Chauvel Charles: Patents Bill — First ReadingText is incorporated into the Bound VolumeChauvel Charles: Patents Bill — First Reading[Sitting date: 05 May 2009. Volume:654;Page:2879. Text is incorporated into the Bound Volume.]CHARLES CHAUVEL (Labour):Law students know that in general terms a patent is a set of exclusive rights granted by a nation State to an inventor or his or her assignee for a limited period of time in exchange for public disclosure of the fact of the invention.Internationally there are widespread differences between the practice of nation States as far as the requirements that are placed on patentees and the extent of the exclusive rights conferred are concerned. These vary widely between countries according to national laws and international agreements. Typically a patent application must include one or more claims that define the invention which must be new inventive and useful or industrially applicable. In many countries certain subject areas are excluded from patents such as business methods and mental acts. The exclusive right granted to a patentee in most countries is the right to prevent others from making using selling or distributing the patented invention without permission.In England the Crown issued letters patent which provided any person with a monopoly to provide or produce particular goods or services. The first such letter was granted by Henry VI in 1449 to a Flemish man for a 20-year monopoly for his invention a manufacture process for stained glass destined for Eton College. This was the start of a long tradition by the Crown of granting letters patent that granted monopolies to favoured persons or people who were prepared to pay for them. The famous legal scholar Blackstone explained how letters patent or in Latin literae patentes—literally “letters that lie open” —were so called because the seal hung from the foot of the document. They were addressed “To all whom these presents shall come” and could be read by anyone without breaking the seal as opposed to letters closed which were addressed to a particular person who had to break the seal to read them.The power to grant monopolies began to be abused as a revenue-raising technique for the Crown. As an alternative to calling Parliaments together to seek appropriations the Crown began to grant patents in respect of all sorts of common goods—salt was a notorious example—so the courts began to limit the circumstances in which they could be issued. After a public outcry over the abuse of patents James I of England was forced to revoke all existing monopolies and declare that they were thenceforth to be used only for projects of new invention. This declaration was incorporated into the Statute of Monopolies which Parliament used to explicitly restrict the Crown’s power so that the king could issue letters patent only to the inventors or introducers of original inventions for a fixed number of years. In the reign of Queen Anne—1702-14—English lawyers developed the requirement that a written description of the invention must be submitted along with the patent application. These developments which were in place during the colonial period before the independence of the United States were the foundation for patent law in the US New Zealand Canada Australia and the other English-speaking jurisdictions.Interestingly—and the previous speaker Peseta Sam Lotu-Iiga touched on this development—in the United Kingdom the Patents Act 1977 and its successor in 2004 harmonised UK patent law with the European Patent Convention. As a result of this although New Zealand law remains based on the old English Statute of Monopolies UK patent law is now an amalgam of UK and European practices. International law has also had a bearing on the development of contemporary patent law and practice. Under the World Trade Organization Agreement on Trade-Related Aspects of International Property Rights patents should in general be available in World Trade Organisation member States for any inventions in all fields of technology and the term of protection available should be a minimum of 20 years—harking back to the old Henry VI first patent for the production process of stained glass for Eton College.New Zealand patent law has not been updated for over half a century. Given the history that I have just recounted and the fact that the relevant UK law is now largely a reflection of European treaty provisions and developments in international law it was clearly timely for the previous Labour Government to introduce the present bill. I pay tribute to Judith Tizard the Minister responsible for this area in the last Government for having done so.As the Labour Party’s associate spokesperson on commerce I am very pleased to say that—Paul Quinn: Why is she not here now?CHARLES CHAUVEL: —as this is a reintroduction of our own measure I say to Mr Quinn we will obviously support it. Members opposite will be interested to remember that New Zealand has a small economy we are remote from our markets Kiwis like to travel and live abroad and our high level of education and mobility means that we are free to do so in significant numbers. With some notable exceptions we remain reliant on innovation in the primary production and services sectors. We are innovative people.So what are the virtues that a reformed patent law system should embody and what are the evils that it should seek to regulate? There are six virtues that I think the system should promote. First and above all we should have a system that incentivises invention in the first place. Secondly there should be incentives to disclose the invention once made so that the general science in the applicable area can advance. Thirdly it should be attractive to invest the sums of money necessary to improve the invention and to produce and market it. Fourthly it should be relatively easy to design around and improve upon earlier patents—again to build innovation into the system on a continuous basis. Fifthly a patent scheme should promote any unique cultural and other advantages that New Zealand possesses. Finally it should interact consistently and robustly with the international legal rules surrounding the protection and promotion of innovation.The major evil that a patent regime should avoid given that as I said earlier it confers a negative right upon a patent owner is unduly excluding competitors from using or exploiting the invention even if the competitor subsequently develops the same invention independently. As I have tried to show the history of patent law is too full of examples of abuse of the right that it confers because of just how sweeping it is so too rigid a system will stifle innovation. That must be avoided at all costs particularly for those of us who care about building a robust economy in New Zealand which certainly includes all the members on this side of the House.Labour members look forward to measuring the Patents Bill against the tests that I have mentioned. We look forward to hearing submissions in the select committee from affected parties. Above all we look forward to contributing to modernising the New Zealand patent system in a way that balances respect for the rule of law with promoting a vibrant culture of innovation in this country.