Patents Bill — In Committee Third ReadingText is incorporated into the Bound VolumePatents Bill — In Committee Third Reading[Sitting date: 27 August 2013. Volume:693;Page:12948. Text is incorporated into the Bound Volume.]Patents BillIn CommitteeDebate resumed.Part 1 Preliminary(continued)IAIN LEES-GALLOWAY (Labour—Palmerston North): Before the lunch break I was talking about the new clause that the Commerce Committee added to the “Purposes” clause of the Patents Bill which is around getting the balance right between the rights of the patent holder and the person who invented a particular item to which a patent applies and the interests of the well-being of the wider society.I think there are two aspects to this. One is the fact that if we clamp down too tightly with patent law that is too restrictive that stifles innovation. A very important aspect of innovation is building on previous ideas—taking an idea that someone else has had and adding something new to it. If patent law is too restrictive then it is not possible for that type of innovation to be carried out.But there is also the societal good side and I think that Pharmac is a particular example of this. Pharmac makes use of the fact that medicines come off patent after 20 years and can therefore provide cheaper access to medicines than is otherwise possible whilst medicines remain on patent. It is important that drug companies are able to patent medicines and reap the rewards from the research and development that they have carried out and the invention of that new medicine or the discovery of the ability that a particular product has as a medicinal property. But after a period of time when they have justifiably held a monopoly on the rights to such a product it is important that they are opened up.There is a debate going on internationally about how long medicines should stay on patent and I know that New Zealand is under pressure from a number of different organisations and from people located in a number of different countries to change our patent law in a way that would keep medicines on patent for a lot longer. The purpose of this bill speaks to that. It speaks about the balance that has to be struck between the rights of the patent holder and wider society and I think that we have a good balance in New Zealand between the rights of the holder of patents of pharmaceuticals and thewell-being of wider society. I think New Zealand should be firm on its stance in holding to that 20-year period because as this bill says that is a fine balance that must be struck carefully.The CHAIRPERSON (Lindsay Tisch): I call Clare—no I am sorry that member has had her four calls. I call Chris Hipkins.CHRIS HIPKINS (Labour—Rimutaka): Thank you Mr Chair. I will have a go. I am very happy to take a call on Part 1 of the Patents Bill and I am sure that Mr Henare who seems to be so amused over there is just preparing his thoughts on what he wants to say on the Patents Bill because after all it was a Labour bill that has been sitting on the Order Paper now for 5 years due to the inefficiency of this Government. So completely hopeless is the Government that after 5 years of being in Government it has suddenly decided that it needs to progress this bill under urgency.Hon Tau Henare: Do you support this bill?CHRIS HIPKINS: It is 5 years since the Labour Government introduced this possibly longer and then finally this Government brings it forward and allows it to be introduced. Mr Henare asks me whether the Labour Party supports this bill—yes yes. The Labour Party does support the bill. The Labour Party does support the bill—it is actually a very important issue. It is a very important issue. It is a very thick bill. The debate on this I am sure is going to go on for quite some time with all of the significant amount of content that there is here in the Patents Bill.Let us have a look at what the purposes of this bill are.Hon Tau Henare: OK you go and have a look.CHRIS HIPKINS: We turn now to the “Purposes” clause for MrHenare’s benefit. That would be clause 3. It states: “The purposes of this Act are to”—Hon Tau Henare: What’s it say?CHRIS HIPKINS: What does it say? I am happy to enlighten the member. I am very happy to enlighten the member. I am sure that I can read it to him faster than he can read it for himself. So “The purposes of this Act are to—(aa) provide an efficient and effective patent system”—Hon Tau Henare: I don’t know about that. Is that because I’m aMāori—or what? Is that because I’m older than you?CHRIS HIPKINS: What was that?Hon Tau Henare: You heard.CHRIS HIPKINS: No I did not.Hon Tau Henare: Oh yes you did.CHRIS HIPKINS: I was busy talking.Hon Tau Henare: Oh yes you did.CHRIS HIPKINS: I was too busy talking.Hon Tau Henare: You heard.CHRIS HIPKINS: Oh no I did not. Look he is welcome to repeat himself. I know he is very familiar with repeating himself. He is welcome to do so. So one of the purposes of the Patents Bill in clause 3(aa) is to “provide an efficient and effective patent system that—(i) promotes innovation and economic growth while providing an appropriate balance between the interests of inventors and patent owners and the interests of society as a whole;”. That is incredibly important. It is a very important balancing act.Hon Tau Henare: Wow! The man can read! The boy can read!CHRIS HIPKINS: It is an important balancing act—for Mr Henare. I know that balancing is something that he has a great deal of difficulty—very great deal of difficulty—with these days. The purpose is also to comply “with New Zealand’s international obligations;”. Well that is not something that Mr Henare is interested in atall—complying with New Zealand’s international obligations—but that is something that I think is important. If we move to paragraph (a) within the “Purposes” clause of the bill it is about ensuring “that a patent is granted for an invention only in appropriate circumstances by—(i) establishing appropriate criteria for the granting of a patent; and (ii) providing for procedures that allow the validity of a patent to be tested;”.Hon Tau Henare: So much for the whip protecting the leader.CHRIS HIPKINS: What was that?Hon Tau Henare: So much for the whip protecting the leader.CHRIS HIPKINS: Oh come on that is not relevant to this debate. That is not relevant to this debate. I tell you what. Mr Henare should be patented because he is clearly one of a kind. He is clearly one of a kind. I do not think I have ever found a member quite like Mr Henare in this Chamber. We should be quite grateful for that. We should patent Mr Henare and then make sure that there is a clear restriction that no more are to be produced—that no more are to be produced after that particular point in time.Anyway we are getting into the further detail of the Patents Bill. This bill as I mentioned of course is a bill that was introduced by Labour. We will support it unless our amendment is voted down because it can be added to the long list of improvements to the business and regulatory environment that were made by the previous Labour Government. Of course we are actually interested in improving the business regulatory environment unlike this Government here. It talked a lot about cutting red tape. Actually the only red tape it is interested in cutting is the stuff that its mates want to get rid of; it is not actually interested in protecting consumers and protecting New Zealanders.The bill attempts to balance the interests of the innovators who should be entitled to make a profit from their inventions—I think that is quite important—but also we have to look at the interests of society as a whole. I think there is a general view that the existing patent law is too generous for those people who are seeking access to patents and too many corporations end up getting monopoly rights. So in a way I am surprised that the National Government is progressing this legislation because of course we know that this Government’s priority is the top 10 percent—the people who are more likely to be able to access the patent rights—rather than the rest of society. I am pleased and I want to congratulate the Government. It is actually taking a very positive step now in making sure that society’s interests are balanced against the interests of those who might be able to access the monopoly rights to patent. So overall I think this bill has a lot of merit.Hon TREVOR MALLARD (Labour—Hutt South): I would like to start off by absolutely disagreeing with my colleague the chief whip Chris Hipkins. I know that will not do me much good but if he had looked carefully at this Patents Bill especially clause 10 he would know that Tau Henare is not patentable because to be patentable you have got to be useful. You have got to be useful. Clause 10 states: “An invention so far as claimed in a claim is ‘useful’ if the invention has a specific credible and substantial utility.” And any suggestion that Tau Henare has a specific a credible or a substantial utility can only be a lie—can only be a lie—and therefore there is no question that Tau Henare is patentable.I think it is also worth having a good look at clause 9 of the bill “Disclosure to be disregarded in certain circumstances”. I think this is something that Mr Henare could have a good look at because it is an area that he would be particularly interested in. What it does is go to things being obtained unlawfully or in breach of confidence. I invite Mr Henare to consider his relationship with his leader and matters of confidence—and matters of confidence. I think it is fair to say that members on this side of the Chamber had a lot more confidence in him when he was attempting to elevate hisstatus than the Prime Minister did and I want to just thank the Hon Tau Henare for the disclosures that he made in that particular area—the disclosures that he made to the House and the disclosures that he made to the country about his availability.Andrew Williams: He’s gone quiet.Hon TREVOR MALLARD: Yes he has gone quiet.I am going to accept that it has been a long time since I had a look at this bill. I think that the last time I had a detailed look at it Simon Power was the Minister of Commerce. I note that this lazy Minister of Commerce has not progressed it at all. In fact he has not progressed it far enough even to put his own name on the bill. Craig Foss has got his name on the Order Paper but he has not worked hard enough on this bill has not made enough progress on the bill and has not made a proper contribution even to the extent that when one goes to the title page of the bill. We see that it is still in the name of the Hon Simon Power.Hon Member: On the cover it is.Hon TREVOR MALLARD: No no it is not on the front. I am working by the report-back copy.I do want to say thank you to the Minister though on the question of the information and communications technology programming issues around patents—the fact that in the end he got to the right decision. I think it is fair to say that as someone who has been involved in both patents and earlier in the copyright area mine was one of the in-boxes that tended to act as a magnet to the objections when the Minister attempted to overturn the decisions of the Commerce Committee and I do want to say that I think that the select committee worked hard on it.I think it is also fair to say that the select committee was much less influenced by overseas information and communications technology companies than were the Minister and a number of the officials. Without making any specific comment I think we do need to watch very very carefully the influence of the major information and communications technology companies in this area.I am looking forward to the contribution of the Hon Maurice Williamson in this area because I know that he is someone who has quite a good knowledge in this area. He did some programs himself which probably had copyright on them. They involved the National Party’s canvassing system. Unfortunately he left them in George Hawkins’ office at one stage I think along with a floppy disk that had a letter to the transport department asking to be let off a fine for speeding in a period before he was a Minister. So I think it is fair to say that these things are relatively easily discoverable especially if people are careless and leave their floppy disks down the back of the couch as the Hon Maurice Williamson did.This is getting towards being a good bill. There are some important Supplementary Order Papers. There are a couple that the Labour Party will not support. I do want to indicate that I am slightly surprised with one of the later Green Supplementary Order Papers in that it does not appear to be drafted in a way that addresses the interpretation section of the bill. Although Supplementary Order Paper 348 is attempting to take the “advisory” out of “Māori advisory committee” the Supplementary Order Paper is slightly sloppily drafted in that it does not address Part 1 in the way that it probably should if it was carefully drafted and if there had been consultation on it. I am not saying that if there had been consultation on it we would have supported it. Probably we would not—givingMāori a veto over patents is something we are not up to yet. Listening hearing taking advice is important but I think taking the word “advisory” out of the “Māori advisory committee”—I am going to be interested to see how the Hon Tau Henare votes on that particular amendment—Hon Tau Henare: I’ll be voting with the Government brother just like you.Hon TREVOR MALLARD: He is going to be on my side again. On that note I will leave it to my colleagues.Hon LIANNE DALZIEL (Labour—Christchurch East): This bill the Patents Bill as my colleague Chris Hipkins has said was introduced into this Parliament quite some time ago—on 9 July 2008 in fact when the Hon JudithTizard’s name was on the bill as Associate Minister of Commerce.Hon Ruth Dyson: Who was the Minister?Hon LIANNE DALZIEL: Of course I was the Minister of Commerce at the time. When the bill was referred to the Commerce Committee though I was no longer the Minister of Commerce. I was in fact the chair of the select committee. I will take all of those encouraging words that I just heard from the Hon Trevor Mallard to be an endorsement of my chairmanship of that particular committee and I want in turn to acknowledge Clare Curran who actually acted as a very strong liaison person for a range of interests that were needing to be heard.I think that when the original set of submissions was heard on the bill we were left with the position—and we had a very good meeting with Simon Power who was the Minister at the time which basically gave us comfort that the position that we would ultimately adopt would be one that would be acceptable to the Government. He was very accepting of the fact that we were engaging quite appropriately with the wide range of interests that were expressing quite strong views on both sides of the argument. I think we came to a very good position and we did so in a very robust way.It was of great disappointment I think to both Clare and me that we ended up in a situation where a new Minister a fresh Minister having another look at the legislation decided to overturn all of that good work and thereby create exactly the same environment that we had confronted when we heard the submissions.I want to comment on this because I am not going to be here for very much longer so it is an opportunity just to say that when I was a Minister I found that allowing the select committee to have the leeway to work closely with officials and to even meet off-line with people who had very strong interests actually enabled people to reach sensible conclusions. Sometimes there is no need to stick to a formatted process just because that is the way things are always done. Sometimes things get missed in the to-ing and fro-ing and sometimes it is actually better to get people to go off-line and have these conversations and to show a bit of trust.I think that trust was certainly experienced with Simon Power as the Minister. I felt as the Minister that I had that relationship with him and then afterwards as the select committee chair again there very