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

I want to say from the outset that the Labour Party will support this bill. It is an important bill for the innovators in our community. We know from the statistics that we do not hold enough patents in New Zealand. Patents are extremely difficult and extremely expensive for many, particularly smaller innovators, in our community who want to protect their intellectual property.

But I have got to say, before I do this, that I want to thank the chair of the Commerce Committee, Melissa Lee, for the way she chaired this piece of legislation. She allowed a lot of latitude to examine its content and, particularly, the officials. Normally, I would not criticise public servants. I think we have a world-class public service. But—if you read the report from the committee, not just the minority view from the Labour Party but, actually, the words that are consensual, if you like, between the parties on the select committee—I have to criticise, absolutely, the process of this legislation.

This bill set out to facilitate the development and implementation of a single patent application process and a single patent examination process, in respect of the Intellectual Property Office of New Zealand and its equivalent in Australia. It was something that the Labour Party supported. It was a Government proposal, like many of the trans-Tasman amalgamations that we have had in respect of the law in accountancy, greater efficiency, ease of access for the industry, etc., etc. We then got some concern from the patent attorneys and, I have to say, from a couple at the big end of town—Fisher & Paykel Healthcare and others that are involved in serious innovative work—that this would be detrimental to the industry.

If you go and look at the select committee report, it talks about the lack of benefits to businesses and patent attorney firms making applications on their behalf—that there would be a small cost, perhaps, in time savings. It talks about increased administration costs to business, it talks about significant costs in other ways, and then we get to the heading: “Consultation and quantification of costs”. All those criticisms, which have led the Government to gut the bill and to reverse its original proposal to do away with the trans-Tasman amalgamation, on the basis—

💬 Hon Paul Goldsmith: We listened.

I do not actually criticise the Minister—he had a chirp there. I do not criticise him. In fact, I am on record—Melissa Lee will verify this—as saying that I felt sorry for him. If he was served up the drivel that we were served up by officials to the Minister—it was almost impossible for the select committee to make a recommendation. But he was served up, I think, grossly inadequate advice.

There was no quantification of cost in respect of costs and benefits. In fact, officials came to us—and I wrote this down. It took us, I think, two meetings to get it out of them. We asked them whether they had quantified the costs and whether they had gone and talked to industry about it. The answer was: “Oh, yes. No. Well, maybe. Well, we’ll come back to you with something.” The following week they came back to us with nothing written down. But I wrote this down: they gave us the figure, I think, of half a million dollars in respect of some of the costs. We asked: “How did you come to that?”. They said that that was “our best guess” and “back of the envelope”. That is what these officials from the Ministry of Business, Innovation and Employment (MBIE) told a select committee.

The process was so bad that at one point, thankfully—unusually, but thankfully—the Minister’s own adviser came and attended a private session of the committee, which I and, I think, all members of the committee welcomed, to give the Minister feedback on the lack of adequacy in respect of this bill. If you look at the paragraph under “Consultation and quantification of costs”—and this is a paragraph written by the committee as a whole and supported unanimously, I think, by all parties—it says this: “We consider that there was a lack of consultation with patent attorneys and the rest of the industry …”, because, of course, MBIE did not consult the innovators, the small guys and girls at the small end of town.

The Labour Party actually went out and talked to some of the universities and others, and to innovators. The officials talked to a few at the big end of town, like Fisher & Paykel. I make no criticism of Fisher & Paykel, but the officials did not actually talk to the innovators, many of whom struggle to access patents and to protect their intellectual property. The paragraph goes on: “… there was a lack of consultation with patent attorneys and the rest of the industry before the development and proposal of these enabling provisions. Moreover, we consider that quantification of likely costs—that is, the costs of developing and implementing these processes, and the compliance costs to the industry and patent applicants—was inadequate.” As I say, I do not often criticise those in our public service, but I suspect other members will join with me in that criticism.

The pre-consultation process was hopeless. When we asked about and dug into the lack of costings and the lack of quantification and the reason for the reversal of the Government’s own proposal, we were told, basically, at one point, that the industry—and by that, the officials meant the patent attorneys, but the industry is wider than that; it goes to the patent attorneys’ clients, the innovators who require this form of patent protection. We were told, basically, that “They didn’t like it, trust us.”—“us” being the officials—because they have heavy-duty so-called expertise in this. I have got to say, and I do say it with seriousness and I did say it to the officials, that if this was the sort of rubbish and lack of analysis that you served up to your Minister, I actually feel sorry for the Minister. And I mean that in all seriousness. I did say it, and we actually said to them to go back and talk with the Minister, and the Minister has made some decisions in respect of the suit.

