Biosimilars Deals 2021

Recent reforms to streamline New Zealand’s medicines approval process may have inadvertently undermined its compliance with an international trade agreement, the CPTPP.

Medicines approval reforms

In July 2026, New Zealand implemented a new, fast-track pathway for the approval of pharmaceuticals under sections 22A to 22F of the Medicines Act 1981.  The new pathway is formally named “Consent by Verification” but is colloquially known as the “Rule of Two”.  It enables a drug to be consented for marketing in New Zealand on the basis that it has already received marketing approval from two foreign “recognised regulatory authorities.”  The initial “recognised regulatory authorities” are:

• Australian Therapeutic Goods Administration (TGA)
• Health Canada
• European Medicines Agency (EMA)
• Singapore Health Sciences Authority (HSA)
• Swiss Agency for Therapeutic Products (Swissmedic)
• UK Medicines and Healthcare products Regulatory Agency (MHRA)
• United States Food and Drug Administration (FDA

A principal purpose of this reform was to speed up approval times for new pharmaceuticals in New Zealand, which have historically been slow.  The legislative Rules governing Consent by Verification require a decision on consent to be made within only 30 working days of an application.

The new pathway also lowers the cost to a sponsor drug company of making an application.  The official fees are considerably lower than for the two other available pathways (the standard New Medicines Application process and the Abbreviated Evaluation process), and as foreign dossiers can be relied on there is no need to compile a full dossier for New Zealand.  Lowering the barriers to compliance was expected to improve access to medicines as high costs were thought to reduce the attractiveness to suppliers of New Zealand’s relatively small pharmaceutical market.

This legislative reform was undertaken to honour a political commitment in the coalition agreement underpinning New Zealand’s current three-party coalition government.  The reform process itself was undertaken relatively quickly with the amendment Bill being introduced to Parliament in March 2025 and passed into law by November 2025.  The implementing Rules and guidelines were then developed and consulted upon by medicines regulator Medsafe.  The new pathway came into operation in July 2026, with general support from the industry and health sector.

Trade Agreement implications

Although the benefits of the Rule of Two are self-evident, it may yet cause an issue for New Zealand’s trade relations.

New Zealand is a signatory to the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a multi-lateral free trade agreement with 12 current member states and 11 others at various stages of negotiating accession.  As is common in free trade agreements, the CPTPP includes commitments aimed at harmonising intellectual property laws.  These include a commitment to implement a form of patent linkage.

Patent linkage refers to systems whereby applications for approval of generic or biosimilar medicines are linked to patents covering those medicines.  These patents are usually owned by the developer of the innovative product used as a reference for the competing generic or biosimilar.  The purpose of patent linkage is to allow patent holders an opportunity to enforce their patent rights to prevent or delay the marketing approval of a generic or biosimilar competitor.

In particular, Article 18.53 of the CPTPP requires member states to, in summary:

• Provide a system allowing notification to a pharmaceutical patent holder that a generic version of its patented product is the subject of an application for marketing approval; and
• Ensure that there is adequate time and opportunity for such a patent holder to seek, prior to the marketing of the allegedly infringing product, available remedies such as preliminary injunctions.

Despite Article 18.53, New Zealand has never implemented any legislative or regulatory patent linkage system.  New Zealand’s official position on compliance with the requirements of Article 18.53 has always been:

New Zealand’s current law and practice already satisfies these requirements through the information Medsafe publishes on its website, the availability of injunctive relief and the time it takes Medsafe to process applications.

Medsafe has an historic practice of promptly publishing searchable details of all new applications for marketing approval, including for generic and biosimilar products.  New Zealand’s purported compliance with Article 18.53 rests expressly on this practice and Medsafe’s historically slow medicines approval processes.  It also implicitly relies on patent holders keeping an active watch on Medsafe’s publication of applications.

