Patents (Advancement Patents) Amendment Bill

I move, That the Patents (Advancement Patents) Amendment Bill be now read a first time. I nominate the Governance and Administration Committee to consider the bill.

It is with immense pleasure I take this call in the first reading of my member’s bill, the Patents (Advancement Patents) Amendment Bill. The timing for my bill to be drawn from the ballot was perfect. It was in the month of April. It is in the month of April that we observe the World Intellectual Property Day. My bill is a substantial bill to address a very important gap in our intellectual property protection legislation. I’m really passionate about supporting more and more research and development and more and more technological advancement, and this bill is a product of my passion to do more for small to medium enterprises and more technological advancement. This bill is to allow incremental advancements that may not qualify for a standard patent to have intellectual property protection rights.

Protecting ideas and advancements helps New Zealand innovators and businesses, and it will help them stand out on the international stage, as well—not only locally. This bill is to introduce a second-tier patent system that is accessible and is quicker, and this is, as I said, for small to medium enterprises making incremental advancements that may or may not qualify for a standard patent under the standard patent Act—that is, the Patents Act 2013. With the introduction of a second-tier patent system, the owners of the advancement patent will be able to enjoy an innovation monopoly in the same way the owners of a standard patent can. If it is a product to be commercialised, they can go out and commercialise it with reduced risk of it being copied or stolen. With this ability, New Zealanders will continue to benefit from the creativity and innovation that we have in our country.

New Zealand is known to be a net importer of technology. We have heard this several times. Yes, New Zealand is a net importer of technology, but I want to challenge our views, and I want to say that we don’t want to be complacent. We don’t want to accept the status quo. If you go out and see innovators and businesses, we know that they are already doing really well not just locally but internationally too, and they are really eager and ready to lead us on the international stage. But what we have to do is move along with these innovators and businesses. We have to provide the tools and means for these small businesses and researchers to do well so that we can shift our status of being a net importer of technology to actually becoming a trader of technology.

This won’t happen without the help that is needed for small to medium enterprises, and protection of intellectual property is a very important tool for that. People that are stuck in that mentality, I say to those people they should come along and visit businesses that I see—research institutes, universities, and businesses doing a great job. They are pushing New Zealand forward on the innovation front. It’s about time we put our money where our mouth is and help to provide the means New Zealand needs for the future of our technological development.

I’m really fortunate to be surrounded by people that are always pushing ideas forward. But, with a large number of people, the necessity of innovation is taken for granted. People don’t realise how time-consuming it is to come up with an idea, an innovation, and then take it to the next level. It’s not only that taking it to the next level but it’s also about securing markets in a successful manner, and that is where the idea of intellectual property protection comes in, because you don’t want to see someone else stealing your idea. As I said, simply innovating isn’t enough. Protecting that innovation is essential, and that is why my bill is important.

Many innovations that would have qualified only for a second-tier patent in other countries were able to get a standard patent here in New Zealand under the old patents Act—that is, the Patents Act 1953. But, as we know, we reviewed our Patents Act 1953, and now we have a new Patents Act—that is, the Patents Act 2013. That was a good thing to do, bringing the level of invention in line with the international norm. But, with that, what has happened is that some of the incremental advancements will have nothing to fall back on when it comes to protecting those advancements. So there is a gap, and this gap needs to be filled. This is to allow small to medium enterprises to enjoy intellectual property rights. I believe that with increased investment in research and development, an increase in economic activity would follow.

According to the World Intellectual Property Organisation, there are 59 countries around the world that already have a second-tier patent system—yes, I repeat: 59 countries around the world already have some form of second-tier patent system. So with so many countries already having a second-tier patent system, it was my job, while creating this bill, to look at what worked and what didn’t work in other countries. So I looked at some successful models in European countries, and I also very keenly looked at the Australian innovation patent system for reasons of it being in the media. We saw that in Australia the Government decided to abolish it but then they decided not to. So that was a big push from small to medium enterprises in Australia.

For someone to do a direct comparison of my bill with the Australian innovation system will be completely wrong, because I want to highlight this: there is no international consistency when it comes to second-tier patent systems. We can adopt a second-tier patent system according to our conditions, according to our uniqueness.

So, as I said, I learnt from other countries what worked and what didn’t work, so it was a great position I was in. Just to give some examples, in Australia we know that when it underwent the review, we saw the biggest criticism of the Australian innovation patent system was that it doesn’t provide certainty. Uncertainty was the big issue there, because examination is optional in the innovation patent system in Australia. But, as members will see in my bill, examination is required at three years, and, if it is not examined, the patent going to lapse. This also addresses another concern of other companies coming and filing patents to block innovation. That has been already addressed in my legislation.