Although we support the bill, I can do no better than read the last paragraph of the Labour Party’s minority view, which says this: “Labour will vote for the proposed amendments. We remain bemused at the dexterity required by the Government to justify a complete reversal of its original position.” This is a bill that should have gone out to the industry as a whole. It is the industry that knows best about this, but I think officials felt that they would just fire this one through. The amount of time and money that has been wasted to dish up an inadequate piece of legislation, badly drafted, and to then put that before a select committee—and then for the Government’s own officials to come in and say “We want to reverse what we originally put to you.”, not just a minor tinkering in the odd amendment, but the major part, the trans-Tasman amalgamation, if you will, of the processes around patents.

Now, it may well be valid. I say that we support the legislation, but I have to say that, given the lack of analysis and advice we had, the jury is still a bit out. We will see how this goes. But I just say to the Government—and this has bubbled up in a number of pieces of legislation where bad advice for badly thought-out legislation has been served up. Actually, to the credit of the National members and New Zealand First members and others on the committee collectively, we took a long time to examine the bill and pull the facts and the truth from officials. We have done our best, I think—and thanks to the chair—to put humpty-dumpty back together again and to put a bill before Parliament that, I hope, will serve the industry, not just the big end of town but those innovators, the patented attorneys’ clients, who need this sort of legislation to work and work well.

It is a great pleasure to rise to speak on the second reading of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. Before I actually get going on the substantive nature of the bill, I am just a little bit in shock that I got so many compliments from the member who just sat down. It is actually quite surprising to get so many compliments. I think I was counting about four things at least that he actually thanked me for. I thank the member. Compliments across the Chamber are way better than insults, and I thank the member for his contribution to the select committee process.

I would like to also thank the members of the public who, in fact, contributed to the select committee process, as the Hon Clayton Cosgrove has said. The select committee is actually there to scrutinise the piece of legislation. I just want to remind the member—he has been here long enough—that select committee members meet often, we actually examine legislation, there are things that we may not like, and select committees decide. In this circumstance, the committee as a whole agreed that there were some elements within the legislation that needed to actually exit the legislation. I am thankful for the unanimous decision that we made as a committee, and we, in fact, worked quite constructively.

I think the important aspect of the bill is not the single patent application (SAP) and single examination process (SEP); it is actually the thing about the implementation of the single trans-Tasman registrations regime for the patent attorneys in our two countries. I know that we have actually had quite a lot of submissions from patent attorneys who were opposed on the grounds that it would, perhaps, impact on the competitiveness of the New Zealand patent attorneys, that it might in fact increase costs to quality as a patent attorney in New Zealand, and that it might actually reduce the level playing field with Australian patent attorneys. There were lots of concerns raised by submitters saying that, as a country with such small numbers, we may actually lose out to Australian patent attorneys.

I think the committee actually agreed as a matter of course that, in fact, that might make us more competitive against the Australian patent attorneys. I think even the minority report of the Labour Party members actually acknowledges that, in the sum of it all, when we actually got to the bottom of it, it was, in fact, because of the benefit for New Zealand and the benefit of the competitive nature of it that we were actually supporting it. I think having joint registration implementation of patent attorneys across the two countries is something that we value and we promote and we will have, and I think it is a welcome decision. In relation to the SEP and SAP, which we removed, that was supported, and the Hon Clayton Cosgrove has spoken extensively on that particular matter.

I now move to the recommendation of the “lack of unity of invention” grounds issue, which I raised previously in my speech in the House. The issue that some people might actually have is the issue of retrospectively applying it from the date that the Patents Act 2013 entered into force, which is 13 September 2014. We as a committee did, in fact, note the undesirability of retrospective law being passed by this House, but we also understand that no application on file would be affected by this amendment, and that it is important for any potential applicants to be aware of the potential law change so that there are no challenges based on the unintended provisions currently in legislation over the period between the bill’s time in Parliament and the resulting passage into law.

I think the New Zealand patent, of course, gives key intellectual property rights under the bill with the recommendations as proposed. We will see stronger protections for patents and the role that patent attorneys across Australia and New Zealand have to play in their development. We believe in ensuring our regulatory regimes are fair and effective for those businesses and companies that utilise them, and I think it was agreed as a committee that we are here to protect the businesses so they can be competitive, and having a shared regime between Australia and New Zealand will, in fact, improve the competitiveness of New Zealand’s innovative business.

It is a good bill. I thank the members of the committee for working constructively on this bill, and I commend the bill to the House.

This is, indeed, an interesting debate to be having here in the House. We do, on this side of the House, support what is left of this bill. It became very evident through the process that the homework of the Government had not been done and that the Minister, unfortunately, had failed to instruct his officials clearly to question the motion put forward by the Prime Minister that we should unite these markets in this way. This, as I recall the history of it, was about something that the Prime Minister promised after a backslapping episode, I think, with Kevin Rudd in Australia. This is where it came from. It was a great idea, “Let’s do this. It seems logical on paper. Let’s give it a whirl.”, and away they went. I do not know whether they were kayaking at the time or quite what they were doing, but there was no real outcome. I do not know—was it a pyjama party? One of the members on the other side will be able to tell me what happened and what preceded this bright idea.

