holds that principle that we should line up with our trading partners. I wait with bated breath and anticipation to hear those arguments about incentive and disincentive in respect of imprisonable offences around cartels be played out in the same way that he was levelled by Radio New Zealand National on Morning Report just before Christmas. So I commend the Minister for his good works, and we look forward to others that follow.

I would like to thank the Minister of Commerce and Consumer Affairs for bringing this bill to the House and I commend the member who just sat down, Clayton Cosgrove. He speaks sense, and it is a great opportunity to speak in support of the first reading of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. Before I go on, Mr Deputy Speaker, I would like to wish you a happy New Year, especially since yesterday was the Lunar New Year for the Chinese and Koreans and many, many nations that actually celebrate the Lunar New Year. I would like to say kung hei fat choy, xin nian kuai le, and se hae bok mani baduseyo, which actually mean “May you receive lots of blessing and luck for the new year.”

It is the Year of the Fire Monkey. Monkeys are born this year, or they turn 12, 24, 36, 48, or 60. They do actually say that those who are born in the Year of the Monkey, especially in the fire monkey year, should avoid the colour red. [Interruption] Apparently so. Anyway, that was a little bit of trivia there for you, Mr Deputy Speaker.

💬 Mr DEPUTY SPEAKER: Anyway.

The bill as it has been put to this House is fairly straightforward. It is to deal with matters arising from the current application of the Patents Act 2013. The bill will also align, as other members have said, the patent system more closely with that of Australia, and will better reflect our closer economic relations through integrating trans-Tasman regulations. When passed, this amendment legislation will be the first major update to the way our patent law profession has operated in over 60 years. In doing so, it will strengthen our reputation as a good place to do business and will reduce costs for applicants. I think the previous speaker, the Hon Clayton Cosgrove, actually talked about the reduction in costs. When you are making only one application that is actually going to both countries, instead of having to do both—one in New Zealand and one in Australia—instinctively you would think that the costs would be less for those businesses that are wanting to register their patents.

It is important to remember that New Zealand patents are the intellectual rights that are granted for an invention of an individual or a company or group that has created a new product or process. Patents cover a variety of areas and can include new products, processes, or ideas. I am sure that we have seen court cases dealing with both Apple and Samsung, which have intellectual property. They were trying to protect their inventions. I know that New Zealand inventors and New Zealand writers protect their work and creative output through copyright as well as their inventions through patents, and I think protecting our creations is very, very important.

This bill will make three main changes to the 2013 Act. It amends the grounds on which a person can oppose the grant of a patent under the Patents Act 2013 and proposes a single patent application process and a joint registration. As I have just explained, you do not have to do it in both New Zealand and Australia. You can do it in just one, and it goes to both Australia and New Zealand. The first change proposed in the bill will be an amendment to the Act “to explicitly exclude lack of unity of invention as a ground of opposition.” during the pre-grant process. “Unity of invention” is a term used whereby a patent application can be applied to only one invention, or a series of close or interrelated inventions. Under the current wording there is the potential for an interpretation of “unity of invention” to be used as a ground to object to a patent application. The 2013 Act introduced this ground of opposition into the pre-grant process by allowing “a grant of a patent to be opposed on the ground that an accepted patent application claims patent protection for more than 1 invention”—a wording that was unintended when the 2013 Act was actually legislated. I know it is a little bit confusing.

The second and third changes introduced by this bill deal with consolidating and better applying existing laws between our two nations. The single economic market programme will support a single patent application that will establish a single application portal where applicants can file one set of documents and pay one fee. As I said earlier, that basically means that we will reduce the costs, in my view.

I look forward to the submission process in the select committee. I believe this is a good bill, and I commend it to the House.

Thank you, Mr Deputy Speaker, and happy New Year to you and to everyone in the House and across Parliament, including all the staff. As perhaps the only speaker on this bill tonight who actually sat in the Commerce Committee from 2009 through to 2013 when the Patents Bill, which is now the bigger Act that this bill is amending, was being passed—sat through all of the hearings, the debates, and then the big drama that ensued in ensuring that it passed in a way that did not suppress our innovation in this country—I think that it is good to bring a little bit of historical perspective.

I want to just go back a bit to nearly 10 years ago, when this bill had its gestation in a process that began under the previous Labour Government, and that was ultimately about wide-ranging reform of our patents system and the Patents Act of 1953. The year 1953 is quite a long time ago, well before I, and, presumably, most people sitting in the House tonight, appeared on the earth—not all, but most. The Patents Bill had its first reading in 2009, and it included a provision to update and modernise our registration requirements for patent attorneys and align New Zealand’s regime with that of Australia.

It is useful for people to know—and they may not have worked that out tonight, listening to the debate so far—that the current bill that has been tabled is not a new bill. Well, it is a new bill, but it has its gestation in a previous bill that sat on the Order Paper for a long time. But by the time that that bill, the bigger bill, made its way back to Parliament in 2011, the Commerce Committee recommended that that part of it that was about the modernisation and updating actually be separated—because there had not been a single trans-Tasman framework for regulating patent attorneys established, even though it had been signalled by both the New Zealand and Australian Governments. It could not be included in the bill at that point because the framework had not been established. So that is what we are seeing here tonight in this bill.

