RESTRICTEDWORLD TRADE
ORGANIZATIONIP/Q3/NZL/1
24 October 1997
(97-4655)
Council for Trade-Related Aspects
of the Intellectual Property RightsOriginal:  English
REVIEW OF LEGISLATION IN THE FIELDS OF PATENTS, LAYOUT-DESIGNS
(TOPOGRAPHIES) OF INTEGRATED CIRCUITS, PROTECTION OF
UNDISCLOSED INFORMATION AND CONTROL OF
ANTI-COMPETITIVE PRACTICES IN
CONTRACTUAL LICENCES
New Zealand1
The present document reproduces the introductory statement made by the delegation of
New Zealand, the questions put to it and the responses given in the review of legislation on patents,
layout-designs (topographies) of integrated circuits, protection of undisclosed information and control
of anti-competitive practices in contractual licences at the Council's meeting of 26-30 May 1997.2
_______________
I. INTRODUCTORY STATEMENT
Patents legislation
The basis of New Zealand’s patent law is the Patents Act 1953.  It deals with both the
technical aspects of patent applications as well as substantive matters such as patent term, compulsory
licensing, Crown use, and international agreements.  There are also three amendments as follows:
- The Patents Amendment Act 1992.  The principal purpose of this Act was to deal with
technical issues related to New Zealand’s accession to the Patent Cooperation Treaty.
- The Patents Amendment Act 1994.  The purpose of this Act was to give effect to obligations
in the TRIPS Agreement.  It made a number of substantive changes to the 1953 legislation
covering, for example, patent term, compulsory  licensing, Crown use, and reversal of the
burden of proof.
- The Patents Amendment Act 1996.  This made three technical changes to the
1953 legislation.
There are also associated regulations as follows:
                                                     
1As regards legislation relevant to the areas under review and notified by New Zealand under
Article 63.2 of the Agreement, reference is made to documents IP/N/1/NZL/1-2, IP/N/1/NZL/P/1-4 and
P/1/Add.1 and P/3/Add.1, IP/N/1/NZL/L/1, IP/N/1/NZL/I/1 and I/1/Add.1, IP/N/1/NZL/U/1.
2The minutes of the meeting have been circulated in document IP/C/M/13.IP/Q3/NZL/1
Page 2
- the Patents Regulations 1954 and amendments; and
- the Patents, Designs and Trade Marks Convention Order 1996.
It should be noted that New Zealand’s patent legislation is under review and reform proposals
have been publicly released.  The Government is currently consulting with New Zealand Maori about
some concerns they have about the proposed reform of the legislation.  It is likely these consultations
will continue for the remainder of 1997.
Layout designs legislation
New Zealand’s layout designs legislation is  found in the Layout Designs Act 1994.  This
provides protection for the layout designs of integrated circuits.  The Act gives effect to the
obligations in Section 6 of the TRIPS Agreement.
The Act has five parts.  Two relate to interpretation and miscellaneous issues respectively.
Three parts cover substantive matters relating to ownership and the nature of layout design rights,
exceptions, and remedies for infringement.
Protection of undisclosed information
Undisclosed information is protected in New Zealand by a combination of statute law and the
common law.
Information covered by Article 39(2) is protected by the Fair Trading Act 1986 through
prohibiting misleading or deceptive conduct, false representations, and certain specified unfairpractices.  The remedy for a party to take action in respect to undisclosed information is based on the
English common law action of breach of confidence.
Information covered by Article 39(3) is protected by three statutes:
- the Animal Remedies Amendment Act 1994;
- the Pesticides Amendment Act 1994;  and- the Medicines Act 1994.
These three statutes provide an almost identical regime for the three areas they cover and, in
essence, provide:
- a system of protection for undisclosed test or other data submitted to New Zealand
governmental authorities when marketing approval is being sought for medicines, pesticides,or animal remedies;
- a system that defines the type of information which is to be protected;  and
- that information is protected both from unfair commercial use and disclosure for a period of
up to five years first calculated from 1 January 1995 when the new system took effect
(although some protection commenced before 1 January 1995 where the information wasalready held as at 1 January 1995).IP/Q3/NZL/1
Page 3
II. REPLY TO THE GENERAL QUESTION ON PRIORITY RIGHTS3
Does your country recognize a right of priority on the basis of an earlier patent
application filed in any other WTO Member by a national of a WTO Member?
