New Zealand’s New Grace Period
On 30 December 2018, New Zealand will implement a grace period for disclosures by an inventor or applicant made in the year before a patent application is filed.
This follows from New Zealand ratifying the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on 25 October 2018, and the CPTPP being scheduled to enter into force on the same day.
This article discusses how the new New Zealand grace period will work.
Currently, any public disclosure of an invention could prevent an applicant obtaining a New Zealand patent for that invention. There are only very limited situations in which disclosure can be disregarded (such as being in breach of confidence). This change will align New Zealand with countries like Australia, the United States, and Japan.
Many jurisdictions (notably Europe and China) still have limited, or no, grace periods for disclosures. A disclosure before filing a patent application can therefore still be damaging, and should be avoided if possible.
The new law
From 30 December 2018, the Patents Act 2016 will have a new grace period provision in section 9(1)(f). This will provide:
(1) For the purposes of section 8, the disclosure of matter constituting an invention must be disregarded if 1 or more of the following applies:
(f) that disclosure occurred during the 1-year period immediately preceding the patent date and the disclosure was made by any of the following persons:
(i) the patentee or nominated person:
(ii) any person from whom the patentee or nominated person derives title:
(iii) any person with the consent of the patentee or nominated person:
(iv) any person with the consent of any person from whom the patentee or nominated person derives title.
Which patent applications can use the grace period?
A patent application must have a patent date within 1 year of the disclosure. The disclosure must have occurred on or after 30 December 2018 (future Schedule 1AA(4) of the Patents Act 2016).
The patent date is the date a complete specification was filed (s 103(1)(a)) or that the PCT application was filed (s 46). The filing date of a provisional specification, or any other priority date, is not the patent date.
The provision is not retrospective. Any disclosures that occur before 30 December 2018 are not covered by the grace period.
If you wish to take advantage of the grace period, a complete specification must therefore be filed within one year of the disclosure. It may be worth filing a PCT application in the first instance to use the grace period in multiple countries at once.
Who can disclose?
The new provision expressly covers disclosures made by the patentee (or nominated person who will receive the granted patent, if different) (s 9(1)(f)(i)), the inventors (or anyone else the patentee derives title from) (s 9(1)(f)(ii)), and anyone else with consent of these parties (s 9(1)(f)(iii)–(iv)). This seemingly covers anyone directly involved in a patent application.
This complements the existing provisions which provide a 1-year grace period for disclosures made unlawfully or in breach of confidence (s 9(1)(a)–(b)).
What about third parties?
If a third party receives the inventor’s public disclosure, then on-discloses the information they received, would this third party on-disclosure be covered by the grace period?
Maybe not. A strict reading of the provision would suggest third party on-disclosures are only covered if the third party has the consent of the patentee or inventor. How this works in practice is unclear. Can an unknown party in unknown circumstances receive consent? Does the act of making the information available to the public give implied consent to the public generally for on-disclosure? Would a copyright notice that the information is not to be copied be equivalent to an express lack of consent?
For example, a common scenario would be when an inventor discloses their invention publicly at a conference, and a third party (unknown to the inventor) then publishes a summary of the invention. It is unclear if the third party summary is covered by the grace period or whether it would be prior art.
This exposes a potential hole. Some disclosures may not have consent (and therefore cannot use the new s 9(1)(f) grace period) but are not in confidence or obtained unlawfully (and therefore cannot use the existing s 9(1)(a)–(b) grace period). These disclosures will therefore still be prior art.
Whether third party on-disclosures are covered by the grace period may need to be settled by the courts. Interestingly, the underlying text of the treaty contains no reference to consent being required for the grace period to apply. Instead, the treaty requires that disclosures by “a person who obtained the information directly or indirectly from the patent applicant” must be disregarded (Trans-Pacific Partnership Agreement art 18.38). Depending on the interpretation by the courts, it may therefore be that New Zealand law is not fully in compliance with this part of the treaty.
In the meantime, to mitigate the potential risk of third party on-disclosure, patent applications should be filed as soon as possible after a public disclosure.
How does this compare with Australia?
Australia has had a 1-year grace period since 2002.
The Australian grace period provision is worded differently. The Australian grace period covers information made publicly available by or with the consent of an inventor or applicant (Patents Act 1990 (AU) s 24(1)(b)). The Australian provision therefore focuses on the information disclosed, rather than who made the disclosure. This side-steps the issue of whether a third party needs consent for the grace period to apply to on-disclosure, as long as the initial disclosure was made with consent.
It appears the New Zealand provision was based on the Australian provision. But the change in wording to focus on the person disclosing rather than the information disclosed may be meaningful. It may suggest an intention from Parliament that unconsented third party on-disclosures are not covered by the grace period, and therefore should still be usable as prior art. It remains to be seen how this is applied by the courts in practice.