Under the existing standard and abbreviated pathway timeframes, there was little question that a reasonably prudent patent-holder would have had time to detect an application for approval of a generic version of its product and to take appropriate court action if required.  The position is much less certain under the 30-working day time frame introduced by the Consent by Verification pathway.  Assessing likely timeframes for determination of a preliminary injunction application is an inexact science given the lack of recent precedent and recent reforms to New Zealand’s civil procedure.  The authors’ view is that the New Zealand courts do have the ability and the available procedures necessary to issue an urgent preliminary injunction decision within 30-working days or fewer.  The patent holder will need to have very promptly identified the application for approval of the potentially infringing product, and made the necessary arrangements to launch court proceedings.  It may be that an initial decision would be made either ex parte, on a Pickwick basis, or otherwise on a temporary basis with a more detailed hearing scheduled to hear fuller argument and evidence on the matter.

In any event, other CPTPP member states might reasonably question whether New Zealand can continue to reply on Medsafe’s historic practices and timelines as demonstrating proper compliance with the patent linkage requirements of the CPTPP.

The future

This may be an issue that could be dealt with in the pending reform of the Medicines Act 1981.  The Ministry of Health is currently working on a comprehensive Bill to replace that Act.

The problem may become more acute if a patent holder from another member state finds that it suffers serious loss because it had no opportunity to obtain a preliminary injunction to prevent a generic competitor from being marketed in New Zealand.

In practice, this is a relatively remote possibility due to New Zealand’s unique drug-funding model which imposes a further barrier to market entry for generic and biosimilar products.  Even if a generic competitor to a patented product obtained Medsafe approval, for most medicines it would be unlikely to quickly capture a significant part of the market.  New Zealand’s government medicines funding body, Pharmac, has an almost universal practice of only funding a single brand of any particular medicine.  Pharmac also has a policy of taking patent rights into account when considering which brands to fund, ostensibly to avoid problems with continuity of supply.  Consequently, potentially infringing generic products are very unlikely to be subsidised.  The time taken by Pharmac to notify and consult on any proposal to switch from funding an innovative medicine to funding a generic or biosimilar alternative would provide ample notice and time for a patent holder to take steps to enforce its rights.

Practical implications

The current circumstances make it even more important for innovator drug manufacturers to maintain a frequent and careful watch on Medsafe applications.  Pearce IP reviews new applications on a weekly basis and can provide general or tailored reports.

If the Consent by Verification pathway becomes frequently used by generic and biosimilar manufacturers, innovator companies from other CPTPP members may consider raising the issue directly with New Zealand’s government, or lobbying their own governments to put pressure on New Zealand to more explicitly comply with Article 18.53 of the CPTPP.

About Pearce IP

Pearce IP is a privately owned/independent, specialist, life-sciences focussed, intellectual property/law firm offering lawyers and attorneys in Australia and New Zealand.

Our lawyers and attorneys specialise in pharma, biopharma, biotech, ag-tech, food-tech, med-tech, although our work is broader than these industries.

Pearce IP and its leaders are ranked in every notable legal directory including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, Best Law Firms, among others. In 2025, Pearce IP was honoured by Australasian Lawyer and New Zealand Lawyer as a Top Specialist Firm, 5 Star Employer of Choice, and the “Standout Winner” for Inclusion and Culture (<100 employees).  

Pearce IP is the only leading IP firm in Australia and New Zealand with a female founder, and is certified by WEConnect International as women owned.

Clear first, launch second: what the High Court’s decision in Zip Co Limited v Firstmac Limited [2026] HCA 16 means for new brands.

Choosing a new brand can be an exciting part of launching a product, service or business. Once the preferred name has gained internal support, however, commercial momentum can build quickly: domains are secured, packaging is commissioned, regulatory documentation is prepared and marketing plans begin to take shape.

A recent High Court decision provides a timely reminder that trade mark clearance needs to occur before that momentum becomes too difficult (and expensive!) to reverse.

In Zip Co Limited v Firstmac Limited [2026] HCA 16, the High Court considered whether buy-now-pay-later provider Zip Co could rely on “honest concurrent use” as a defence to infringement of an earlier trade mark registration for the word mark ZIP by non-bank lender, ‘Firstmac’.

The lessons from the decision apply to any business developing a new brand, but are particularly important for pharmaceutical and healthcare companies, where a proposed name can become embedded in regulatory, clinical and commercial workstreams well before a product reaches the market.

What happened in Zip Co v Firstmac?

Firstmac was the registered owner of an Australian trade mark registration for the word mark ZIP in relation to financial services in class 36 since 2004.