New Zealand currently recognizes a right of priority on the basis of an earlier patent
application for those countries that are members of  the Paris Convention or where New Zealand has a
bilateral agreement concerning the priority of patent applications.
An amendment to the Patents, Designs and Trade Marks Convention Order is currently being
prepared.  The purpose of the amendment is to extend the Convention Order to WTO Members who
are not members of the Paris Convention.
III. REPLIES TO QUESTIONS POSED BY THE EUROPEAN COMMUNITIES AND
THEIR MEMBER STATES
1. Would a compulsory licence pursuant to Section 46(1) of the Patents Act 1953 (as
amended) be granted under New Zealand patents law where the patentee justifies his failure towork the patent by legitimate reasons?  If so, what reasons would be regarded as being
legitimate?  (Article 2.1 of the TRIPS Agreement in conjunction with Article 5(A)(4) of the Paris
Convention) .
Section 46(2) provides for one ground only for the grant of a compulsory licence, namely
where "a market for the patented invention is not being supplied, or is not being supplied onreasonable terms, in New Zealand".
[Follow-up questions from the USA]
Please indicate whether any licences with out the authorization of the patent owner
under the authority of "Crown Use" or under the compulsory licensing authority of Section 46
et seq ., respectively, have been granted by the Government of New Zealand since
1 January 1993.
No compulsory licences have been granted by the New Zealand Government since
1 January 1993.
It should be noted that from 1 January 1995 an application for a compulsory licence in terms
of Section 46 needs to be made to the High Court, not to the Commissioner of Patents as was the caseprior to 1 January 1995.  We are unaware that any application for a licence has been made to the High
Court since that date.
Please explain how the phrase "on reasonable terms" under Article 46(2) of the Patents
Act has been interpreted.
In the light of the answer given to the first follow-up question, there is no legal precedent to
indicate how a Court would interpre t this phrase in the context of Section 46 as it is now worded.
While the phrase did occur in the predecessor to the current Section 46, it is not considered
that worthwhile assistance can be gained from this provision for the following reasons:
                                                     
3At the meeting of the TRIPS Council of 27 February 1997, Members agreed to respond to this
question in the context of the present review (document IP/C/M/12, paragraph 18).IP/Q3/NZL/1
Page 4
- The wording of the provision in which the phrase occurred differed from the current wording
in Section 46(2) resulting in a different test being required.
- The pre-1995 provision was one of five, broadly worded grounds upon which a licence could
be applied for.  The present provision (Section 46(2)) contains two narrowly based grounds.
2. Does New Zealand law allow for a period of grace for the payment of fees prescribed for
the maintenance of patent rights which is not shorter than six months, having regard to
Section 30(5) of the Patents Act 1953 (as amende d)?  (Article 2.1 of the TRIPS Agreement in
conjunction with Article 5bis of the Paris Convention) .
Yes.  Section 30(5) - as amended - provides an affirmative answer to the question posed by
the European Communities.  The effect of the provision is to provide a grace period of six months.
3. Is the authorization of the use of patented inventions for the services of the Crown
pursuant to Sections 55(2) and 55(3) of the Patents Act 1953 (as amended) considered on its own
individual merits?  (Article 31 of the TRIPS Agreement) .
Yes.  Both Sections 55(2)(a) and 55(3) refer to very specific and unusual situations in respect
to Crown use.
4. Does New Zealand law provide for an obligation to inform promptly the patent owner
where a patent is used for the services of the Crown, and the government or contractor, without
making a patent search, knows or has demonstr able grounds to know that it will use a valid
patent?  (Article 31 of the TRIPS Agreement) .
Yes.  The wording in Section 58B(l) is not exactly the same as the last sentence of
Article 31(b), but it has the same effect.