On paper, it does sound like a very simple and bright idea: the reduction of time and resources spent by businesses applying for and obtaining patents in both countries; regimes that sit slightly at odds with each other, that require correction in duplication, and so on. Why would you not address that? Why would you not get stuck in and make it a single regime across the countries? It seems pretty sensible, and as Melissa Lee has just said, New Zealanders fancy themselves as being able to do some of these things more efficiently and better than our cousins across the Tasman—and we often do in these common market things. So the idea looked good on paper, and somehow that was the end of it. A bill was drafted up. It went through—“Tickety-boo, tickety-boo. Send it off to the parliamentary Chamber. We will rip this one through, we will put a big tick next to it, and we will claim that we made business easier. That is what we do as a Government.” But there was no homework done.

What became evident in the process as this went through the select committee was that there had been no homework done. The Government had not even talked to the industry itself. The Government had not talked to the industry that would be affected by the legislation. It is almost beyond belief. I have never seen anything quite like it in this Parliament. And, of course, as Mr Cosgrove said in his contribution, the dexterity required for the Government to reverse its original position in this particular bill was admirable—

💬 Hon Clayton Cosgrove: Awe inspiring.

It was awe inspiring. It turned on the head of a pin and then eviscerated the bill, sending it through the Parliament.

How much does each bill that goes through Parliament cost in terms of the time of all the members sitting here? It would be hundreds of thousands of dollars, I dare say, by the time you add in the staff time to get one bill through this Parliament. It is important that this Parliament debates issues that make sense, not ones that have not been homeworked first; not ones where the Minister is trying to do the Prime Minister’s bidding without checking out whether it is a good idea in the first place. This is because it then leads to this kind of embarrassment, where we stand here in the House and have to reverse out, in quite an elegant way, for the Government to put it through.

Believe you me, it would have been delightful for us to oppose this bill, but we realised on this side of the House—and we certainly hope—that we will inherit this legislation before too long. This Government is now so out of touch, so arrogant, that it does not want to consult industry on anything, and it is digging its own grave right now with this kind of legislation. We hope, ultimately, when we are in Government, to manage this kind of legislation and make it good and better for business, but across there they are making an absolute bugger’s muddle of this, and that is why we are standing here today supporting a bill that started out doing one thing and now does almost nothing. It now does almost nothing. It is because that was the save that we could make that actually got a bill through that did one or two little, tiny things that needed to be done anyway and it somehow went some way towards justifying the hundreds of thousands of dollars of parliamentary time that it cost to put a bill through. We did not want to just oppose it and have an absolute shambles go through, because they had the numbers. We had to find a way through in the select committee process that somehow made sense, and that somehow satisfied the industry.

The industry, of course, put up the argument that when you are looking at doing patents and so on, it is advantageous to have a local industry that knows how this stuff is done—one that is close to business in your own country. As people deal with intellectual property, naturally enough they reach out to those who are closest to them—the people whom they have dealt with before, the businesses that help them with their intellectual property development. If you were to gut the industry in New Zealand by completely changing the requirements overnight, you would end up with a situation where New Zealand businesses were required to get in contact with a Sydney office they had never had anything to do with or a Melbourne office they had never had anything to do with, and you would have the world turned upside down. You would have, effectively, a loss of intellectual property to New Zealand, where the whole object should be that you set up a regime that looked to gain intellectual property for New Zealand in the longer term. The whole thing was an absolute shambles. It was a sloppy, unedifying process of drafting, as the report notes.

I congratulate members opposite—I really, genuinely do—who could also see how bad it was and who had the courage over there to challenge the Minister and say: “Look, this is just so bad that we are going to recommend to the Minister that we take out the key parts of the bill.” There you have it in the combined report from both sides of the select committee, which says: “We therefore recommend that clause 5 be deleted to remove the empowering provisions.” It does not get much plainer than that. They gutted the bill, and they agreed to gut the bill because it just did not make sense. Those on the select committee did their job, and I congratulate them on that side of the House. Sometimes they require a little bit of pushing, a little bit of guidance to challenge the Minister, and I can understand that—the backbenchers want to be Ministers themselves one day and do not want to criticise colleagues—but, in this case, those members opposite should stand up and take a bow. Mr Brett Hudson and our chair, Melissa Lee, should stand up and take a bow because they were prepared to challenge the Minister and they were right—they were absolutely right. The thing is a shambles, and members on that side on the backbenches were prepared to stand up to a Minister who had not done his homework, who was too quick to say yes to the Prime Minister to try to do bidding for something that was completely indefensible.

