OFFICE OF THE MINISTER
OF COMMERCE
The Chair
Cabinet Economic Growth and Infrastructure Committee
Trans-Tasman Regulatory Framework for Patent Attorneys
Proposal
1.
This paper reports back on submissions received in response to the discussion paper
entitled Single Trans-Tasman Regulatory Framework for Patent Attorneys and
recommends that the patent attorney profession in Australia and New Zealand be
regulated under a trans-Tasman regulatory framework.
Executive Summary
2.
Patent attorneys make up a small profession who provide specialist advice to businesses
on obtaining and protecting intellectual property, especially on obtaining patents and
registering trade marks. There are currently 194 registered patent attorneys domiciled in
New Zealand and 675 domiciled in Australia. Australia and New Zealand each maintain
independent, but similar, registration regimes for patent attorneys.
3.
The majority of New Zealand patent attorneys are registered to practice in Australia and
vice versa. For the majority of patent attorneys there is, therefore, a substantial
duplication of regulatory and business compliance costs that must be met in each country
in order to practise on a trans-Tasman basis. The two independent registration regimes
may also be preventing an open and vibrant trans-Tasman market for patent attorney
services, leading to higher costs for businesses requiring patent attorney services.
4.
In August 2009, Prime Ministers Key and Rudd issued a joint statement of intent in which
outcomes for the Single Economic Market (SEM) between Australia and New Zealand
were agreed. One of the outcomes for intellectual property endorsed by the Prime
Ministers was the development of a single trans-Tasman regulatory framework for patent
attorneys.
5.
In March 2011 Cabinet agreed to the joint release in Australia and New Zealand for public
consultations of a discussion paper entitled Single Trans-Tasman Regulatory Framework
for Patent Attorneys. The discussion paper outlined a proposal for how patent attorneys
could be regulated by a trans-Tasman framework.
6.
Submissions from Australian stakeholders supported the introduction of a trans-Tasman
framework. The majority of submissions from New Zealand patent attorney, however,
opposed the introduction of such a framework. A key concern was that a trans-Tasman
framework would facilitate over time Australian patent attorneys capturing work currently
undertaken by New Zealand patent attorneys in New Zealand on behalf of international
clients. Submitters were concerned that this would lead to a loss of income for New
Zealand patent attorneys and an eventual decline in the number of patent attorneys
available to support innovative New Zealand businesses.
7.
There may be a risk that increased competition could have a short term effect on the
distribution of patent attorneys between Australia and New Zealand. There is, however,
no empirical ideal number of patent attorneys necessary to support economic development
and generally competitive forces should be left to determine this. The impact, if any, is
therefore likely to be negligible.
2
8.
I recommend that the two registration regimes be replaced by a single trans-Tasman
registration regime for patent attorneys. The trans-Tasman registration regime would
provide, inter alia:
a.
a Governance Body responsible for education, registration and disciplining of
Australian and New Zealand patent attorneys;
b.
a single definition of patent attorney services that only trans-Tasman registered
patent attorneys may provide in Australia and New Zealand;
c.
a single code of conduct for all patent attorneys and disciplinary regime to ensure all
patent attorneys provide the same minimum standards of service;
d.
one register for all trans-Tasman registered patent attorneys and managed by the
Governance Body;
e.
one set of registration and renewal fees; and
f.
Secretariat services for the Governance Body principally supplied by IP Australia.
9.
The trans-Tasman framework would contribute to the strengthening of trans-Tasman
economic integration as part of the outcomes framework for the SEM agenda. It is
consistent with the SEM principles, would foster international competitiveness of both
patent attorneys and businesses using their services, and would improve the environment
for doing business on both sides of the Tasman.
10.
In order to implement the trans-Tasman framework, it will be necessary to develop an
overarching bilateral instrument between Australia and New Zealand. This instrument will
be developed in close consultation with Australia and would require appropriate legislative
changes to the New Zealand Patents Act 1953 and the Australian Patents Act 1990.
11.
I also recommend that the Patent Attorneys Bill 2008 should be allowed to lapse and not
be reinstated on the Order paper.
Background
What is a patent attorney?
12.
The role of a patent attorney is to ensure that an inventor's idea is not in breach of anyone
else's intellectual property rights and at the same time, to gain suitable protection for their
client's intellectual and creative rights in the process.
13.
There is potential for significant irrevocable financial harm to occur to a business from
either not seeking specialist advice from a patent attorney or receiving advice from an
unskilled person. There can be high costs for breaching another’s intellectual property
right and for not adequately protecting the investment made in developing new and
innovative products and services.
14.
To mitigate the financial risk to businesses of receiving advice from unskilled persons both
Australia 1 and New Zealand 2 maintain independent, but similar, registration regimes for
patent attorneys under which only a registered patent attorney may provide the following
services for financial gain (“patent attorney services”):
a.
1
2
apply for or obtain patents;
Australian Patents Act 1990.
New Zealand Patents Act 1953.
3
b.
prepare patent specifications or other documents for the purposes of the patent law;
or
c.
give advice other than a scientific or technical nature as to the validity of patents or
their infringement.
15.
For businesses seeking to protect their intellectual property the cost of obtaining specialist
advice from a patent attorney amounts to a substantial portion (sometimes up to and over
90%) of the total cost of protecting and exploiting IP. For example, the cost of using a
patent attorney to obtain a patent for an invention typically falls within the range of $4,000$100,000 and more. The cost will depend on the nature and complexity of the invention
and on whether protection is required overseas.
16.
The high cost of patent attorney services comes from a combination of the type of work a
patent attorney performs in blending scientific knowledge with legal expertise and the
registration regime. The small size of the profession and the limited competition between
patent attorneys may also contribute to the high cost. There are currently 194 registered
patent attorneys domiciled in New Zealand. In comparison, there are over 11,000
barristers and solicitors registered to practice in New Zealand.
17.
In 2003 and in 2007 Cabinet agreed to amend the Patents Acts 1953 to implement a
number of reforms to the regulation of patent attorneys in order to modernise and more
closely align the regulatory framework with Australia [EDC Min (03) 5/6 and ECD Min (07)
14/4 refer]. Key reforms included providing a board to govern the profession, a code of
conduct and disciplinary regime to address misconduct, and a subsequent increase in
registration and renewal fees. The legislative changes required to implement these
decisions are incorporated into the Patent Attorneys Bill 2008, which was reported back to
the House by the Commerce Committee on 30 March 2010.
Trans-Tasman market for patent attorney services
18.
The Trans-Tasman Mutual Recognition Arrangements 1997 (TTMRA) allows, through
respective implementing legislation, a patent attorney registered to practice in New
Zealand to register to practice in Australia, and vice versa. The TTMRA has therefore
created a trans-Tasman market for patent attorney services.
19.
There is now a substantial overlap between the Australian and New Zealand registers of
patent attorneys. For example, of the 641 patent attorneys registered to practise in New
Zealand, 413 are domiciled in Australia. Australia has 808 registered patent attorneys
comprising 103 patent attorneys domiciled in New Zealand.
20.
Despite the high number of cross-registrations for patent attorneys, the volume of transTasman work being undertaken by Australian and New Zealand patent attorneys is small.
Most businesses, whether local or foreign, prefer to use New Zealand patent attorneys in
New Zealand and Australian patent attorneys in Australia. This local favouritism occurs
because businesses believe the local patent attorneys are not qualified to represent them
across the Tasman. Some businesses are, therefore, forgoing the potential cost savings
that can be made by eliminating duplication of patent attorney services in each country,
including price and exchange rate differentiations between Australian and New Zealand
patent attorneys.
4
21.
There are a number of administrative inefficiencies and inconsistencies between the
Patent Attorneys Bill and the Australian Patents Act 1990 that are not addressed under
the TTMRA. This adds unnecessary regulatory and business compliance costs to those
patent attorneys providing trans-Tasman patent attorney services. For example, a person
has to complete registration formalities and meet registration requirements in one
jurisdiction to be entitled to seek reciprocal registration in the other jurisdiction. This leads
to a duplication of both registration and renewal fees 3 and documentation (added expense
and effort for patent attorneys to practice).
22.
Because the majority of Australian and New Zealand patent attorneys are now registered
to practice in both countries, there is also significant duplication of effort and costs to IP
Australia and the Intellectual Property Office of New Zealand (IPONZ) in maintaining two
independent, but largely identical, registers of patent attorneys. The cost to IP Australia is
around AU$620,000 per annum, whilst it is estimated that the cost to IPONZ is at least
$250,000 per annum 4. These costs are fully recovered through the fees payable by
patent attorneys. Rationalising the two registers into a single register would, therefore,
realise significant savings in registration fees for patent attorneys.
23.