Labour is certainly supporting that to the select committee and sees no problem with that in theory, because streamlining is a good idea, the modernisation and updating of this regime is clearly important—it was 1953, it is now 2016—and it is supporting efficiencies in the patent process. Again, as my colleague Clayton Cosgrove said, in terms of the alignment of the jurisdictions, we have no issue with that. We had no issue with that in another piece of legislation that went through the select committee last year on accounting standards and how they operate. That is a good and sensible thing to do. But I do think it is important that when a bill comes to the House, you do actually hear its history and that it was part of a bigger bill that did pass through the House in 2013—and that it has sat, waiting, until that streamlining framework has actually been established, which has now occurred.

I do, however, want to express a concern. It is not an outright concern, and my hope is that any fears will be allayed when we get to the select committee. But I do want to express a concern with one of the aspects of the bill. The first part of the explanatory note says that since the Patents Act 2013, the bigger bill, entered into force “an issue has been identified with the grounds on which third parties can oppose the grant of a patent on an accepted patent application.” Melissa Lee referred to that before. The questions I have are: who has expressed the concerns; where have these concerns been expressed? I did not hear the Minister allude to what the concerns are. All of the information that I can find out about this bill does not go into any detail about that. It all uses exactly the same phraseology around that.

The explanatory note also talks about the fact that, as enacted, there has been some kind of “drafting error”, as it was described somewhere, in the Patents Act 2013 that “allows a grant of a patent to be opposed on the ground that an accepted patent application claims patent protection for more than 1 invention …”. And that is described—and it is jargon—as “a lack of unity of invention.” It then goes on to say that “There was no policy intention to introduce lack of unity of invention as a ground of opposition in the Patents Act 2013.” Well, I sat on that select committee and perhaps it is a stuff up, and perhaps it is a drafting error. And if that is the case, then that is fine, but there were reasons, and I want to go back to the intent of the bill that came back to the House in 2013, and just draw the House’s attention to what it said.

It said—and this is paraphrasing part of the commentary on that bill—“We think that the grounds on which third parties can oppose a patent being granted, request that a grant of patent be re-examined, or request that a patent be revoked should be consistent, and recommend amending the appropriate clauses of the bill to achieve this.” It said: “Many submitters favoured pre-grant opposition, and argued that it allows New Zealand businesses to limit the scope of troublesome international applications; and that an opposition mechanism allows overly broad patent claims to be narrowed, preventing patent owners from wrongfully asserting invalid rights, and thus reducing costs and disruption to business.”

Well, what that is shorthand for are these things called patent trolls. Patent trolls are endemic in the United States. They are an industry unto themselves. They do not produce anything. They do not add any value. All they do is litigate and create barriers to innovation, and huge costs. And they result in small businesses, particularly innovation businesses, going under. My concern is, well, what is this drafting error? We spent a lot of time discussing this in the select committee: what impact will that have on putting up the barriers to patent trolls? The whole point of having third-party opposition to patents was to provide a mechanism to ensure that there could not be rampant patent troll activity.

Just to give you a sense of the extent of patent trolls—most of them come from the United States. It is important that people know where the litigators and attempts to try to prevent innovation and companies from achieving a patent are occurring, and that they come from the patent trolls. In 2015 more patent law suits were filed in the United States than in any other year save one, buried beneath heaps of high-tech lawsuits, led by patent trolls—shell companies with no real assets other than patents. About two-thirds of all patent lawsuits were filed by patent trolls.

Hopefully, those fears will be allayed in the select committee. I am raising that concern because I do hope that the history of this bill—the importance of patent reform—is not being reinvented, and that we are not going to open up New Zealand businesses that are trying to achieve patents to risk from that patent troll regime.

I rise in support of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. As has been canvassed across both sides of the House today, this bill will do three things in the main: an amendment to the grounds on which a person can oppose the grant of a patent under the Patents Act 2013; a single patent application process and a single patent examination process with Australia, which not only will be hugely beneficial for those who apply for patents, in terms of time and cost savings, but will actually save time and cost for the regulatory bodies also; and a joint registration regime with Australia for patent attorneys—something that is manifestly to the benefit of patent attorneys in New Zealand. It is quite a small, highly specialised profession over here, one that is quite considerably larger in Australia, and it makes a great deal of sense where it is possible—and it was determined some time ago that it should be—to adopt a single registration regime. In fact, it is a bit broader than just a registration regime; it will also adopt a single code of conduct and a single disciplinary code and approach also.

I just want to turn for a moment to the part about the grounds of opposition to the grant of a patent. Ms Curran kindly read to us from the Commerce Committee report on that 2013 legislation when it was investigated. I note that what she read was the point that people wanted to enable opposition to patents if there might be a situation where the granting of such could be deemed unreasonable or, in fact, not worthy. But in all that she read out to us, it did not actually address the point that this amendment addresses, which is specific to one, and only one, condition, which is that that is known as the unity of invention. If we go back to the Patents Act of 1953, there was nothing in that Act that prevented someone making a single patent application for, perhaps, a new product, or a new method that might in fact have more than a single invention within it. There was nothing, as read out in that report for the 2013 patents legislation, that actually gave any indication that the committee or, in fact, the Minister who introduced it, or the officials were deeply concerned about lack of unity.

I think this probably falls into an unintended consequences thing, because what we are at risk of with the current provisions—where anything that can be shown to have a lack of unity of invention cannot have a patent approved—is that where someone has created, has innovated, and has this new product that has more than a single invention, they can file an application for only one of them. In the meantime, they lose any rights to any second or subsequent innovation that might exist within that product. It does not seem to me to be a very sound way of helping to bolster and foster innovation in our economy today by, basically, saying: “If you do innovate, don’t innovate too much, because you can have a little bit but not all of it.” So I think it is a very sensible thing that we are actually going to address what is clearly, by looking at the historical Act, an anomaly. As I reiterate, there was nothing in the select committee report for the 2013 patent legislation that indicated that lack of unity of invention was actually an issue.