5. Could the Government of New Zealand clarify whether an authorization to use a layout-
design by or on behalf of the Crown is liable to be terminated if and when the circumstances
which led to it cease to exist and are unlikely to recur?  Is the continued existence of thesecircumstances subject to review by the competent authority?  Please explain.  (Article 37 of the
TRIPS Agreement).
An authorization to use a layout design on behalf of the Crown is only permitted in defence,
national security or national civil emergency circumstances and where the Crown has been unable to
obtain the licence of the owner of the layout design on reasonable terms.  The authorization is liable to
be terminated if the circumstances which led to it being granted cease to exist.  See Section 21 of the
Layout Designs Act 1994.
The continued existence of these circumstances is subject to review.  See Section 24 of the
Layout Designs Act.
6. On what basis and under what conditions does New Zealand grant the protection to
undisclosed information provided for under Article 39.2 of the TRIPS Agreement?
The obligations in Article 39.2 are met in New Zealand by:
- legislation - i.e. the Fair Trading Act 1985; and- the common law - i.e. by way of the cause of action based on breach of confidence.IP/Q3/NZL/1
Page 5
The Fair Trading Act, in essence, prohibits:
- misleading and deceptive conduct;
- false representations; and- certain specified unfair practices.
Remedy for a party to take an action in respect of undisclosed information is found in the
common law in the cause of action known as breach of confidence.  Several points can be made about
the breach of confidence action as follows:
- it has its origins in English law;- it is well recognised as a cause of action in New Zealand law.  New Zealand also follows the
three stage test established in an English case for determining whether the cause of action has
been made out.  This test is as follows:
- there must be "the necessary quality of confidence" in respect of the information
which has been disclosed;
- the information which has been disclosed must have been done so in circumstances
which imply that there is an obligation of confidence; and
- there must be an unauthorised use of the information which has been disclosed to the
detriment of the party communicating it.
There are numerous examples of information whic h New Zealand courts have either protected
or indicated could be protected under this cause of action.  Three examples are:
- knowledge of a tender price;- the workings of a machine which was one of three similar machines in the country;- internal business forms used in a tax consultancy.
7. How does New Zealand protect confidential information disclosed to a New Zealand
Government Department or Statutory Body under Section 35C(1)(b) of the Animal Remedies
Amendment Act 1994, Section 35C(1)(b) of the Pesticides Amendment Act 1994, and
Section 23C(1)(b) of the Medicines Amendment Act 1994 against unfair commercial use?  Are
there any limitations to the conditions in which such information may be disclosed?
(Article 39.3 of the TRIPS Agreement) .
Confidential information is disclosed to other departments or bodies only when the original
Minister or department is confident that appropria te protocols and procedures are in place to ensure
that the confidentiality of the material will be respected and that the material will be used only in
accordance with legislation.IP/Q3/NZL/1
Page 6
[Follow-up question from the EC]
In its response the New Zealand Government  refers to the use of material "only in
accordance with legislation".  Please specify wh ich legislation is referred to and the relevant
provisions.  Does the legislation in question pr otect such data against disclosure, except where
necessary to protect the public, or where steps a re taken to ensure that the data are protected
against unfair commercial use, as provided fo r in Article 39.3 of the TRIPS Agreement?
Could New Zealand clarify how it implements Article 39.3 of the TRIPS Agreement
with regard to confidential information disclosed to a New Zealand Government Department or
Statutory Body under Section 35C(1)(b) of the Animal Remedies Amendment Act 1994,
Section 35C(1)(b) of the Pesticides Amendment Act 1994, and Section 23C(1)(b) of theMedicines Amendment Act 1994 against unfair co mmercial use?  Are there any limitations to
the conditions in which such information may be disclosed?
How are "other departments or bodies" defined, to which confidential information may
be disclosed?
What are the criteria to decide whether the "original Minister or department is
confident that appropriate protocols and procedures are in place to ensure that the
confidentiality of the material will be respected  and that the material will be used only in
accordance with legislation"?