The two countries have broadly similar registration criteria with the objective of ensuring
that registered patent attorneys are sufficiently knowledgeable and competent to give
advice about their respective country’s IPR laws and practice. The registration criteria do
not, however, have the objective of ensuring that a patent attorney has the knowledge
and competent in each other’s laws and practice. The registration criteria in each country
may be directly contributing to the reluctance of businesses to use patent attorneys on a
trans-Tasman basis.
24.
The independence of the two registration regimes gives rise to two different standards of
service that patent attorneys providing trans-Tasman services must adhere to, because
each country has its own code of conduct and disciplinary regime.
25.
This gives rise to additional business compliance costs for patent attorneys and may also
create cost and uncertainty for businesses when choosing which patent attorney to use
(based on price and expected standard of service). These differences may be another
factor contributing to why businesses are not using patent attorneys on a trans-Tasman
basis.
A single trans-Tasman regulatory framework
26.
In August 2009, Prime Ministers Key and Rudd endorsed the development of a single
trans-Tasman regulatory framework for patent attorneys as one of the intellectual property
outcomes for the Single Economic Market (SEM) agenda. The joint regulatory framework
proposal reflects the key SEM objective to improve the productivity and innovation of
Australian and New Zealand businesses by providing a single trans-Tasman market and
improved institutions. Patent attorneys would become the first occupational group to be
regulated under such a framework.
27.
Given the significant legislative implications for New Zealand of this proposal, passage of
the Patent Attorneys Bill was placed on hold pending the development of the transTasman regulatory framework.
3
For Australia the registration fee is AU$200 and the annual renewal fee is AU$350. For New Zealand
the registration fee under the Patent Attorneys Bill was estimated in 2003 to be $210 and the annual
renewal fee was estimated to be at least $370.
4
The figures are based on 2003 estimates to implement the Patents Attorneys Bill. Given the passage of
time, these estimates are now likely to substantially underestimate the actual costs of implementing the
Bill.
5
28.
In March 2011 Cabinet agreed to release a discussion paper entitled Single TransTasman Regulatory Framework for Patent Attorneys, which was jointly prepared by the
Ministry of Economic Development (MED) and IP Australia (EGI Min (11) 6/2 refers). The
discussion paper was simultaneously released in Australia and New Zealand and sought
public comment, especially from the Australian and New Zealand patent attorney
professions, on a proposal for regulating the two professions under a single trans-Tasman
regulatory framework (the “trans-Tasman framework”).
29.
Key features of the proposed trans-Tasman framework included:
30.
a.
Single trans-Tasman Governance Body with responsibility for education, discipline
and registration of patent attorneys in Australia and New Zealand;
b.
Single definition of patent attorney services which would only be performed by a
registered patent attorney or legal practitioner;
c.
Single code of conduct that every patent attorney would be required to adhere to;
d.
Single disciplinary regime to address complaints about patent attorneys;
e.
Consistent patent attorney educational qualifications and continuing professional
education requirements;
f.
Single registration process and register managed by the Governance Body;
g.
One set of registration and renewal fees, initially pegged to the existing fees
payable in Australia;
h.
Flexible arrangements for patent attorneys to form multi-disciplinary practices and
for partnerships to be incorporated; and
i.
Secretariat support unit largely supplied by IP Australia, with assistance from
IPONZ.
A full outline of the proposed framework is included as Appendix B.
Summary of Submissions on the trans-Tasman framework
31.
18 submissions were received by IP Australia and MED in response to the discussion
paper. Of the five received from Australian stakeholders, four were from Australian patent
attorneys. Of the 13 received from New Zealand stakeholders, 11 were from New
Zealand patent attorneys.
Australian stakeholders’ comments
32.
5
On the whole the Australian submissions were broadly supportive of the introduction of a
trans-Tasman regulatory framework for patent attorneys. This response was anticipated
because the proposed trans-Tasman framework largely reflected the existing framework
in operation 5. Australian patent attorneys did not want to see any dilution of the existing
standards to qualify for registration or in standards of service required from patent
attorneys in Australia. No mention was made of the potential effects the framework might
have on trans-Tasman competition between Australian and New Zealand domiciled
patent attorneys.
The Australian Office of Best Practice Regulation has assessed the changes that would be required to
the Australian Patents Act to implement the proposed trans-Tasman framework as minor and machinery
in nature.
6
New Zealand stakeholders’ comments
33.
In contrast the majority of submissions from New Zealand patent attorneys were not
supportive of the introduction of a trans-Tasman framework. Many considered that since
the TTMRA already allowed reciprocal registration of patent attorneys between Australia
and New Zealand and therefore allowed patent attorneys to practice in both countries, a
single Trans-Tasman framework was not necessary.
34.
Patent attorneys were concerned that costs to New Zealand’s economy, businesses and
patent attorney professions under the trans-Tasman framework would become significant
over time. It was alleged that the trans-Tasman framework would cause the current work
undertaken by New Zealand patent attorneys for international clients to gravitate over
time to Australian patent attorneys firms, causing a reduction in revenue. They were
concerned that a reduction in revenue would lead to reduction in the size of the New
Zealand profession and erode the ability of New Zealand patent attorneys to support local
innovative businesses. Also, a reduction in the size of the New Zealand profession could
cause an increase in the cost local businesses pay for patent attorney services.
35.
Submissions from New Zealand stakeholders also commented on the details of the
proposed trans-Tasman framework. A number of submissions expressed a clear
preference for retaining the existing qualifications regime and registration criteria currently
provided for under the Patents Act 1953. Some patent attorneys expressed concern at
the proposed increase in registration and renewal fees under the trans-Tasman
framework. Patent attorneys also wanted to see more flexible arrangements provided
under the Lawyers and Conveyancers Act 2006 (LAC), in line with Australian regulation,
for lawyers and patent attorneys to form multi-disciplinary partnerships.
36.
The submission from the New Zealand Law Society emphasised the need to retain the
existing restrictions under the LAC preventing lawyers from forming multi-disciplinary
practices. The submission from EverEdge IP Ltd 6 noted there was some tension between
the technology commercialisation industry and the patent attorney profession over
services each offers to innovative New Zealand businesses. EverEdgeIP Ltd called for
the definition of patent attorney services to be clarified so that a person may provide
advice about commercialising new technologies without needing to also be a registered
patent attorney.
37.
Submissions from patent attorneys also called for the introduction of a trade mark attorney
registration regime in New Zealand so as to regulate those who may offer advice and
assistance for registering trade marks. Submitters also considered it inequitable that the
Australian trade mark attorney registration regime prevented them from marketing
themselves in Australia as “trade mark attorneys”, when there was no restriction on
Australians marketing themselves as trade mark attorneys in New Zealand.
Comment
38.
6
I recommend that patent attorneys in New Zealand be jointly regulated under a transTasman regulatory framework with Australian patent attorneys as set out in Appendix B.
The trans-Tasman framework as set out in Appendix largely reflects the registration
regime that would be implemented under the Patent Attorneys Bill.
EverEdgeIP Ltd describes itself as a technology commercialisation company that helps other private
and public organisations (companies and research institutes) to actively commercialise technology.
7
39.
The proposed trans-Tasman framework is part of the outcomes framework for the SEM
agenda and could further deepen trans-Tasman economic integration. The framework
would foster the international competitiveness of both patent attorneys and businesses
which use their services and, thus, improve the environment for doing business on both
sides of the Tasman. The trans-Tasman framework would also be a more efficient and
effective means for regulating patent attorneys on a trans-Tasman basis compared to the
mutual recognition regime provided for under the TTMRA.
40.
Key SEM principles that would be achieved include:
a.
allowing patent attorneys, as a regulated occupation, to be able to operate
seamlessly between each country;
b.
ensuring that patent attorneys services supplied in one jurisdiction are able to be
supplied in the other;
c.
allowing both governments to achieve economies of scale in regulating patent
attorney services; and
d.
optimising a net Trans-Tasman benefit.
41.
The 105 New Zealand patent attorneys registered to practice in Australia and the 413
Australian patent attorneys registered to practice in New Zealand, as well as any future
person seeking to practise as a patent attorney in both countries, are expected to benefit
from the implementation of the trans-Tasman framework. Their regulatory and business
compliance costs to register and practise on a trans-Tasman basis, as discussed above,
would be approximately halved.
42.
Importantly, the trans-Tasman framework would ensure that all patent attorneys are
equally qualified to provide patent attorney services in Australia and New Zealand. The
qualifications regime would assist to break down perceptions within businesses that
prevent them from using local patent attorneys to assist in obtaining IP protection across
the Tasman. The trans-Tasman framework would also ensure that businesses received
the same standard of service irrespective of whether they used an Australian or New
Zealand based patent attorney, because all patent attorneys whould be subject to the
same code of conduct and disciplinary regime.
43.