The other part I want to touch on is the single patent application process and the single patent examination process with Australia, because one of the things that I think is quite telling in this is that about 95 percent of the patent applications that are filed in New Zealand have a corresponding application in Australia, but at the moment they are filed separately, they are assessed separately, and they are examined separately—for something that ultimately is intended to have protection across both countries—so bringing them together is a sensible part of a single market patents programme. The approach that is planned seems to me very pragmatic. You file one application in a portal in either country, and that creates a separate application in the other, but you have a single fee. You can submit for a single examination, which, quite frankly, not only is going to reduce time and costs for the applicant, whom we should be most concerned about, but, it holds, also will save time and costs for those who assess the applications. So I think this is a very sound bill. I think it will go some way to providing sound regulation, but regulation that is also both time and cost-effective. I commend the bill to the House.

Kia ora, Mr Deputy Speaker. Ngā mihi nui ki a koutou. Kia ora. First, I would like to start by welcoming MPs back on the first day of Parliament and hope that they and all New Zealanders had a fantastic summer break with their friends and whānau.

I rise to support the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. I have found that talking about patent law is a sure-fire way to lose people to talk to at parties and a sure-fire way to fall asleep at night, but it is something critically important to the future of New Zealand and our prosperity. The Green Party knows that intellectual property and patent law is important as part of building a smarter, richer Aotearoa New Zealand.

In this contribution I would like to touch on some of the broader issues, but first touch on this bill. The bill does three things, which you have heard tonight. It amends the grounds on which a person can oppose the granting of a patent under the recently amended Patents Act 2013; it creates a single patent application process and a single patent examination process with Australia; and it creates a joint registration regime for patent attorneys. Back in 2013 that legislation, which I know Clare Curran talked about, was amending more than 50-year-old legislation. The highlight for me was the campaign successfully convincing the Government to—I have forgotten how many backflips there eventually were, but finally we got there—ban all software patents. It was an incredibly good step. That was not a long time ago, and here we are—having to fix up this mess in the original legislation.

The amendment to the grounds on which a person can oppose a patent application is the correction of the drafting error around the unity of invention clause, which we have heard about. It seems pretty much common sense to be passing this, if it is in fact a drafting error. One of the questions I will be looking out for in select committee is around hearing from patent attorneys how many cases actually were affected by this so-called drafting error, because I have read reports that there is an argument that this change should be applied retrospectively. When the Patents Act 2013 was passed, it did include an element of retrospectivity in terms of New Zealand priority claims. So it is an interesting case: we applied retrospectivity in one case, but not this one. I am looking forward to having that discussion in the select committee.

That cleans up the mess, but the big part of the bill deals with a part that is bigger in scope, which is a single patent examination and application process. We have heard tonight that 95 percent of those 6,000 patent applications filed in New Zealand are also filed in Australia, so there is a strong argument around common sense and efficiency in avoiding duplication by having a similar regime.

On the other side of the ledger, I understand that there would be concerns around New Zealand losing its sovereignty. The tribunal, for example, only has, at least, a single New Zealand member, so I understand some of those concerns. But I would like to respond to them, and point out that, in fact, it is hard to argue there is a loss of sovereignty, because there will be one examiner from each country, a New Zealander in the case of New Zealand hearing a New Zealander who is domiciled here. Both the officers would be applying their own unique jurisdictional legislation when it comes to those cases.

We heard, in the small amount of consultation around this bill, that Australian patent attorneys support this registration process, but patent attorneys in New Zealand have raised some concerns around the likely increased regulatory and business compliance costs to register and practise in New Zealand. It is going to be interesting to hear from them in terms of their perspective in New Zealand, because when you look around at just the single patent examination process, the “SEP”, the Government’s own departmental disclosure statement does say that there was no consultation and that the cost and benefits of implementing it have not been quantified. In fact, it is unclear whether the fees would need to increase or decrease. So there are still substantial questions for a bill that has been in the pipes for a long time.

In the remaining time, I would actually like to touch on the wider and, in fact, more important issues. It is great to be seeing the Government of New Zealand discussing patents and intellectual property in our Parliament, but what we are doing tonight is simply scratching the surface, dealing around the edges, the fringes, and in fact ignoring the biggest, most important question facing us, which is how we increase the innovation potential of New Zealand.

The Government is happy to deal with intellectual property issues. In fact, that is exactly what we see in the Trans-Pacific Partnership (TPP) agreement. There, the Government is explicit—you could say that it is patently clear—that there is going to be a cost to New Zealanders in the order of $55 million from the copyright extensions of term limits. So the Government is happy to talk about intellectual property when it comes to the TPP agreement, happy to talk about a joint regime with Australia despite all the questions and perhaps additional costs for New Zealand patent attorneys—all nearly 200 of them—but it is not talking about how we actually increase the number of patents we see filed in New Zealand. Under this legislation it may be easier, and it may be more expensive to file a patent in New Zealand and Australia, but we are not having those conversations.

