Welcome to the Australian Intellectual Property Report 2017
As Assistant Minister for Industry, Innovation and Science it is my pleasure to introduce the 2017 edition of the Australian Intellectual Property (IP) Report.
This report outlines data, trends and analysis developed to stimulate discussion and assist with decision-making on IP and innovation policy settings.
IP provides a foundation for innovation which in turn creates new knowledge, builds businesses and contributes to economic growth. IP and innovation play a crucial role in maintaining and enhancing our economic competitiveness.
Figures in this year’s report show an encouraging increase in Australian patent activity, with demand for patents by Australian residents up 15 per cent in 2016. This is in contrast to a decline in non-resident patent fillings. Trade marks filed by Australians largely maintained the level achieved through the previous year’s record growth, despite a drop in non-resident filings.
These trends are indicative of the level of innovative and entrepreneurial activity by Australian business and researchers. They provide positive signals about the Government’s focus on creating an environment conducive to innovation and entrepreneurship in Australia.
In recent years we’ve seen increasing recognition of the economic importance of IP for trade, investment and growth. It is now more crucial than ever that our IP system strike the right balance between enabling innovation and fostering the sharing of new knowledge.
It is my hope that the data, research and analysis produced by IP Australia, and summarised in this year’s Australian IP Report provides valuable insights to help drive a productive and informed IP discussion and decision-making.
Assistant Minister for Industry, Innovation and Science
The overall story on IP applications in 2016 was mixed, following a year of significant growth in 2015. Overall, demand declined for patents and trade marks, but Australia saw record growth in patent applications from Australian residents, and resident trade mark applications remained high after a record year in 2015. Design rights and plant breeder’s rights both recorded overall growth of three and eight per cent respectively, albeit driven by non-resident filings
This report focuses on the data related to IP, and each IP right administered by IP Australia. We also present the IP research and analysis being undertaken by IP Australia’s Office of the Chief Economist. In particular, this year, we focus on a new look at the data on university industry collaboration. Using IP data we take a fresh look at the collaboration story in Australia and find that in contrast to previous studies, Australia’s performance is reasonably good when compared to other countries. We also highlight some of these collaborative IP applications in the illustrations used throughout this report at the start of each chapter.
The Productivity Commission (PC) inquiry into the IP system stimulated much discussion over the past year on IP policy settings and Chapter 7 focuses on this inquiry. There was also a continued focus on free trade agreements and IP, following the publication of the Trans-Pacific Partnership agreement. International trade is likely to continue to be an important aspect of IP considerations in 2017, and IP Australia will continue to support international IP negotiations and engagement with research, analysis and advice.
IP Australia plays a key role in identifying IP trends and changes in the international and domestic IP landscape, and providing advice to the Australian Government on the development of IP policy. IP Australia administers the system of patents, trade marks, designs and plant breeder’s rights, contributes to international negotiations and cooperation to support the global IP system, and promotes awareness of IP. Copyright is administered separately by the Department of Communications and the Arts, and is therefore not discussed in this report.
In publishing the fifth annual Australian IP Report our aim is to promote awareness of IP rights and discuss the latest IP trends and statistics. As part of the work to better enable evidence-based policy, we are also releasing the latest version of the IP Government Open Data (IPGOD) 2017 with this report, which contains all of IP Australia’s administrative data, linked to business numbers on www.data.gov.au. A live version, updated weekly, is also available on www.data.gov.au.
The data, graphs and statistics used in this report can be found online at: www.ipaustralia.gov.au/economics
We welcome all comments, questions and suggestions. Please get in touch with us at:
Australian application number: 2013243238
Patent application type: Standard
Invention title: Supervisory control of automated irrigation channels
Applicant: Rubicon Research Pty Ltd and The University of Melbourne
Filing date: 2013-04-05
Expiry date: 2033-04-05
PCT number: PCT/AU2013/000355
WIPO number: WO2013/149304
A patent is an exclusive center granted for an invention. Inventions can be broadly described as a new way of doing something, or a new technical solution to a problem. For a patent to be successfully granted in Australia, the invention must be examined by IP Australia and found to:
- be novel - the idea or technology must not already exist elsewhere
- be patentable subject matter, as some things cannot be patented
- demonstrate an ‘inventive step’ so that the invention is not obvious or minor
- have a specific, substantial and credible use.
An Australian patent holder can exclude anyone else from using their patented invention in Australia for up to 20 years.1
Patent protection means the invention cannot be commercially produced, used, distributed, imported or sold by others without the patent owner’s consent. There are two types of patents available in Australia: the standard patent and the innovation patent.