much was flexibility from that particular Minister to enable the officials to also go off-line and to have conversations with the people who were making submissions.I really want to kind of endorse the process and invite Parliament to think very carefully because I notice that we have had a letter for an update of our Standing Orders. In fact it may be worthwhile having a look at that because at a select committee hearing during the select committee process you cannot provide briefings to people who are not members of the committee. Well you can to other MPs but you cannot provide briefings outside unless there is a report to the House and then that enables information to be made publicly available.I think that some of those rules could actually be looked at if it was done by agreement. It seems to me that the Standing Orders of Parliament would be improved if in fact our select committees were able to facilitate that level of engagement with the officials and the protagonists. This is in relation to this one clause that is in Part 1. It is absolutely related to that because Supplementary Order Paper 120 which brings in the definition of a computer program amends clause 10 which is in Part 1. That is why Ithink that it is absolutely critical because what we ended up seeing was that the Minister himself obviously went off-line in a process as a new Minister and then came back with what was in fact an unacceptable option without discussing it with the members of the select committee who had—Hon Ruth Dyson: Which Minister was this?Hon LIANNE DALZIEL: Well it was the Minister of Commerce who is in the chair now. I do not know why that happened but putting that particular clause out into the public arena on a Supplementary Order Paper caused a furore because there really had been an acceptance that we had reached a good decision we had used a good process to get there and the select committee had actually contributed I think very positively to this bill.I think what the Minister has unfortunately done by going down this pathway—and it actually picks up on what Trevor Mallard was saying before about the timetable and about how he had not seen this particular piece of legislation since it first had Simon Power’s name on it. In actual fact this could have been dealt with a lot sooner and the legislation could have been passed and in place prior to the 2011 general election. I think it would have been incredibly helpful to have had that matter resolved although admittedly he did not take over that role until after the 2011 election. But here we are in 2013 and we have wasted literally 2 years of our time generally to update patent law.The legislation itself obviously has lots of different provisions within it but because this particular provision is so important for where we get to in terms of the IT sector and the definition that the legislation will now contain—and I have got so many Supplementary Order Papers here that I am just trying to find exactly the correct one that has the new wording in it which is that “(1) A computer program is not an invention for the purposes of this Act. (2) Subsection (1) prevents anything from being an invention for the purposes of this Act only to the extent that a patent or an application relates to a computer program as such.”The wording “as such” is still there which is not as helpful as it could have been but it is better than the previous wording. The one example that we kept coming back to at the Commerce Committee was what we called the “Fisher and Paykel example” where the particular embedded software within the machine itself is not a computer program in its own—Jonathan Young: Yes it is.Hon LIANNE DALZIEL: Well it is not a computer program but the purpose of patenting it is for the type of washing machine that it is rather than the software process per se. I suppose that means “as such” does it not? What it does mean is that the mere execution of a method within a computer does not allow the method to be patented and I think that is the core difference in respect of the wording that has finally been agreed.So I think that we are all on the same page. This is essentially what the select committee agreed to do with slightly different wording and we could have avoided the significant level of delay that has been incurred if we had been able to get together and probably resolve these issues before it came out the way that it did.I think it is kind of a warning to others who are in this situation: when there are competing interests then I think trusting the select committee to play a role in terms of seeking to broker a compromise is actually not a bad thing to do. But then when you have trusted it to do that please let that continue and do not try to overrule it without going back to the people who brokered that compromise. Sometimes legislation will be compromised if you have really strong competing views. Sometimes there is a way through the issue as I think we found in this particular case. We were all on the same page and it would have been helpful if the Minister had decided to join us there much earlier.Hon DAVID PARKER (Labour): I will make a brief contribution to this part of the debate. I think as the Minister of Commerce and most in this Committee will understand patent rights involve a trade-off that is thought to be in society’s interests. If we enable the people who make discoveries and go to the trouble of investing in the research that leads to discoveries and we allow them a reward from their efforts then society is better off because people will go to the effort of making those discoveries. If there was no protection of the discoveries they make that have utility and if there was no protection for them for the economic benefits that flow from those discoveries they would not do the research in the first place and as a consequence society would be poorer for it. We would have fewer medicines and we would have fewer discoveries in engineering across society. We would be poorer in a wealth sense we would be in poorer health and we would have worse environmental outcomes were it not for those discoveries.This tension between the monopoly rights that you confer upon a patent holder to enable them to get the fruits of their labour rather than having them being ripped off by someone who has not put the time and investment into the discovery immediately upon that discovery becoming public is dealt with in a public policy sense by limiting both what it is that you can patent and the term of the monopoly right that flows from the patent. This legislation the Patents Bill attempts to do that.Where you stand on how broad patents should be or on how broad what should be able to be patented should be and the period for which patent protection should exist seems to depend in part from the point of view of some countries on what is in their economic interests. Countries that end up owning a disproportionate share of the world’s intellectual property rights as protected by patents seem to think that from an economic sovereignty point of view that justifies their trying to push the boundaries of what can be protected and how long it can be protected for. We see that and we perhaps will see that playing out in the Trans-Pacific Partnership negotiations that are under way. In respect of that I would suggest that even those who have lots of intellectual property should be hesitant to extend protections too far because it stymies innovation even in their own countries. If you extend patent rights too far—and I am coming to how this is relevant in respect of the definition of computer programs and of what can or cannot be programmed in respect of computer programs or indeed in respect of DNA code—you stop other people innovating.One of the concerns that the New Zealand computer industry has both in terms of patent law and copyright law is that the New Zealand Government will go too far in adopting what countries like the United States want to which the Australians actually agreed in their free-trade agreement with the Americans notwithstanding their Treasury advice that it came at significant economic cost to the Australian economy. If you go too far that way you actually block innovation in your own country because the computer programmers who might want to design or write a software solution—for example in medical technologies which New Zealand is very strong in—could be blocked from doing so because their freedom to operate is effectively prevented by the terms of patent law protecting prior inventions that have been allowed to be patented under patent law. So if you push it too far that is the consequence and then the societal outcome of that is that you actually have less innovation which runs in the opposite way of what the underlying intention of patent law is. This is the balance we are trying to strike.In my opinion we always need to be very wary about those who claim extensions to patent rights because their attempts to extend the terms of their monopoly rights is often motivated by their financial interests rather than by the societal need for more knowledge which should be what drives patent law. So it is with that somewhat longand complicated—necessarily so I think—description of what it is that underlies the principle we should be judging this amendment to insert proposed clause 10A as to whether it gets the balance right. As the Hon Lianne Dalziel has said it tries to say that where you have some computer software that is intrinsic to the working of a mechanical device then the fact that the mechanical device includes some software does not stop it being patented. Yes I agree with that. But if you go so far as to say that source code can be protected by way of patent—this is not copyright; this is patent—then you can go too far because you can block other people from innovating.Similarly in respect of some of the lines that we have to draw round DNA related - technologies there was a time in the United States when you could patent a string of DNA that had been decoded. There was no invention in that step. There was nothing that should have been patentable in there. It was essentially a list using a technology that might in itself have been patentable. The patentable technology that allows you to read the list might very well be properly patentable but the list that you read in DNA as a consequence and other DNA when you are reading that should not be patentable. That particular branch of the law was closed off even in the United States when it realised the folly of its way and cut back on patent rights.That is an example of why you need to be very careful about not extending the scope of patents in a way that does not meet the underlying purpose. The underlying purpose is to stimulate investment in the research and development that increases the sum of knowledge in society in a way that would not otherwise occur so justifying the time-limited monopoly rights that are conferred because as a society we are better off. I would like the Minister to explain on the basis of that principle how he has arrived at this amendment that he proposes to insert clause 10A in respect of computer programs.The question was put that the amendments set out on Supplementary Order Paper 237 in the name of the Hon Craig Foss to the proposed amendments set out on Supplementary Order Paper 120 in his name to Part 1 be agreed to.A party vote was called for on the questionThat the amendments to the amendments be agreed to.Ayes117New Zealand National 59; New Zealand Labour 34; Green Party 14; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes4Māori Party 3; Mana 1.Amendments to the amendments agreed to.The result corrected after originally being announced as Ayes 103 Noes 18.The question was put that the amendments as amended set out on Supplementary Order Paper 120 in the name of the Hon Craig Foss to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes103New Zealand National 59; New Zealand Labour 34; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes18Green Party 14;Māori Party 3; Mana 1.Amendments as amended agreed to.The question was put that the amendments set out on Supplementary Order Paper 348 in the name of Metiria Turei to Part 1 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes15Green Party 14; Mana 1.Noes106New Zealand National 59; New Zealand Labour 34; New Zealand First 7;Māori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan.Amendments not agreed to.Part 1 as amended agreed to.METIRIA TUREI (Co-Leader—Green): I raise a point of order Mr Chairperson. I would just seek your advice as to why my amendment to Part 6 of the bill was put during the vote on Part 1.The CHAIRPERSON (Lindsay Tisch): I will just have to seek some clarification. The answer is that it has amendments to clauses 4 and 6 which form part of Part 1.METIRIA TUREI (Co-Leader—Green): I raise a point of order Mr Chairperson. Does that mean that the amendments to clauses two hundred and something—I cannot recall the exact numbers now—will be put during the vote on Part 6?The CHAIRPERSON (Lindsay Tisch): That is correct.Part 2 Patentable inventions and patent rightsHon DAVID PARKER (Labour): I want to address respectfully Steffan Browning’s proposed amendment to clause 15 of the Patents Bill in Supplementary Order Paper 124 and explain why it is that the Labour Party will not be favouring that amendment. Thank you for consulting us about it and the way in which you have gone about that.The explanatory note or the letter that came with the Supplementary Order Paper said that one of the things that the amendment intends to do is to stop people—in its current form it says it encourages biopiracy of indigenous resources. I understand the member’s concern. There have been some quite I suppose famous cases around the world that have been referred to. One relates to the scientific properties of theNeem tree which is an Indian tree as I understand it. Have I got that right? Yes it is an Indian tree the extracts of which have long been used as a control of insects and other fungal infections in trees. There were patents taken out that were then said to have been used to stop the traditional uses of theNeem tree despite the fact that that had been a long-standing practice.Secondly there were assertions—and I do not understand enough to know whether all of these assertions were right—that it seemed unfair that the insecticidal and fungicide effects ofNeem tree extracts could be commercially taken by someone who claims that they have discovered the chemical reason that that is occurring in a way that prevented other people from doing it despite the fact that they had always done it. I agree that that seemed unfair. If that was properly described I have problems with that. But that does not mean to say that I think that this amendment can be supported because what this says is that you will not be able to patent organisms including plant varieties and traits in organisms and that is the issue that I want to deal with.We know that we have a lot of challenges environmentally in the world. One of the challenges that we have is that the form of energy that we use at the moment produces carbon emissions that are put into the atmosphere. We know that in order to reduceemissions we need to do lots of things. One of the things that we may need to do is to bring forward scientific research into organisms that help prevent that from occurring or enable othersubstitutionary forms of evidence that are not high in greenhouse gas emissions. For example the conversion of plant material into biofuels may require or may be advantaged by the use of bacteria or other organisms that are discovered in volcanic vents deep at sea. Thesethermophiles as I think they are called are organisms that can survive very high temperatures.I think there is a proper question to be asked or to be asked by those who are researching in favour of making those discoveries as to whether what they are discovering is something that is novel that is of utility and that was not known previously in a way that should be patentable. I find it hard to see a distinction—a hard distinction—drawn in respect of that