How do we get more Kiwis coming up with those good ideas, commercialising them, marketing them, and exporting them? New Zealand does have an innovation problem, and numerous reports clearly show that. Members no doubt are aware of the New Zealand paradox, which is that we face lower growth internationally compared with our competitors, ostensibly, despite having the right economic mechanisms in place. On a per capita basis, I think the answer is pretty clear. I agree with Shaun Hendy on this point: the answer to the New Zealand paradox is that, in fact, we have an innovation problem. We are in the bottom half of the OECD when it comes to research and development. We file four times fewer patents than the OECD average. If you agree with the recent Productivity Commission report—it notes that there has been an increase in research and development spending currently; however, the actual innovation benefits are debatable, and when it comes to the patents area we are in fact stagnant.

As a country we need to ask ourselves why we are spending more money on research and development but only getting the same number of patents, and why that is so. The result is that New Zealanders have got to work harder for every dollar we earn as a nation, and we continue to slide down those economic rankings. If you have a less innovation-focused economy, you remain reliant on those raw commodities, the milk powder and the brown paper bags, the raw logs lining up on the port. We see our talented young Kiwis head off overseas. All members should know—although I think that the Government sometimes has its head in the sand over it—that there is a limit to the amount of milk powder we can export. There is a limit, and we are seeing it in our waterways at the moment when we cannot swim in them over summer. We are seeing that limit. But there is no limit to the amount of intellectual property, services, products, and software that we could be exporting across the world.

💬 Chris Bishop: Human ingenuity is limitless.

Human ingenuity is limitless. I agree with the member when he raises that point. But why is the Government not seeing the number of patents rise? Why is the Government continuing to see New Zealand in the bottom half of the OECD? Why is the Government continuing to prop up coalmines, hoping for oil in the deep seas—

💬 Chris Bishop: We don’t prop up coalmines.

—and subsidising irrigation? You say that but you do not follow with your actions. I know the member wants to be a Minister one day, and maybe when he is a Minister one day, he can actually implement the stuff, but at the moment what we do see from the Government is a focus on more milk, more cows, and more coal. It is a recipe for disaster. It is a recipe that sees us slide down those rankings, and it is a recipe that sees New Zealanders working some of the longest hours for some of the lowest wages, and paying some of the highest costs of living in the OECD.

My vision for New Zealand is one that invests in innovation. At the last election we took a policy of investing an extra $1 billion over 3 years, in terms of research and development. It was a policy to increase the number of places in tertiary institutions. As a country we could be providing more advice for Kiwis to be developing those good ideas, patenting them, marketing them, and commercialising and exporting. What the Green Party wants to see is New Zealand not just languish at the bottom half of the OECD but get to the top half. We want to see more patents filed, more in line with the OECD average. We want to see more collaboration between our great Kiwi thinkers. We want to see an economy that is built on ideas and not just on grass, water, and coal, and turning that into milk powder.

In summary, if you look at the New Zealand economic story over the last decade, despite some of those great exemplars—I am thinking of the Rocket Labs and the Xeros—what we have seen is an economy becoming more simplified, more dependent on a few raw commodities, and it is that old story of being dependent on milk powder. So tonight as we discuss patents and intellectual property, let us not ignore that elephant in the room, which is the innovation gap that stares our country in the face. Next year is election year, and I look forward to standing on the hustings and arguing for a more innovative economy, one that invests in its people and actually sees us innovating and thriving. That is the recipe for a cleaner, smarter, fairer Aotearoa New Zealand.

I would just like to start this evening by saying that I am really pleased to be back in the House. I have found that being away for the past 8 weeks has been rather interesting, but I have been really pleased at a local level, in my office, being kept really busy helping constituents.

I am pleased to rise on behalf of New Zealand First to speak to the first reading of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. The New Zealand Patents Act 2013, which took effect on 13 September 2014, constituted a comprehensive redrafting of New Zealand’s patents law. Given the scale of this mammoth exercise, I am not surprised that, once again, this Government has passed legislation that has had unintended effects and consequences. Last year two anomalies were identified in the legislation. These two anomalies were, firstly, the possibility of a post-acceptance, or a lack of unity, attack, which could place patent applicants in the difficult position of having to choose between two valuable independent claims; and, secondly, significant uncertainty surrounding patent filing dates, on which validity may turn.

New Zealand First is not surprised that this Government has brought forward the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill, because this bill proposes three main things, as previous speakers have discussed in the House tonight. Three main areas are proposed as changes: the amendment to the grounds on which a person can oppose the grant of a patent under the Patents Act 2013, a single patent application process and a single patent examination process with Australia, and a joint registration regime with Australia for patent attorneys.

As I said earlier tonight, the Patents Act took effect in September 2014, and issues have arisen, specifically the grounds on which a third party or third parties can oppose the grant of a patent on an accepted patent application. This allows the grant of a patent to be opposed on the grounds that an accepted patent application claiming patent protection for more than one invention can be put simply as lack of unity of invention. For those folks at home tonight who are watching and are finding tonight’s discussion a little bit confusing, I will try to give you an example that is quite straightforward and quite simple. The example that I am going to give you tonight is that I have invented the rPhone. The rPhone is one component of my full unit. The second is my proprietary battery. However, my battery fails to be protected under the patent. Therefore, it gives a third party the opportunity to develop a battery that will fit into my one unit under the patent. That puts me, as an inventor, at an absolute disadvantage.

I think that this issue was not a ground for opposition under the Patents Act 1953, which was replaced by the Patents Act 2013. I can see that there was no policy intention by this Government to introduce lack of unity of invention as a ground for opposition in the Patents Act 2013. From the simple example I have used tonight with my rPhone invention, I had one unit invented, with two major components: the rPhone and the proprietary battery. If this ground remains as it is, then the patent applicant may be, as I said, unfairly disadvantaged.