The second thing that was criticised in the Australian innovation patent system was that it was difficult to know if it was already a certified patent. In my proposal, I have made it very, very clear that it is going to be called a provisional advancement patent until it is certified and will be called an advancement patent only after certification. But, as I said, there are some things that are different from other countries, as we are a small country with a smaller economy and our businesses, our researchers, might take longer to secure funding to commercialise their prototype. So I have allowed a slightly longer time than other countries, which is 10 years, for my advancement patent. It’s really important to note that we are a small country, we have small businesses, and we need to do more for our small businesses so that they can thrive.

To summarise, this bill will help innovation. This bill will help research and development. Most importantly, this bill will help start-up companies. This bill will help companies that are going through that very important phase, that growth phase. This is about supporting the ideas that start from garages, the ideas that start up on kitchen benches. Our businesses—96 percent of our businesses are small to medium enterprises. To allow innovation, we should not fear competition. I repeat: to allow innovation, we should not fear competition.

I’m really hopeful that the Government will take a bipartisan approach on this bill and support this bill to go to the select committee to allow the sector to have their say. This is not only about this bill; this is also about raising awareness about intellectual property protection rights in New Zealand. So I’m really hopeful that the Government, if they wish to support small to medium enterprises, if they want to increase research and development—this is a perfect opportunity. I urge Government members to support this very important bill. I support this bill and commend this bill to the House. Thank you, Madam Deputy Speaker.

Thank you very much, Madam Deputy Speaker. Can I start my contribution by acknowledging the sponsor of this bill, Parmjeet Parmar, and the good intentions with which she brings this bill before the House. I think all members of this House want to see greater investment in research and development in New Zealand. We do lag behind other OECD nations in our private and public investment in research and development, and we want to see more businesses engaged in research, engaged in high-technology activities, because we know that is what can help drive productivity, that is what can help drive wages up, and that is what can improve living standards. As a Government that is absolutely focused on transitioning our economy to one that is productive, sustainable, and inclusive, we certainly commend the member for bringing this bill to the House with those intentions, which makes me wonder why the previous Government didn’t include a second-tier patent system when they introduced the new Patents Act in 2013.

By 2013 plenty of other countries, as the member sponsoring the bill said, already had a two-tier system. It was not a new idea, and if it was a good idea, if it was one that was working well and that would be fit for purpose here in New Zealand, I’m quite sure that the previous Government would have introduced it as part of its Government legislation. That was legislation that the Labour Party in Opposition supported. It was a good piece of legislation, and the idea that is at the heart of this bill that the member is bringing is one that could easily have been included in that bill. But I think there are good reasons why the previous Government did not have a two-tier patent system as part of the Patents Act 2013.

The first is that there are question marks about whether two-tier systems really work. In fact, many of the nations that have two-tier systems either have decided to do away with it or are actively considering whether they should do away with having a two-tier system. So, for instance, the Netherlands introduced a two-tier system in April 1995, but in June 2008 they did away with the two-tier system. As is common in most second-tier patent systems, there was no examination for novelty and an inventive step at the patent office. The unexamined six-year patents created legal uncertainty to competitors.

💬 Chris Bishop: Send it to a committee to have the debate.

Belgium followed the Netherlands in January 2009—and the member raised Australia. Australia is another jurisdiction where they are seriously considering, actively considering, doing away with two-tier systems. So the members opposite are saying, “Well, send it to a select committee.” Well, actually, people have had their say in New Zealand, first of all, by not clamouring for this. We in the Government actually tried to find where the public outcry is, where the outcry is from within the tech sector, and where the small to medium sized enterprises are—those who want to engage in more research and development and want to be more high-technology and be able to get more patents more easily. Where is the cry from them for this change?

There isn’t one. It’s not there. It simply doesn’t exist. In fact, Computerworld New Zealand described this bill as something of a horror film for our industry. Now, I think that’s a bit rough on the member, to be honest, but it does demonstrate the feelings of people out there who are actually operating in this space and would be coming out and supporting this if they thought it was a good idea.

I know I haven’t got much time left this evening, but I just want to touch on a comment that was made at the 10th annual conference of the European Policy for Intellectual Property Association, “As a conclusion, the empirical evidence on the economic benefits of two-tiered patent systems in advanced economies remains non-existent.” Why would we, at this time, introduce a bill that takes us down a path that so many other countries are rejecting at this stage? I do appreciate what the member is trying to do. I understand the sentiment behind this bill, but it is clear that this is not the direction that other nations that we compare ourselves with are going in. In fact, they’re going in the opposite direction.

Debate interrupted.

The House adjourned at 10 p.m.