sort of discovery that would mean that it should not be patentable and I think that the societaldisbenefit of preventing patents in those areas would be that we do not have discoveries that help us overcome some of these other planetary challenges that we face.So I think that if I properly understand that—and it is possible that my understanding is wrong; if it is I invite Mr Browning to point it out. I am not here saying whether those discoveries should be made through or variations in the organisms should be—I do not think this is through this bill a debate about genetic modification or more traditional technologies. I think the same principle applies to both here which is not to advocate for genetic modification; it is just to say that the same principle applies.If I give another example the technology that is being pursued byLanzaTech is taking the flue stream gases of steel mills that are carbon monoxide I understand rather than carbon dioxide and using a process to convert that carbon monoxide into ethanol which is a fuel that can then be used as a substitute for fossil fuels. Overall the environmental impact of steel production is reduced as a consequence. My understanding is that the process does involve organisms that are going to be modified through technology in order to make them more efficient so that that becomes a viable technology.LanzaTech could not do that and could not raise the money to make that advance in science if it were not for the protection that it gets through patents. My understanding of this amendment proposed by Steffan Browning is that if it passed it could prevent that patent from being granted which would then cut off the money forLanzaTech—Hon Member: No.Hon DAVID PARKER: Well it would not cut off the money forLanzaTech? I think it probably would. If it could not get an economic return for its investment it would be less likely to make an investment in it. For those reasons based on our current understanding of this amendment the Labour Party will not be supporting that Supplementary Order Paper.STEFFAN BROWNING (Green): I will address that aspect straight away in this contribution on the Patents Bill. In terms of biofuels bacteria and other organisms certainly are intended to be used by some. They will be being used. Whether they need to be modified and whether they need patenting is a whole different matter. We are very very keen on public-good science and not everything should be tied up in commercial entities or operations. I can think back to when we had the Department of Scientific and Industrial Research and our Crown research institutions which were seriously about public-good science and were very collaborative. Clearly we are working as a country to try to get some sense of that back.This need it seems to have everything put into a commercial context is very unfortunate—the novel and the utility. It should still be part of public-good science and we have to be careful because this suggestion that there is a suppression on innovationby stopping organisms or traits of organisms from being patented is misleading. It is the same with ethanol from methanol conversions and shouldLanzaTech be the only one going down that path when it is such an international need as we acknowledge that we need to look at other forms of energy then that is a very very sad day. We have institutions and we have science in this country that does not need to be bound to somebody who ultimately would get a patent and then monopolise that. If it is so important—and it is—to work around the area of biofuels it should not be able to be monopolised or controlled by a single corporate or owner.So I have put forward Supplementary Order Paper 124 on this crucial area of making sure that companies cannot patent life nor certain elements of life because it goes right back to public expectations. That includes genes and proteins that exist in nature. We accept that patents are a statutory right. They were created hundreds of years ago for good purpose but that was around things not life. Patents should not be permitted over things that are fundamentally part of the natural world. No one has invented life or the elements of life so it follows that no one should be entitled to a patent in New Zealand over life—in fact anywhere.Some of this comes back to some early decisions—I say “early” but not hundreds of years ago. It was really in 1980 when life first got patented. It is a case known asDiamond vChakrabarty and it concerns a decision about a bacterium.Chakrabarty had isolated a particular bacterium. Even then he was able to get the patent but he admitted that he simply shuffled genes about. He said he changed bacteria that already existed. He did not create a new form of life; he merely intervened in the normal processes by which strains of bacteria exchange genetic information. Genetic modification of course is an extension of that. It goes much further. That same genetic modification has caused the monopolisation of major parts of the global food supply. So if you think of soy corn and canola they are some real fundamentals in terms of the international food supply and they are monopolised and they are controlled because there are patents on some aspects of the technology behind them.We cannot afford intentionally or not to allow for the patenting of life forms or the elements of life that exist in nature. A colleague over here was right in saying that we believe it will encourage biopiracy of indigenous resources and it turns those life forms into just mere commodities to be used for profit. This is life that pre-existed us as well and to be putting that into some commercial separate ownership is inappropriate. It also puts up barriers to the free flow of scientific research and in the material I circulated I pointed out that there was a case—and it has just been won in the Supreme Court in the United States—where a breast cancer cell and an ovarian cancer cell had been patented and that was blocking research in that area. Anything around life any genetic material is everybody’s and again my colleague spoke about the fact that the helix of DNA is part of the natural world. Sure we are getting to understand it and there is some fantastic science and there are individuals who are discovering new aspects all the time but that is ours that is everybody’s and it should not be included.The issue as I was saying about breast cancer and ovarian cancer and those genetic mutations that were identified resulted in a huge uproar. There were multiple groups scientific associations and medical people who pushed against that decision until it was reversed. We have to be careful here in New Zealand when we look at some fantastic new approaches and patents around computer software and programs. Here we could make another clear statement in a similar league by supporting this Supplementary Order Paper. Allowing the passing of this bill without supporting the Supplementary Order Paper will lead to the continued blocking of open research and to profit making from our collectively owned genes and resources and importantly it will continue the process of stealing those resources including the intellectual property ofMāori.Some industries seek out organisms and they draw upon this intellectual property to get control and to get control of the food chain. One of them of course is internationally known as Monsanto and it has just created case after case in the courts. It has put farmers out of business and it has really distorted where farming where agriculture where the food supply should naturally lie. It has also had an effect on the availability of the diversity of seed available to everyone from farmers down to home gardeners. There is a huge reduction in the amount of genetic material available because these monopolies that have got greater and greater control through some patents and just some small angles have also ended up buying up the seed companies and have restricted others’ access to those same seeds.So what would the amendment do? The amendment would specify that life is not a patentable invention. Currently the bill already excludes some aspects of life—those exclusions being human beings and their biological processes. That is great. That is a very good exclusion but it does not go far enough. The invention of a method of treatment of human beings by surgery or therapy is a very good exclusion. The invention of a method of diagnosis practised on humans is another. The list of exclusions includes computer programs which is a fantastic shift. Plant variety because it is already very deeply and solidly covered under the Plant Variety Rights Act still leaves many life forms and those elements of life are still part of it.Plants and humans aside the bill does not go anywhere near far enough. Animals bacteria viruses cells and algae all need that extra protection of the Supplementary Order Paper—and their traits. Even a piece of DNA of genetic material from those is something that is ours. It is everybody’s. Everybody on this planet owns that and letting someone manipulate it even slightly is something quite different from inventing a thing. There is a moral level. [Bell rung] Life is not—I suppose I have done my time.The CHAIRPERSON (Lindsay Tisch): I am going to call—I will just explain. You have had two calls in a row and we do not normally give a third one when someone else is calling so I am giving the call to Dr Megan Woods.Dr MEGAN WOODS (Labour—Wigram): I am very happy to take this call on the Patents Bill and to hear further from the member Steffan Browning because I think we are discussing some very important issues around his Supplementary Order Paper 124 this afternoon in the Chamber. There are some very complicated issues around the level of debate informing a number of people. I want to join with my colleague David Parker in thanking the member for the consultation he has done with us around the Supplementary Order Paper that he has put up. It was a discussion that was engendered amongst the caucus too which we have been able to have.I think that what we are discussing this afternoon cuts to the heart of what a 21st century economy might look like and what a high-tech 21st century economy in New Zealand may look like. The 20th century in many ways in New Zealand was transformed in the 1980s by New Zealand researchers and New Zealand commercial entities in 1987 being able to protect their plant variety rights as New Zealand moved more into the intellectual property sphere in terms of what we did around protecting our intellectual property rights. The fact that we hadprotectable rights around plant varieties saw Zespri invest $20 million in developing Hort16A which is the kiwi gold kiwifruit that has gone on to earn that company billions of dollars. It saw the New Zealand Apple and Pear Board under its various incarnations invest similar amounts of money in apple varieties and it gave us the Jazz apple. What we know is that if we are going to have high-value high-tech sustainable industries in the 21st century we do need them to be commercially viable and we do need people to invest in that research and development.Mr Browning raised some very interesting questions in his first contribution—one of what I am sure will be many on this issue—about public-good science and the role thatpublic-good science should play in our society. Public-good science is hugely important but I think it is very important to remember when we are talking about whether or not we can protect biotechnology intellectual property that it is not a dichotomy—it is not either/or. I started talking about the transformation that the New Zealand economy could undertake in the 20th century through the protection of plant variety rights. I truly believe that the ability to haveprotectable intellectual property around organisms and particularly micro-organisms in the 21st century is going to be a similar transformational boon for the economy. It is something that New Zealand cannot be left out of and something that we have to make sure we have progressive and world-leading legislation around to make sure it is fully capable of dealing with these situations.In terms of whether or not as Mr Browning has suggested we might put commercial protections around knowledge and whether that will actually stifle the ability of researchers and the way in which researchers conduct themselves and the ability for knowledge to flourish in this country—the way in which we need knowledge in this area to flourish if we are going to have the kind of economy that we on this side of the Chamber know is our future. I do not think that protecting will do that. We have seen an analogous situation in what has happened in the fields of our traditional crop sciences around the ability to protect the horticultural and arable crops. We have not seen a stifling of interactions. We have not seen a stifling of the ability of researchers to get together. Something that we always have to remember is that this research happens on a continuum. The fundamental basic research is still going to be published in the scientific journals. It is still going to be subject to peer review. It is as we get down the chain and we look more at the applications of this knowledge that the protections come into place.Let us think about what it is that a patent process does and what would happen if we do not have a patent process. If we do not have a patent process what will happen is that industry and commercial entities will be less likely to let their scientists and their researchers share their knowledge and work with other collaborators. What they will rely on is know-how—trade secrets and know-how. But if they go through the patent system then there is a clear chain of documentation. There is a clear chain that lays out the research path that it has been put on and a clear chain of who the researchers working on it are. Part of the patenting process after all is about making that knowledge public. We need to see whether there is prior art. We have to consider what research has happened in the past in this field so these are things that I am confident will allow our biotechnology sector to flourish in New Zealand. I think that this new economy the biotech economy is an important part of our future going into the 21st century.I want to consider some of the ways in which micro-organisms might play a role in a 21st century New Zealand economy. One of the things that we have to absolutely grapple with in this century is the idea of greenhouse gas emission and how in an agricultural economy and an agricultural society and country we are going to manage that. Bacteria and micro-organisms can play a crucial role in this. The photosynthesis that happens via bacteria is so much more rapid than photosynthesis that occurs through only plant material. Using bacteria in our soils is actually a way for us to reduce our reliance on nitrate-rich fertilisers in our soils. There are huge environmental gains for us to be made by having the ability to use these micro-organisms in our agricultural practice but the only way that we will get industry to invest to commercialise these products and for us to be able to use them is if they can see a viable business model that operates around them. Being able to protect their intellectual property for the millions of dollars of investment that they are going to make is absolutely vital to this.We have seen that the popular science literature is full of ways in which bacteria and micro-organisms are going to be a huge part of our finding a sustainable path for the 21st century. Toxins that can usually last in soils and sands for up to 10 years can be broken down in a matter of days through the use of bacteria. Imagine what we could do in terms of cleaning up around spills if we have these high-tech high-value products that can be used to do that. But we need to encourage industry to invest in this. Yes our public-good science and our universities absolutely have a part to play and that is something that I believe in passionately. I believe that we need our universities to be “critic and conscience” and free to publish