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NZ government to move on stalled patents reform

Tuesday 21st August 2012

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Patent law reforms that have been stalled in Parliament since their introduction by the last Labour government are finally back on the agenda, with passage into law expected by the end of the year.

The Patents Bill progress was one of a cluster of minor announcements accompanying this morning's release of the second of six "progress reports" being launched by Economic Development Minister Steven Joyce, entitled "Building Innovation."

The report is the second of six the government is producing in an effort to repackage its economic policy agenda, which is now overseen by six informal committees of ministers, arranged around exports, innovation, workplace skills and safety, capital markets, natural resources and infrastructure.

Also foreshadowed in the latest report is a shake-up of university governance to speed up decision-making and focus on commercial opportunity by the country's tertiary institutions, a review of whether tax treatments are discouraging research and development, pursuit of joint science initiatives with Singapore, and seeking export opportunities from public sector intellectual property.

At a Business New Zealand breakfast, and accompanied by Prime Minister John Key and Communications Minister Amy Adams, Joyce also announced that Christchurch businesswoman Sue Suckling will head the newly formed Advanced Technology Institute.

Key announced the ATI, which is intended to become a hub agency for high-value industrial research and commercialisation, will be named after the late Paul Callaghan, the Victoria University physicist who became a champion of New Zealand's scientific potential before his death earlier this year.

In a nod to the central role of the Crown-owned Industrial Research agency in the new institute, IRL's current chair, Michael Ludbrook and another IRL director, Richard Janes, are also on the six member establishment board.

Also appointed are Auckland-based professional director Paul Lockey, chair of the Plant and Food Research crown research institute, Michael Ahie, CRI taskforce review chair and noted entrepreneur Neville Jordan, and an Australian food industry veteran, Michele Allan.

The Patents Bill was introduced to Parliament in July 2008, under the government of Labour Prime Minister Helen Clark, had its first reading in Parliament in May 2009 and was reported back from select committee in March 2010, but has not progressed since.

Joyce said Commerce Minister Craig Foss would have announcements next week, with the goal of aligning New Zealand and Australian process patents to create a single trans-Tasman patents examination regime.

The report lays out a target for private sector investment in research and development to rise from around 0.5 percent of gross domestic product at present to 1 percent of GDP - a level which would "put us up the front of the class with the good kids," said Joyce.

However, both Joyce and Key ruled out any return to tax incentives for research and development, despite a Treasury and tax department project to examine whether current tax treatments could be discouraging private sector investment in innovation.

Tax credits might create the appearance of a surge in activity, but accounting firms' advice was that companies were likely simply to reclassify expenditure as research and development in order to get the tax break, said Key.

The government continued to favour direct government funding through schemes such as Tech NZ.

On university governance, Joyce suggested university councils were too large, at around 20 members, and were often too slow to react to changing circumstances, not pursuing commercialisation of research as effectively as possible, and were lagging in their international education initiatives.

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