For those Australian patent attorneys practising only within Australia, their existing
regulatory and business compliance costs would remain unchanged from what is currently
required under the Australian Patents Act. While the annual registration renewal fee for
New Zealand patent attorneys who choose to practise only in New Zealand would
increase to AU$350, this fee would be comparable to the fee payable under the Patent
Attorneys Bill.
Impact of increased competition from Australian patent attorneys
44.
There is no evidence to support the allegation that the trans-Tasman framework will result
in the patent attorney services currently provided by New Zealand patent attorneys in New
Zealand, especially for international clients, being taken over by Australian patent
attorneys. While the TTMRA already allows patent attorneys to practise on a transTasman basis, the benefit of the trans-Tasman framework is that it would provide a “level
playing field” under which all patent attorneys would be equally qualified in both countries
and be required to adhere to the same standards of service. This would leave three clear
variables for patent attorneys to distinguish themselves in a competitive trans-Tasman
market: price, quality and their relationships with existing and potential clients.
8
45.
In terms of price differences, New Zealand patent attorneys are estimated to be between
20-50% cheaper than their Australian counterparts. There appears to be no clear
distinction between the quality of services currently provided between Australian and New
Zealand patent attorneys or the value international clients place on the importance of their
relationships with either Australian or New Zealand patent attorneys. Cost conscious
businesses are expected to be more attracted towards using New Zealand patent
attorneys, rather than Australian patent attorneys.
46.
There is a risk that Australian patent attorneys may take advantage of the trans-Tasman
framework to more aggressively compete against New Zealand patent attorneys. The
risk, however, equally applies to both countries. New Zealand patent attorneys are not
prevented from competing more aggressively in Australia.
47.
Increased competition may have a short term effect on the distribution of patent attorneys
between Australia and New Zealand. There is, however, no empirically provable ideal
size of the patent attorney profession to optimise support for local innovation. Even if
some of the work currently undertaken by New Zealand patent attorneys on behalf of
overseas clients was to move to Australia, the impact, if any, on availability of patent
attorney services for New Zealand businesses may be negligible.
Registration renewal fees for trans-Tasman patent attorneys
48.
Under the trans-Tasman framework the annual registration renewal fee for New Zealand
patent attorneys to practice solely in New Zealand will increase from NZ$65 currently
payable under the Patents Act 1953 to AU$350 (approximately NZ$420). While this would
be a significant increase for the minority of New Zealand patent attorneys not currently
practising on a trans-Tasman basis, it is important to note that the fee increase is in line
with the original 2003 estimated fee ($370) that they would be required to pay if the
Patent Attorneys Bill was implemented. The fee is, however, substantially less than the
annual registration renewal fees associated with other similarly regulated professions in
New Zealand, such as lawyers ($1,426) and Chartered Accountants ($880).
49.
For the majority of New Zealand patent attorneys (those who wish to practise on a transTasman basis), however, the proposed trans-Tasman framework would provide significant
savings. If the Patent Attorneys Bill was to be implemented, these patent attorneys would
be required to pay a combined annual registration fee of at least $790.
Costs associated with qualifying to become a registered patent attorney
50.
Under the trans-Tasman framework, the Australia Patents Act and the Patent Attorneys
Bill, a person must complete an accredited course of study provided by a university in
order to qualify and register as a patent attorney. There are currently no New Zealand
universities providing suitable courses of study, because the Patents Act 1953 does not
allow a candidate to qualify in this manner. A person may only qualify by passing the
examinations largely run by the New Zealand Institute of Patent Attorneys, Inc. (NZIPA)
on a pro bono basis.
51.
New Zealand patent attorneys are concerned that New Zealand universities may not
provide suitable courses of study; forcing New Zealand candidates to qualify through one
of the Australian university run courses. This would create a high barrier for entry into the
profession in New Zealand and be an expensive option for firms to sponsor their staff to
qualify. This issue was covered by the Commerce Committee when it was considering
the Patent Attorneys Bill.
9
52.
The Australian experience is that candidates and firms prefer a professionally run course
of study provided by a university, despite the costs involved, rather than relying on an
examination regime administered by the profession.
53.
Initial inquiries with several New Zealand universities have indicated a positive interest in
providing suitable courses of study, but such courses could take a couple of years to
develop and implement. Provision has been made in the trans-Tasman framework for the
NZIPA to continue with its current examination regime, but with oversight from the
Governance Body, until such time as one or more New Zealand universities can offer
suitable accredited courses of study. The onus would be on the Governance Body to
encourage and work with New Zealand universities to make suitable accredited courses
of study available in New Zealand.
Multi-disciplinary partnerships
54.
The trans-Tasman framework allows patent attorneys to enter into multi-disciplinary
partnerships (MDPs) with other regulated occupations, and for those partnerships to
incorporate. This feature, whilst consistent with the current Australian regulatory
framework, will allow New Zealand patent attorneys firms to evolve over time to offer a
range of services to support New Zealand businesses to create, protect and
commercialise innovations.
55.
Many New Zealand patent attorneys are also lawyers and, therefore, their ability to form
MDPs with members of other occupational groups, including other patent attorneys who
are not also lawyers, will continue to be constrained by restrictions in the Lawyers and
Conveyancers Act 2006 (the “LAC”). In Australia, lawyers are regulated under State
legislation, which provides greater flexibility for lawyers and patent attorneys to form
MDPs. The historical differences between New Zealand and Australian restrictions on
lawyers forming MDPs accounts for why most New Zealand patent attorneys are also
lawyers, whereas most Australian patent attorneys are not lawyers.
56.
It is not the aim of the trans-Tasman framework for patent attorneys to regulate the
circumstances under which lawyers may form MDPs and, therefore, I am not proposing
amendments to the LAC. I do consider, however, that without closer alignment of the
LAC to Australian regulation, New Zealand lawyers and patent attorneys will have less
flexibility compared to their Australian counterparts to explore more efficient and effective
business arrangements for the provision of advice to businesses on obtaining and
protecting IP rights.
Definition of patent attorney services
57.
The submission from EverEdgeIP Ltd sought a change to the definition of patent attorney
services to clarify that a person may provide advice on the commercialisation of new
products or services without needing to be a registered patent attorney. The transTasman framework does not, however, restrict a person’s ability to provide
commercialisation advice. The reserved area of work for patent attorneys is narrowly
limited to applying for patents and providing advice on the infringement and validity of
patents, and is based upon the existing definitions under the Australian and New Zealand
Patents Acts.
58.
Officials will monitor the implementation of the trans-Tasman framework to ensure that
services a person provides related to the commercialisation of new products and services
is not unnecessarily constrained by the definition of patent attorney services. I also note
that flexible arrangements for patent attorneys to enter into MDPs should encourage the
technology commercialisation industry and patent attorney profession within New Zealand
to work more closely together for the overall benefit of innovative businesses.
10
Registration of Trade Mark Attorneys
59.
The risk of irreversible financial harm occurring to business in New Zealand from receiving
poor or unskilled advice on the registration and protection of trade marks appears to be
sufficiently low as to not justify the costs that would be imposed by introducing and
maintaining a trade mark attorney registration regime in accordance with Cabinet Office
Circular CO (99) 6. I also understand that the large majority of those providing “trade
mark attorney services” in New Zealand are already regulated because they are either
lawyers and/or patent attorneys. The existence of a trade mark attorney registration
regime in Australian is not, on its own, sufficient justification for a similar regime to be
introduced in New Zealand.
Implementation of the trans-Tasman framework
60.
In recommending the trans-Tasman framework I acknowledge that it may take some time
for New Zealand patent attorneys to adjust to it, largely because the framework
represents a significant change to the way the profession is currently regulated under the
Patents Act 1953. The trans-Tasman framework, however, contains only minimal changes
to the regulatory framework that would be provided under the Patent Attorneys Bill.
61.
Some form of an overarching bilateral instrument between Australia and New Zealand
would be needed to implement the trans-Tasman framework for regulating the patent
attorney profession.
62.
Because the trans-Tasman framework would create a new joint institution, there are a
number of complex implementation issues that are still to be determined, which would
need to be addressed in such an instrument. These issues include: how the Governance
Body and Disciplinary Tribunal will be constituted (and under which country’s law), how to
confer powers and rights on these bodies and, conversely, impose duties, responsibilities
and hold them accountable; judicial reviews and appeal procedures in each country; the
power to collect evidence during disciplinary proceedings; and the application of Official
Information Act 1982 and Privacy Act 1993 (and the Australian equivalents).
63.
The Ministry of Economic Development will work with the Ministry of Foreign Affairs and
Trade, the Ministry of Justice and Treasury and their Australian counterparts to develop
such an instrument to address these issues.
64.
I anticipate that each country would then need to enact legislation to implement the
agreement and repeal existing national legislation on the regulation of patent attorneys.
