NEWS RELEASE

11 December, 2002

Patents Act Amendment Threatens Patent Enforcement

A back door amendment to the Patents Act introduced via the Statutes Amendment Bill No. 2 when it was reported back from a Select committee in September, could have far reaching consequences and limit effective patent protection in New Zealand, according to intellectual property specialists, A J Park.

Doug Calhoun, partner at A J Park, says the amendment is so broadly worded, it allows anyone to do any of the activities normally prohibited under a patent, provided the activities are related to developing information for some regulatory approval.

“Under this amendment, someone could copy and manufacture a patented kayak for example, and sell 5000 of them. If they were then sued for patent infringement, they could claim in their defence that the sales were to develop information to show to the Ministry of Transport that the kayaks were safe for use in New Zealand.”

Doug Calhoun says the amendment is causing great concern in the intellectual property and business community and could have far reaching implications for New Zealand, with no opportunity for public submissions on the change.

“According to the commentary in the Bill itself, amendments made under a Statutes Amendment Bill are supposed to be non-controversial and not related to the implementation of a particular policy.”

Doug Calhoun says this is hardly a non-controversial change. “The effect of the legislation is to reverse two decisions of the Court of Appeal. It is also an introduction of a new policy not previously a part of the patent law in New Zealand. As there is currently a review going on of the Patents Act, this policy should have been formulated and debated as a part of the overall review of the Patents Act”, he says.

Doug Calhoun says the change would also put New Zealand in breach of Article 33 of the TRIPS agreement, which we are supposed observe to harmonise international IP law. “This is hardly a smart move when New Zealand is trying to negotiate a free trade agreement with the United States”, he says.

He says the reason given for introducing the amendment to the Patents Act is that there is similar legislation in other countries. “However in every other country where such an amendment has been introduced they also introduced an extension of patent term beyond the normal 20 years. There is no compensating factor for patent holders in this case. It simply removes a part of the patent right.”

Doug Calhoun says the intention of the legislation is to "springboard" the launching of a generic equivalent to a patented medicine. “It allows the generic manufacturer to import sufficient product to gain approval to launch the product shortly after the patent has expired.”

He says the change introduced by the Government goes far beyond this. “It allows much more than a limited use. It allows manufacturing or selling of a patented invention provided you are doing it for uses reasonably related to the development of information required under New Zealand law or the law of other countries regulating the manufacturing, construction, use or sale of any such product.”

Doug Calhoun says everyone with an interest in preserving the integrity of our intellectual property law should be calling on the Government to withdraw this amendment and have the issue considered in the review of Patents Act where submissions can be heard.

ENDS

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