It would not have got this far down the track if the Minister himself had spotted it, if he had asked officials to do their homework, if he had asked officials to talk to the industry properly, and if he had asked officials to talk to their Australian counterparts—who, incidentally, stopped work on it when they saw that it was an absolute shambles, too. The Australian counterparts stopped work on this. They have no intention of bringing this into place. Everybody could see that the bill as it was proposed was not good for New Zealand and was unlikely to proceed because of that. Thank goodness, again, for Mr Brett Hudson and Ms Melissa Lee, who stood up, along with other members of the committee, and said: “Enough. Enough, Minister. This is a shambles. We will have nothing to do with it, and we will be glad to eviscerate it for you so you don’t have to face the ignominy of going out to the industry with a bill that has just made a mess of that whole field.”

I think we do have to look at the bigger picture and see that this bill is a sign—one of those signs, one of those symptoms—of a Government that has lost its way. It is a Government that had, once upon a time, a claim to represent business—small business in particular—but here in this bill the very group affected by this bugger’s muddle would have been small business, and the Government is so out of touch that it does not think it needs to consult the very industry that is affected by the bill. You have got to ask yourself what the Minister was doing when he waved this bill through to Parliament. It is half-baked, but we are seeing that across Government. We are seeing that in housing policy—the Government has come forward with a half-baked housing policy when we have got people out there who are living in cars. We have got people living in cars—

The ASSISTANT SPEAKER (Lindsay Tisch): Order! That is not part of the bill.

—and their half-baked solutions will not solve that. I challenge members opposite to continue to challenge the Ministers who are out of touch—those backbenchers across there who I again say should take a bow for agreeing to make these changes in the bill to save it from its own fate. They should stand and take a bow, but they should also challenge the Government as more bills come through this House that achieve precisely unedifying outcomes for industry, for New Zealand, and for business. Good on those members of the committee who stood up and said they would not stand for this. Well done those members of the committee across the House who said the Minister needs to do his homework. The Minister has been put on notice, and I hope that the bills we receive in future will be better for New Zealand, better for business, and better overall. Thank you.

It is a pleasure to rise in support of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill.

💬 Dr David Clark: Take a bow.

Thank you, Dr Clark; I will bow. Before I move on to it, I just want to remind the House that the actual core purpose of this bill was to replace a 60-year-old and outdated regulatory regime for the attorneys and to put in a modern licensing regime. That was the heart of the bill.

To help Dr Clark and his understanding of what empowering provisions are, empowering provisions do not mean that those provisions are the heart of the bill. Empowering provisions empower other things to take place, and they may not themselves be wholly prescriptive. That is what an empowering provision does—it empowers something else to happen—but, unfortunately, Dr Clark thinks that an empowering provision is the heart of the bill. He is most certainly wrong. The two parts that the bill was intended for and will deliver were, firstly, a joint registration system for patent attorneys between Australia and New Zealand, which would also include a single disciplinary regime and a disciplinary tribunal to determine complaints and to discipline attorneys as might be necessary.

The second substantial part of the bill was about opposition to patents on the grounds of lack of unity of invention, and I will cover that one first, because the lack of unity of invention was simply a drafting error from a previous amendment. What it meant was that unless you were seeking to patent only one unique piece of innovation, someone could object to your patent application and it would be struck out. It was clearly something that had not originally been intended, and it was the purpose of this bill—and still is—to remove that odd ground for opposition.

But the heart of it is about the registration system, which includes the disciplinary framework and tribunal. Within that, it is true that the officials had looked at a single application process and a single examination process common to the two countries for patent applications and examinations. What was discovered through the select committee process was that that was looked at some years ago, and times have moved on. Technology has moved on. There are already some applications, either in place or in part, being developed that would, to one degree or another—and, quite frankly, to almost a whole degree—supersede and nullify the SAP/SEP application, as it was called, that had originally been mooted. It was for that reason that it was removed from the bill. There simply is no purpose for that, no reason to go to those lengths on our own now, as things currently stand.

But the heart of the bill—the heart of what is still progressing through this House—is all about a joint registration system between Australia and New Zealand for patent attorneys, one that has a common disciplinary code of conduct and a common disciplinary tribunal. That has always been what this bill is about, that is what it remains about, and I commend it to the House.

As a new MP, I am going to try to be constructive with all my interventions, as I said in my maiden speech. However, I should say that, in this case, I find that to be a major challenge. I am, obviously, new to considering this Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill, but I have benefited from discussions with my colleagues. In reading through the history of this bill and the submissions so far, and the discussions of the Commerce Committee, I am deeply concerned at the performance of the Government on this bill. It has been poorly drafted legislation and poor Government policy direction. There was obviously a serious problem with the previous legislation, enacted in 2013, which had to be rectified by retrospective legislation. This is an extreme measure that the House should avoid wherever possible. However, due to poor drafting, we agree that it is necessary in this case, and, reluctantly, the Green Party will support this removal of the lack of unity for invention in order to rectify the problem with the Patents Act 2013.