but we also need to have the part of the chain where we can commercialise this knowledge well-though-out and part of a sophisticated economy that is capable of taking us forward. It is about the ability to protect the knowledge around these organisms and particularly even the organisms themselves because that will be our competitive advantage in the 21st century. It is our raw natural product of our talent and our ability to work in this field put together with what we have always done well that will take us into the 21st century.What we know is—and my colleague David Parker talked about it and Mr Browning addressed it—the fact that biofuels is something that we know are going to be part of the 21st century. Bacteria and micro-organisms are an absolutely crucial part of this technology. Without the ability to build a business model around it to see how it stacks up and to know how it is that a company can make a commercial gain out of this it will not be the way.Of course there need to be limits on this. We need to be able to protect the ability for us to have surgical procedures and the things that there is a morality around. They need to have limits. But the legislation as it currently stands offers those protections. We do not need this amendment. All this amendment will do is stifle the ability to innovate when actually there are some very elegant solutions that have been well-thought-through that have been worked hard on by this Committee and are indeed in this current piece of legislation. Labour will not be voting for this Supplementary Order Paper. It has been an interesting discussion and I thank the Committee for this discussion.METIRIA TUREI (Co-Leader—Green): I raise a point of order Mr Chair.The CHAIRPERSON (H V Ross Robertson): Ah point of order. The honourable member Metiria Turei.Tēnā koe Ms Turei.METIRIA TUREI: Thank you Mr Chair.Tēnā koe. I am glad you are so relieved. I seek the leave of the Committee to amend a Green Party vote on Part 1. We mistakenly opposed Supplementary Order Paper 237 when we should have voted in favour.The CHAIRPERSON (H V Ross Robertson): Is there any objection to that course of action being taken? There is none. The vote shall be amended. Thank you. Kei te pai.METIRIA TUREI (Co-Leader—Green): I hope you are similarly relieved by the content of my speech. I have Supplementary Order Paper 348 on the Table which amends various clauses within this Patents Bill including at least one clause in Part 2 and a substantive one in Part 6. I would like to take the opportunity to talk with members about Supplementary Order Paper 348. It does two main things. First it removes the advisory aspect—or the dominance of the advisory aspect—from theMāori committee and makes the recommendations of theMāori committee concerning patents obligatory on the Commissioner of Patents and the decisions that the commissioner makes. Second it removes the commissioner from the appointment of members to theMāori committee and instead replaces that person with the Minister of Commerce.I want to briefly outline the issues around why Supplementary Order Paper 348 was put together. We have committed to making further changes to intellectual property law to give effect to the Wai 262 claim and the Waitangi Tribunal reportKo AotearoaTēnei.We want first to just acknowledge the original claimants of Wai 262 which was lodged 20 years ago—more than that possibly—by members ofNgātiKurī Te RarawaNgātiKōataNgatiPorouNgāti Wai andNgāti Kahungunu and acknowledge that none of those original claimants is still alive. All have passed on. We acknowledge the support of those claimants particularlySaana Murray and DellWīhongi who were so instrumental in fighting the incursion of genetic engineering into our environment because they believed with all their hearts that we must protect the mauri of Te AoMāori not for themselves or for ourselves but for their tamariki and for our mokopuna to come.The issues here concerning patents have a very long history—a very long Te Tiriti - based history. Unfortunately in the way that the bill has been prepared and the select committee process for this bill that history has been largely ignored. Although we cannot fix that failure during this Committee process we can make a small step to try to remedy at least part of that failure. So we have Supplementary Order Paper 348 on the Table which meets some of theMāori submitters’ concerns about the nature of theMāori advisory committee and gives that committee more authority and more decision-making power in the decisions around patents.We will be clear. We support this bill because it makes some significant improvements to patent law in New Zealand ruling out patents on humans on methods of treatment and diagnosis on plant varieties and on computer programs. I acknowledge the work of my colleague Gareth Hughes which was instrumental in campaigning to make sure that those protections or exclusions were put in place. These changes are important and they are way overdue.But the bill does not deal with the issues that were raised in Wai 262. It does not deal with the issues that were raised by the tribunal inKo AotearoaTēnei. That means there are serious gaps and flaws in it. We acknowledge that. In supporting this legislation we acknowledge those gaps. Our support comes with the knowledge that there is no real progress onmātaurangaMāori here in this legislation.The reason we have put forward the changes in Supplementary Order Paper 348 is to at least give theMāori world view—mātaurangaMāori Te AoMāori—the opportunity to have a genuine say at the table. I would just refer members to the Waitangi Tribunal report. The tribunal was very careful and very measured—it has had some criticism for being far too measured I have to say—in stating its view on howMāori should be part of the decision-making process around patents. It said: “The Treaty of Waitangi gave the Crown the right to govern and enact laws but that right was qualified by guarantee of tino rangatiratanga … for iwi andhapū over their ‘taonga katoa’ … The courts have characterised this exchange of rights and obligations as a partnership. In this context tino rangatiratanga means that iwi andhapū are entitled to exercise authority over theirmātauranga and to exercise authority over their relationships with taonga such as cultural works and parts of the environment that are significant to their culture and identity so that they can fulfil their obligations as kaitiaki.”So that sets the framework for how these issues need to be considered by the Crown. The tribunal then went on to say that its recommendations include in relation to changes to patent law in particular “the establishment of aMāori advisory committee to advise the Commissioner of Patents and Plant Variety Rights about whether inventions are derived fromMāori traditional knowledge or use taonga species;”—that is there in a very watered-down form in this bill—“establishment of a register of kaitiaki interests in taonga species; granting the Commissioner of Patents the power to refuse patents that unduly interfere with the relationship between kaitiaki and taonga; and introducing a legal requirement for patent applicants to disclose anyMāori traditional knowledge usedin research and the source and the country of origin of any genetic or biological material contributing to the invention.”This is essentially about making sure that there isMāori decision making about whether patents should proceed based onmātaurangaMāori and theMāori connection—their obligation to be kaitiaki of those natural taonga—and that there is an obligation on those seeking patents to provide information about those patents from aMāori point of view. That is good. That means that when those organisations those companies those researchers and those inventors are in this country this Te Tiriti - based country they need to take as their first principle considerations of whereMāori interests lie in the work they are doing whose taonga they are using for the invention how they have communicated with those people who are kaitiaki and how they then work with those kaitiaki to make sure that themātaurangaMāori is respected restored and protected. That obligation should be on those who are making the applications. It should be on the researchers and on the inventors.We must make sure thatMāori interests are maintained and upheld from the very start. The current law simply does not deal with any of that at this point. It does nothing about that. We cannot fix that in this bill at this point. It does mean that at some point the Government is going to have to—well we would very much like the Government to—take the tribunal report the findings and these recommendations very seriously and find a way to implement them in this new patents law.We understand that it was not widely understood or acknowledged at the time that the bill was drafted and at the time that the Commerce Committee heard the submissions. Now that we do know now that we have the report and now that we have more information and understanding about how the law could better reflect and incorporatemātaurangaMāori and Te AoMāori into its decision-making processes we have an obligation as a Parliament to make it happen. This is what the Treaty relationship requires.The Green Party will be supporting this bill. We urge members to support our Supplementary Order Paper 348 around theMāori advisory committee to at least give some opportunity forMāori to be decision makers over those issues that are most important to them. It is a small but significant step that could be made today to take the issue just a little bit further and then for us to find a way to work together in the future—and in the very near future I would hope—to really bring these issues fromKo AotearoaTēnei to the fore and further amendments to patent law and intellectual property law. Thank you.Dr DAVID CLARK (Labour—Dunedin North): I rise to speak to this Patents Bill. I want to start first by agreeing with the previous speaker Metiria Turei that the Wai 262 matters need to be addressed. That is fundamentally something that this Government has been very slow to work on andMāori whom I speak with who have an interest in this area are incredibly frustrated with the lack of progress on that particular claim. There is absolutely no doubt that there are some very tricky details to sort through but that is no excuse for not addressing them and for parking the work and not actually getting on with having that conversation. It is my understanding that that is the current state of things. The Minister in the chair the Minister of Commerce may like to take a call to correct me if that is not the case and maybe explain what work is going on because it does cut to the heart of the issue that we are debating here and to which I wish to return as I round out my contribution on this part of the bill Part 2.This part of the bill is as I said right there at the core. It starts out: “Patent may be granted for patentable inventions only”. In one sense we would say that that is an absolute truism but then this part of the bill wants to set out what that means and what it does not mean because we need to know as lawmakers exactly why we are puttingthese things in place and what the purpose is that we are trying to achieve. We talked about the wider public and social good in the previous part. This part of the bill lays out exactly what it is that that means.There are many types of intellectual property. We are talking about patents that protect ideas and concepts as opposed to patents for designs which protect appearance aesthetics and the like; copyright which protects the copying of things that are exactly the same; or trademarks which are designed to protect a unique sign. It is distinguished from know-how which is more around confidential information and is the kind of thing that is usually covered by contract.So we are talking here about patents and what is patentable. There is a significant change that is picked up in this part. Clause 13 of Part 2 says that an invention that is patentable is one that is a manner of manufacture is novel takes an inventive step—that means it is not obvious—is useful and is not excluded by other clauses that are discussed elsewhere in clauses 14 and 15.All of these criteria must be satisfied before a patent application can be accepted and granted. Currently inventive step and usefulness are not part of the patent examination process. So this tightens up the law in a fashion that we think is very important. But we do not go so far as to say that we think that organisms including plant varieties and traits in organisms are not patentable inventions. That is because of the kind of economy that we believe there should be in New Zealand.I should say that all members of the House—or I believe most parties—are going to be supporting this bill. We are all in agreement that we need to have patentable material and that it needs to be well defined in the interests of New Zealand. What we are having a debate about in one sense is precisely how far this patenting should extend. The Labour Party has a strong view that we need a diversified economy and that we need an economy that is based on new technologies new inventions new ideas and new concepts. So we want to support legislation that encourages new patents that encourages new inventions and that encourages and protects the ideas generated by New Zealanders for reasons of greater social good but also in the interests of New Zealand as a country. That is why we support the legislation and that is why we think these tests need to be put in place.The idea that we will not protect plant varieties as suggested in Supplementary Order Paper 124 which Mr Browning has put forward does potentially undercut the future prosperity of New Zealand. In the Labour Party we believe that we need to have a prosperous and flourishing economy in order to provide those social goods and in a sustainable fashion that we as a country would like to afford and need to afford. With high unemployment at the moment and an economy that is struggling we see many of these things being cut through a range of cuts by the Government.In order to afford the health care and the education that we as a country would like to see we need to have a prosperous economy. One way in which we do that is by protecting intellectual property correctly. A law that updates the understanding of what that might mean is very important to New Zealand’s future prosperity and to a diverse economy that is not susceptible to putting all our eggs in one basket and then susceptible to global trends in commodity prices to use one very pertinent example right now with the trade issues with China. This kind of legislation can encourage entrepreneurs to explore new ideas to expand the base of human knowledge and therefore to also increase New Zealand’s prosperity over time.There are exclusions that are explicit in this part of the bill and we support these as well. The examples provided here and in several of the Supplementary Order Papers are intended to give a signal to law interpreters further down the track. For example we know that exclusions are there to restrict access to necessary health-care to treatmentsof human beings by surgery or therapy to methods of diagnosis practised on human beings and to biological processes for their generation in respect of human beings. There are others that are here as examples obviously intended as a guide.If we look at clause 14(1) and beneath it we have a series of examples that are designed to suggest a more general principle. It states: “An invention is not a patentable invention if the commercial exploitation of the invention so far as claimed in a claim is contrary to—(a) public order … or (b) morality.” and these things in that list are things that we would consider moral potentially. Those kinds of exclusions are put in there for good reason. They are technical exclusions but they are very important and are intended as a guide for future use. This part also defines the term of a patent which is 20 years from the patent date unless certain fees that are