New Zealand First does support this bill, because this bill will amend the application so that the patent protection is claimed for only one invention. That means the applicant will lose patent rights to the invention or inventions, such as the proprietary battery for my rPhone invention that I have given, which would have put me at a disadvantage and allowed a different battery to go into my invention. Therefore, the proposal in this bill is to amend section 92(1)(c) of the principal Act, to specify and exclude lack of unity of invention as a ground for opposition. New Zealand First is looking forward to listening to the submitters at the select committee talk specifically to this so that we can actually get, I guess, a more informed grasp of this, particularly.

The second main change proposed is the single patent application process and single patent examination process with Australia for patent attorneys. Currently, since the Patents Act 2013 took effect, the documentation that must be provided for both Australia and New Zealand patent applications is almost—well, essentially it is the same. The criteria for granting a patent are now more similar to those in Australia, but with significant differences. The procedure for examining the two patent applications is the same, however.

What has been discovered is the significant degree of duplication of work between the Intellectual Property Office of New Zealand, also known as the IPONZ, and the Australian Patent Office, also known as IP Australia. This duplication of work does increase costs and complexity for applicants. Given that around 95 percent of the patent applications filed in New Zealand have a corresponding application filed in Australia, it makes common sense to have a consistent approach to establishing a single portal application where applicants may wish to apply for the same invention in both countries, and we can also access that in either portal. This allows applicants to file one set of documents and pay one fee. That generates two applications: a New Zealand one, which is sent to the Intellectual Property Office of New Zealand, and an Australian application, which is sent to the Australian Patent Office for further processing.

The third main change is the joint registration regime with Australia for patent attorneys. In New Zealand they make up a small profession that provides specialist advice to businesses, obtaining and protecting intellectual property, especially obtaining patents and registering trademarks. Currently, there are 493 patent attorneys who reside in Australia or New Zealand and who are registered in both countries, so that is 55 percent of Australian and New Zealand patent attorneys. Often it is asked what the benefits for patent attorneys will be, and we can see quite clearly that it is less red tape and increased business opportunities for attorneys not currently registered in both countries.

I do want to bring it to the attention of the Government that I find this is an area that is quite complex in the regulatory impact statements and the debate pack and the ministerial statements that I have read through today. As I said earlier, New Zealand First will be supporting this bill’s referral to the select committee because we actually look forward to hearing from the submitters at the select committee as to how these three main points that are proposed for changes in this bill can actually affect, increase, or invigorate competition between Australia and New Zealand. So in saying that, I listened to the previous speakers tonight, and the fact that we are all supporting this bill says that we are concerned about patent application and the protection of inventors when they do invent a specific invention that is going to take the world by storm.

I want to look at the statistics that I asked the Parliamentary Library to prepare for me today, and they, in some ways, do actually add to these proposed changes. Interestingly enough, in the years 2005-15—and there is no definition as to exactly what it costs for these businesses to go through the process. The number of prosecutions under the New Zealand Patents Act 1953 in 2013 was 54. These prosecutions have occurred in New Zealand for inventions protected under the New Zealand Patents Act. What it does not tell me, though—it does not show the inventions developed in New Zealand that are copied in overseas jurisdictions. So I have got this chart here that I am really looking forward, as a member of the Commerce Committee, to using to ask those questions and to get some solid answers, because there are areas in this bill that still do not quite explain the ins and outs for me. So New Zealand First looks forward to this bill going to the select committee. Thank you.

First of all, I would like to take this opportunity to wish a happy New Year to all members of this House and to the staff working here in Parliament. I would like to take this opportunity to congratulate the Hon Paul Goldsmith on introducing this bill, the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. This bill amends the Patents Act 2013, and it makes three major amendments. The first amendment is to the grounds on which a person can oppose the grant of a patent under the Patents Act 2013. The second one is to propose a single patent application process, and the third one is to have a joint registration with Australia for patent attorneys. Ever since this Government took over in 2008, it has been trying to make sure that ease of doing business is achieved, and having the singular registration authority across the Tasman with Australia will allow patents to have a single application process, which will reduce the fees structure as well as the paperwork.

Last week I had the opportunity to attend the launch of the 26th chapter of the Institute of Chartered Accountants of India, which gave me the opportunity to meet the representative of Chartered Accountants Australia and New Zealand, who mentioned that the passing of the legislation to have chartered accountants working across the Ditch on a single regime has really helped their businesses. Similarly, this bill will give patent attorneys the opportunity to lodge a single application, so that the paperwork is reduced, the fees are reduced, and businesses can do the business they want to do much more easily.

The joint registration regime will help attorneys to have more working capacity. There are fewer than 1,000 registered patent attorneys in New Zealand and Australia. Each country maintains separate but similar registration regimes for patent attorneys, and over half are registered to practise both in Australia and New Zealand. A single trans-Tasman regulatory framework for patent attorneys was endorsed by Australia and New Zealand in 2009; New Zealand and Australia signed a bilateral agreement for implementation of the regime in 2013. The regulatory framework will introduce a single trans-Tasman register for patent attorneys—a single definition of service that may be performed only by registered patent attorneys. Our trans-Tasman Governments worded a single disciplinary regime and code of conduct, and a single disciplinary tribunal will determine complaints and discipline of attorneys. This will help businesses to have their problems addressed by a single authority.

