Swiss-style Patent Claims In New Zealand – Part 2 Law and Policy

Swiss-style (or Swiss-type) patent claims  have been routinely sought and granted in New Zealand for many years[1].  However, the New Zealand courts are yet to determine the question of what conduct will infringe such a claim.  This article is the second in a series that explores the history of Swiss-style and Swiss-type claims (referred to herein simply as “Swiss claims”) in New Zealand, the relevant law and policy considerations, and the likely judicial approach to the question of infringement.

The first instalment in this series gave a brief history of Swiss claims in New Zealand.  This second part looks at New Zealand law relevant to the infringement of Swiss claims and the commercial and economic circumstances that inform New Zealand’s policy approach to patent law.  The final article in this series will consider how this law might be applied in light of those policy considerations.

Infringement of Swiss claims

The common understanding of Swiss claims is that any infringing conduct will be that of a manufacturer using the substance the subject of the claim for manufacturing a medicament for the claimed purpose.  Further, a medical practitioner using the medicament itself to treat a patient will not be at risk of infringing.  These perceptions may warrant closer consideration in a New Zealand context.

New Zealand statute law

Under the Patents Act 2013[2], a typical Swiss claim will be directly infringed if a person, in New Zealand, does any of the following in respect of the medicament claimed:

• (a) manufactures the medicament;
• (b) sells the medicament;
• (c) “otherwise disposes” of the medicament;
• (d) offers to do any of (a), (b), or (c);
• (e) uses the medicament;
• (f) imports the medicament;
• (g) keeps the medicament for the purpose of doing any of the above.

It will also be an infringement[3] to supply or offer to supply, in New Zealand, an essential element of the invention, such as the pharmaceutical substance (i.e. the API) referred to in a Swiss claim, for the manufacture of the claimed medicament for the claimed purpose, if that supplier knew or ought reasonably to have known that the substance was suitable for that purpose and that the person being supplied intended to use it for that purpose, and that by doing so the person would themselves infringe.

Common law

New Zealand law also recognises the common law doctrine imposing joint liability where two or more parties participate in a common design that intends and results in an act that infringes a patent.

When confronting the issue of infringement of Swiss claims, the New Zealand courts will without doubt consider the law of other common law countries.  New Zealand’s derivation of its patent law from UK law, and its paucity of domestic patent case law, mean that foreign law is frequently considered in determining New Zealand cases.  Data are scarce[4], but generally UK and Australian law are the most common influences, with Canadian and US law also frequently cited.  To the extent that foreign law would be given any weight, preference is likely to be given to jurisdictions with the most similar legal context, being those in which method of medical treatment claims are deemed unpatentable.  Like New Zealand, the UK has a statutory exclusion of method of treatment claims[5].  Canada generally excludes such claims on a common law basis.  Australia and the USA allow method of treatment claims.

Infringement – New Zealand context

New Zealand imports the majority of its domestically-used pharmaceutical drugs.  It has a relatively small local manufacturing industry that supplies domestically and for export.  Any major infringement action involving a Swiss claim is likely to involve a foreign patent owner claiming primary infringement by importation into New Zealand of, and subsequent dealing in, a product of the process of the claim.

New Zealand’s medicines regulatory regime is generally consistent with those of other developed countries.  An application for approval, including safety and efficacy data from clinical trials, is made to the government regulator, Medsafe.  Medsafe will approve medicines for distribution for specific indications, including approval of a package label, data sheet, and Consumer Medicine Information document.  Medicines may be approved for sale over-the-counter, pharmacy-only, or by prescription.  Certain medical practitioners are nevertheless able to prescribe drugs to a specific patient for “off-label” use for indications not approved by Medsafe.

New Zealand can be slower than other jurisdictions to approve new medicines due to delays at Medsafe[6] and the fact that an economy the size of New Zealand may not be a commercial priority for a drug manufacturer.

New Zealand’s government drug-funding system is unique.  An independent government funder, Pharmac[7], is tasked with securing national supply of drugs within a fixed budget.  It will typically principally fund only one manufacturer’s brand of any particular medicine.  It actively takes steps to avoid funding medicines that may infringe New Zealand patent rights.  This means that if a particular medicine is approved for both “on-patent” and “off-patent” indications, funding even for off-patent uses is highly likely to be available only to a supplier that is, or is authorised by, the relevant patent owner.  High-cost drugs may also only be funded on a Special Authority basis, further limiting the possibility of off-label use being funded.  This system, in practice, reduces the likelihood of a drug supplier being accused of infringing a Swiss claim as there is usually reduced commercial incentive to supply drugs that are subject to patent protection in New Zealand including by Swiss claims.

As a net importer of technology including drugs, New Zealand legislative policy tends to favour limiting patent rights as much as possible within the limits of applicable international agreements, including WIPO treaties and free trade agreements.  For example, New Zealand does not permit any form of patent term extension[8], nor is there any formal patent linkage system relating to regulatory approval of generic medicines[9].  Conversely, New Zealand courts have recently shown a “patent-friendly” tendency[10].

New Zealand also permits advertising of approved drugs direct to the public, unlike the vast majority of developed countries (the USA is the other exception).  Advertising must comply with legislation and is subject to a universally observed voluntary code of conduct.

In the next and final article in this series, we will look at how each of the issues discussed above may impact the judicial assessment of claims of infringement of Swiss claims in New Zealand.  In the meantime, please contact us if you have any questions about Swiss claims in New Zealand.

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