The founders of Zip Co independently selected the ZIP and ZIP MONEY brands without initially knowing about Firstmac’s registration. However, evidence established that Zip Co did not search the Australian Trade Marks Register or obtain legal advice before filing its trade mark applications.

In October 2013, IP Australia issued adverse examination reports identifying Firstmac’s earlier registration as an obstacle to registration of Zip Co’s ZIP and ZIP MONEY brand names on the basis that the marks closely resembled one another and covered similar services.

The reports received only cursory attention from Zip Co’s founders, and despite becoming aware of Firstmac’s earlier registration, Zip Co proceeded to launch under ZIP-formative branding the following month. In the years that followed, Zip Co subsequently developed a substantial business and reputation in its ZIP brands.

When Firstmac later commenced infringement proceedings, Zip Co sought to rely on the honest concurrent use defence. Broadly, honest concurrent use can provide a pathway to registration – and, in some circumstances, a defence to infringement – where similar marks have been used honestly alongside one another without any instances of consumer confusion.

However, the High Court unanimously found that Zip Co had not established the requisite ‘honesty’ component.

Why didn’t Zip Co’s later success solve the problem?

The High Court confirmed that honesty must be assessed at the time of each potentially infringing use. Zip Co therefore needed to establish an honest state of mind from the point at which it first launched its services under the ZIP-formative marks.

At that time, Zip Co had received examination reports specifically identifying Firstmac’s earlier registration as an impediment. The critical issue was not that the Zip Co founders had originally selected the ZIP-formative marks dishonestly: their independent and honest adoption of the marks before learning of Firstmac’s registration remained relevant. Rather, Zip Co bore the onus of positively establishing that its state of mind was honest when potentially infringing use began in November 2013, by which time it knew that IP Australia considered the earlier registration a material impediment to legitimate use of its marks.

Zip Co had chosen not to engage with the adverse reports and did not lead sufficient evidence that, despite the warning, its decision-makers genuinely believed that consumers would not be confused or that Zip Co would not benefit from any confusion. Nor was there sufficient evidence to establish that its failure to turn its mind to those matters was not reckless. Those gaps meant that Zip Co failed to prove the requisite honesty. Its later commercial success and substantial reputation could not retrospectively supply the evidence missing at the time use commenced.

Importantly, the High Court did not hold that knowledge of an earlier trade mark is invariably fatal to honest concurrent use, or that carelessness is itself equivalent to dishonesty. A failure to search the Register will not, without more, establish a lack of honesty. The inquiry is directed to the user’s actual state of mind, assessed against the standards of ordinary, decent people. However, knowledge of an earlier registration will ordinarily weigh strongly against a finding of honesty – particularly where the business has received a specific warning that the registration may materially impede its proposed use and then elects not to engage with it.

What does the Zip Co decision mean for brand owners?

Businesses sometimes assume that a trade mark issue can be dealt with later, once the proposed brand has been tested in the market or sufficient use and reputation has been established. And this can sometimes be true, but the ZIP decision illustrates the danger in that approach.

The central lesson is therefore not simply that businesses should search before launch – it is that the discovery of a potentially conflicting right creates a real decision point. A name may have been selected independently and in good faith, but that does not answer whether the business acts honestly when it later commences or continues use with knowledge of the obstacle. What the business investigates, believes and decides at that point may become critical.

An adverse search result or examination report should therefore be actively assessed rather than parked while the brand gathers momentum. If the business wishes to proceed, it should obtain advice, test the basis on which use is considered legitimate and document the reasoning at the time. Honest concurrent use may remain available in an appropriate case, but it must be proved by evidence of the user’s actual state of mind – it cannot be assumed that later reputation, market success or an absence of known confusion will fill an evidentiary gap left at launch.

Why is early trade mark clearance critical for pharmaceutical and healthcare launches?

For pharmaceutical and healthcare businesses, changing a brand late in the development process can be particularly difficult.

Before a product becomes publicly available, its proposed name may already appear in:

• regulatory applications and supporting dossiers;
• clinical trial and investigator materials;
• product information and consumer medicine information;
• packaging, labels and instructions for use;
• manufacturing, supply and distribution agreements;
• healthcare-professional education;
• patient-support programs; and
• websites, applications and other digital platforms.