The single patent application process and the single patent examination process with Australia—out of the businesses that registered their patents in New Zealand, the majority, 95 percent, also registered their patents in Australia. It is very important that we should give opportunities for businesses to have ease of doing business, rather than that they are stuck with paperwork or paying double fees on their patents. The world is now where you can have a very competitive business, and, unless you reduce your costs, you will not be able to compete with the other companies across the world, because the markets are open and anybody can come and work anywhere. We have passed many pieces of legislation that are helping businesses to do business in New Zealand as well as Australia. With these words, I commend this bill to the House.

The next call is a split call. I call Jan Logie—5 minutes.

I rise to take a short call on the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. My colleague Gareth Hughes has given the major contribution on the first reading previously and I recommend that people watch that.

My colleague Gareth has informed me that this is a critically important issue for New Zealand, and although most of us in New Zealand may not be all over patent law, I think most people do understand that if we are going to position ourselves strongly as a country, economically as well as socially, we would benefit from moving our economy more towards one based on innovation, low-carbon, greentech, and more of a knowledge-based economy than the current low-wage economy centred on the depletion of our resources and forests. So patents are very relevant in that context.

What this bill does is three specific things, and I am not going to repeat what everyone else has been saying in too much detail, but what it does is create a single patent application process and a single patent examination process covering both Australia and New Zealand. I think on my first reading of that I thought: “Oh, this is going to bring up issues in terms of sovereignty and the differences between Australia and New Zealand.” But, interestingly and encouragingly, on closer reading it does not seem to do that. What it does is provide one portal for applicants to file their applications for Australia and New Zealand, because 95 percent of patent applications filed in New Zealand are also filed in Australia. So now you will no longer need to file in both places. You can file through just one portal and it will go to both places. You will have to pay just once rather than twice in two different countries. But it will be considered by an examiner in Australia according to their law and an examiner in New Zealand according to our law. There is no change in terms of the status of our laws in that sense; it is just providing an easy pathway in, streamlining it, and reducing costs for applicants.

When New Zealand has, I think, four times fewer patents being filed than the OECD average, I think it is a pretty clear indication that we need to be doing more to encourage innovation in this country, ease the way, and create the environment for people to start thinking about patents, about inventions, and about how we could be setting up new projects in this country. What this bill will also do is amend the Patents Act 2013 to explicitly exclude lack of unity of invention as a ground for opposition in the pre-grant process. We have been told that this was a drafting oversight in the previous legislation. Questions have been raised by other speakers in the House tonight who were part of seeing that legislation through in 2013, who have said that they personally will be interested in hearing submissions and examining that point more closely because it was a very thorough process apparently. But drafting errors do happen, particularly when it is a comprehensive piece of legislation, as that was, dealing with a law that had not been changed in a very long time. I do note that some lawyers’ responses have been saying it is good to see this being fixed up.

Some people have raised the question about why it is not being retrospectively amended and although the Greens certainly do not usually support retrospective legislation, I do think that the point they made, or the way I read it, was interesting in that it is quite possible that some applications have been filed and not yet examined, so that is worth consideration. Thank you.

The Hon David Parker, 5 minutes.

I rise on behalf of the Labour Party to take a call in the first reading of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. As other members have usefully described the bill, I will not do that all again. I will, though, just recount for the House that we always need to keep in mind the balance that we are trying to strike with patent law.

On the one hand, we want to encourage innovation in society. To do that, we have got to give commercial advantage in some situations where people invest time and effort in making a new discovery. Why do we do that? We do that for two main reasons: one, we want to encourage the world to become a better place through encouraging that sort of endeavour that makes new discoveries for the benefit of humanity over time. On the other hand, we also want to encourage the long-term publication of those inventions so that other people can leverage off that knowledge and either take that invention further in the future or produce that same new invention more cheaply to the benefit of more people. We try to achieve that by giving people a time-limited monopoly right to exploit, for their commercial gain, the commercial opportunities that arise from their invention. Obviously, if someone does not have that monopoly right, it is less likely that they will invest in the first place.

There are other models of investment. There are some people who think that drug discovery would be more efficient worldwide if the countries that, effectively, fund the cost of those drugs cooperated, decided what were the drug targets, and actually put Government funding into pursuing those directly rather than letting the private sector do it, or at least some of it. A lot of the research that is relied upon by the private sector is already publicly funded. There are some who think that it would be more efficient for countries to move beyond a patent route for drug discovery and more cost effective given that in the end it is Governments that, by and large, fund the patented drugs through their health systems anyway. Nevertheless, we are where we are in that international paradigm and we should make sure that it works appropriately.

We also must always be aware that if you are giving someone a monopoly right, they exploit it to maximum advantage and they are not constrained as much in their conduct. They price it for the maximum price they can sell it for, rather than competing down to a price that relates to the cost of producing the good or the service, mainly goods, that have been patented. So we have got to be really careful that we do not inappropriately extend the terms of patent right. If we do that, we actually do not end up with any more patented goods; we actually just extend the period of patent royalty and the monopoly rent that can be extracted from exploitation of it. So if this legislation was coming to the House suggesting an extension to the term of patents, I for one would be standing up and asking the Government to prove that this would actually meet the social purpose of patents, which would be to encourage more innovative discovery on the part of people and society. I do not think it would. Therefore, I am one of those people who do not think we should extend patent rights beyond the current terms that we have.

