A sneaky little devil in the detail: Cabinet paper on New Zealand's new Patents Regulations imposes time limit for filing divisional applications

Article  \  7 Aug 2014

A proposed change to the time period within which applicants can file a divisional application will significantly reduce patent applicants flexibility during the examination process. Sue Rutledge explains.

New Zealand's new Patents Act 2013 will come into force on or before 13 September 2014. The new Act is a long overdue modernisation of our well out-of-date 60 year old Act, and the changes generally bring us more into line with other jurisdictions such as Australia and Europe. Read our latest update on the change that imposes a time limit for filing divisional applications.

Somewhat ironically, international applicants, particularly in the pharmaceutical and biotechnology areas, are likely to be more affected by a change that is characterised, rather misleadingly, as 'a minor and/or technical regulation' in a cabinet paper released on 2 July 2014.  The cabinet paper approves the drafting of the Patents Regulations 2014, which will implement procedural features of the Act. 

The proposed change relates to the time period within which applicants can file a divisional application, which is a type of patent application that contains subject matter from a previously filed application (the parent application).  A divisional application is filed later than the parent application, but it may retain its parent's filing date.

The proposed regulation effectively restricts the period in which a divisional application can be filed to five years from the effective filing date of the parent application. It does this by setting the deadline by which examination of a divisional application must be requested at five years from the antedated date of filing the divisional application.

In contrast, under the current law, a divisional application can be filed at any time while an application is pending and before it has been accepted for grant.

Why the change?

The official documents issued concerning the drafting of the new Patents Regulations are curiously silent about the proposed change.  The Intellectual Property Office of New Zealand (IPONZ) issued a discussion document in December 2013 containing proposals for the new Patents Regulations 2014, and inviting public comment.

The only hint that some restriction on the filing of divisional applications may have been contemplated is in paragraph 131 of the paper, which states:

'As noted with respect to divisional applications, it is in the public interest to examine applications in a timely and effective manner to ensure that the applicant obtains any patent protection, and that the public are in a clear position to understand what rights have been granted, without unduly long periods of time passing from the filing date of the application.'

Despite the lack of any further information in the discussion document, members of our firm were aware from discussions with IPONZ officials that IPONZ wished to prevent applicants from filing a divisional application from a divisional application (referred to as 'daisy chaining').  We understand that IPONZ views this practice as an abuse of the system, having the undesirable effect of prolonging the time a patent application is pending without the public having the certainty of knowing whether a patent will eventually be granted.

Reduced flexibility for patent applicants

AJ Park takes the view that additional time limits or restrictions on the filing of divisional applications are unwarranted. We do not consider that there is evidence of widespread abuse of the divisional system. We also believe that the proposed restriction will unfairly disadvantage patent applicants, for reasons outlined below.  

Despite the lack of information in the discussion document on any specific changes IPONZ might have been contemplating, we made submissions in an attempt to pre-empt any proposed restriction on the filing of divisional applications. It is apparent from the new regulation proposed in the cabinet paper (which was not considered important enough to merit any further comment in that paper), that our submissions were to no avail. The proposed change therefore seems set to proceed.

It is our view that the proposed time limit on the filing of divisional applications, of five  years from the effective filing date of the originating parent application, will significantly reduce patent applicants' flexibility during the examination process.  This in turn will impact on their ability to obtain commercially relevant patent protection. 

File now under the current patentee-friendly Act

The proposed time limit is another reason for applicants to consider filing in New Zealand while the current, less restrictive rules still apply, particularly where they anticipate that divisional applications may be needed. The current rules will continue to apply to all New Zealand patent applications filed with a complete specification before 13 September 2014, and to PCT applications that enter the national phase in New Zealand before 13 September 2014.