This is discussed in further detail below.
Consultation
65.
The following have been consulted on this submission: Te Puni Kokiri; Ministry of
Consumer Affairs; the New Zealand Customs Service; Ministry of Education; Ministry of
Foreign Affairs and Trade; Ministry of Justice; Ministry of Science and Innovation; the New
Zealand Qualifications Authority; and the Treasury.
66.
The Department of Prime Minister and Cabinet has also been informed.
Fiscal Implications
67.
IPONZ is currently responsible for administering the register of patent attorneys. The fee
for registering as a patent attorney ($65 excluding GST) and the annual practicing fee
($65 excluding GST) are set on a cost recover basis. IP Australia is responsible for
administering the Australian register on a cost recover basis. The application fee in
Australia is AU$200 and the annual practicing fee is AU$350.
11
68.
Under the trans-Tasman framework IP Australia would be primarily responsible for
providing secretarial support to the Governance Body, including managing the financial
arrangements necessary for the Governance Body to operate and carry out its activities,
under existing Australian standards. IPONZ would assist IP Australia with the provision of
secretarial support to the Governance Body and will investigate how it might carry out
these functions. There would be no immediate increase in registration and renewal fees
from the introduction of the trans-Tasman framework from existing fees payable in
Australia at the time of implementation. IP Australia, in providing the secretariat duties,
would absorb any additional costs or shortfalls associated with the transition.
69.
In the longer term, fees would need to be reviewed and set by MED and IP Australia, with
approval from the relevant New Zealand and Australian Ministers. Revenue would be
quarantined and the costs of administering the Governance Body and its activities met by
fees paid by patent attorneys and those seeking registration.
70.
The implementation of the trans-Tasman framework will result in a change to the IPONZ
baseline (Vote Commerce: Registration and Granting of Intellectual Property Rights)
because IPONZ will no longer be administering the New Zealand register of patent
attorneys. Until the role of IPONZ in supporting IP Australia to administer the transTasman register and Governance Body is clarified, the actual change to the baseline
cannot be determined. There would, however, be no overall impact on the government's
operating balance because fees are currently required to be set at the appropriate level to
ensure full cost recovery. On implementation, changes to the baselines will be sought.
71.
IPONZ is reviewing the fees payable as part of the law reform process being undertaken
across trade marks and patents. The timing of the fee investigation work and any
subsequent changes that may be sought to the IPONZ baseline will coincide, therefore,
with that reform process. Initial focus will be on trade marks following recent enactment of
the Trade Marks Amendment Act 2011.
Human Rights
72.
The proposals in this Cabinet paper appear to be consistent with the New Zealand Bill of
Rights Act 1990 and the Human Rights Act 1993. However, the requirement for a person
to register before they can practice as a patent attorney would raise an apparent limit to
freedom of association. This limit would be justified as meeting the objectives of a single
register of patent attorneys, consistent qualification requirements and a single code of
conduct, governance body and disciplinary regime. Officials from the Ministries of Justice
and Economic Development will work to improve consistency with the Bill of Rights Act.
Legislative Implications
73.
Patent attorneys are currently regulated under the Patents Act 1953. Provisions to
update and modernise the regulation of the profession that were originally included in the
Patents Bill 2008 were divided out into a separate Patent Attorneys Bill by the Commerce
Committee when considering the Patents Bill. The Patents Bill now makes provision for
the existing regulation under the Patents Act 1953 to continue to apply after the Patents
Bill is enacted.
74.
Cabinet has agreed to place the Patent Attorneys Bill, which is currently waiting a second
reading, on hold pending the development of the trans-Tasman framework. Cabinet has
also agreed to the development of a Trans-Tasman Patent Attorneys Bill to implement a
trans-Tasman framework and accorded it a priority of 5, drafting instruction to Parliament
Counsel Office, for 2011. Enactment of the trans-Tasman Patent Attorneys Bill will need
to be coordinated with the necessary legislative changes to the Australian Patent Acts
1990.
12
75.
I recommend that the Patent Attorneys Bill, which would become redundant under the
trans-Tasman framework, should be allowed to lapse and not be reinstated on the Order
paper after the General Election.
Regulatory Impact Analysis
76.
A regulatory impact statement has been attached as Appendix A.
Quality of the Impact Analysis
77.
The Deputy Secretary, Organisational Development and Support Branch, Ministry of
Economic Development and the Regulatory Impact Analysis Review Panel have reviewed
the Regulatory Impact Statement (RIS) prepared by the Ministry of Economic
Development and associated supporting material, and considers that the information and
analysis summarised in the RIS meets the criteria necessary for Ministers to fairly
compare the available policy options and take informed decisions on the proposals in this
paper.
Consistency with Government Statement on Regulation
78.
I have considered the analysis and advice of my officials, as summarised in the attached
Regulatory Impact Statement and I am satisfied that, aside from the risks, uncertainties
and caveats already noted in this Cabinet paper, the regulatory proposals recommended
in this paper:
a.
Are required in the public interest;
b.
Will deliver the highest net benefits of the practical options available, and
c.
Are consistent with our commitments in the Government Statement on Regulation.
Publicity
79.
The decision to provide a trans-Tasman framework for regulating patent attorneys would
be publicised through the release of a joint media statement by IP Australia and the
Ministry of Economic Development. A copy of the Cabinet paper will also be published on
the Ministry’s website.
13
Recommendations
80.
It is recommended that the Committee
1
Note that patent attorneys are regulated under the Patents Act 1953;
2
Note that the Patent Attorneys Bill 2008 would provide a modern regulatory
framework for patent attorneys and repeal the provisions in the Patents Act 1953
related to the regulation of patent attorneys;
3
Note that in August 2009 the Prime Ministers of Australia and New Zealand
endorsed Australian and New Zealand officials working together to develop a
proposal for a single trans-Tasman regulatory framework for patent attorneys, as
part of the intellectual property outcomes for the Single Economic Market agenda;
4
Agree that patent attorneys in New Zealand and Australia should be regulated
under a single trans-Tasman regulatory framework, which in principle would
comprise the following elements;
Patent Attorney Services
4.1
4.2
Only registered patent attorneys and legal practitioners are to be allowed
to offer the following services for financial gain:
4.1.1
apply for or obtain a patent, whether domestically or overseas;
4.1.2
prepare specifications or other documents for the purpose of
patent law, in Australia, New Zealand or elsewhere; and
4.1.3
give advice (other than advice of a scientific or technical nature)
about the validity, or infringement, of patents;
A legal practitioner, who is not also a registered patent attorney, is to be
prevented from preparing or amending a patent specification unless the
practitioner is acting under instruction of a registered patent attorney or
the amendment has been directed by an order of the Court;
Governance Body
4.3
A single trans-Tasman Governance Body is to be responsible for
educating, registering and disciplining patent attorneys in Australia and
New Zealand;
4.4
The Governance Body is to comprise a Chair, the Director General of IP
Australia as an ex-officio member from Australia, the General Manager of
the Intellectual Property Office of New Zealand as an ex-officio member
from New Zealand, and at least five subject matter experts;
Single trans-Tasman register of patent attorneys
4.5
The Governance Body would be responsible for maintaining a single
trans-Tasman register of patent attorneys;
14
Registration criteria
4.6
Applicants for registration as patent attorneys are to be required to have
a science or technology qualification issued from the higher education
sector in a field of patentable subject matter and approved by the
Governance Body;
4.7
Applicants for registration as patent attorneys are to be required to have
successfully completed accredited courses in a range of specified topic
areas as determined by the Governance Body;
4.8
The New Zealand Institute of Patent Attorneys, Inc. would be able to seek
accreditation from the Governance Body to continue to provide the
existing examination regime under the Patents Act 1953 for the specified
topic areas as determined by the Governance Body if there are no New
Zealand tertiary institutions offering accredited courses of study;
4.9
The Governance Body is to be able to grant exemptions in certain topic
areas where the Governance Body is satisfied that the applicant has
successfully completed a comparable course of study from a nonaccredited tertiary institute;
4.10
Applicants for registration as patent attorneys are to be required to have
been employed for at least two years by a trans-Tasman registered
patent attorney, IP Australia or the Intellectual Property Office of New
Zealand and be able to demonstrate to the satisfaction of the
Governance Body that they have acquired competency in prescribed
practical skills;
4.11
Applicants for registration as patent attorneys are to be fit and proper
persons to practise as patent attorneys, including being of good character
and not having been convicted of an offence where such an offence
would reflect adversely on the person’s fitness to practice as a patent
attorney;
4.12
Once registered, patent attorneys are to be required to undertake a
prescribed level of continuing professional education each year to be
eligible for renewal of their registration;
Code of conduct and disciplinary matters
4.13
All registered patent attorneys are to be required to adhere to a single
code of conduct meeting specified objectives;
4.14
The code of conduct is to be developed and maintained by the
Governance Body;
4.15
The grounds on which a complaint can be made, the procedure for
making a complaint and the orders following any breach of acceptable
standards of service are to be specified;
4.16
The Governance Body is to be able to receive, investigate, including the
ability to appoint an investigator to collect evidence in certain cases, and
determine complaints received from third parties or on its own initiative;
15
4.17
The Governance Body is to be able to direct parties to certain complaints
that do not involve disciplinary issues to undertake alternative dispute
resolution or arbitration mechanisms to resolve the complaint;
4.18
The Governance Body is to be able to refer any complaint regarding
serious misconduct to an appropriate Disciplinary Tribunal (the “Tribunal”)
to determine, and where appropriate, discipline, patent attorneys;
4.19
The Tribunal is to be chaired by an experienced barrister and include two
advisers drawn from a panel of experienced current or former patent
attorneys;
Miscellaneous matters
4.20
Registered patent attorneys to be able to form multi-disciplinary practices
where at least one partner is a registered patent attorney;
4.21
Patent attorney practices to be permitted to incorporate provided a
manager or director of the company is registered as a patent attorney;
4.22
Registered patent attorneys to be provided with protection against
disclosure of communications with their clients, including communication
with overseas clients overseas;
4.23
A registered patent attorney to be required to maintain an address for
service in either Australia or New Zealand; and
Transitional arrangements
4.24
Transitional arrangements to be provided to ensure that people currently
sitting the professional qualification examinations under the Patents Act
1953 are not disadvantaged and that patent attorneys registered under
the Patents Act are deemed registered under the trans-Tasman
regulatory framework;
5
Direct officials to works with Australian officials to develop an overarching
bilateral instrument, which would be the basis for implementing the decisions in
paragraph 4;
6
Note that the overarching bilateral instrument will need to address a number of
complex implementation issues that are still to be determined, such as how the
Governance Body and Disciplinary Tribunal will be constituted (and under which
country’s law), how to confer powers and rights on these bodies and, conversely,
impose duties, impose responsibilities and hold them accountable; judicial
reviews and appeal procedures in each country; the power to collect evidence
during disciplinary proceedings; and the application of Official Information Act
1982 and Privacy Act 1993 (and the Australian equivalents);
7
Agree that the Patent Attorneys Bill 2008 should be allowed to lapse and not be
reinstated on the Order paper; and
16
8
Invite the Minister of Commerce to issue instructions to the Chief Parliamentary
Counsel to give effect to decisions in paragraphs 4 and 5.
