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Guest blog by Doug Calhoun

The new Ministry of Business, Innovation and Employment, which will combine Economic Development, Science and Innovation, Labour, and Building and Housing, attracted the usual headlines about job losses and efficiency dividends: (see here).

But beyond the headlines there has been some reasoned analysis of what current structures and accountability procedures have and haven’t achieved. The ‘Better Public Services Report’: (released at the same time as the announcement of the super ministry) has added a new word to government speak — RESULTS. In a sardonic footnote on page 23 the report notes:

‘The technically-minded reader will note this report uses the term ‘results’ rather than the PFA term ‘outcomes’. We have gone with the more open term as results can encompass outcomes, intermediate outcomes and outputs where necessary.’

The report notes, on several occasions, a common problem from the current set up:

Page 20 — ‘The most challenging social and economic issues facing New Zealand need action across agency boundaries, and currently this action takes too long. Having many agencies and a culture of high levels of consensus-seeking consultation between agencies slows progress down.’

Page 23 — ‘Alongside containing and reducing costs, the greatest challenge facing the state services is to gain more traction on achieving results: the complex and long term issues that cross agency boundaries. This is hard territory as it requires cooperative action from Ministers, boards and agency leaders and staff, action that sometimes competes with those Ministers’ and agencies’ narrower objectives.’

Page 26 — ‘The Advisory Group’s assessment, supported by discussions with chief executives and Ministers, is that one of the main obstacles to the state services responding more effectively to cross-agency results is the inflexibility in current organisational arrangements. It tends to be too hard to divert staff from existing work plans. Multi-agency work is on occasion characterised by individual agencies protecting their own patch rather than focusing on solving the common problem.’

Page 27 — ‘Overall, and on balance, the Advisory Group considers that New Zealand is not well served by the high number of departments in the state services, particularly where there is a lot of overlap and duplication between separate agencies’ briefs.’

Page 28 — ‘One of the reasons the system has struggled to make traction on inter-agency results is the quality and alignment of policy advice.’

[And a footnote references the December 2010 Scott Report]:

Which can all be summed up by saying that all too often the left hand of government does not know (or care) what the right hand is doing.

The solution announced on Super Thursday is to put both hands under the control of one management with the objective that they work together to achieve an overall result consistent with the government’s objectives. And Stephen Joyce has been given the task of doing this.

The Patents Bill v Innovation Policy

As I endeavoured to point out in my first guest post: the Patents Bill was drafted with the aim of minimising the leakage of patent ‘benefits’ to overseas owners. The result intended under the new regime is that patents are to be as difficult to obtain as possible, they are to be vulnerable to validity attacks by anyone, and they make many high value manufacturing sector (HVMSS) technologies ineligible for patent protection.

At the same time the innovation policy endorsed by the government during the last election campaign advocated ramping up HVMSS technology transfer from universities and CRIs through enhanced intellectual property deal flow.

The patent policy came from MED; the innovation policy came from MSI.

Now – have a look back at each of the quotes from the Better Public Services Report. ‘This is hard territory as it requires cooperative action from Ministers, boards and agency leaders and staff, action that sometimes competes with those Ministers’ and agencies’ narrower objectives’ – is my favourite.

The result that both Mr key and Mr Shearer said they wanted to achieve in their ‘Super Thursday’ speeches was a more prosperous New Zealand. The result that the Patents Bill aims to achieve is a chill on New Zealand patents. The result that MSI is seeking is to convert good science ideas into innovation — and one of the tools they recommend for doing so is technology transfer. And patents are the currency of technology transfer.

The Patents Act 1953 was virtually a carbon copy of the 1949 British Patent Act. The British Act was replaced in 1977 by a substantially different one based on the European Patent Convention. In the early 1980s the government appointed a committee (IPAC) that looked at some aspects of patent law on an ad hoc basis. In 1989 the Law Commission had a brief look at patent law, but gave it over when the Ministry of Commerce took on the task. In 1992 MOC produced a set of ‘proposed recommendations’ that almost led to a rewrite of the patent law. But in 1994, in anticipation of the formation of the WTO with its minimum IP standards, the Patents Act was tweaked. The 1994 changes resulted in the Wai 262 claimants protesting that all IP law reform should halt until their treaty claim was settled. It did. The Wai 262 report was finally released in mid-2011.

If you are still with me, in 2000 a new round of patent law reform began, and it set off in a very different policy direction from the 1992 recommendations. The resulting Patents Bill has been through a select committee and returned to Parliament where it has sat in limbo for two years so far. (My take is that the delay is partly because the government is awaiting the outcome of the TPP negotiations — and American demands — and partly until the government responds to the Wai 262 Report recommendations.)

So my plea to Mr Joyce is this. Review of our patent law has been going on for 30 years. So another delay will not be of much consequence. Your government has to define the results that it wants to achieve. Does it want a Patents Act that puts a chill on anyone getting patents (to stop leaks of benefits to foreigners); or does it want a Patents Act that achieves a result of quality patents serving as a reliable currency for technology transfer? Don’t pass the Patents Bill until you define the result you want. And then make sure the bill achieves that result.

~ Doug Calhoun
IP Mentor
Serial Stirrer