Patents Bill would implement patent system that failed in Australia

Late last week a private member's bill called the Patents (Advancement Patents) Amendment Bill was introduced to Parliament by National MP Parmjeet Parmar.

The aim of the Bill is to "enhance New Zealand's innovative performance" by offering protections to a broader range of inventions that might not usually qualify for a patent. These "second-tier" patents are supposed to be quicker and cheaper to obtain.

The idea is similar to Australia's innovation patents and the utility models in Europe. Notably though, Australia is currently in the process of abolishing its innovation patent system.

New Zealand has a successful history of looking beyond its borders to see what does and doesn't work in a policy sense. It has, by and large, been very successful in implementing good policy as a result. But while the sentiment underpinning the Bill is commendable, it is unclear whether the underlying policy and the drafting of the Bill have taken into account the Australian experience.

Australia had similar good intentions when it introduced its innovation patent system. Around 15 years after innovation patents were introduced the Productivity Commission in Australia undertook a comprehensive review of innovation and found the innovation patent system wasn't working as intended. Economically it was not effectively achieving its stated objective of stimulating innovation. Worse, it had some perverse consequences, from greater uncertainty regarding patent infringement and increased compliance costs through to entities 'gaming the system' to ensure infringement of a patent which is very hard to contest. Based on that review, Australia is abolishing its innovation patent system.

So the Bill is clearly out of step with what is happening in Australia (our closest trading partner and the country we seek to align our IP policy most closely with).In my experience working in Australia, local innovators were most likely to be adversely impacted by innovation patents. That is, the system did not serve those that should theoretically benefit most from a cheaper and easier patent system.

If this member's Bill goes further then hopefully there can be some good work in the legislative process to adapt it in a way that better serves the goal. Otherwise, better to let this one go through to the keeper.