The first version of this bill included a single patent application and a single examination process. These were strongly opposed by submitters, by the Green Party, and, ultimately, by the Commerce Committee itself—and I echo my thanks to the chair and members of the committee from all sides of the House for their acceptance of the need for change to this bill. The officials eventually agreed that the joint mechanisms with Australia would not be in New Zealand’s interest and have recommended deleting clause 5 from this bill. The Green Party agrees, but it questions how the draft bill was able to get to this stage without proper analysis. The process around this bill has been flawed. There was inadequate consultation on the provisions of the draft bill—a point made by many submitters.

The remaining substantive provision in this bill is the trans-Tasman licensing regime for patent attorneys. We believe this needs careful consideration, particularly in light of the failings outlined previously. We accept the case for updating and modernising the existing licensing regime under the Patents Act 1953. It is, as has been observed, over 60 years old, and we agree it is no longer fit for purpose. However, we have got continuing concerns over the remaining proposals in this bill, and we are mindful that they were opposed by all 13 submissions from patent attorneys and the submission from Fisher & Paykel Healthcare Ltd. For clarification, the opposition from these submissions is opposing the licensing provisions as well as those provisions that have already been taken out of the bill.

We are particularly concerned by the lack of joined-up thinking around the licensing regime. A more coherent approach would have ensured that the key elements were in place before instituting trans-Tasman licensing—notably a New Zealand trademark or attorney scheme, a New Zealand qualification scheme, and an extended period for a New Zealand patent attorney to register in Australia. We urge the Government to put these missing elements in place. To not do so, we think, would result in prospective New Zealand patent attorneys being disadvantaged in comparison with their counterparts across the Tasman—and being required to bear higher costs.

More broadly, we think there needs to be a review of the effectiveness of trans-Tasman harmonisation arrangements to ensure that there are not unintended consequences for New Zealand professionals. The establishment of this licensing scheme should not be regarded as a model for other professions—other than how not to do it. An ideological push for harmonisation will not work. Any change needs serious work and analysis, and we believe this is a cautionary tale for other attempts for cross-Tasman harmonisation. The licensing regime would, as the Government has pointed out, create a level playing field in some respects; for example, the same set of criteria to register and practise would apply to New Zealand and Australian patent attorneys. However, since the locus for registration and licensing will be in Australia, it is likely that New Zealand patent attorneys will need to bear additional costs for travel, particularly if it is a protracted process such as a disciplinary hearing.

There are also issues of governance that will not be so subject to a level playing field. In particular, a domination of Australian representatives on the governing council and disciplinary board, established under Australian law, is likely to mean that future development of licensing is likely to be more oriented towards the needs of Australian firms and not to New Zealand patent attorneys. It will be similar with the disciplinary process and rules. It may well be that the identical qualifications and codes of conduct would achieve the Government’s aims of harmonisation and cost-effectiveness, but with the sacrifice of local flexibility and governance.

The Green Party accepts that major changes have already been made to this bill. We would, however, like there to be greater attention paid to the concerns raised by submitters, and particularly to the issues of joined-up thinking on a trademark scheme and New Zealand qualification scheme. This should be done as a matter of urgency, and we would look to have assurances in that respect. We also consider there may be a process of governance that would allow the establishment of something like a governance and disciplinary subcommittee of the board that would be specific to dealing with the application of a common base of qualification standards and rules for application in New Zealand.

We look forward to analysis about the impacts of the remaining elements of the bill on small business. That is a crucial consideration that we consider has not yet had sufficient scrutiny. In closing, we have concerns, but we would be prepared to support the bill if there were assurances that these issues would be addressed in the implementation of the bill, and we would be looking forward to further amendments at the next, Committee stage. Thank you.

I am pleased to rise on behalf of New Zealand First and take a call on the second reading of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill. New Zealand First supported this bill to the Commerce Committee in its first reading. At the time, it seemed like this bill was a pretty straightforward bill that had all the answers to fix all the outdated issues, the poor drafting results, and the things that were wrong for the patent profession.

In my first reading speech, I referred to the comprehensive redrafting of the Patents Act 2013, which took effect in September 2014. That was, at the time, a mammoth exercise where we saw sweeping changes introduced to the Act, and now, 18 months later, here we are again in the House fixing unintended consequences. That is why New Zealand First supported this bill in the first reading—so it could go through the select committee process and go through the scrutiny it needed to have.

