Second Reading Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (19:31): Thank you, Madam Speaker. I move, That the Patents Amendment Bill be now read a second time. I acknowledge my predecessor, the Hon Scott Bayly—Simpson. “Scott Bayly”—we’ve merged it; we’ve merged the two. Frankly, why don’t we acknowledge the Hon Andrew Bayly, too, for all the work that he has done in the reform of financial services and all the ongoing work around the reform of the capital markets. So I honour and pay tribute to my two predecessors: the Hon Scott Simpson and Andrew Bayly. Right—let’s move right along. Mr Simpson was responsible for bringing the bill back to the House and progressing it through its initial stages. I also thank the Economic Development, Science and Innovation Committee for their work on the bill. This is pretty technical stuff, so I appreciate the efforts there. Submitters on the bill shared a wide range of views at select committee, and I thank all who participated in the process. This bill is a modest but meaningful reform. It’s a necessary and practical step to keep our intellectual property system fair, modern, and fit for purpose. This will lift productivity…
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Second Reading
Hon CAMERON BREWER (Minister of Commerce and Consumer Affairs) (19:31): Thank you, Madam Speaker. I move, That the Patents Amendment Bill be now read a second time.
I acknowledge my predecessor, the Hon Scott Bayly—Simpson. “Scott Bayly”—we’ve merged it; we’ve merged the two. Frankly, why don’t we acknowledge the Hon Andrew Bayly, too, for all the work that he has done in the reform of financial services and all the ongoing work around the reform of the capital markets. So I honour and pay tribute to my two predecessors: the Hon Scott Simpson and Andrew Bayly. Right—let’s move right along.
Mr Simpson was responsible for bringing the bill back to the House and progressing it through its initial stages. I also thank the Economic Development, Science and Innovation Committee for their work on the bill. This is pretty technical stuff, so I appreciate the efforts there. Submitters on the bill shared a wide range of views at select committee, and I thank all who participated in the process. This bill is a modest but meaningful reform. It’s a necessary and practical step to keep our intellectual property system fair, modern, and fit for purpose.
This will lift productivity by reducing unnecessary costs and giving businesses the certainty they need to innovate and invest. A well-functioning patent regime is essential to a productive, competitive economy. New Zealand has a rich culture of practical problem-solving. Many ideas have been commercialised successfully because inventors could rely on a patent system that protected their work. Patents give inventers the legal right to stop others from making, using, or selling something they have invented for up to 20 years. A well-designed patent regime doesn’t just help individual inventors; it helps build industries, attract investment, and encourage the next generation of innovators. The bill ensures our patent settings continue to foster that kind of innovation by closing outdated gaps in the system. With that context, I now turn to the technical details of the bill.
The Patents Act 2013 replaced the Patents Act 1953, a very important year in our country, introducing stricter standards for patent examination, including that there had to be an inventive step. Those were important improvements to modernise the patent system. However, transitional provisions allow applications filed under the 1953 Act, and any related applications called divisional applications filed later, to continue under the old rules. Because the 1953 Act did not require an inventive step examination, patents could be granted for ideas that would not meet today’s expectation of innovation. That’s created a loophole that needs closing. This loophole may seem narrow, but in practice it has created real risks.
As long as divisional applications related to 1953 applications can be filed under the older, lower standard, there is potential that undeserving inventions are granted a patent. These patents create uncertainty for businesses and impose unnecessary legal costs if they choose to oppose them. This bill closes that gap by amending the transitional provisions so that all new divisional applications must meet the 2013 Act’s stricter criteria.
Again, thank you to the Economic Development, Science and Innovation Committee for all its work on the bill. I note that they recommended to the House that the bill be passed without amendment. By closing this loophole and aligning all future divisional applications with the 2013 Act standards, this bill strengthens the integrity of our intellectual property regime. As I say, it’s a modest but meaningful reform. It improves certainty for businesses, removes outdated rules, and reinforces the principles of fairness and quality that underpin our intellectual property framework. It is a practical support that supports innovation, productivity, and growth. I commend this bill to the House.
ASSISTANT SPEAKER (Maureen Pugh): The question is that the motion be agreed to.