The question refers to the phrase "only in acco rdance with legislation" used in the original
answer.  The word "legislation" was used in a broad sense to refer to the pieces of legislation that each
government department is responsible for administering.  As these pieces of legislation are different
for each department, and as there are many of them, it is not possible to specify them in detail.  Thepoint being made, however, is that using material "only in accordance with legislation" will ensure
that it is not used for improper commercial use.
One particular piece of legislation is worthy of note.  The Official Information Act (1982)
allows any New Zealander to request of any government department access to any information held
by that department.  However, the Act also gives the department in possession of the information the
right to refuse the request if certain conditions pertain.  Two such conditions are that releasing thematerial would be contrary to the provisions of a specified enactment (Section 18(c)(i)), or that the
material is commercially sensitive (Section 9(2)(b)).  These sections can be invoked to refuse a
request for the release of confidential informatio n submitted under the Acts referred to in EC’s
question 7.  However, Section 9(2)(b) can be outwei ghed by public interest considerations, e.g. strong
public health and safety reasons.
The follow-up question also refers to the definition of "other departments or bodies" as used
in the response to EC’s question 7.  The word "d epartments" refers to Government Departments and
has no special meaning in this context.  The word "bodies" refers to Statutory Bodies established by
Statute for regulatory purposes.  These include the Pesticides Board and the Animal Remedies Board.
In addition, the follow-up question asks for further clarification on how New Zealand
implements Article 39.3 of the TRIPs Agreement.   There is no requirement for the Boards or
Departments to disclose confidential informatio n to other government departments or statutory
bodies.  Furthermore, Section 35C(1)(b) of the An imal Remedies Act, Section 35C(1)(b) of the
Pesticides Act, and Section 23C(1)(b) of the Medicines Amendment Act allow the Boards orDepartments to disclose the information only if, in the opinion of the Board or Department, the
receiving Government Department or statutory body, as the case may be, will take reasonable steps to
ensure that information is kept from unfair commercial use.  Therefore, if a request is made, and theIP/Q3/NZL/1
Page 7
relevant Board or Department were to decide to release confidential information, after consultation
with the company that submitted the data, then it would formulate appropriate protocols before
releasing the confidential information in order to en sure that the confidentiality of the information is
respected - e.g. an exchange of letters between the Boards/Departments/statutory bodies concerned.
There are no limitations as to the content of the conditions that Boards or Departments can impose in
such protocols - they can impose whatever conditions are felt to be necessary in order to respect theconfidentiality of the information.
8. How does New Zealand protect confidential information disclosed to the persons or
bodies as provided under Section 35C(1) of the Animal Remedies Amendment Act 1994,
Section 35C(1) of the Pesticides Amendment Act 1994, and Section 23B(1) of the Medicines
Amendment Act 1994?  Are there any limitations as to the conditions in which such information
may be disclosed?  (Article 39.3 of the TRIPS Agreement) .
It is assumed that the question refers to Section 23C(1)(c) of the Medicines Amendment Act.Disclosure of confidential information to the regulatory authority of a WTO member will not
lead to a breach of commercial confidence, as all members are bound to comply with Article 39(3) of
the TRIPS Agreement.
The information provided to international organizations is in the form of reports containing an
evaluation of data contained in a registration package.  It is not possible to make unfair commercialuse of such information.
Information is provided to other persons or bodies only as approved by regulation and, as
required by TRIPS, only when safeguards are in place to prevent unfair commercial use.
[Follow-up question from the EC]
To which regulation and to which specific safeguard does the New Zealand Government
refer in the latter part of its response to  question 8 on the protection of undisclosed
information?
The regulations cited can be made under the Acts which are the subject of EC's question 8.
However, to date no such regulations have been established.
The "safeguards" referred to in the response to EC's question 8 should be seen as analogous to
the protocols discussed in the answer just give n to the follow-up question to EC's  question 7.
[Follow-up question from the US]
Please explain whether and how New Zeal and provides protection against unfair
competition for test data provided by an entity seeking regulatory approval of a new
pharmaceutical or agricultural chemical produc t before the relevant New Zealand authorities.