Hon Simon Power
Minister of Commerce
_____ /_____ /______
17
Appendix A: Regulatory Impact Statement
STATUS QUO AND PROBLEM DEFINITION
National registration regimes
Patent attorneys are a small profession providing specialist advice on obtaining, protecting
and exploiting intellectual property rights (IPRs), particularly for patents and trade marks.
Patent attorneys are required to blend scientific knowledge with legal expertise. Many patent
attorneys therefore hold, in addition to their patent attorney qualification, scientific and law
qualifications. The small size of the profession and qualifications patent attorneys hold
contribute to the high cost to business for receiving advice from patent attorneys. It can cost
a business from $4,000 to $100,000 and more in patent attorney fees to protect an invention
as a patent. The cost depends on the nature and complexity of the invention and on whether
protection is required overseas.
The New Zealand register of patent attorneys, which is maintained by the Intellectual
Property Office of New Zealand (IPONZ) under the Patents Act 1953, comprises 194 New
Zealanders and 413 Australians.
There is potential for significant irrevocable financial harm to occur to a business from either
not seeking specialist advice from a patent attorney or receiving advice from an unskilled
person. There can be high costs for breaching another’s intellectual property right and for
not adequately protecting the investment made in developing new and innovative products
and services. The principle beneficiaries of the registration regime are, therefore, intended to
be businesses, not patent attorneys.
The Patent Attorneys Bill 2008, currently before Parliament, will repeal and replace the
existing framework under the Patents Act in order to provide a modern occupational
regulatory framework for patent attorneys. The regulatory framework will be closely aligned
with the existing registration regime in Australia. The Bill creates a Patent Attorneys’
Standards Board to be responsible for education and discipline for the profession. IPONZ is
to be responsible for administering the register of patent attorneys and for providing
secretarial services to the Board, including administering the Board’s finances. The costs of
the Board and IPONZ are to be fully recovered from fees payable for a person to register and
practice as a patent attorney. The registration and renewal fees (currently each fee is $67
under the Patents Act) are expected to increase significantly under the Patent Attorneys Bill
to at least $244 for registration and $427 7 to renew a registration.
Patent attorneys are similarly regulated in Australia under the Patents Act 1990. The
Australian register comprises 675 Australians and 105 New Zealanders. The Professional
Standards Board (PSB) is responsible for education and discipline, whilst IP Australia
administers the register of patent attorneys and provides secretarial services to the PSB,
including administering its finances. The costs of the PSB and IP Australia are fully
recovered from the fees payable for a person to register and practise as a patent attorney.
The registration fee is AU$200 and the annual registration renewal fee is AU$350.
While the two registration regimes are similar, there are a number of differences between the
Patent Attorneys Bill and the Australian Patents Act that reflect different domestic
approaches to occupational regulation. For example, patent attorneys in Australia must
complete 10 hours per annum of continuing professional education in order to renew their
registrations, whereas there are no continuing professional education requirements in
New Zealand.
7
Based on 2003 estimates to implement the Patent Attorneys Bill and adjusted for CPI since then.
The estimates assumed that there would be no change in number of Australian patent attorneys
registering to practise in New Zealand.
18
Trans-Tasman Mutual Recognition Arrangements
Since 1998 New Zealand and Australian patent attorneys have been able to register and
practise across the Tasman pursuant to the Trans-Tasman Mutual Recognition
Arrangements (TTMRA). The effect of the TTMRA was to create a trans-Tasman market for
patent attorney services. The majority of Australian and New Zealand domiciled patent
attorneys, pursuant to the TTMRA, are now registered to practise in both countries.
Single Economic Market Agenda
In August 2009, Prime Ministers Key and Rudd issued a joint statement of intent in which
outcomes for the Single Economic Market (SEM) agenda between Australia and New
Zealand were agreed. One of the key objectives of the SEM is to improve the productivity
and innovation of Australian and New Zealand businesses by deepening the level of
economic integration between the two countries and providing a trans-Tasman market and
improved institutions. For intellectual property, Prime Ministers endorsed a range of
outcomes being developed, including a single trans-Tasman regulatory framework for patent
attorneys. Patent attorneys would become the first occupational group to be regulated under
a single trans-Tasman regulatory framework.
Ineffective trans-Tasman market for patent attorney services
It has been nearly 13 years since the TTMRA came into force and there is little evidence to
show that a vibrant and competitive trans-Tasman market has developed for patent attorney
services over this time. Despite there being a significant overlap between the Australian and
New Zealand registers, and in this regard a high number of Australians registered to practise
in New Zealand, local and overseas businesses continue to primarily use Australian patent
attorneys for services in Australia and New Zealand patent attorneys in New Zealand. The
absence of effective competition within a small profession may be contributing to the high
cost of patent attorney service in Australia and New Zealand.
There appear to be several barriers discouraging businesses from using a patent attorney on
a trans-Tasman basis. These are:
•
Many businesses believe that their local patent attorneys are not sufficiently qualified to
represent them across the Tasman. The TTMRA does not require an Australian patent
attorney demonstrate his or her competence in the knowledge of New Zealand law and
practice to be able to register and practice in New Zealand, and vice versa for New
Zealand patent attorneys in Australia. Australian registered patent attorneys are required
to undertake continuing professional education to keep their skills and knowledge up to
date, but there is no such requirement in New Zealand.
•
Differing standards of service for patent attorneys and disciplinary regimes in Australia
and New Zealand. This makes it difficult for businesses to determine which patent
attorneys are providing the “best value for money”.
The TTMRA is not about professions in Australia and New Zealand being equally qualified to
provide advice on a trans-Tasman basis, providing consistent standards of service or
ensuring businesses are serviced by an up-to-date profession.
Inefficient institutional arrangements
While the TTMRA means that an Australian patent attorney can more readily become
registered and practice in New Zealand and vice versa, it still requires each country to
provide and maintain separate registration regimes for patent attorney services. This means
that it does not allow the governments to take advantage of economies of scale in regulating
patent attorneys.
19
The cost of operating two independent regimes is inherently inefficient. Each country must
maintain independent registration regimes in order to govern largely the same group of
individuals registered as patent attorneys in both countries. Two independent registration
regimes means there are two registers of patent attorneys to be maintained and two boards
to govern the patent attorneys essentially performing the same roles, while each board in
turn is supported by different government agencies.