Hon RACHEL BROOKING (Labour—Dunedin) (19:36): There are some curious elements to why we are here on a Saturday evening discussing this bill, the Patents Amendment Bill, and the main one is that the select committee report—I’ve just heard the Minister of Commerce and Consumer Affairs say that it came back with no amendments, but I’m just not sure when that was, because it does appear to have been on the books for quite some time. So it would be good to hear contributions from the other side about when that was.
Hon Cameron Brewer: It went through your Cabinet.
Hon RACHEL BROOKING: I’m hearing, “Oh, it went through your Cabinet.” So that is quite some time again—why is it that this Government has decided now that it needs to be bundled into Budget urgency with other things when it could have waited on the legislative agenda? Why has it not come up earlier? Because we know, of course, that the regulatory impact statement was made on 14 February—oh, that’s Valentine’s Day, isn’t it?—2020. February 2020 was an interesting time. Some other things were happening then, I guess, which is why; there were some distractions with COVID. Anyway, we are here, we are supporting the Patents Amendment Bill, obviously, for reasons put to me from the other side that this bill has been in place for quite some time.
Now, I’ve got some questions that I will of course be asking the Minister in the committee of the whole House stage. But the premise seems to be that we have an old law from 1953 and then we have a newer law from 2013. The old law was a bit lax with how it was that you could prove that your invention was significant enough to be deserving of a patent, and a patent, of course, is an intellectual protection and other people can’t use the invention without having an arrangement with you.
So the mischief of this bill appears to be that anything that the old Act applied to—so, the 1953 Act, where it applies to inventions, it is looser, but it extended to the divisional patents. So the things that you can say are related to the patent that was filed before 2013 can be extended—so this is the divisional applications. The mischief is here, as I understand it, but I look forward to asking the Minister about this when he’s in the chair. The mischief is that the divisional applications can be far too broad, and then what happens is that something has intellectual property surrounding it and a bundle of rights that means that other people can’t use that knowledge, that invention, and that stops good new entrepreneurs.
That, I think, is the base of the problem and the mischief that we are trying to fix here. It will be interesting to ask the Minister for some examples—I’m telling him now so he’s got some time to think about it—of what the type of patent, the divisional patent, that applies that has been causing some upset for our entrepreneurs and for our inventors and people who make things, and how bad it is.
This bill does have, arguably, a retrospective aspect to it, so we do want to know exactly whether it is worth it and also what—but the main point is: can the Minister, can the other side give us examples of where the mischief is going to be stopped? We see in the legislative statement, it talks about undeserving inventions being patented—it says at (2), “It will help to ensure that undeserving inventions are not patented, giving businesses the freedom the manufacture and sell those products without legal risk of infringing the patent”. What we want to know is: what are the examples of some of those undeserving inventions and the different test in that is in the 2013 Act as compared with the 1953 Act—where will that line go, in terms of these undeserving inventions, and what do we imagine the impacts will be for those businesses that want the freedom to manufacture and sell those products?
We also know that why this is important to New Zealand’s economy is because the protection of intellectual property (IP) creates the incentives for people to invent new things. If they know that they can have that IP protected, then they can continue to generate some income off it, and that’s important. It’s also important because it brings—we want those IP laws to be consistent with our trading partners. We want to make sure that New Zealand is in line with its obligations in relation to our free trade agreements with the European Union and the United Kingdom, for instance. And, of course, we need to make sure that our domestic laws adhere to the World Intellectual Property Organization, of which New Zealand is a member.
It appears that this has been canvassed some time ago by the community in New Zealand, the business community that does manufacturing—that they, in fact, asked for this change to be made because there is a mischief. The mischief is that things that can be related to protections, patents made under the 1953 legislation that has a lower threshold that they can attach to them as divisional advocations rather than going through the more robust 2013 process, and that has meant that some other businesses in New Zealand can’t use that IP and they think that that is unfair. I’m very keen, when we get to the committee stage, to hear some examples of what we’re talking about, because it’s quite difficult to explain in a speech on a Saturday night. Thank you very much.
SCOTT WILLIS (Green) (19:44): Thank you, Madam Speaker, and it is my pleasure to rise on a Saturday night to talk about the Patents Amendment Bill, a fascinating bill—a fascinating bill for us to talk to tonight. I also want to reflect on the time that it has taken, because if my memory serves me correct, I think we were debating this bill at the last Budget debate, possibly. I’m not sure; it’s a long time ago, and it is interesting that the Government has decided that this is worthy of a Budget debate, but here we are.