Having said that, we have also got to be aware that we have rules that are pretty consistent with what the rules are internationally, otherwise it is a bit unwieldy, internationally. Perhaps we could also suffer the disadvantage that overseas patented innovations would not become available in New Zealand because those who had those patented rights would not be willing to bring them to New Zealand and New Zealand would suffer a disadvantage in that regard. For that reason I think that the Government is probably right to be correcting this anomaly, which seems to have been introduced in 2013, that allows a patent to be challenged on the ground that more than one area of invention that has been patented lacks unity. As I read the explanatory note—and I do not pretend great expertise in this area—it suggests that the lack of unity as a ground of opposition, which was introduced in the Patents Act in 2013, is out of whack with the rest of the world and can lead to unfairness in that patents that ought to be approved are either not approved or are struck down later.

It is a pleasure to be here and I hope you have had a good break. It is great to be talking on this bill tonight on the first day of Parliament for 2016. It is particularly great to be talking on this bill, the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. Although this bill seems confined to the extent of what it is seeking to address, I put it to you that this bill is actually crucial for New Zealand, not particularly around the exact provisions in this bill but what it means for New Zealand. In essence, intellectual property is really a pre-eminent source of competitive advantage in today’s knowledge economy. For New Zealand to grow in the international sector, how we protect intellectual property, how we promote intellectual property, and how we assist people to want to undertake that innovative process and go through a patent process is absolutely crucial if we are to continue to be successful as a nation.

Traditionally, bankers and financiers have always looked at the balance sheets of companies and looked at the fixed assets. It was interesting that my colleague Kanwaljit Singh Bakshi was talking about the chartered accountants—and, of course, there are a lot of rules around how you value fixed assets. More recently, probably over the last 10 years to 15 years, there has been a migration to also valuing brands. But now intellectual property is so crucial to driving future wealth that the need to focus on that part of the balance sheet is really, really important. It is staggering. If you start to think about all the Crown research institutes that the Government has an involvement in and all the intellectual property that resides within the Government itself and all its activities, let alone the commercial sector, it is a huge value that is often unrecognised and probably not properly valued in the sense that it is not exploited and utilised as well as it should be.

The key issue with intellectual property is that it is very, very difficult, first of all, to define what is new and unique when you go to patent a product—that situation—and certainly to actually undertake the search, which often has to be a worldwide search, to make sure there is no competing intellectual property that may be related, but it is quite difficult to understand whether it is valid or not. The second thing is actually the process of registering a patent. If any of you have been involved in it, you will know that it is a multiple-step process, taking many years to complete. If you are successful in actually getting the intellectual property, which is not always the case, there is an ongoing monitoring and management process that is difficult and expensive. So anything that we are doing to actually enhance or reduce that cost is removing some of the barriers to helping our vibrant innovators in New Zealand to actually get under way and do some of this good work. When you think about the dynamic parts of our economy, we should be doing all of this.

So I have got to say I highly recommend this bill. I think it is insightful. I think it is a great step towards improving New Zealand’s economic situation. Thank you very much.

It is my first opportunity to contribute this year, so can I offer a New Year greeting to all colleagues and particularly, as it is the lunar New Year for the Year of the Fire Monkey: Kung hei fat choy. Xin nian kuai le.

This is a very important bill, as the member who has just resumed his seat, Mr Bayly, has quite correctly pointed out, and I am passionate about intellectual property for exactly the reason that Mr Bayly has specified. We stand on the brink of what is called the second information revolution, and the Labour Party has been thinking a great deal about the impact of that revolution on the future of work: the importance of having a resilient economy, a well-trained workforce, and adding value through productivity that lifts incomes and provides a good life for all New Zealanders. It is absolutely crucial that we get away from thinking of ourselves just as—well, it is not bad in itself; it is a good first base—producers of world-class commodities and agricultural products. We must add value to that, and the No. 1 way to do it is, by adding information and protecting that sustainable competitive advantage, requires intellectual property rights. This bill tweaks—it does not radically change, but it tweaks—the system through which those rights are awarded and maintained.

What I would like to do is divide my remarks into three sections: quickly touch base on the principles that drive this reform, a quick summary of the provisions and some issues that the select committee may wish to consider, and then a word at the end on the process as we sum up.

The principles are that whatever we do in the area of intellectual property and patents must serve a higher order goal: the strategy of building a high-value, information-rich, highly productive economy in a very dynamic and rapidly changing world. This bill has got to play a small but positive part in that process. Drop it down a level and, from the point of view of the individual company—and we are a nation of small businesses; 80 percent of our companies employ fewer than 20 people—we have got to reduce the costs to Kiwi companies of getting a patent. We have got to make it easier, and we have got to make it more effective. That is the No. 2 test. The No. 3 test is that we have got to make those patents more effective. They have got to be easier, not harder, to enforce—certainly across the Tasman, and globally if we can get it.

How do the provisions shape up against those tests? Well, the first provision, the key one, is the amendment of grounds. That is, the removal of the opportunity for third parties—not, say, the New Zealand company taking the patent out, but, as my colleague Ms Curran said, removing the possibility that offshore patent trolls can make an objection based on the fact that a singly accepted patent application applies to more than one invention. That is called the lack of unity of invention objection. It is often used in defensive patent objections and filings by patent trolls.

It was very sobering to hear the statistics from Clare Curran: about two-thirds of all patent activity in the United States is defensive or trolling patents. I have heard from a very senior patent attorney in New Zealand that around 90—nine, zero—percent of all patent activity in New Zealand is defensive patenting by international companies, and only 10 percent is by New Zealand companies seeking to acquire intellectual property rights of their own. We have to turn that round, we have to get that balance better, and that is a key objective. As this goes to the select committee, at first blush the removal of that trolling provision looks like a very good idea, but let us get the select committee to test through the submission process how that is going to work in practice.