When this bill came to the Commerce Committee, we were provided with advisers, which is the normal process. I believe that when advisers are appointed to any select committee, the chief purpose of the advisers is to be the specialists for those members of that select committee. Therefore, they are to provide documentation, evidence, facts, things that actually could be wrong with the bill, and recommendations that we need to consider when going through the bill under that scrutiny process. I absolutely believe that advisers need to be professional at all times. They need to be organised, they have to be informed, and they must treat members with respect. Above all, I believe that should there be any potential personal interest in a bill and its passage through the select committee and this House, then it should be treated by advisers with the professionalism that I would expect them to give to a bill.

I do not wish to slam the advisers too heavily, but I do feel really strongly about the lack of transparency. I felt, at the time, quite concerned about the fact that when advisers were pushed, they really did not want to give members the answers that we wanted—like the cost analysis of the implementation, which we expected to be informed about by the advisers. I found that that whole process was a Mickey Mouse outfit. I found that it was like drawing blood out of a stone to get the advisers to answer the questions. So I echo what members of the Labour Party have said this evening—that the performance of the advisers overall was really poor. Had I known at that time that there was a process that members were actually allowed to perform, I would have actually insisted on that and had an outcome happen with those advisers. So I believe it was a hindrance to the members, and it was really frustrating.

Through my contribution tonight I will address why this bill is still not fit for purpose. After what the Labour Party and Green Party members have just said, I cannot understand why they are still supporting this bill. It is critical that this bill has buy-in from the profession itself and the industry. I feel that with the amendments and with the submissions that came through, the Government still does not have buy-in on this bill. I think it is imperative that we make the right choices and we look after the industries that we say this bill will look after.

There were 20 submissions that came to the select committee. We heard six oral submissions, and there were two supplementary submissions. As has already been echoed through the House, there was an absolutely overwhelming opposition from the submitters—the patent attorneys—which was to do with the single patent application process (SAP) and the single patent examination process (SEP) and the aim to implement a pilot project to see whether this project would work across the Australia and New Zealand jurisdiction.

However, the advisers advised the select committee that a new electronic procedure for filing patent applications had been put in place by the World Intellectual Property Organization—WIPO for short—and this was not only endorsed by the industry itself but used effectively. They had alerted advisers that the pilot project preferred by our advisers would actually make the SEP and the SAP undesirable and, therefore, redundant. This was the issue that New Zealand First had when we first considered the bill, and that is what raised a red flag.

I just want to also add to the fact that had the SAP and SEP not been removed from this bill, it would have put an absolute financial burden on the patent profession itself. What I do want to address is that, clearly, the Minister of Commerce and Consumer Affairs was not aware that the proposed SAP and SEP, proposed by his advisers, was merely a pilot programme that advisers wanted to put to the test through legislating a pilot programme inside of this bill, which came into the House on 9 February this year. They wanted this pilot programme to be put inside of this bill so that it could be tested to see whether or not it was going to be successful. I seriously ask how the legislating of a pilot programme because of the belief of an adviser that this would work in this country can be a responsible use of the time of this House.

In terms of the submitters who came to the select committee, I was alerted to the fact that they felt that they were absolutely not consulted with at all and that their industry, overall, performed quite well. The first time they knew that there were issues was actually when this bill came to the House. I would like to actually read some of the concerns from the submitters, specifically a submission from the New Zealand Institute of Patent Attorneys. It said: “It is our view that consultation with the New Zealand profession has focussed solely on how a joint registration regime should be implemented rather than on whether it is wanted or required or how it would benefit New Zealand businesses and/or the New Zealand patent attorney profession. The NZIPA can only see increased costs and compliance for the New Zealand profession as a consequence of joint registration.” Another submitter, Mr Matt Adams, stated: “We don’t seem to have been consulted on whether we want a joint registration regime. The assumption is that we need one.”—the assumption was that they needed one. He continues: “If we are going to go down this route we need to make sure that we have a level playing field. What I see proposed needs amendment to ensure a level playing field.”

Another question that came up was the qualification pathway of patent attorneys through this proposal. A very well-known submitter with a lot of credentials in this field submitted about the fact they were worried about the watering down of patent attorneys here in New Zealand and their being overtaken by the Australian system. What this submitter, Elspeth Buchanan, said in her submission was: “Further, since New Zealand will have only a tiny representation on the governing council, it will be very easy for the governing council to set (for example) continuing education requirements and training requirements to suit the Australian profession only. As matters stand at present, it is doubtful whether it is going to be possible to train patent attorneys in New Zealand in the same manner as prescribed in Australia. If in fact all training has to be done in Australia, this is a truly enormous cost burden for any of the New Zealand firms, and the end result could easily be that New Zealand firms cannot accept trainees. Persuading Australian staff to come across to work in New Zealand firms (which in general pay substantially lower salaries) is extremely difficult, and it is not scaremongering to predict that the New Zealand patent attorney profession could in fact cease to exist within a few years.” That was a huge concern when we were within the select committee, listening to the submissions.