This can create understandable resistance to changing a preferred name. However, the fact that a brand has become costly or operationally difficult to change does not resolve the underlying infringement risk or establish an entitlement to continue using it. By the time the issue is revisited, the business may have lost the practical flexibility it had when the name was first selected, without having improved its legal position.

The practical objective should therefore be to identify and assess trade mark issues while alternative names remain commercially viable, not after the business has become committed to a single option.

Four practical steps for brand owners

1. Conduct trade mark clearance while several names remain available

Trade mark clearance should take place before a proposed name is approved internally or incorporated into regulatory, packaging and launch workstreams.

A search should extend beyond identical marks. Depending on the brand and the markets in which it will be used, it may need to consider:

• visually, aurally and conceptually similar marks;
• related goods and services;
• unregistered brands and marketplace use;
• company names, domain names and digital use; and
• relevant overseas jurisdictions.

Pharmaceutical naming may also require consideration of regulatory requirements, International Nonproprietary Names, protected stems and medication-safety concerns.

2. What should a business do if trade mark clearance identifies a conflicting mark?

A problematic search result or examination report should not be treated as an administrative matter that can simply be parked until closer to launch.

The business should promptly determine:

• whether the earlier registration presents a genuine infringement risk;
• whether the earlier mark may be vulnerable to challenge;
• whether consent or a coexistence arrangement may be available;
• whether changes to the proposed mark or commercial scope could reduce the risk; and
• whether an alternative name should be selected.

Not every citation requires a rebrand. The important point is that the issue is investigated and an informed decision is made before use begins.

3. Why should businesses document their trade mark clearance assessment?

If a business decides to proceed despite an identified earlier right, it should carefully document the basis for that decision.

Relevant records may include legal advice, information about the selection of the name, differences between the respective marks and offerings, the intended market, investigations into the earlier owner’s use and any attempts to obtain consent.

This is not merely an evidence-gathering exercise. It helps ensure that the risk has been properly considered by the relevant decision-makers.

4. When should trade mark clearance be completed before launch?

The most effective protection is often procedural. Businesses should incorporate trade mark clearance into their formal approval process for new products, services and campaigns.

Ideally, legal approval should be obtained before:

• the proposed name is treated as final;
• regulatory applications are submitted;
• packaging or labels are commissioned;
• public announcements are made; or
• significant launch expenditure is incurred.

This is particularly important where legal, regulatory, product and marketing teams operate on different timelines.

The key takeaway

The ZIP decision does not mean that businesses can never proceed after discovering an earlier mark. Some obstacles can be distinguished, negotiated, challenged or otherwise overcome.

It does mean that a known obstacle should not be ignored in the expectation that commercial success will eventually cure the problem.

The best time to resolve naming risk is while the name is still changeable. Early clearance preserves options, supports an informed launch decision and can prevent a trade mark issue from becoming a much larger commercial problem.

Pearce IP can assist with the clearance, protection and management of new product and corporate brands in Australia, New Zealand and internationally. Use our Contact Form or email us at info@pearceIP.law or call Australia Tel: +61 (0) 2 9023 9988 or New Zealand Tel: +64 (4) 886 1199.

About Pearce IP

Pearce IP is a privately owned/independent, specialist, life-sciences focussed, intellectual property/law firm offering lawyers and attorneys in Australia and New Zealand.

Our lawyers and attorneys specialise in pharma, biopharma, biotech, ag-tech, food-tech, med-tech, although our work is broader than these industries.

Pearce IP and its leaders are ranked in every notable legal directory including: Chambers & Partners, Legal 500, IAM Patent 1000, IAM Strategy 300, MIP IP Stars, Doyles Guide, WTR 1000, Best Lawyers, WIPR Leaders, Best Law Firms, among others. In 2025, Pearce IP was honoured by Australasian Lawyer and New Zealand Lawyer as a Top Specialist Firm, 5 Star Employer of Choice, and the “Standout Winner” for Inclusion and Culture (<100 employees).  

Pearce IP is the only leading IP firm in Australia and New Zealand with a female founder, and is certified by WEConnect International as women owned.