Existing arrangements are also inconvenient and inefficient for patent attorneys. The two
registration regimes require separate applications to be made and fees to be paid in each
country to enable a person to practise as a patent attorney on a trans-Tasman basis. Both
IP Australia and IPONZ are required to fully recover the costs for administering the
registrations regimes from the registration and renewal fees. Those Australian patent
attorneys registered to also practise in New Zealand and who are not actually providing
services in New Zealand are effectively subsidising the New Zealand registration regime, and
vice versa. If Patent Attorneys Bill was to be implemented, the increase in registration and
renewal fees (which are $67 under the Patents Act 1953) may deter a large number of
Australians from renewing their New Zealand registrations. This in turn would require IPONZ
to seek an increase in the registration and renewal fees that New Zealand patent attorneys
would have to pay to maintain the regime under the Patent Attorneys Bill.
The existing arrangements for regulating patent attorneys services do not support the SEM
agenda.
OBJECTIVES
The objective is to improve the regulatory environment for the delivery of affordable, high
quality patent attorney services to businesses in Australia and New Zealand.
In accordance with the SEM agenda, the outcomes sought include:
•
Providing a larger market for patent attorneys services to encourage patent attorneys
to innovate and increase their productivity;
•
Providing a joint regulatory environment for patent attorneys to register and operate
seamlessly between each country;
•
Allowing economies of scale to be achieved in the regulatory design and
implementation of the institutional arrangements for regulating patent attorneys
services;
•
Reducing the regulatory and business compliances costs for patent attorneys to
practise on a trans-Tasman basis;
•
Facilitating conditions for the development of a more vibrant and competitive market
for patent attorney services;
•
Increasing business confidence in the quality and standards of service provided by
patent attorneys, especially when patent attorneys provide services on a transTasman basis; and
•
Optimising a net Trans-Tasman benefit for Australia and New Zealand.
20
REGULATORY IMPACT ANALYSIS
Options for regulating patent attorneys services
Option 1 (identical, but independent, registration regimes in both countries)
Under this option the Patent Attorneys Bill would be amended to replicate the registration
regime currently provided under the Australian Patents Acts. Each country would therefore
provide:
•
a register of patent attorneys administered in Australia by IP Australia and in New
Zealand by IPONZ;
•
a local patent attorney standards board responsible for education and discipline;
•
the same qualification requirements for registration and renewal as patent attorneys,
including minimum prescribed continuing professional education requirements;
•
a code of conduct and disciplinary regime;
•
separate registration and renewal procedures, including registration and renewal fees, for
a person to practice as a patent attorney; and
•
allow a person to register in both countries, pursuant to the TTRMA, in order to be able to
practice on a trans-Tasman basis.
Option 2 (Trans-Tasman Regulatory Framework) – Preferred Option
Under this option the national registration regimes would be merged into a single transTasman registration regime (the “trans-Tasman framework”). The Australian and New
Zealand professions would effectively become a trans-Tasman patent attorney profession.
The resulting trans-Tasman regulatory framework would comprise the following key
elements:
•
a single definition of the functions and services which would only be performed by a
registered patent attorney and who would be allowed to hold themselves out as
providing patent attorney services in Australia and New Zealand;
•
a trans-Tasman Governance Body responsible for education, discipline and registration
of patent attorneys in Australia and New Zealand;
•
one set of qualification requirements for registration and renewal as a patent attorney;
•
a trans-Tasman register of patent attorneys, with one registration and renewal process;
•
one set of registration and renewal fees, payable to IPAustralia, to fully recover the costs
associated with regulating patent attorneys across Australia and New Zealand, which
would initially be set at the existing Australian fees - currently AU$200 (NZ$244) to
register and AU$350 (NZ$427) to renew registration;
•
a single trans-Tasman code of conduct and disciplinary regime; and
•
IP Australia would be primarily responsible for providing secretarial and administrative
support to the trans-Tasman Governance Body and, with some assistance from IPONZ.
21
Analysis of the options
Below is a table outlining our assessment of how each of the options would impacts on the
delivery of patent attorney services in Australia, New Zealand and on a trans-Tasman basis.
Because no occupational group has been regulated previously on a trans-Tasman basis, our
assessment of the impact of Option 2 is largely qualitative.
Status quo
NZ$244
NZ$412
AU$200 (NZ$244)
AU$350 (NZ$427)
NZ$488
Option 1
NZ$244
At least NZ$412
AU$200 (NZ$244)
AU$350 (NZ$427)
NZ$488
Option 2
NZ$244 (AU$200)
NZ$427 (AU$350)
AU$200 (NZ$244)
AU$350 (NZ$427)
NZ$244 (AU$200)
NZ$839
NZ$839
NZ$427 (AU$350)
194
194
Australian domiciled
patent attorneys
675
675
Total number of
trans-Tasman
registered patent
attorneys 8
Meets SEM objective
Increase the size of
the market for patent
attorney services
Patent attorneys able
to operate
seamlessly in both
countries
Achieve economies
of scale in
institutional
arrangements
Facilitate competitive
market
Business confidence
in patent attorney
services provided in
NZ
Business confidence
in patent attorney
services provided in
Australia
<518 (105 in NZ plus
413 in AU)
<518 (105 in NZ plus
413 in AU)
Not known, may
increase or decrease
in the short term
Not known, may
increase or decrease
in the short term
869
No
No
Partly
No
Yes
Yes
No
No
Yes
No
No
Yes
No change
Partly
Yes
No change
Small positive
increase
Small positive
increase
No change
No change
No change
NZ registration fee
NZ renewal fee
Au registration fee
Au renewal fee
Trans-Tasman
registration fee
Trans-Tasman
renewal fee
NZ domiciled patent
attorneys
8
The number of Australian patent attorneys registered to practise in New Zealand is based on the
number currently registered under the Patents Act 1953, were the registration and renewal fees are
NZ$67. The number of Australian registered to practice in New Zealand under the Patent Attorneys
Bill may reduce because of the increase in the registration and renewal fees.
22
Business confidence
in patent attorney
services provided on
a trans-Tasman
basis
Long term impact on
supply of patent
attorney services in
New Zealand
Long term impact on
supply of patent
attorney services in
Australia
Net trans-Tasman
benefit
No change
Small positive
increase
Positive increase
None
Minimal, slight
increase in the
quality of services
Minimal, slight
increase in the
quality of services
None
None
No
No
Increase in supply of
patent attorney
services into
Australia from New
Zealand domiciled
patent attorneys
leading to a lowering
of the cost of patent
attorney services in
Australia.
Yes
Compared to the status quo and Option 1, the trans-Tasman framework under Option 2
would provide an improved regulatory environment for business in Australia and New
Zealand to receive patent attorney services and better facilitate the provision of patent
attorney services across Australia and New Zealand whilst allowing both governments to
achieve economies in scale in regulating patent attorneys services. Importantly the transTasman framework would contribute a small, but significant, first step towards economic
integration between Australia and New Zealand in the provision of services by regulated
occupations.
Australian impact
Because the trans-Tasman framework is closely aligned to the existing Australian registration
regime, the changes in Australia to implement the trans-Tasman framework have been
assessed by the Office of Best Practice Regulation as “minor and machinery in nature”. The
trans-Tasman framework would not, therefore, substantially alter the existing regulatory
regimes under which patent attorneys are permitted to practise in Australia.
Australian patent attorneys who are also registered to practise in New Zealand would see a
significant reduction in their regulatory and business compliance costs to practice on a transTasman basis. For the remainder of Australian patent attorneys, their regulatory and
business compliance costs to continue to practise in Australia would not change.
For businesses in Australia the trans-Tasman framework would facilitate increased
competition from New Zealand patent attorneys. The trans-Tasman framework would reduce
barriers preventing businesses from reducing their costs for patent attorney services by using
the same patent attorney in both Australia and New Zealand. Because New Zealand patent
attorneys are generally 20-50% cheaper than their Australian counterparts, increased
competition from New Zealand patent attorneys may have the effect of reducing the overall
costs to businesses to receive patent attorney services in Australia.
23
New Zealand impact
Because the trans-Tasman framework would be broadly similar, but not identical, to the
registration regime to be provided under the Patent Attorneys Bill, the trans-Tasman
framework would have more of an impact on New Zealand patent attorneys compared to
their Australian counterparts. Any impact is not likely to be significant, because the majority
of New Zealand patent attorney are already registered to practice in Australian and,
therefore, already subject to the Australian regime.
For New Zealand patent attorneys already registered to practice in Australia, their regulatory
and business compliance costs to practice on a trans-Tasman basis would be substantially
reduced. For the remainder of the New Zealand patent attorneys, their regulatory and
business compliances would be similar to those they would experience under the Patent
Attorneys Bill.