In closing, New Zealand First is absolutely not in favour of supporting bad legislation, and this bill is no different. Sadly, the National Government has brought bills like this to the House many times. They are written badly, not fit for purpose, and not fit for the profession that they say they are going to protect. This bill does not justify the fact that the Government has been forced to do a complete U-turn, scrap the SEP process and the SAP, and has still continued to ignore what the majority of the submitters said—that “We are an industry that acts above the expectations of New Zealand, and this bill is going to do nothing but wipe us out.” Thank you.

I am pleased to take a call on the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill in its second reading. I just want to point out a small irony, somewhat tongue-in-cheek, with the last speaker who has been very concerned about a supposed U-turn around the single patent application process (SAP) and the single patent examination process (SEP) but has also indicated that New Zealand First has done a U-turn and is voting from having supported it to not supporting it.

This is a good piece of legislation. It is a small change, but obviously it is significant for those who practise as patent attorneys. This is something that has come about—well, I think it is about 60 years, I understand, since there have been changes—and fundamentally, at the heart of this, is to work out a cooperative model between Australia and New Zealand, and why, as we heard from other speakers, this could be of a concern. Actually, it sits on a background of a closer economic relationships between New Zealand and Australia over a long, long time. In fact, I would argue that it would be rather odd for us not to move towards a single framework or system in this area, in the way that we have done with many, many others.

I note too in some of contributions that there was great concern around the officials. It is all well and true for people to voice what they feel, and I am not going to change that. But I was struck by one line that was put out earlier, which I thought was quite indicative: to say that “we did not get the answers we wanted”. We heard from the Opposition that “we did not get the answers we wanted”. I think that is an insight there, shall we say: that receiving answers is not about whether you want them or not; it is the answers that were given. I suppose that is where some of the debate has come from.

The other thing I just want to draw the House’s attention to, and certainly of anyone who is listening, is this whole SAP and SEP thing. It is always very easy at times to have a whole lot of acronyms, but it can sound a little bit daunting. SAP refers to what they call the single patent application process and SEP is the single patent examination process. The long and the short of it is that these were proposed and now have been withdrawn for the simple reason that, actually, the ground has changed. The situation has changed. I think it would be foolhardy for any Government to maintain a system whose time has come. I know it has become almost a singular obsessive focus of the Opposition. Again, it is completely up to them. But I see it as quite prudent, as once again the Government continues to adapt to modern times. I look forward to the progress of this bill.

Thank you for the opportunity to stand in support of the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Bill in its second reading. The main purpose of this bill is to update a 60-year-old, outdated regulatory regime so that patent attorneys can have a modern licensing regime. It is the most important part of the bill, which has been missed out. It is going to benefit patent attorneys significantly with time and cost savings, through the establishment of a single trans-Tasman registration regime. It will allow them to seamlessly practise in both New Zealand and Australia. That is important, because the Government has been working for a long time to ensure that businesses get the opportunity to do their business in a better way and to reduce red-tapeism and paperwork so that it can be helpful in growing their business.

This bill helps to build our economy, and we have an understanding with Australia that we will have many more opportunities to reduce red-tapeism. This bill aligns our patents system more closely with Australia’s, building on our close economic relationship by integrating a trans-Tasman relationship. It is important to understand that businesses should be allowed to do what they do best—not do paperwork. With these words, I commend this bill to the House.

I rise in support of this bill along with my colleagues, but I do so with some comments that I think go to the heart of the bill’s conception, construction, and implementation. If I can use a medical analogy—this bill was flawed in its conception, it was mangled in its gestation, and it would have been stillborn were it not for the midwifery that was offered by the Opposition. I am sure that the Minister will have learnt some salutary lessons from this process.

In all my time in this House, I have probably never ever seen a worse officials’ performance in front of a parliamentary select committee. To say that they were not frank would be a great compliment. To say that the information presented to members of this House was partial would be undoubtedly kind. There were real issues of probity when it emerged, under cross-examination from my colleague Mr Cosgrove, that the officials briefing the New Zealand Parliament in a confidential, closed session were at the same time carrying out negotiations with their Australian counterparts, without reference to the select committee and without volunteering that information until it was dragged out of them. I note that there are none actually present in the Chamber today. Can I just say that I hope the Minister will take those matters up with the chief executive concerned, because it was frankly a display that was not befitting of the high standards that the New Zealand Parliament and the New Zealand Government normally expect.

Let me restate before I get into the meat of the bill where we in the Labour Opposition and the Government do agree, because there is some common ground and that is the basis of why we are in fact offering our support for this vote. Firstly, of course we support free and fair international trade. In general, we support closer economic integration with our largest market, our neighbour Australia, provided that that operates in terms of New Zealand’s national interests. We supported the closer economic partnership agreement. We support, within limits, the single economic market limit that was actually kicked off by the Hon Dr Michael Cullen and his counterpart, Mr Costello, in Australia. But it is worth noting, because it is an underpinning of this bill, that the current Government changed the rules from pursuing those options that were in the interests of New Zealand and in the interests of Australia to pursuing anything that was in the interests of the totality, which means usually that it would be in the interests of the larger player but may not be in the interests of the smaller one.