appropriate to the filing of a patent are not paid.The purpose of a patent is to enable the inventor to exploit the invention. Obviously it is to encourage them to invest and therefore reap a reward further down the track. The various what shall we call them protections—is the right word—put around that throughout Part 2 are there to make sure that those things are looked after. Subpart 3 is about who may be granted a patent and it covers technical details around co-owners of patents. We know that once you add a few more people into the mix these things can become more complicated and it is good that the department has worked through the detail in that respect. Part 2 also gives power to a commissioner to give directions to co-owners so there is a discretion clause in here—clause 25 in Part 2 Subpart 3—that gives the commissioner some discretion. That seems appropriate in the context of this legislation so that we do not get perverse outcomes from the legislation.But to round out this contribution we in the Labour Party are uncomfortable—very uncomfortable—with the exclusion of organisms especially considering the way in which some of our more prosperous inventions have come from that area. An example is the kiwifruit industry as alluded to by my colleague Dr Megan Woods earlier on. We know that patents such as the Hamilton jet and so on are the trademark—not the trademark excuse the pun. They are the—Hon Maryan Street: Hallmark.Dr DAVID CLARK: —hallmark. Thank you to the Hon Maryan Street for that tip. They are the hallmark of a New Zealand that we would want to see going into the future. It is that kind of inventiveness that our very good education system has produced. We produce quality graduates who are smart thinkers. We want to ensure that New Zealand’s prosperity is built on that creativeness.I am looking forward to hearing a contribution from the Minister because it is a very important issue for this bill as to whether these inventions are excluded or included and I am interested in his view on this matter. He has been strangely quiet—perhaps a member of that rare species of parliamentary wallflower whom the public would happily have us patent in order for more widespread exploitation. But I am sure that the Minister will take a call and I look forward to hearing why it is that he thinks this Supplementary Order Paper should be included or excluded. Thank you.The CHAIRPERSON (H V Ross Robertson): I call the honourable member Denis O’Rourke.DENIS O’ROURKE (NZ First): Thank you Mr Chairman—a very good choice. The Minister of Commerce’s amendments in Supplementary Order Paper 120 as they apply to Part 2 will be supported by New Zealand First and New Zealand First will also support Steffan Browning’s Supplementary Order Paper 124. We will also support his Supplementary Order Paper 336 amendments on Part 3 which are only inconsequential amendments.As he points out the Patents Bill allows many life forms to be subject to patentability and this should not be the case. We agree with the reasons he gives for that—in particular because it may encourage piracy of some of New Zealand’s indigenous flora and fauna turning life forms into commodities to be used for profit. There is also the problem of the barriers to scientific research that it may create. We think that is a very significant issue because it is not in the interests of any country at all that scientific research should be inhibited in any way whatsoever. That is possibly an unintended effect of the bill but it is one that we take very seriously.Life forms however they come into being must not become the exclusive property of anybody or any corporation and free access to them by everybody—especially the science community—should be clearly preserved in our view. As a matter of principle nobody invents life forms. No matter how they may be discovered manipulated or used they are not actually invented. Even if a life form can be altered to display characteristics different from similar forms found in nature this is still not an act of invention by humans. It is just a manipulation of the life form already subsisting in the natural world. So in the end for people who own the traits created by such manipulation such as the seeds it is just in fact a method of securing a monopoly which we do not necessarily see as positive. This must not be allowed or encouraged. It is sufficient that those who create such traits will have a head start in exploiting them.I know that where I live in Canterbury there are companies overseas that send seeds to Canterbury to be grown first because of course New Zealand is a season ahead of the rest of the world. Having been grown and reproduced the seeds can be used very quickly in other parts of the world. That is the advantage those companies would have from the seeds so there is no need for them to be patented. In fact it is better that they should become as widely available as possible in due course for the potential benefit to all humankind.As Mr Browning points out the bill prohibits only some life forms from patentability. It says for example that human tissue cannot be patented whether for treatment or therapy purposes or other such purposes. Plant varieties are also not patentable but they are protected under the Plant Variety Rights Act. The definition of that term in that Act means that there are still many life forms not covered. Therefore we think a more comprehensive provision is needed in order to prevent patents for living life forms. Therefore the Browning amendment would not compromise the development of exclusivity relating to products such as Zespri that have the protection of the Plant Variety Rights Act and of international agreements.Concerning the development of new—that is changed—micro-organisms for commercial use such as in the development of biofuels although not covered by the Plant Variety Rights Act and although such developments may become commercially valuable that does not itself justify patentability and does not in the end undermine New Zealand’s commercial interests in using such organisms because the value of them would be in New Zealand’s economic advantage such as climate advantage in producing and marketing them. So I do not accept that Mr Browning’s amendments would damage New Zealand’s commercial interests at all as claimed by Labour. I think that Labour has got it somewhat wrong and should have another look at the situation. New Zealand First will therefore vote for Mr Browning’s amendment but whether it passes or not we will also vote for Part 2.STEFFAN BROWNING (Green): I would just like to address some of the issues that have come up from Labour members in regard to plants and patents. Labour members seem to think that we will lose the advantages that we have had in the development of different kiwifruit and apples and it is around the Plant Variety Rights Act. There is a distinct difference between a patent and the protections in the PlantVariety Rights Act and those very plants that they are talking of are protected regardless of my Supplementary Order Paper 124 because they are protected under a very strong Plant Variety Rights Act—that is not a patent. I will mention some of the limits or exemptions to a grant holder’s rights that allow for a more communal approach or reach into those plants that have got those protections. There is very good protection for those people who have bred or who have put that effort in to get those plants to fruition and then out into the market. Other persons are free to grow or use protected varieties for non-commercial purposes—so the community at large can benefit—but the commercial aspect is still protected for those who have developed them. Other persons are free to use the plants or parts of a protected variety for human consumption or for other non-propagating purposes. They are free to use a protected variety for plant breeding although the repeated use of a protected variety for the commercial production of an F1 hybrid seed is not permitted without the authority of the rights holder. There are some pretty strong protections for the breeders of the plant varieties but they do not need a patent so I think it would be good if our colleagues in Labour have a rethink there because the legislation certainly does not cut off that innovation and the commercial benefit for those who do that development.But on a moral level life is not an invention and should not be owned by any one person or corporation. Unfortunately with a patent just the little addition of a single gene can become the invention of someone who claims private ownership. So any animal bacteria cell virus or algae could be patented and as I say we have already got plants covered elsewhere. I will run through a little bit of history where this has run amok internationally with the patenting. I will use plants as an example even though we are not patenting them or an extreme version of them. You can add that once you start to put these bacterial traits or viruses or whatever into plants then you start to get into the world of patents. In 1994 the US Plant Variety Protection Act was amended incentivising breeders by no longer allowing farmers to save seed without a licence from the owner of the seed variety and ultimately they got into the area of patents. As a result the farmers become bound to pay licence fees and royalties to the companies developing them despite their prior universal right to save plant and exchange seed from their own harvests requiring the skills and knowledge of their localities.Modern biotech companies have claimed the rights over entire species and prevented access to their inventions by other scientists but it was the fact that they were able to allow for patents in there that really locked things up. The advent of patenting genes was followed by an extremely successful float on the stock market of a company calledGenentech which raised huge money. Those companies then saw the potential of a new stream of income and they encouraged development which has led to the monopolisation of the agricultural seed market which I mentioned earlier and a significant collapse of traditional seed markets. There is plenty of research supporting that.Monsanto actually got a patent on Roundup the weed killer and it was due to lapse after a period of time. So how was it going to manage and maintain that market? Well it patented some crops using what they call the “events”—an “event” is using some material from a micro-organism and putting it in. With these events as such being patented and being able to express that through crops Monsanto benefited because it had this Roundup ready technology tied into its genetically modified seeds. A technology fee was charged to farmers and then they had to pay a per-acre royalty on patented seeds and then they were also bound by an agreement that prevented them from saving the seed for planting in a subsequent year instead buying new seeds every year. This followed lots and lots of litigation about farmers not using their geneticallymodified seeds. I have seen the same thing in Australia. I am over there shortly and will be looking at some other situations where things have gone bad from contamination.But it is the actual micro-organisms that are involved in this; it is not the plants traditionally protected under the Plant Variety Rights Act. We are getting into all aspects of life and the genetic material being able to be patented. That went wrong because companies have become quite monopolistic in the way they have managed that in the United States and in some other countries. With the increased use of herbicides plants have now got resistance so now companies are patenting and doing new genetically modified varieties right through to having varieties modified so they can spray 24-dichlorophenoxyacetic acid on them as well. That is just so they can retain control of the food chain and be able to sell their herbicides and pesticides which although we were told would not increase in use have in fact increased hugely—significantly—in use. So now there are new varieties coming through with other micro-organisms and other traits being developed. Note that we say “against the patenting of traits” for very very good reason because this allows that control of what has happened over there.This is not about blocking innovation; it is about ensuring access for the community for farmers for researchers and for medicine to all these traits of these parts of life: the genetic material the microbes algae the cells of animals the different parts of animals which with a little tweak is something that they can own—something that is everybody’s. My colleague Metiria Turei talked before about the issues around theMāori advisory board and the group that would give recommendations if asked by the Commissioner of Patents. That comes down to the same core—the same aspect. It comes right down to the basis of life and whether it should be patentable. I hope that colleagues and other parties will reconsider and support all of the Green Party Supplementary Order Papers which will make this bill a really strong fantastic innovative bill. Thank you.CLARE CURRAN (Labour—Dunedin South): In speaking to Part 2 of this Patents Bill I would like to take us back to the overarching principles that my colleague David Parker referenced in his speech on this part of the bill earlier this afternoon. What this bill is trying to achieve is the balance of two interests. Those interests are around allowing innovators to profit from their inventions and second ensuring that the monopoly rights that accompany patents are not unduly exploited. Those principles lie beneath every part of this Patents Bill and as I will set out in a minute there have been deliberate exceptions set out in this bill because it is acknowledged that in order to modernise this bill we had to look at the things that should not be patentable. Part 2 is the part that excludes software from being patentable. We have had a detailed discussion about that. But it also excludes a number of other things.The other thing that underpins this bill is the idea and the knowledge that our 1953 patent law is out of date that it needs updating and that it is too generous to people seeking patents. One of the things that my colleagues from the Greens and even New Zealand First need to think about when we are actually discussing this bill is that there has been a push back to say that not everything that has been patented before should be allowed to be patented. There has been a significant relaxing I suppose of that environment so that the ability to go out and get a patent for whatever you like is no longer there. It is just no longer there. It is actually really important to bear that in mind.With reference to the organisms debate it should be noted—and let us be very clear here—that you cannot patent any living thing in New Zealand as it occurs in its natural form. You can patent only novel processes or cell lines or genetic modifications. I note that the Minister of Commerce is nodding his head vigorously. It would be good if he perhaps took a call to actually point that out.I will draw everybody’s attention to the criteria for granting a patent where those criteria have to align to those that apply in other countries. A patentable invention is an invention that is a manner of manufacture it is novel—so it has to be new—it has to take an inventive step that is not obvious it has to be useful and obviously it is not part of the exclusions which I am going to list again in a minute. Those criteria have to be met. They have to be satisfied before any patent application can be accepted and granted. I am just going to read again that you cannot patent any living thing in New Zealand as it occurs in its natural form. That is a really important principle and that is why the Labour Party is not supporting the Greens’ Supplementary Order Paper 124 because as we see it the bill has gone through an extensive select committee process where all of those issues were discussed and were addressed. Yes we can have further debate about them but what the Supplementary Order Paper proposes is