This bill is something that we will obviously support, because we have shown that this is something that we want. It is long overdue. It’s something that we noted that we would support a tougher novelty test and some of the specific exclusions from patent protection. We’re in support of this bill, and we can see how the different aspects of it work. It’s quite interesting that from 1953, the parent patent application allows any number of divisional applications—any number—up until 2013, up until that change, and that, obviously, presents some problems and some challenges.
What this bill does is it makes it clear that from 2026 onwards, there will be some retroactive application to make sure that we get rid of some of those divisional applications. This is an improvement because the problem with that unlimited number is that we simply get out of control. This is what we heard in select committee from Fisher & Paykel in particular, if I recall correctly.
The big issue here is that we have a challenge now not only to patents, or a problem we’re solving with patents, but we also have a problem with generating those patents. What we’ve also seen is that we’ve had a Budget that, if I can quote Troy Baisden, “Budget 2026 pushes the science system into quiet purgatory with zero announcements from the Minister’s office since 1 April. The only real story for science is the long-running decline in the foundations of our research and tertiary education system.”
The patents protect good ideas, and good ideas come from that foundational research. That foundational research gives us the opportunity to make new patents, new businesses, new opportunities to go abroad, to sell things that people need in other parts of the world, to boost productivity. When we cut off the source of that, then we are cutting off opportunity. We had an opportunity not so long ago, a few weeks ago, to go and visit the MacDiarmid Institute and to see what’s been happening at the MacDiarmid Institute, and it is really impressive—really impressive. One of the projects was the development of an anti-bacterial coating that had been patented and was being sold into the US market—so a fantastic opportunity that had happened out of the MacDiarmid Institute, but, again, this is something that is now at risk.
While we may have the patents bill correct, finally, we may be drying up the source of patents themselves. We may be cutting off our investment in foundational research, and I’d just like to point out that we can see here, on this diagram, the amount of investment in public research has dropped from 2017 to some of the lowest levels we’ve seen in decades, and that’s with the most significant reform to the science sector that has had no capital associated with it. While we may be working on the Patents Amendment Bill to bring something that obviously needed doing into force, at the same time, we are also drying up all of the science, all of that innovation, that is going to provide new patents, new opportunity, greater productivity. While I’m very pleased that we are finally getting to the point where we’re going to pass the Patents Amendment Bill, I am deeply disappointed that we are doing so much damage to our science system at the same time.
So, I guess, the most important thing is that we ensure that we have good legislation. We can see that parent patent applications from 2013 are already affected by the new 2013 regime. This won’t change. What we’re really talking about is a small number—a small number—from 1953 to 2013.
We are happy to support this bill. We wonder why the Government decided it was so important to do under Budget urgency. Surely, they have something that they want to tell us about that. We’ll wait and see. But we are happy that we are finally moving along, because we wanted to make that happen for quite some time, and what better time, really, to do it on a Saturday night in Wellington when we can all be here together?
Hon Cameron Brewer: Oh, that’s nice.
SCOTT WILLIS: Isn’t that lovely—isn’t that lovely? I just want to say that we have appreciated the contributions from the other side of the House tonight on this bill, so far—well, there’s only been one, but that’s been better than the five seconds that we’ve had typically, or the eight seconds we’ve had typically, from the other side of the House. So bring it on, please. We do like those longer contributions, because they help us get there.
Tim Costley: Fix your collar.
SCOTT WILLIS: Fix my collar? Oh, thank you—that’s really helpful! I get a sense we’re building a sense of greater collegiality in the Parliament tonight, and I really appreciate that—and if we could work together and also work on the energy system, for example, and develop a national energy strategy, we would be in a good space.
So, I think, for our support of the Patents Amendment Bill, it’s really, really clear that this is something that is building a sense of collegiality in the Parliament, and we can take that in all kinds of directions in the future. But a word of warning: if we continue to keep on defunding or underfunding the science system, we really risk cutting the feet out of this Patents Amendment Bill or making it irrelevant, because there won’t be that foundational science; there won’t be that innovation; there won’t be the buzz from our science sector that that gives us productivity, that gives us exciting things, that makes that innovation happen.