I say that the job of the New Zealand Government is to look after the New Zealand national interest, and we were vigilant in this committee, and the Government dropped the ball. The level of research contained in the regulatory impact statement and the materials presented to the committee were desultory. There was no cost-benefit analysis to speak of to support the Government’s contention that the bill as proposed would have reduced compliance costs to New Zealand business. The Labour Party supports the idea, as we support New Zealand business, that we do want to remove unnecessary compliance costs. And if it were the case that the patent attorneys profession was, shall we say, gold plating or featherbedding, that would be a legitimate target for Government action, except that there was actually no evidence presented to the Commerce Committee that that was in fact the case in any quantifiable manner. The only submissions that were available to the select committee, from both the institute and New Zealand businesses, said the opposite—that the bill as drafted would have increased compliance costs to New Zealand and would have defeated its own purposes. And submitters pointed out that the Government’s officials had not consulted with them in an open and broad-based manner. It was a bad process supporting a questionable idea.

The performance of advisers in the select committee was not up to par, and that is putting it mildly. Not only was there not any form of rigorous cost-benefit analysis but officials were not frank about the level of analysis that did exist. In other words, it sounded like there was some until they were cross-examined and we found out that the emperor had no clothes on. That should not be the case in the New Zealand parliamentary process.

Secondly, as I have said, officials of the New Zealand Government were having a parallel negotiation with their Australian counterparts, which resulted in the amendments that have been brought to this House. The trouble was, they must have been giving them information about a confidential New Zealand parliamentary process while it was happening and without being frank to us that that was going on. Again, it was cross-examination from my colleagues that slowly but surely dragged out of the officials what was actually going on, and it was reprehensible and bad process.

Thirdly, officials contradicted themselves, because they said that this bill was designed to enrich the intellectual property environment of New Zealand. Yet all of the evidence, all of the submissions, rang warning bells that in the medium- to long-term the opposite would be the case. The reason for that, which was contained in submissions, was that it shifted the centre of gravity of IP formation and protection away from New Zealand to Australia, reinforcing a pre-existing process that corporate control and corporate head offices were already largely moving across the Ditch and high-end professional services were following them, and this would mean that the IP community was likewise. Although that may not have been a critical issue in the first year, it may have been a very significant issue over 10 years or 20 years when it became more and more difficult to sustain intellectual property protection and IP law and practices in New Zealand, and so trade marking and copyrighting would be done in Australia—yet another reason why, if you are an innovator, you would not locate in New Zealand.

That is a step that, if that had played out—and it actually will not, to an extent that we consider dangerous, because of the amendments—it would have been directly contrary to the stated goals not only of the New Zealand Labour Party but of the Government itself: that we want to have a higher value, higher-income, high knowledge economy. Why would we export our knowledge production processes to our nearest competitor? It made no sense. All right, if there had been evidence of a major cost advantage, but there was none. All right, if corporate New Zealand had lined up behind it, but they did the opposite. All right, if there had been good consultation and a reasonable level of acceptance by the profession, but there was the opposite. Just imagine that had been done to the New Zealand Law Society or the Bankers’ Association or Federated Farmers or the Road Transport Federation. Why does the Government have it in for the intellectual property profession? It beggars belief.

Well, what was the end of this story? As I said, the bill was subject to a forceps delivery. There was quite a bit of pain. Two thirds of the bill was removed without anaesthetic. The single application process and the single examination process, which were the heart of the bill, no longer exist. They have not been amended; they have been amputated. The only thing that is left in this shell of a bill, a fig leaf for ministerial process, was the joint training process that allows New Zealand patent attorneys to be trained in Australian universities. Fair enough, because there currently is not a proper course in New Zealand, although Victoria wants to put one on. I do think that although we support this bill, we are going to need to monitor the long-term impact of the educational opportunities on both sides of the Tasman.

Summing up, as you will gather from my remarks, I have rarely seen a worse select committee process than this. I would like to commend my colleagues for the way in which they handled that. They were temperate, but they were also not going to let the issues go when officials were trying to do an end run around the New Zealand Parliament. I am pleased that they were able to hold them to account. I commend the Minister, actually, for having the courage to make the amendments that he has made, which has afforded us the opportunity of supporting the bill. As I say, we support the principle of reducing cost where that can reasonably be done for the New Zealand business community, we support good international trade rules, and we support, within reason, a closer relationship with Australia. We will watch with interest to see what contribution the remains of the bill make.