extensive. It is extensive in terms of compromising the intent of the Commerce Committee as it stood back in 2010.There have been extensive speeches given this afternoon by a number of my colleagues about the impact on our clean green tech industries and the importance of being able to patent new processes in order to be able to progress them. There was the reference toLanzaTech and the world-leading climate change work around natural bacteria which cannot be patented. It is the process of carbon monoxide conversion to create ethanol for fuel that is patentable. It is the process; it is not the organism itself. I did want to point that out. We had a very passionate speaker in my colleague Megan Woods giving a great defence and being very proactive around what sort of economy we could and should become—a diversified economy.The other thing that Part 2 does in this bill is to set out exclusions from patentability. They are set out in clause 14(2) which states that “commercial exploitation must not be regarded as contrary to public order or morality only because it is prohibited by any law in force in New Zealand.” There are half a dozen exclusions from this of which computer software is one. We have discussed that at length and I am not going to go into that but the others are also important. Because the legislation brings in that concept of morality ultimately that is the cover. That is the cover for many of the issues that are being brought up in the Chamber this afternoon. Clause 14(1) includes examples of non-patentable inventions: “an invention that is a process for cloning human beings:”—no part of a human being can be patented—“an invention that is a process for modifying the germ line genetic identity of human beings: an invention that involves the use of human embryos for industrial or commercial purposes: an invention that is a process for modifying the genetic identity of animals that is likely to cause them suffering without any substantial medical benefit to human beings of animals or an invention that is an animal resulting from such a process.” Those matters are important. Those are examples of some of the things that cannot be patentable. Also clause 15(2) includes: “An invention of a method of treatment of human beings by surgery or therapy … (3) An invention of a method of diagnosis practised on human beings …” and then the computer program. Those matters are significant. They are significant. There was in-depth discussion by submitters and discussion in the select committee with officials on all of those matters and I think that on balance the select committee ultimately got it right.Finally I just want to refer to the discussion around theMāori advisory committee and Supplementary Order Paper 348 introduced by Metiria Turei. We on the Labour side of the Chamber feel that there is a question mark around just what that Supplementary Order Paper would actually achieve. Just let me reiterate what the bill does around the establishment of theMāori advisory committee. It would advise the Commissioner of Patents in relation to patent applications for inventions involvingtraditional knowledge or indigenous plants and animals. That committee has to be allowed to function in order to progress this discussion and I certainly think that there is a case for further discussion on this matter. It is very significant but we have to get on and allow that committee to actually start to function and to provide that advice that can be used by the Commissioner of Patents to assist in determining whether those inventions are novel whether they involve an inventive step and whether the commercial exploitation of those inventions will be contrary toMāori values. We need to put this bill into practice so that we can actually get on and do that. I do want to note that the establishment of theMāori advisory committee was recommended by the Royal Commission on Genetic Modification. This is again a significant part of the bill. I certainly think that it needs further discussion but I think we have got to get on with it and test it and see how it works.RINO TIRIKATENE (Labour—Te Tai Tonga):Tēnā koe Mr Chairman. I thought I would pick up on the contributions from my colleague Clare Curran on theMāori advisory committee. I understand it comes in at Part 6 of this Patents Bill but if my colleague could send me a copy of that Supplementary Order Paper 348 I would be most appreciative.I want to make some comments on the advisory committee because there has been aMāori trade marks advisory group around for—I would say—close to 10 years now. It was quite an innovative thing at the time of its creation and I understand that it has been doing some very good work in terms of providing advice on trademark applications. I do not want to be sort of stretching into Part 6 but because this Supplementary Order Paper on this part deals with theMāori advisory committee I want to make a contribution.The CHAIRPERSON (H V Ross Robertson): Well done.RINO TIRIKATENE: Thank you to my colleague for the copy. I think we do need to look closely at the role of the advisory committee. It is commendable that it is included in the bill and that it follows from the advice of the royal commission but in contrast with theMāori Trade Marks Advisory Committee the power of appointment to the committee is in the hands of the commissioner. If you look at theMāori Trade Marks Advisory Committee you see that the membership of that committee has hardly changed in over 10 years and you have a lot of—what should I call them—intellectual-type people mainly Auckland-based people and maybe some Wellington bureaucratic - type people who have been members of that committee for a very very long time. I would not want to see the composition of the patents advisory committee drawn from the same type of people.I come from the South Island and we are very very aware of ourMāori interests in our flora and fauna and our natural landscape. It is disappointing to see that there is very little South Island input into say theMāori Trade Marks Advisory Committee and that has been the case for close to 10 years. Although it is not specified in the bill it would be advisable I believe to have geographically broad iwi representation and consideration but more fundamentally to have expertise in those matters when the commissioner actually comes to selecting people to sit on these advisory committees.I have just a further remark: we do want to make sure that they are the best people for the job. This is highly specialised and also culturally significant expertise that is required but I do not think that it is helpful to have advisory committee members appointed for such long durations of time—in excess of a decade or whatever. They just roll them over and roll them over. I think there needs to be some consideration of their performance and giving others a go. Basically you knowMāoridom is made up of many iwi and manyhapū within those iwi and there is a lot of expertise right around the country—traditional expertise on tikangaMāori andmātaurangaMāori. I think it isfair that we give a broad representation and regular advice or expertise if there is expertise—and I know there is expertise on many many different maraes and inwhānau andhapū right around the country—so that we freshen up the composition of these bodies with the expertise that is there right around the countryside.Sure I guess you have to have a mix a composition on any type of board or advisory committee but comparing it with theMāori Trade Marks Advisory Committee I see names on that committee that have been there for close on 10 years. Being from the South Island I do not know who they are. Many of these people are just academics from Auckland so I do not want to see those sorts of same old same old institutionalised people put on to these advisory committees representing all ofMāoridom. They are defending ourpā. They are the ones who will be defending ourpā. They are advising the commissioner and so we need to get a broad mix of ourmātauranga of our tohunga you could say of our traditional expertise incorporated into that committee.I know that there is no size limit given to the committee but I would certainly hope that there would be a fair representation of the geographically diverse iwi from the North Island and the South Island and that their tikangaMāori expertise would be incorporated into the full composition of that advisory committee. But I will give further remarks on this matter when we get to Part 6. I just wanted to pick up on that given that I heard that the member Metiria Turei had mentioned the advisory committee in Supplementary Order Paper 348. Kia ora.CATHERINE DELAHUNTY (Green):Tēnā koutou katoa. I would like to take just a short call on a similar point to that of the previous speaker Rino Tirikatene and give some background as to why we put up Supplementary Order Paper 348. We did that because we actually went outside the walls of this Whare and talked to some people who had been involved in these issues for many years. What they said was that aMāori advisory committee is very 1980s as a concept. We are working towards a different world where we actually honour the Treaty in our legislative programme and when we want to consult on vital issues like this we actually create entities that reflect the Treaty and this Patents Bill is not it. So although we support the Patents Bill we raised this Supplementary Order Paper in the hope that the House would be ready to move towards more of a co-governance approach as we do with Treaty legislation. This is not co-governance. This is actually about allowing two different world views where one gets to make all the calls.Receiving advice has got nothing to do with following advice. In fact if you look at the law it does not require the Commissioner of Patents to take the advice. It requires the commissioner to hear the advice but not to take it and it allows the commissioner to appoint. That is why we have suggested in the Supplementary Order Paper that it should be the Minister of Commerce rather than the commissioner who does this and that the people on the committee should have power over their advice not on all matters but on critical matters to do with taongaMāori and themātaurangaMāori world view and that advice would be binding. It is very interesting that when we talk about this process we want people to be able to be heard but not listened to. We want them to be able to speak but we do not want to have to abide by what they say. So one world view is fine it is going to dominate and it is going to be accepted but the other world view will not be. It might be if it is lucky and the commissioner decides that they will listen to it.This is very old-school and it is very inappropriate in the 21st century in terms of both the findings of Wai 262 and the people who put up Wai 262. We spoke to people like Aroha Mead who is an internationally recognised expert on intellectual property issues and other people from around the motu who actually had huge concerns about what this bill entrenches in this bit—not the whole bill which has got many manymerits. It takes us right back in time to the good old era when the commissioner could tell the tangata whenua: “Thanks for the advice but we’ve decided to continue with our approach anyway.” Let us hope that that will not happen because what we hear is that theMāori Trade Marks Advisory Committee in many ways has actually worked pretty respectfully with the tangata whenua advice but we cannot assume that that will happen. When we write law we should do the right thing and that law should be robust.That is why we are also supporting Steffan Browning’s Supplementary Order Paper 124. There is something very fundamental about what he has put forward in the Committee today—something very fundamental about what it is to be alive what it is to be patented and what it is to be protected by the law. What Steffan has done will also have the support of many of our colleagues in the tangata whenua world whom we have spoken to about this. They supportSteffan’s Supplementary Order Paper as well because basically it is talking about recognising that life cannot becommodified and therefore the Supplementary Order Paper should be supported. Life cannot becommodified and Te Tiriti should not be watered down to be about advice. So support our Supplementary Order Papers. There is the opportunity to do so on all sides of the House so that we actually get both these issues into what is a piece of legislation that we are encouraged by and that we believe the Minister of Commerce has made great progress on.There is no excuse in the 21st century for treatingMāori advice as token. There is always a risk when the commissioner has all the power as they do. I support the member Rino Tirikatene in saying that often these committees become entrenched. They become about certain people receiving a position that they become comfortable in and others are not heard. It is very important that we take this seriously and do not stay in the old mind-set of consultation.As my dad once said—[Bell rung] I am about to finish but I do want to say one more thing about what my dad always said about consultation: it is a cross between a con and an insult. I think that is an important point when the law does not require us to act around the responsibilities of article 2 in Te Tiriti o Waitangi. Kia oratātou katoa.The question was put that the amendments set out on Supplementary Order Paper 120 in the name of the Hon Craig Foss to Part 2 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes103New Zealand National 59; New Zealand Labour 34; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes18Green Party 14;Māori Party 3; Mana 1.Amendments agreed to.The question was put that the amendments set out on Supplementary Order Paper 348 in the name of Metiria Turei to Part 2 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes15Green Party 14; Mana 1.Noes106New Zealand National 59; New Zealand Labour 34; New Zealand First 7;Māori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan.Amendments not agreed to.The question was put that the amendment set out on Supplementary Order Paper 124 in the name of Steffan Browning to Part 2 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes26Green Party 14; New Zealand First 7;Māori Party 3; Mana 1; Independent: Horan.Noes95New Zealand National 59; New Zealand Labour 34; ACT New Zealand 1; United Future 1.Amendment not agreed to.Part 2 as amended agreed to.Part 3 Process for obtaining grant of patent and other mattersThe question was put that the amendments set out on Supplementary Order Paper 120 in the name of the Hon Craig Foss to Part 3 be agreed to.Amendments agreed to.The CHAIRPERSON (H V Ross Robertson): The amendments set on Supplementary Order Paper 336 in the name of Steffan Browning to Part 3 are out of order because they were contingent on agreement to the amendment set out on Supplementary Order Paper 124 in his name.Part 3 as amended agreed to.Part 4 Infringement other patent proceedings and matters affecting patent ownershipThe question was put that the amendment set out on Supplementary Order Paper 237 in the name of the Hon Craig Foss to the proposed amendment set out on Supplementary Order Paper 120 in his name to Part 4 be agreed to.Amendment to the amendment agreed to.The question was put that the amendments as amended set out on Supplementary Order Paper 120 in the name of the Hon Craig Foss to Part 4 be agreed to.A party vote was called for on the questionThat the amendments as amended be agreed to.Ayes103New Zealand National 59; New Zealand Labour 34; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes18Green Party 14;Māori Party 3; Mana 1.Amendments as amended agreed to.Part 4 as amended agreed to.Part 6 Administrative and miscellaneous provisionsThe question was put that the amendments set out on Supplementary Order Paper 237 in the name of the Hon Craig Foss to the proposed amendments set on Supplementary Order Paper 120 in his name to Part 6 be agreed to.Amendments to the amendments agreed to.The question was put that the amendments as amended set out