It is not entirely clear, however, how facilitating the conditions for increased competition
between Australian and New Zealand domiciled patent attorneys would impact supply and
price of patent attorneys services in either country. A supply and demand model framework
would suggest some possible scenarios. Because New Zealand patent attorneys are
generally cheaper than Australian patent attorneys, an increase in competition is likely to
lower the price of patent attorney services in Australia. If New Zealand patent attorneys are
able to work in Australia for higher prices, this may also lead to an increase in the cost of
patent attorney services in New Zealand, if New Zealand patent attorney move across the
Tasman to chase higher incomes available in Australia.
While there is a short term risk that increased competition may result in a reallocation of
patent attorneys between Australia and New Zealand, there is no empirically provable ideal
size for the patent attorney profession to support innovation and economic development.
Generally competitive forces should be left to determine the size of the profession. In the
long term, it is likely that the single trans-Tasman model would have a net impact of levelling
out supply, demand and prices on a trans-Tasman basis.
CONSULTATION
The following departments were consulted on the trans-Tasman framework: Te Puni Kokiri;
Ministry of Consumer Affairs; the New Zealand Customs Service; Ministry of Education;
Ministry of Foreign Affairs and Trade; Ministry of Justice; Ministry of Science and Innovation;
the New Zealand Qualifications Authority; and the Treasury. The Department of Prime
Minister and Cabinet was also informed.
The Ministry of Justice and Treasury raised concerns about how the trans-Tasman
framework would be implemented; noting that there are a number of implementation issues
that are still to be addressed. It is also concerned about risks rising from the precedent
setting nature for other work surrounding the creation of joint trans-Tasman institutions. This
issue has been acknowledged and will need to be addressed as part of the work to
implement the trans-Tasman framework.
In April 2011 the Ministry of Economic Development and IP Australia jointly published a
discussion paper outlining a proposal for a trans-Tasman framework for regulating patent
attorneys. 18 submissions were received in response to the discussion paper, five from
Australian stakeholders and 13 from New Zealand stakeholders. On the whole the
Australian submissions, which included submissions from the Australian patent attorney
profession, were broadly supportive of the introduction of a trans-Tasman regulatory
framework for patent attorneys.
The submissions from Australian patent attorneys
emphasised a need to ensure that the trans-Tasman framework did not result in a dilution in
the quality of persons registering as patent attorneys nor in the standards of service required
in Australia.
24
Of the 13 submissions received from New Zealand stakeholders, 11 were from patent
attorneys. In contrast to the submissions received from Australian patent attorneys, New
Zealand patent attorneys were not supportive of the introduction of a trans-Tasman
framework.
While New Zealand patent attorneys acknowledged that the Trans-Tasman framework would
facilitate increased levels of competition between Australian and New Zealand patent
attorneys, one of their main concerns was that, overtime, overseas businesses may prefer to
use Australian patent attorneys in New Zealand. This might lead to a loss of income for
New Zealand patent attorney firms and an eventual decrease in the number of patent
attorneys domiciled in New Zealand and, therefore, fewer patent attorneys available to
support innovative local businesses. Fewer patent attorneys in New Zealand might also
cause an increase in the cost of patent attorney services in New Zealand.
One of the objectives of the SEM work program is to establish a larger market into which
Australian and New Zealand business can compete. The larger market should assist to
encourage businesses, including patent attorneys, to innovate and increase their
productivity. While there is a risk that increased competition may result in a reallocation of
patent attorneys between Australia and New Zealand, the regulatory regime does not exist to
guarantee patent attorneys a ready source of income. The regulatory regime exists for the
benefit of businesses, so that they can have access to reliable, high quality advice on the
protection and exploitation of intellectual property.
New Zealand patent attorneys were concerned that the Trans-Tasman framework would
impact on the manner a person qualifies as a registered patent attorney and increase the
associated costs when compared to the existing framework for regulating the profession
under the Patents Act 1953. The existing patent attorney registration regime and scheme for
qualifying for registration under the Patents Act 1953 is no longer appropriate nor sustainable
in the 21st Century and issues associated with costs related to providing a modern regulatory
framework for patent attorneys were addressed during Select Committee consideration of the
Patent Attorneys Bill.
Some amendments to the details of the proposal have been made to address specific
concerns with some of the key features. For example, the composition of the Governance
Body has been modified so that emphasis is placed on the appointment of people with
appropriate knowledge and skills to aid the overall performance of Governance Body, rather
than on a person’s residency.
25
CONCLUSIONS AND RECOMMENDATIONS
It is recommended that option 2, a trans-Tasman regulatory framework for patent attorneys,
be pursued. A single trans-Tasman regulatory framework would both facilitate the broader
objectives of the SEM as agreed by Prime Ministers, and create a more enabling business
environment for the majority of patent attorneys to operate within New Zealand and Australia.
While the framework’s overall contribution to the development of the SEM is not likely to be
significant, it is nevertheless an important step towards the overall goal of economic
integration between Australia and New Zealand, especially in the area of services provided
by regulated occupations. Even though the small size of the patent attorney profession
means that the overall net benefit is likely to be small, the proposal should be seen in the
context of wider trans-Tasman objectives and should be pursued in preference to either
implementing the Patent Attorneys Bill or making further changes to the Bill to align it with the
Australian registration regime.
IMPLEMENTATION
An overarching bilateral instrument between Australia and New Zealand would be required to
provide the trans-Tasman framework. It is also anticipated that legislative changes would
then need to be made simultaneously to the Australian Patents Act 1990 and New Zealand
Patents Act 1953 to implement the trans-Tasman framework.
Taking these factors into account, it is anticipated that it will take at least two years to
implement the trans-Tasman framework. During this period the current regulatory regime
under the Patents Act 1953 would need to continue in New Zealand.
MONITORING, EVALUATION AND REVIEW
IP Australia is mandated to review all its fees every five years. A review of the registration
and renewal fees under the trans-Tasman framework would, however, be undertaken “out of
cycle” and within 2 – 3 years of implementation.
While the trans-Tasman framework would be monitored post-implementation by IP Australia
and the Ministry of Economic Development to ensure that it is working as expected, a wider
review of operation and effectiveness of the trans-Tasman framework would be initiated with
five to six years following implementation.
26
APPENDIX B: SINGLE TRANS-TASMAN REGULATORY FRAMEWORK FOR PATENT
ATTORNEYS
The single trans-Tasman regulatory framework for patent attorneys is to comprise the
following elements:
A SINGLE GOVERNANCE BODY FOR PATENT ATTORNEYS
•
The Governance Body would be responsible for educating, disciplining and registering
patent attorneys in Australia and New Zealand.
•
The Governance Body would comprise a Chair (who need not be a patent attorney),
one ex-officio member from each of Australia and New Zealand, and at least five
subject matter experts.
Subject matter experts would comprise at least one
representative from each of the Australian and New Zealand patent attorney
professions, an academic and an Australian registered trade mark attorney.
•
The Group Manager of the Intellectual Property Office of New Zealand (IPONZ), and
the Director General of IP Australia would hold office as the ex officio members from
New Zealand and Australia. These two people will be primarily responsible for looking
after the wider public (Australian and New Zealand) interest in manner the Governance
Body regulates the patent attorney profession.
•
The Chair of the Governance Body appointed by agreement between the two
responsible Ministers from the Australian and New Zealand governments for a term of
up to three years. The nationality of the Chair would regularly rotate between the two
countries over time. A procedure for appointing the subject matter experts is still to be
determined.
•
The Governance Body would be required to adopt its own rules and procedures for
decision making.
CONSISTENT QUALIFICATION REQUIREMENTS FOR REGISTRATION AS A PATENT
ATTORNEY
•
A function of the registration process is to ensure that the public are provided with clear
guidelines as to what skills and knowledge is necessary to enter the profession and
that the public have confidence in the quality of service provided by registered patent
attorneys and provides confidence to the users of patent attorney services that patent
attorneys are sufficiently knowledgeable.
•
Applicants for registration as a patent attorney would be required to have a science or
technology qualification issued from the higher education sector in a field of patentable
subject matter and approved by the Governance Body. This would be a new
registration requirement for New Zealand patent attorneys.
•
An exemption would be granted to any New Zealand applicant who did not hold an
appropriate science/technology qualification issued from the higher education sector in
a field of patentable subject matter where the applicant was employed by a patent
attorney firm at the transitional date and had passed at least one paper of the New
Zealand Patent Attorney Examinations provided for under the Patents Act 1953.
•
Applicants for registration as a patent attorney would be required to have successfully
completed accredited courses in a range of specified topic areas as determined by the
Governance Body.
27
•
The Governance Body would be able to grant exemptions in certain topic areas where
the Governance Body is satisfied that the applicant has successfully completed a
comparable course of study from a non-accredited tertiary institute.
