Fisher & Paykel Healthcare has called on New Zealand Parliament to act quickly to close a loophole in the country’s patent laws. The company warns the gap is costing millions and threatening local manufacturing.
Fisher & Paykel Healthcare Calls for Swift Parliamentary Action
Speaking to a select committee on 11 September, its general manager of intellectual property, Jon Harwood, said: “The bill closes this loophole and is critical to our ability to continue manufacturing our products with confidence in New Zealand.” Lawmakers are now under pressure to address the issue promptly.
Legacy of Outdated Patent Law
The issue stems from the transition between the Patents Act 1953 and the Patents Act 2013. The newer regime introduced a higher standard of “inventive step,” requiring inventions to be non-obvious as well as novel.
However, the transitional provisions allowed applications filed before September 2014, and their “divisional” spinoffs, to be assessed under the old 1953 standard, which required only novelty.
Harwood said this gap opened the door for competitors to file weak patents that could still be used to seek injunctions. “The loophole allows certain patents to be examined under a lower standard … in the meantime, they can be used to stop us [from] manufacturing.”
Financial and Operational Implications
The company has spent approximately $1 million annually fighting such claims since 2014, lodging more than 70 oppositions. “This is not just a financial drain but also a distraction to our business,” Harwood told MPs. He warned that lawsuits enabled by the loophole could have “significant implications” for the company’s ability to keep producing in Auckland.
Fisher & Paykel employs more than 7,500 people globally, with over half of its production and all research and development based in New Zealand. In the year to March, it reported $2 billion in revenue and $377 million net profit, backed by heavy investment in innovation.
Government Response to Patent Reform
Commerce and Consumer Affairs Minister Scott Simpson introduced the Patents Amendment Bill, which passed its first reading with cross-party support. He described the measure as “a useful tidy-up” that would align New Zealand with international practice. “The bill supports innovation competition in New Zealand,” he told the House.
Critics Urge Legislative Caution
The New Zealand Law Society questioned whether reform is still necessary, noting that pending 1953-era applications have fallen from 774 in 2019 to just 80 today. It warned against “retrospective legislation without any convincing evidence that there is a need for it.”