on Supplementary Order Paper 120 in the name of the Hon Craig Foss to Part 6 be agreed to.A party vote was called for on the questionThat the amendments as amended be agreed to.Ayes103New Zealand National 59; New Zealand Labour 34; New Zealand First 7; ACT New Zealand 1; Independent: Horan; United Future 1.Noes18Green Party 14;Māori Party 3; Mana 1.Amendments as amended agreed to.The question was put that the amendment set out on Supplementary Order Paper 126 in the name of the Hon Craig Foss to Part 6 be agreed to.A party vote was called for on the questionThat the amendment be agreed to.Ayes117New Zealand National 59; New Zealand Labour 34; Green Party 14; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes4Māori Party 3; Mana 1.Amendment agreed to.The CHAIRPERSON (H V Ross Robertson): The amendment set out on Supplementary Order Paper 336 in the name of Steffan Browning to Part 6 is out of order because it is contingent on agreement to Supplementary Order Paper 124.The question was put that the amendments set out on Supplementary Order Paper 348 in the name of Metiria Turei to Part 6 be agreed to.A party vote was called for on the questionThat the amendments be agreed to.Ayes15Green Party 14; Mana 1.Noes106New Zealand National 59; New Zealand Labour 34; New Zealand First 7;Māori Party 3; ACT New Zealand 1; United Future 1; Independent: Horan.Amendments not agreed to.Part 6 as amended agreed to.Schedule 2The question was put that the amendment set out on Supplementary Order Paper 237 in the name of the Hon Craig Foss to the proposed amendment set out Supplementary Order Paper 120 in his name to schedule 2 be agreed to.A party vote was called for on the questionThat the amendment to the amendment be agreed to.Ayes117New Zealand National 59; New Zealand Labour 34; Green Party 14; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes4Māori Party 3; Mana 1.Amendment to the amendment agreed to.The question was put that the amendments as amended set out on Supplementary Order Paper 120 in the name of the Hon Craig Foss to schedule 2 be agreed to.A party vote was called for on the questionThat the amendments as amended be agreed to.Ayes103New Zealand National 59; New Zealand Labour 34; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes18Green Party 14;Māori Party 3; Mana 1.Amendments as amended agreed to.Schedule 2 as amended agreed to.Clause 1agreed to.Clause 2 CommencementThe question was put that the amendment set out on Supplementary Order Paper 237 in the name of the Hon Craig Foss to the proposed amendment set out on Supplementary Order Paper 120 in his name to clause 2 be agreed to.A party vote was called for on the questionThat the amendment to the amendment be agreed to.Ayes117New Zealand National 59; New Zealand Labour 34; Green Party 14; New Zealand First 7; ACT New Zealand 1; United Future 1; Independent: Horan.Noes4Māori Party 3; Mana 1.Amendment to the amendment agreed to.The question was put that the amendment as amended set out on Supplementary Order Paper 120 in the name of the Hon Craig Foss to clause 2 be agreed to.A party vote was called for on the questionThat the amendment as amended be agreed to.Ayes103New Zealand National 59; New Zealand Labour 34; New Zealand First 7; ACT New Zealand 1; Independent: Horan; United Future 1.Noes18Green Party 14;Māori Party 3; Mana 1.Amendment as amended agreed to.Clause 2 as amended agreed to.Bill reported with amendment.Report adopted.Third ReadingHon CRAIG FOSS (Minister of Commerce): I moveThat the Patents Bill be now read a third time. The bill will repeal and replace the Patents Act 1953 other than the provisions relating to patent attorneys. The passage of this bill marks the conclusion of a lengthy process to reform and update New Zealand’s patent legislation. I would like to take this opportunity to highlight key features of the bill that will contribute to ensuring that New Zealand’s patent legislation supports innovation while ensuring an appropriate balance between the interests of patent owners and society as a whole.The Patents Act 1953 does not achieve this objective. Its criteria for the grant of a patent are relatively weak compared with the criteria applied in most other countries. It is possible for patents to be granted for inventions that are not new or that are merely obvious variations of what is already known. The grant of such overly broad patents can impose unnecessary costs on consumers and businesses by restricting access to products and services that should be free for all to use. Such patents can actually inhibit rather than encourage innovation. Most innovations build on what already exists. If existing innovations are too heavily protected by patents it can be difficult for subsequent innovators to build on them. This bill tightens up the criteria for grants in order to as far as possible ensure that patents are granted only for inventions that are genuine innovations—that is innovations that are new that are not obvious and that have identified real-world use.The Commerce Committee in its report to the House on the bill recommended the inclusion of a provision that computer programs should not be patentable inventions. Supplementary Order Paper 237 introduced a number of amendments in the form of a new clause 10A of the Patents Bill which deals with the patentability of computerprograms. The amendments were designed to provide additional guidance on the proper interpretation of new clause 10A in a manner that is consistent with New Zealand’s international obligations under the Agreement on Trade-Related Aspects of Intellectual Property Rights. The amendments also provided an appropriate balance between the interests of inventors and the interests of society as a whole which is one of the key purposes of the Patents Bill and was already provided for in clause 3 of the bill.The Supplementary Order Paper amended the Patents Bill to provide additional clarity as to the meaning of the phrase “computer program as such” in new clause 10A. The “as such” wording was taken from the European Patent Convention and the United Kingdom Patents Act. In the United Kingdom the “as such” wording has been interpreted to mean that patent applications that involve or make use of a computer program are ineligible for patent protection if the alleged inventive feature lies solely in it being a computer program. Supplementary Order Paper 237 introduced two new subclauses to the bill subclauses 10A(3) and 10A(4). The effect of these two additional subclauses is to codify in legislation the first three steps of a test set out in an English Court of Appeal decision known as theAerotel test. The amendments provide a clarification about how clause 10A should be interpreted. The Commissioner of Patents and the New Zealand courts should apply theAerotel test and subsequent English jurisprudence that applies the test when considering patent applications involving computer programs.Given the lack of New Zealand cases in this field of patent law the ability to refer to UK case law will assist New Zealand practitioners when providing guidance to their clients. The effect of the test set out in new clause 10A is that it will not be possible to obtain a patent for an invention that involves or makes use of a computer program if the alleged inventive feature lies solely in it being a computer program. However a patent may still be granted for an invention that makes use of or involves a computer program if the actual contribution made by the invention first lies outside of the computer or second affects the computer itself but is not dependent on the type of data being processed or the particular application being used. The amendments in clause 10A as embodied in Supplementary Order Paper 237 provide improved assurances as to the intention behind clause 10A and thus enable the passage of this important piece of legislation.Also included in the bill are measures to take account of concerns expressed byMāori and others regarding the granting of patents over plants and animals. This includes the establishment of aMāori advisory committee to advise the Commissioner of Patents where patent applications involve the use of traditional knowledge or indigenous plants and animals and providing for patents to be refused where commercial exploitation of an invention will be contrary to morality or public policy. I am aware that the Waitangi Tribunal made a number of recommendations for changes to New Zealand’s patents legislation. Some such as the establishment of aMāori advisory committee were already included in the bill. The Government is in the process of considering the other recommendations but no final decisions have been made. The passage of this bill will not prevent any subsequent amendments if the Government decides to accept any of the other recommendations.These features together with the other changes introduced in the bill will provide a simpler and more open environment for innovation to take place in New Zealand. Although patents will be more difficult to obtain patent owners will have greater certainty that their patents will be valid and enforceable. Those undertaking research and development can be confident that their efforts will not be unfairly restricted by overly broad patents. The Patents Act 1953 also contains provisions regulating the patent attorney profession. These provisions will remain in force for the time beingwhile a single regulatory regime for New Zealand and Australia patent attorneys is developed. I intend to introduce legislation implementing such a regime once it has been developed.I would like to thank everyone who has contributed to the bill and the policy process that led to it including the members of the Commerce Committee the Parliamentary Counsel Office officials and members of the public and industry representatives who participated in the various submissions and policy processes. I want to particularly thank one of my intellectual property officials WarrenHassett who has been working on this bill for over 10 years. I am very pleased to commend this bill to the House.CLARE CURRAN (Labour—Dunedin South): This is a historic day for intellectual property in New Zealand and Labour supports this bill the Patents Bill. This bill was introduced on 9 July 2008 by the Hon Judith Tizard. It had its first reading on 5 May 2009 and the Commerce Committee which was chaired by the Hon Lianne Dalziel reported back on 30 March 2010. It has had a long journey.It has some core principles that underpin it. Those principles are to attempt the balance of two interests: first to allow innovators to profit from their inventions and second to ensure that the monopoly rights that accompany patents are not unduly exploited. New Zealand’s existing patent law is too generous to those people who seek patents. This law has to be updated. It has to be modernised. But we believe that too many corporations have monopoly rights and many multinational corporations can get patent rights to inventions inside New Zealand that would not be protected overseas.As I said this is a historic day for intellectual property in New Zealand. Our economy is still reliant largely on exports that are weight exports—on products that are loaded on to ships and channelled through our ports. Increasingly we are seeing a weightless economy emerge where the new innovators use code as their currency and where inventions rely on their ability to adapt and adopt technology. They rely on the ability to invent and innovate on the basis of lines of code. Those inventors are our new artisans but they are also our artists because they build on what has gone before as do musicians painters authors and dancers. We need to back them. That is why this bill is so important. It sets the framework for intellectual property in New Zealand and it sets the framework on which we can build more intellectual capital.I would like to briefly note some of the comments that were made by the IT industry upon the conclusion of the negotiated settlement around the exclusion of software from being patentable which is included in this bill. I would also like to again commend the Minister of Commerce for ultimately understanding and being prepared to listen to the industry and for allowing that negotiated settlement which has resulted in Labour supporting this bill today.The Institute of IT Professionals has thanked the Minister for “responding to industry concerns clarifying the Patents Bill’s intention to remove patentability of software and for taking extra steps to ensure the law around software patents is clear and unambiguous.” The chief executive officer Paul Matthews said: “The patent system doesn’t work for software. We believe it’s near impossible for software to be developed without breaching some of the hundreds and thousands of software patents awarded around the world often for ‘obvious’ work. Thus many software companies in New Zealand creating outstanding and innovative software live with a constant risk that their entire business could be threatened due to litigious action by a patent holder.” Ian McCrae chief executive of New Zealand’s largest software exporter Orion Health said: “We welcome the announcement. Under the current regime obvious things are getting patented. You might see a logical enhancement to your software but you can’t do it because someone else has a patent. In general software patents are counter-productive often used obstructively and get in the way of innovation.” JohnAscroft theChief Innovation Officer of Jade Software Corporation said: “We believe the patent process is onerous not suited to the software industry and challenges our investment in innovation.”These are the heavyweights of the new economy in software development. These are the people who needed to be listened to and thankfully they were.I would also just like to point out that New Zealand is not alone in heading in this direction in our jurisdiction. Our position on excluding software patents has been met with acclaim around the world in IT industries in many countries. Currently the German Parliament the Bundestag has adopted a joint motion against software patents—in just recent months. The resolution urges the German Government to take steps to limit the granting of patents on computer programs. The German Parliament said that patents on software restrict developers from exercising their copyright privileges including the right to distribute their programs as free software. Patents help to create monopolies in the software market and hurt innovation and job creation. The German Parliament called on the German Government to make sure that free software development was not restricted by patents. That resolution is being discussed currently in the German Parliament and it is looking hopeful that it will progress.Finally I want to say that vigilance is required on this issue. Vigilance is required because I think we have to be watching closely to ensure that this new law provides a sufficient exclusion of software-based patents. Only time will tell that. They are notoriously complex controversial and much litigated. There is not even agreement on what constitutes a software patent. Many can be dressed up as business method patents which are not directly addressed in this amendment.That is why we need to remain vigilant. We need to ensure that we do maintain momentum around the boundaries of the exclusion because they will be tested in due course. We have to watch that the Intellectual Property Office of New Zealand and eventually the courts do enforce this new law robustly because there may be a challenge required to ensure that the intention of this new law is upheld. What is clear is that the New Zealand IT community—the new developers the new economy those who represent our new economy—will not tolerate patents that threaten software innovation. That is to be applauded and that is why we support this bill.JONATHAN YOUNG (National—New Plymouth): I am very pleased to stand in support of the Patents Bill at its third reading. In New Zealand a patent may be granted for an invention that is a manner of manufacture. What it does is it gives the patent owner