•
Applicants for registration as a patent attorney would be required to have been
employed for at least two years by either a trans-Tasman registered patent attorney, IP
Australia or IPONZ and be able to demonstrate to the satisfaction of the Governance
Body that they have acquired competency in the prescribed practical skills.
•
An applicant would also need to be a fit and proper person to practise as a patent
attorney, including being of good character and not having been convicted of an
offence in Australia, New Zealand or elsewhere, especially where such an offence
would reflect adversely on the person’s fitness to practice as a patent attorney.
•
Once registered, a patent attorney would be required to undertake a prescribed level of
continuing professional education each year to be eligible for renewal of their
registration.
•
Tertiary institutions would be able to seek accreditation of courses from the
Governance Body which meet the specified topic areas that an applicant is required to
have successfully completed in order to become registered.
•
Accreditations must be reassessed by the Governance Body against the relevant topic
areas at least every five years.
•
The New Zealand Institute of Patent Attorneys, Inc. would be able to seek accreditation
from the Governance Body for the existing examination regime under the Patents Act
1953 for the specified topic areas that an applicant is required to successfully complete
in order to become registered, especially while there are no New Zealand tertiary
institutions offering accredited courses of study.
•
New Zealand applicants would also be able to seek relevant qualifications from an
accredited Australian university and vice versa for Australian applicants where there
was an accredited New Zealand university.
A SINGLE REGISTER OF PATENT ATTORNEYS
•
Having met all the prescribed requirements, the Governance Body would register
successful applicants and enter them onto the trans-Tasman register of patent
attorneys.
•
All patent attorneys registered in New Zealand and Australia at the date of
implementation would automatically be entered into the single trans-Tasman register.
•
IPONZ and IP Australia would work to develop a joint register of patent attorneys. The
register would initially be administered by IP Australia but would be accessible in both
countries and able to be maintained and updated by both IP Australia and IPONZ as
required on behalf of the Governance Body.
•
The register would include the following information about each person: their full name;
contact address; address for service in either Australia or New Zealand, and status and
history of the person’s registration.
28
A SINGLE CODE OF CONDUCT
•
There would be a single trans-Tasman code of conduct providing standards of ethical
behaviour within the profession by setting out minimum standards of care, competence,
and conduct for all patent attorneys. In particular the code would provide a framework
for fair and equitable dealings between attorneys, their clients, IP Australia, IPONZ,
and other interested parties.
•
The code of conduct would be developed by the Governance Body after consultation
with at least IP Australia, IPONZ, Australia’s Institute of Patent and Trade Mark
Attorneys and the New Zealand Institute of Patent Attorneys, Inc.
•
If required, as a transitional arrangement the existing Australian code could be adopted
as an interim until the Governance Body had developed the Code of conduct.
A SINGLE DISCIPLINARY REGIME
•
The Governance Body would be able to receive complaints from third parties or by any
other means.
•
The Governance Body would be able to investigate a complaint, including appointment
of an investigator to collect evidence in certain cases.
•
The Governance Body would also be able to direct parties to certain complaints that do
not involve disciplinary issues to undertake alternative dispute resolution or arbitration
mechanisms to resolve the complaint.
•
The Governance Body would determine complaints involving disciplinary matters, and
where appropriate discipline patent attorneys.
•
The Governance Body would be able to refer any complaint regarding serious
misconduct to a trans-Tasman Patent Attorney Disciplinary Tribunal (the “Tribunal”) to
determine, and where appropriate discipline patent attorneys.
•
The Tribunal would be chaired by an experienced barrister but would also include two
advisers drawn from a panel of experienced current or former patent attorneys.
•
It is anticipated that members of the Tribunal would be appointed by agreement
between the two responsible Ministers from the Australian and New Zealand
governments for a term of up to three years.
•
The grounds for disciplinary matters would include: a breach of the code of conduct; a
conviction for an offence, which reflects adversely on the person’s fitness to practice as
a patent attorney; acting in a way that makes the person unfit or otherwise unsuitable
to engage in practice as a patent attorney; and fraudulently obtaining registration as a
patent attorney.
•
Where the Governance Body or the Disciplinary Tribunal is satisfied that there is a
reasonable likelihood of the attorney having breached the code of conduct or having
engaged in behaviour that constitutes professional misconduct, the Governance Body
would be able to take appropriate action as prescribed.
29
•
Penalties able to be awarded in disciplinary matters would include one or more of the
following: letter of disapproval; formal reprimand; particular or additional continuing
professional education; payment or refund of monies to a client; financial penalty; to do,
or pay another person to do, a specified act or acts, where appropriate; to rectify an
error or omission where this is practical; to undertake specified training or other
education to remedy any deficiency in competency or skill; and removal or suspension
from the Register of Patent Attorneys.
AN EFFECTIVE OPERATING STRUCTURE (ADMINISTRATIVE AND FINANCIAL)
•
All fees would be payable in either New Zealand or Australian currency and paid into
one account administered by IP Australia. A Secretariat Support Unit, primarily
provided by IP Australia, with some assistance from the Intellectual Property Office of
New Zealand, would administer this account and apply the appropriate Australian
accounting and transparency standards to this account. Applicants would be able to
pay electronically in either currency.
•
There would be no immediate increase in fee levels associated with the introduction of
the new trans-Tasman arrangements above the level set in Australia at the time of
implementation. IP Australia, in primarily providing the secretariat duties, would absorb
any additional costs or shortfalls associated with the transition.
•
In the longer term, fees would need to be reviewed and set by IPONZ and IP Australia,
with approval from the relevant New Zealand and Australian Government Ministers.
Revenue would be quarantined and the costs of administering the Governance Body
and its activities met by fees paid by patent attorneys and those seeking registration.
•
The Secretariat Support Unit, with assistance from IPONZ, would oversee all
secretariat duties associated with supporting the Governance Body, Disciplinary
Tribunal and registering attorneys including maintenance of the register and any web
based content.
•
The Ministry of Economic Development would address matters regarding appointments
and ministerial correspondence for the New Zealand representatives. IP Australia
would address matters regarding appointments and ministerial correspondence for the
Australian representatives.
•
The Secretariat Support Unit would produce a regular progress report to coincide with
each meeting of the Governance Body. The report would include statistical information
and the status of any active disciplinary matters.
CONSIDERATION OF THE RELATED QUESTION OF THE REGISTRATION OF TRADE
MARK ATTORNEYS IN AUSTRALIA
•
The Governance Body would, through the operation of a sub-committee, continue to
oversee the regulation of trade mark attorneys within Australia (as is presently the case
for the Australian Professional Standards Board). At least one subject matter expert
appointed to the Governance Body would be an Australian registered trade mark
attorney.
•
Australian legislation and Governance Body practices in relation to the trade mark
attorney registration regime would be structured in keeping with a single trans-Tasman
framework in the event that New Zealand agreed to a trans-Tasman regulatory
framework for trade mark attorneys.
30
•
Upon commencement of the proposed trans-Tasman patent attorney regulatory
framework, registered New Zealand patent attorneys who can demonstrate (to the
satisfaction of the Australian Designated Manager) competence in trade marks law and
practice would have 12 months in which to be accepted onto the Australian trade
marks register without having to complete all the relevant and prescribed topic groups
with an accredited provider.
DEFINING PATENT ATTORNEY SERVICES
•
The agreement between the New Zealand and Australian governments to provide for
the trans-Tasman framework would provide a single definition of the functions and
services that can only be performed by a registered patent attorney or legal practitioner
in Australia and New Zealand.
•
Only registered patent attorneys and legal practitioners would be allowed to offer the
following services for financial gain: apply for or obtain a patent, whether domestically
or overseas; prepare specifications or other documents for the purpose of patent law,
in Australia, New Zealand or elsewhere; and give advice (other than advice of a
scientific or technical nature) about the validity, or infringement, of patents. This
reflects the status quo in both Australia and New Zealand.
•
A law practitioner, who is not also a registered patent attorney, would be prevented
from preparing or amending a patent specification unless the practitioner is acting
under instruction of a registered patent attorney or the amendment has been directed
by an order of the Court. This also reflects the status quo under the Australia patents
Act and Patent Attorneys Bill.
MISCELLANEOUS MATTERS
•
Registered patent attorneys would be able to form multi-disciplinary practices where at
least one partner is a registered patent attorney.
•
Patent attorney practices would be permitted to incorporate provided a manager or
director of the company is registered as a patent attorney.
•
The matter of whether law practitioners would be able to form multi-disciplinary
practices with registered patent attorneys would be left to national law.
•
Registered patent attorneys to be provided with protection against disclosure of
communications with their clients, including communication with overseas clients
overseas.
•
A registered patent attorney would be required to maintain an address for service in
either Australia or New Zealand.