New Zealand provides such protection by way of the Medicines Amendment Act 1994, the
Animal Remedies Amendment Act 1994, and the Pesticides Amendment Act 1994.  The detail of the
protection has already been provided in response to the questions posed by the European
Communities - in particular, please refer to the answers given to questions 7 and 8 and the two
follow-up questions from the European Communities on the subject of protection of undisclosed
information.IP/Q3/NZL/1
Page 8
IV. REPLIES TO QUESTIONS POSED BY JAPAN
1. In your country, are the following subject matters protectable by patent:  (1) plants and
animals, and (2) plant and animal varieties?
Patents can be granted for plants and plant varieties and animals providing the invention falls
within the definition of an invention specified in the Act, is useful, new and is not obvious.  It should
be noted that in New Zealand plant varieties are generally protected under the plant variety rightslegislation.
2. In your country, is the act of offering for sale included in the exclusive rights of patent?
Yes.
3. In your country, what kinds of acts are rec ognized as exceptions to the exclusive rights
conferred by a patent right?
The main exceptions are: without the author ization of the right holder and Crown use.
4. In your country, in which case is use wi thout the authorization of the right holder
permitted, including use by the government or by third parties authorized by the government?
Use without the authorization of the right holder is discussed in the response to question 1
from the European Community and its Member States.
Use by the Government or by third parties authorised by the Government ("the Crown") is
provided for in Section 55 of the Patents Act 1953 (as amended in 1994).  Special provision is alsomade (Section 58 refers) for Crown use during emergencies.
5. In your country, how is the obligation under Articles 34.1 and 34.2 of the TRIPS
Agreement regarding the shift of the burden of proof in civil proceedings for patent
infringement related to a process patent implemented?
Section 68A of the Patents Act (as amended in 1994) governs the burden of proof in
infringement proceedings concerning a process patent.  Paragraph (l) of Section 68A implements
Article 34(1) and (2).  Both these paragraphs need to be read together since paragraph 2 of Article 34
says that one can implement the obligation in paragraph 1 by implementing either the (a) or (b)
condition of paragraph 1.  New Zealand has provided for condition (a) in Section 68A(l) (see the
second line of paragraph (l)).
6. Please explain whether Articles 46, 48, 55, 56 (1), 57 and 58 of the New Zealand Patents
Act with respect to the compulso ry licences and use of patented inventions for services of the
Crown are consistent with each paragraph of Article 31 of the TRIPS Agreement.
Sections 46, 48, 55, 56(1), 57 and 58 of the Patents Act are consistent with Article 31 of the
TRIPS Agreement.IP/Q3/NZL/1
Page 9
7. Please explain how Article 10 of the New Zealand Patents Act with respect to the
contents of specification is consistent with Article 29 of the TRIPS Agreement which requires
that the invention shall be disclosed in a manner sufficiently clear and complete for the
invention to be carried out by a person skilled in the art.
The information required by Section 10 of the Patents Act with a patent application provides
the necessary disclosure of the details required in order to determine whether the invention can becarried out by a person skilled in the art.
8. Please explain how undisclosed information is protected in your country, as required by
Article 39.2 of the TRIPS Agreement.
See the reply to question 6 from the European Communities.
V. REPLIES TO QUESTIONS POSED BY THE UNITED STATES
1. Please explain whether any inventions are not eligible to be patented under
New Zealand law, notwithstanding the fact that the invention satisfies the criteria of beingnovel, involving an inventive step, and being usef ul.  In so doing, please explain the meaning of
the phrase "means any manner of new manufacture the subject of letters patent and grant of
privilege within Section 6 of the Statute of Mono polies and any new method or process of testing
applicable to the improvement or control of manufacture" and whether under this definition
any of the following inventions if otherwise pate ntable are deemed ineligible to be patented in
New Zealand:
(a) process inventions which, in whole or in part, consist of steps that are performed
by a computer and are directed by a computer program;
(b) product inventions consisting of elements of a computer-implemented invention,
including, in particular:
(i) machine-readable computer program code stored on a tangible medium
such as a floppy disk, computer ha rd drive or computer memory; and
(ii) a general purpose computer whose novelty over the prior art arises
primarily due to its combination with a specific computer program;
(c) methods of treatment or diagnosis of humans or animals; or(d) non-naturally occurring microorganisms,  plants or animals produced through
some act of human intervention.