The second major provision is the trans-Tasman patent protection process. It has two component parts, both of which are voluntary under the framework called the single economic market patents programme, which was agreed between Kevin Rudd and John Key on behalf of our two countries several years ago. The first is the single application process, or SAP, and the second is the single patent examination, or SEP. That framework creates a single portal, an online patent application process where a company applies only once, and it feeds through to apply to both jurisdictions: Intellectual Property of New Zealand in New Zealand, and IP Australia across the Ditch. There is a single examiner who works through the evidence and awards, or does not award, a patent that applies to both countries.

That is really important. Potentially, it saves cost, it saves time, and it saves duplication. But if we look through the lens that around four times as many patent attorneys reside in Australia as in New Zealand, and at the fact that the average size of a Kiwi company is much smaller than the average size of an Australian company, we have to ensure in the fine print how this will work so that it suits New Zealand companies, because they are those we are elected to represent. We just want to make sure, in detail, that this is a step in the right direction.

There are some issues the select committee can look at in that regard. The first is in the regulatory impact statement, paragraph 4, where is says that the costs have not yet been quantified. It goes so far as to say that we do not know whether the cost of filing is going to go up or down. It should go down because there should be efficiency gains, and the value should go up because it applies to both countries, but it would be great to get some evidence from officials on whether that will in fact be the case—because we get paid for our results, not our good intentions.

Secondly, the scale issues are really important, and not least in the Trans-Pacific Partnership (TPP) context. I know that is a slight side issue, but there was relevant debate earlier around the application of patents to software, where around 94 percent of the ICT industry surveyed said that they did not want patents to apply to software, and I believe that the Government took some heed of that. That is crucial because it shows that in the heart of the information revolution the patent system, which was designed for the industrial age, does not work so well in the information age. As part of the Commerce Committee now, I want to make sure that this and other intellectual property legislation is futureproofed to take account of that second information revolution.

There are some wonderful quotes by Ian Taylor, the president of the largest IT-represented body, the Institute of IT Professionals of New Zealand, and, of course, the chief executive officer of the Dunedin firm Animation Research. He says: “We’re an export-driven sector, so we love free trade. However this can’t come at the cost of the future of the technology industry, and that’s what it will be if New Zealand’s current law banning software patents is traded away in the TPP.” I think that is a very interesting little vignette. It is a side issue to this bill, but it goes to the heart of why we also need to take a very careful look at the TPP, and it goes to the reasons why Labour opposes it.

The third key provision is the joint Australia - New Zealand registration of patent attorneys. There are about 200 in New Zealand and about 800 in Australia. They are going to have a single representative body, with a single registration process and a single disciplinary regime. Those clever patent attorneys also tighten up the loophole: you will not be able to provide patent attorney services at all unless you are registered through that joint trans-Tasman body, which, of course, will ensure both minimum standards and no doubt minimum costs.

The governance regime is a key issue the select committee is going to have to look at in that regard. What do we mean by that? Well, who runs this thing? What rules will it be run by? Given that there is a little bit of a difference or disequilibrium between the average Aussie intellectual property - rich firm and the average Kiwi firm—we are smaller; we are more nimble—we need to ensure that the rules suit those Kiwi companies. We need to have a governance system that allows us to go to bat for our own. If it does not, then we may see the benefits of this trade-creating measure occur disproportionately on the other side of the Ditch, and that would not be our primary objective. We need to have a good relative level of influence, based on a very important constitutional principle, which is called sovereign equality. We are a sovereign State. Australia is a sovereign State. The rules have got to be equally fair to both. We are not a state of Australia; we never will be. The select committee will have to ensure that the fine print of these governance provisions reflects the principle of sovereign equality. In so doing, we protect the interests of New Zealand businesses.

I have done a quick romp through this—the principle, the provisions, and the process. The process simply is that the select committee needs the time and the due diligence to make sure we hear from the industry. I hope we will hear from the tech sector, from the patent attorneys, and from the lawyers, and we will work through the detail from there. Labour supports this bill at its first reading. Thank you.

It is great to speak on the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. It is an important bill, and I think there is general agreement across the House on that. It aligns our patent laws with those of Australia and builds on the CER agreement, which was signed in 1983, 33 years ago. It is ironic that we are talking about that tonight—there is great agreement across the House about the aligning of these two countries’ laws and getting a single patent application and examination process across the two countries—when we were talking earlier about the Trans-Pacific Partnership, and really this is just an extension of what CER is, effectively. We have also heard today that we have fewer patents, based on our population, than we should have, compared with other countries. I think that goes to our smaller market and the economies of scale that are required to do research and development and to get a patent across the line. The cost of a patent means that you have to sell a significant number of goods or an idea to make that patent worthwhile and that application worthwhile. So I think we have a smaller market. We must innovate. But getting that scale across markets, with agreements like the CER agreement, makes it much more viable for businesses to go out and innovate. I do agree with that. I think it is quite important, although we have an economy that has a major plank in it based around primary production, that we do innovate. Those innovations come often from that industry and those businesses—in an engineering sense anyway, I know—that have developed products but have struggled to get the market size for them to warrant the cost of applying for that patent, which is very, very expensive. Certainly, being able to do that in one application across both markets will really seriously lower those costs and give those innovative companies an opportunity to consider taking that next step and enhancing the value of their business and our economy. So it is with great pleasure that I commend the bill to the House.

Bill read a first time.

Bill referred to the Commerce Committee.