the right to exclude others from making using or signing a patent invention during the 20-year term of the patent. When it comes to patents competition innovation and all of these issues it is very complex. Although we want goods to be available for the common good we also want to protect the interests of people who are inventors and innovators so that they can get a just and deserved reward for their efforts and so inspire people to continue to innovate.We know that our patent law here in New Zealand had become quite outdated. It was based on laws in the United Kingdom. Our Patents Act was established in 1953 and it was based on the United Kingdom’s Patents Act of 1949 so it is well over 60 years of age and no doubt has had amendments all along the way. A complete rethink and a reworking are important as we live in this modern age where we have not only weightless products but also weighed products that need to be protected and recognised through patents.During this time I have no doubt that other members of the Commerce Committee received emails from many people. I thank them very much for their contributions. I thank the submitters who came and spoke to us during the previous Parliament. Their views have been considered. I believe that the Minister of Commerce was right inaddressing some of those areas. We need to understand that we live in a complex world where so much information and sharing of ideas occurs. How to do that in an appropriate way that not only protects the originality and the inventors’ interests but at the same time enables innovation to occur is important.One of the things that we need to understand here in New Zealand is that we rely on the rest of the world incredibly so. Eighty-five percent of what we make we export and so it is very important for us to have understanding around international treaties. A lot of people emailed and said we were bowing to Big Brother whoever that might have been but we understand that these international treaties enable us to reach out into the world with our products. They protect our interests and very much so.A lot of good debate has taken place this afternoon around the issues of the Patents Bill which is before us. It is good to see that we are making progress and today we shall complete this third reading and enact this law. I want to thank all the members of the Commerce Committee. I am now the chair and I want to just acknowledge Lianne Dalziel a former chair and the work she did as well. I acknowledge the Hon Simon Power and I acknowledge the Hon Craig Foss for the great work he has done in bringing this bill to the House. I think we have got it right. Thank you very much.Dr DAVID CLARK (Labour—Dunedin North): It is with some degree of pleasure that I rise to speak on this Patents Bill. It is very nice to be able to support a Government bill.Hon Simon Bridges: How much?Dr DAVID CLARK: I am invigorated if that is what the member is asking. I am invigorated by this opportunity to speak on the bill. It is with some pleasure that I speak because this is a Government as we know with the worst economic record of any Government in the last 50 years and it is not often that we get a chance to actually speak in support of some of the policies that it puts through. So you Mr Speaker and the members of the House will understand how pleased I am to be speaking on this bill as a consequence.The Labour Party believes in the importance of a clean green diversified economy that creates sustainable jobs for New Zealanders. The issue we have is that this Government is not creating that kind of economy more generally. We know for example that in my home district of Otago there is the highest number of unemployed people in 22 years. There are 7800 people unemployed currently and that is not a proud record for this Government. But here we have a genuine attempt I think to diversify the economy.Hon Simon Bridges: You need more mining in Otago. Dig it up.Dr DAVID CLARK: So I compliment the Government on this. The research and development tax credits are an issue. Mr Bridges across there raises the issue of mining and no doubt he is trying to draw attention in this context to the cuts atOceana Gold that have taken place in the last week in Otago under this Government because of its lack of growth generally and because of its poor economic record.But here we have an attempt to genuinely diversify the economy to look at the issue of patents and what the right balance is between the interests of inventors and patent owners and the incentives on them to develop and produce new technologies new ways of doing things and new ideas and the interests of society as whole which we know can result from these new inventions and ideas. We think that this is a good bill because it does attempt to balance those two interests: first allowing innovators to profit from their inventions; and second ensuring the monopoly rights that accompany patents are not unduly exploited. That has got to be recommended to the House.The absolute novelty test—New Zealand will finally catch up with the rest of the world on that. It means that a patent will be invalid if the invention was not new or wasobvious in light of information available anywhere in the world at the application date. So the bill does tighten New Zealand’s overly generous patent law.I want to just pick up briefly on something that the previous speaker Mr Jonathan Young the current chair of our Commerce Committee raised. He raised the issue of Big Brother and tried to frame this debate in terms of international trade and particularly the Big Brother issue. I think though it must be on record that the complaint that New Zealanders have about the process with the passing of the Government Communications Security Bureau Amendment Bill was that it was not properly investigated. The previous illegal spying acts had not been investigated Mr Young. The Henry report the leaking of theKitteridge report and the various issues and bungles by the Government were not exposed to transparency and not even to an independent investigation. New Zealanders want to know that their spy agencies are acting in their interests and not in some other interests. It would have been good process for the Government to appoint an independent inquiry to sort out those matters before the law was changed to make illegal what was previously legal.I think it needs to be put on record that these two things are not easily likened and pulled under the same banner. Mr Young is drawing a very long bow there. New Zealanders are not happy with the progress of that bill. But here we are protecting ideas and concepts using patents and protecting the intellectual property that will create the kind of economy we need to ensure a prosperous future for our country—a country that is going to prosper from the likes of the ideas of theHamiltonJet theGallaghers of this world the Scott Technologies and so on to make sure that the appropriate protections are in place and the public-good interests are protected in the longer term. Thank you.STEFFAN BROWNING (Green): I rise to speak to the third reading of the Patents Bill. Clearly we are disappointed that the Supplementary Order Papers that take away the ability to patent life or the traits of it and that provide some more support and substance to the committee that would be looking at issues affectingMāori were not agreed to.Because the bill—and we are supporting it—has substantive improvements on the previous Act what is showing up is that the bit that is really missing is around life and around the ability forMāori to actually have a serious meaningful part an assured part in the outcomes. It comes down to that essence of life—right down to the genetic material. I was disappointed to hear that Labour is supporting the bill because it is supporting genetic engineering effectively and that is the significant difference here. The bill is a very very good bill but it has a lack in that it supports genetic engineering in New Zealand and suggests that that might be a way forward for New Zealand and it clearly is not.I think it is time that New Zealand had a serious discussion around that. We have had significant years where all we have had are field trials except for one commercial release of something that has not yet been used—a genetically engineered vaccine for equine influenza that has not been used as far as I know. Everything else has been field trials. Every one of those field trials has had compliance issues and has had issues of contamination. I have brought over Australian farmers who have showed what the issue is when they have gone down the genetic engineering track in Australia and the issues in the community the conflict in the community when neighbour contaminates neighbour and actually degrades the value of their crop and degrades the value of their land.I will be visiting another farmer in Western Australia in a couple of weeks who is actually—Hon Simon Bridges: What’s his name?STEFFAN BROWNING: His name? You have a look. Google it up. You will be right. I will be visiting him. He is appearing in court along with his neighbour supported by Monsanto—David versus Goliath. Why should that farmer have lost the value of his crops just because his neighbour allowed something to drift over on to his place which has devalued the premium that he and his other neighbours were getting? Why should the councils in that area be subject to clean-up costs because this sort of material has got loose?I think that is a real question for New Zealand. We have not gone down that track yet and that is good. We can claim it as a benefit for New Zealand to get a premium for our goods our primary production in this country. The bill would have been extra special if it had effectively banned genetic engineering from being able to be patented here.Hon Simon Bridges: What would the Greens do?STEFFAN BROWNING: We have a very good vision and in New Zealand—remember—we have not got it. We have not got it commercialised in this country now and according to some we are doing just fine.We have got a vision around sustainability of clean agriculture clean primary production and maximising that when we go out to the world with the best possible value and the best possible brand. Genetic modification has no place in that brand. It is not wanted by consumers internationally. More and more information is coming about the negatives in that. We do not need it for biofuels. We do not need it out in our environment at all. We do not need it in our food even more. There is a real issue around the amount that might be in our food but the current Government—in fact the previous Government as well—was remiss in the level of compliance assurance around what was in our food. We have got GE food labelling laws that are soso but they are not even being reinforced by auditing or having a check on them.We have experts in this country and I will talk about Jack Heinemann from Canterbury University who is internationally renowned. He has got a book hereHope Not Hype: The Future of AgricultureGuided by the International Assessment of Agricultural Knowledge Science and Technology for Development. This is a big lump of scientists who have looked deeply into these things to see what is actually sustainable for the future what has gone wrong with this technology in the past and how we can learn from that. We are so lucky that we have not gone down the track that the US and certain South American countries and a few others have gone down. A number of them are pulling back from it and regions are pulling back because they are having very negative effects into their environments. They have also had limitations in public-good science because of the patents on organisms. It has reduced the ability to have the absolute best we could get through medical science because what is considered to be locking up for innovation to give rewards to those corporates ends up being a monopoly a manipulation or a strategic measure to block other research and other users out of what is everybody’s—what is life and what belongs to every one of us.We support the bill for those really positive things and as I say we are very very concerned about the major major gaps in there. They are the ability forMāori to have some genuine influence on things that matter to them—the essence of life in there—and the fact that we can see life patented. New Zealand could have been extra special there. It is great that we have seen the development around software and computer programs. What a fantastic day it is today when we are going to be voting that through and that is very very good. But for the rest of it it is unfortunate. So as I sit down I will still commend the Minister for the positive parts of the bill and the rest of our colleagues who are supporting the bill in its major substance. Thank you.Peseta SAM LOTU-IIGA (National—Maungakiekie): It is a pleasure to speak on this the Patents Bill and to support the Minister of Commerce the Hon Craig Foss and the Commerce Committee which did some fine work on this bill in terms of getting it through the House process.Patents are important. I think we have all said that this afternoon. They are important because they are about innovation and advancement. They are about invention new ideas and new processes. That is the future of New Zealand’s economy and New Zealand business. Patents are important in that respect. Patents are important because it is appropriate to balance research and development and the interests of innovators and inventors with the interests of users of that technology or patented technology and patents. Although patents protect business innovators they are also about providing goods and services for consumers and the people of New Zealand. Patents are important because in a small economy like New Zealand which is becoming increasingly reliant on technology—especially in my electorate of Maungakiekie where there are high-tech manufacturing companies that rely on intellectual property rights—patents are important for our economy and they are important for jobs and opportunities in this country going forward.It is pleasing today that for once this year we have the Labour Party supporting a bill that supports jobs and opportunities and supporting a bill that supports families and communities out there that need legislation to support our economy. It may be indicative that the Labour Party is supporting this bill because it is currently leaderless it is currently rudderless and it is currently in need of some direction.The Patents Act is outdated. We have all acknowledged that fact. Patents are not new. In the 1600s the English Parliament passed a Statute of Monopolies that granted new monopoly rights around manufacturing. Our Act was put in place in 1953 so we can see that we are 60 years in the making in terms of changing and updating this Act. I think we on all sides of the House can take credit for that.The bill is about bringing our patents legislation and making it more closely aligned with our trading partners and the people whom we do business with across the world. In particular it is about looking at a single trans-Tasman patents application and examination regime that will bring down the costs of business and bring down the time delays that are involved in patent applications both here and in Australia. So I support this bill because I know that this bill will make a difference to our economy and will make a difference to our communities and to employers and employees out there who rely on this type of technology.May I finally just acknowledge the Minister and the moves that he made around Supplementary Order Paper 237 which has been talked about. There was wide consultation with the industry and close deliberation and I think we have a solution around computer programming that is workable that is realistic and that will bring positive outcomes for businesses and for inventors alike. So I support this bill because this Government is once again bringing legislation to this House that is promoting the economy promoting jobs and opportunities and leading us into the future. Thank you.Debate interrupted.