Cosgrove ClaytonPATENTS (TRANS-TASMAN PATENT ATTORNEYS AND OTHER MATTERS) AMENDMENT BILLSecond ReadingDebate resumed from 20 September.Hon CLAYTON COSGROVE (Labour): I want to say from the outset that the Labour Party will support this bill. It is an important bill for the innovators in our community. We know from the statistics that we do not hold enough patents in New Zealand. Patents are extremely difficult and extremely expensive for many particularly smaller innovators in our community who want to protect their intellectual property.But I have got to say before I do this that I want to thank the chair of the Commerce Committee Melissa Lee for the way she chaired this piece of legislation. She allowed a lot of latitude to examine its content and particularly the officials. Normally I would not criticise public servants. I think we have a world-class public service. But—if you read the report from the committee not just the minority view from the Labour Party but actually the words that are consensual if you like between the parties on the select committee—I have to criticise absolutely the process of this legislation.This bill set out to facilitate the development and implementation of a single patent application process and a single patent examination process in respect of the Intellectual Property Office of New Zealand and its equivalent in Australia. It was something that the Labour Party supported. It was a Government proposal like many of the trans-Tasman amalgamations that we have had in respect of the law in accountancy greater efficiency ease of access for the industry etc. etc. We then got some concern from the patent attorneys and I have to say from a couple at the big end of town—Fisher & Paykel Healthcare and others that are involved in serious innovative work—that this would be detrimental to the industry.If you go and look at the select committee report it talks about the lack of benefits to businesses and patent attorney firms making applications on their behalf—that there would be a small cost perhaps in time savings. It talks about increased administration costs to business it talks about significant costs in other ways and then we get to the heading: Consultation and quantification of costs". All those criticisms which have led the Government to gut the bill and to reverse its original proposal to do away with the trans-Tasman amalgamation on the basis—Hon Paul Goldsmith: We listened.Hon CLAYTON COSGROVE: I do not actually criticise the Minister—he had a chirp there. I do not criticise him. In fact I am on record—Melissa Lee will verify this—as saying that I felt sorry for him. If he was served up the drivel that we were served up by officials to the Minister—it was almost impossible for the select committee to make a recommendation. But he was served up I think grossly inadequate advice.There was no quantification of cost in respect of costs and benefits. In fact officials came to us—and I wrote this down. It took us I think two meetings to get it out of them. We asked them whether they had quantified the costs and whether they had gone and talked to industry about it. The answer was: "Oh yes. No. Well maybe. Well we'll come back to you with something." The following week they came back to us with nothing written down. But I wrote this down: they gave us the figure I think of half a million dollars in respect of some of the costs. We asked: "How did you come to that?". They said that that was "our best guess" and "back of the envelope". That is what these officials from the Ministry of Business Innovation and Employment (MBIE) told a select committee.The process was so bad that at one point thankfully—unusually but thankfully—the Minister's own adviser came and attended a private session of the committee which I and I think all members of the committee welcomed to give the Minister feedback on the lack of adequacy in respect of this bill. If you look at the paragraph under "Consultation and quantification of costs"—and this is a paragraph written by the committee as a whole and supported unanimously I think by all parties—it says this: "We consider that there was a lack of consultation with patent attorneys and the rest of the industry …" because of course MBIE did not consult the innovators the small guys and girls at the small end of town.The Labour Party actually went out and talked to some of the universities and others and to innovators. The officials talked to a few at the big end of town like Fisher & Paykel. I make no criticism of Fisher & Paykel but the officials did not actually talk to the innovators many of whom struggle to access patents and to protect their intellectual property. The paragraph goes on: "… there was a lack of consultation with patent attorneys and the rest of the industry before the development and proposal of these enabling provisions. Moreover we consider that quantification of likely costs—that is the costs of developing and implementing these processes and the compliance costs to the industry and patent applicants—was inadequate." As I say I do not often criticise those in our public service but I suspect other members will join with me in that criticism.The pre-consultation process was hopeless. When we asked about and dug into the lack of costings and the lack of quantification and the reason for the reversal of the Government's own proposal we were told basically at one point that the industry—and by that the officials meant the patent attorneys but the industry is wider than that; it goes to the patent attorneys' clients the innovators who require this form of patent protection. We were told basically that "They didn't like it trust us."—"us" being the officials—because they have heavy-duty so-called expertise in this. I have got to say and I do say it with seriousness and I did say it to the officials that if this was the sort of rubbish and lack of analysis that you served up to your Minister I actually feel sorry for the Minister. And I mean that in all seriousness. I did say it and we actually said to them to go back and talk with the Minister and the Minister has made some decisions in respect of the suit.Although we support the bill I can do no better than read the last paragraph of the Labour Party's minority view which says this: "Labour will vote for the proposed amendments. We remain bemused at the dexterity required by the Government to justify a complete reversal of its original position." This is a bill that should have gone out to the industry as a whole. It is the industry that knows best about this but I think officials felt that they would just fire this one through. The amount of time and money that has been wasted to dish up an inadequate piece of legislation badly drafted and to then put that before a select committee—and then for the Government's own officials to come in and say "We want to reverse what we originally put to you." not just a minor tinkering in the odd amendment but the major part the trans-Tasman amalgamation if you will of the processes around patents.Now it may well be valid. I say that we support the legislation but I have to say that given the lack of analysis and advice we had the jury is still a bit out. We will see how this goes. But I just say to the Government—and this has bubbled up in a number of pieces of legislation where bad advice for badly thought-out legislation has been served up. Actually to the credit of the National members and New Zealand First members and others on the committee collectively we took a long time to examine the bill and pull the facts and the truth from officials. We have done our best I think—and thanks to the chair—to put humpty-dumpty back together again and to put a bill before Parliament that I hope will serve the industry not just the big end of town but those innovators the patented attorneys' clients who need this sort of legislation to work and work well."