Inventions which may be contrary to morality may not be eligible to be patented.  See
Section 17 of the Patents Act.
The meaning of the phrase “any manner of new manufacture the subject of letters patent and
grant of privilege within Section 6 of the Statute of Monopolies and any new method of process of
testing applicable to the improvement or control of manufacture” has been determined by numerous
court decisions both in New Zealand and other countries.  In New Zealand, the leading case is the
Court of Appeal decision in Wellcome Foundation v the Commissioner of Patents  (1983).  The
principles that guide a court in interpreting this phrase on whether a patent can be granted are that the
invention cannot be contrary to law, cannot be mischievous to the State by raising prices of
commodities at home or hurt trade and cannot be generally inconvenient.IP/Q3/NZL/1
Page 10
In terms of the definition of invention, the situation applying to the four types of inventions
listed in (a) - (d) above is as follows;
(a) Patentable;
(b) Not Patentable;(c) Methods of treatment where they do not relate to surgery, and methods of diagnosis are
patentable;
(d) Patentable.[Follow-up questions from the US]
Please explain the criteria that govern th e determination that an invention "may be
contrary to morality", and if possible, provide examples of inventions that have been so found
under New Zealand law.
No invention has been determined to be contrary to morality for nearly 40 years.  The last
invention rejected for patentability on this ground was around 1960 when an invention involving a
contraceptive device was denied patentability.  This reflected the social circumstances of the time.
The New Zealand Patent Office has seldom had to consider this exception in the last 40 years.
Where the issue has arisen, inventions have been considered on their merits.  Currently, the test the
Patent Office would use is whether the invention is offensive to a significant section of the population.
Please explain how the phrase "cannot be generally inconvenient" has been interpreted
in New Zealand, and if possible, provide examples of inventions that have been found to be such
by New Zealand courts.
We are unaware of any legal case which has specifically interpreted this phrase.  When
reference has been made to the phrase, it has b een in the context of wider comments on the issue of
"manner of new manufacture" generally, which was addressed in the reply to US question 1  and on
which the leading case is the Court of Appeal decision in Wellcome Foundation v The Commissioner
of Patents  [1983] which can be found in the New Zealand Law Reports No. 387.
2. Article 30(3) of the New Zealand Patents Act states that "the term of every patent shall
be 20 years from the date of the patent".  Please clarify whether the "date of the patent" refersto the date on which the patent is granted, or the effective filing date of the application leading
to the patent.
The date of the patent is calculated from the date of the filing of the complete specification.
3. Section 18 of the 1994 Patents Amendment Act specifies that the term of patents that
were in effect on the date of enactment of the Act shall be extended from 16 to 20 years from the
date of the patent.  Under Section 17 of the Act, it appears that some, but not all, applications
that were pending on this date, should they mature into a patent , can obtain a term of 20 years
from the date of the patent.  Please explain (a) the procedures that must be complied with by an
applicant whose application was pending on the date of enactment of the 1994 Act in order toIP/Q3/NZL/1
Page 11
obtain a patent with a term of 20 years from the date of the patent, and (b) whether, under any
conditions, a 20 year term will not be accorded to a patent that derives from an application
pending on the date on which the TRIPS Agreement became applicable to New Zealand.
(a) All applications for patents pending at the date of commencement of the Patents
Amendment Act 1994 and which subsequently resulted in the grant of a patent
automatically obtained a 20 year patent term.  See Section 4(1) of the PatentsAmendment Act.
The procedures referred to in Section 17 relate to the way in which applications
pending at the date of commencement were to be handled.
(b) No.
4. The New Zealand Patents Act does not appear to contain a provision which specifically
defines the specific exclusive rights to be enjoyed by a patent owner.  Please identify the legal
basis upon which a patent owner can enforce the righ ts to be provided with the grant of a patent
as specified in Article 28 of the TRIPS Agreement.
The scope of the rights enjoyed by a patent owner are defined in the letters patent.  See
Section 2(1) under the heading "Patent".