We will support this bill and we’re happy to support it, and we are looking forward to further contributions from the other side of the House to tell us just why it is so important that we do this tonight under Budget urgency. Thank you, Mr Speaker.
TODD STEPHENSON (ACT) (19:53): Thank you, Mr Speaker, I rise to speak on the Patents Amendment Bill. I actually want to thank Scott Willis for his contribution. He was actually on the select committee, and the select committee actually just looked at this bill last year, so it’s relatively fresh. Look, I think it’s pretty—you know, there’s nothing strange about the process this bill’s gone through. It’s had a full select committee. The only difference is we’re sitting here on a Saturday night, and I don’t think New Zealand taxpayers would actually mind that we’re sitting here on a Saturday night, getting good value for money.
And so, again, this bill is really just making some tidy-ups, aligning some of the requirements under the new 2013 Patents Act with the older Act. I note that the select committee recommended no changes; that all parties were represented on there; and, in fact, it’s a very straightforward report. That’s why it is somewhat puzzling we’ve now got 27 amendments tabled by the Labour Party, by a member who actually sat on the select committee. Again, what we’re doing here with this is just delivering certainty for New Zealand businesses, making sure our patent system is fit for purpose, and ACT recommends it to the House.
Dr DAVID WILSON (NZ First) (19:54): I rise on behalf of New Zealand First to speak to the Patents Amendment Bill, and as an economic development and innovation nerd, I’m very pleased to see this bill coming through the House.
Just with the previous member talking about the—I think he was talking about the MacDiarmid Institute: you know, those new innovations that they make, unless they’re patented in this current world, you really need that as a basis for your commercialisation of New Zealand businesses. Those new products and services that we get patents over, they protect us and they allow those companies to grow in New Zealand, so we commend this bill to the House.
LAN PHAM (Green) (19:55): Thank you, Mr. Speaker. It was really interesting hearing the Government member earlier just talking about being surprised about amendments being tabled when members have been at select committee, because, personally, as someone who also sits on the select committee, I would be really stoked if it was actually more expected that, if amendments are put forward and suggestions are put forward at select committee, they were actually considered. That would be absolutely fantastic, and then we might not have to bring them to the House, particularly with bills that go through under urgency.
Now, I’m really glad to be able to speak to the Patents Amendment Bill, and I’m glad to speak to it because I absolutely have had the privilege of being in the science sector and being around scientists and science for many years. I think it’s an example of this Government—a very clear example with this Government and the Patents Amendment Bill and the sort of delight and excitement about patents that might come from this. We support that; we think it should be easier to patent things for innovation and research to be owned, and if people can make money out of that, then great. But it’s somewhat painful to see the glee with this Government, with this Patents Amendment Bill, when there are so many cuts and changes which are going on in the science sector. This has been the biggest disruption to the science sector in 30 years that we’ve had.
Now, we’ve had Crown research institutes that have been amalgamated, we’ve had Callaghan Innovation that has been scrapped, and the last 2025 Budget squeezed the life out of the science and innovation funds to actually help fund other changes that the Government have made in this sector. I think what’s really a shame with that is it demonstrates this lack of understanding about how, ultimately, where innovation and research gets to, where they’re patenting something, where something’s evolving, where something is being improved and distributed and used in the community and the world to, ideally, make it a better place—that that comes from people and it comes from the science.
The money that has been sucked into these amalgamations and changes that are going on are simply going into that rather than the science, which means we’re, ultimately, at the end of the chain, going to be missing out on the innovation, the people, and the research that leads to these patents. The problem with that is that we know that the long-term success of a functional system that is churning out new talent—that is cultivating that innovation and that support and mentoring that a true, vibrant sector actually needs to be successful—often requires years if not decades of work, and years if not decades of science.
I wanted to pick up particularly on the comments of the New Zealand Association of Scientists co-president, Troy Baisden, because he pointed out that this Government has a fundamental misunderstanding and can’t see how their disjointed decisions and actions in the science sector are actually cutting off innovation at its core.
Yes, we’re happy to be supporting the bill; yes, we’re happy that we’re making the patents system better, but it cannot go unnoticed that this Government is fundamentally misunderstanding what it takes to make this whole sector really fly.
Debate interrupted.
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