Patent applications: IP Australia received 28 394 standard patent applications in 2016, a one per cent decline compared to 2015. During the past 10 years, there have been years of decline as in 2009, following the events of the Global Financial Crisis. Since 2009 the overall trend in filings has been upward. This trend was interrupted by a surge in filings in 2013 prior to the implementation of the Raising the Bar reforms of 2012, followed by a corresponding decline in filings in 2014.
Figure 1: Patent applications filed with IP Australia, 2007-2016
Using IPGOD 2017 released with this report, we estimate more than 75 per cent of Australian resident patent applicants in 2016 were private individuals or small to medium enterprises (SMEs).2
Global patent filings rose from 2.68 million in 2014 to 2.89 million in 2015, consistent with the movement in Australian filings from 2014 to 2015.3 The growth in global patent filings since 2009 has significantly exceeded that of patents filed in Australia. Australian applications grew by three to four per cent per annum from 2009 to 2015, compared with an average of eight per cent per annum worldwide in the same period.4 The global growth was largely driven by an increase of approximately 320 per cent in applications from China.
Applicant origin: The decline in patent applications in 2016 was due to a fall in non-resident applications, which make up the bulk of patent applications in Australia. Most applications made by non-residents are filed using the system established by the Patent Cooperation Treaty (PCT).5
Despite the overall decline in applications in 2016, applications by Australian residents increased by 15 per cent from 2284 in 2015 to 2620 in 2016. This includes those who filed directly with IP Australia and those who entered through the PCT route, and together account for around nine per cent of total patent applications.
Filings by non-residents in Australia declined by two per cent to 25 774, accounting for 91 per cent of filings. The main source of the overall decline in application numbers was filings by applicants from the United States (US) to 12 909. US applicants filed around 45 per cent of applications for Australian patents in 2016, a decline of six per cent from 2015.
Of the other major filing nations, Japanese applications decreased by seven per cent to 1604, German applications increased by four per cent to 1394, UK increased by two per cent to 1176 and Swiss applications increased by five per cent to 1151. Applications from these five jurisdictions (US, Japan, Germany, UK and Switzerland) made up 65 per cent of total patent applications in 2016.
Patent grants: 23 743 patents were granted in 2016, representing an increase of three per cent from 2015. Grants to Australian residents represented six per cent of the total, similar to previous years, as noted in Table 1.
The provisional patent: A provisional application allows applicants to claim a priority date before filing a standard or innovation patent. Provisional patent applications have been in decline over the last 10 years, falling by an average of three per cent per annum over this period. Provisional filings appear to have stabilised since 2014 with 2015 seeing a modest increase of one per cent on 2014 and filings in 2016 remaining stable.
Australian residents remain overwhelmingly the primary users of Australian provisional applications, filing 96 per cent (5142) of such applications in 2016.
Figure 2: Provisional and innovation patent applications, 2007-2016
The innovation patent: An innovation patent has a lower application fee, a lower requirement for inventiveness (requiring an ‘innovative’ rather than an ‘inventive’ step), lasts up to eight years in contrast to the 20 year term of a standard patent, and does not require examination unless the patentee wishes to enforce it. In other countries, similar IP rights are often called ‘utility models’.
Last year saw an increase in applications for innovation patents with 2322 applications filed in 2016. This represented a 27 per cent increase on 2015. This change reflects a significant increase in non-resident applications of some 79 per cent from 2015, whereas applications from Australian residents declined by five per cent.
Although Australian residents remain the main users of the innovation patent system, for the first time since its inception, non-residents made up the majority of innovation patent applicants with 54 per cent of the total in 2016.
The increase in international applications is attributable almost exclusively to an increase of some 142 per cent in applications from Chinese residents to 871 applications. This accounts for around 93 per cent of the overall increase in non-resident applications, and represents 38 per cent of total filings. US residents filed 145 applications, representing six per cent of the total, while all other non-resident applications totalled 239 (10 per cent of total applications).
State level: Applications for standard patents increased in all states and territories in 2016, with the exception of the Northern Territory (where one less application was filed than in 2015). Residents of the Australian Capital Territory (ACT), Western Australia (WA), Tasmania, Queensland and Victoria all filed over 15 per cent more applications than in 2015.
Figure 3: State-by-state patent applications 2015-16
Australians filing overseas: IP centers are granted on a national basis, so to acquire centers in other countries, Australian inventors need to file abroad. As a result, Australian residents file more patent applications overseas than they do domestically.
The latest data from the World Intellectual Property Organization (WIPO), which is available until 2015, shows a decline of nine per cent in applications from Australians filing in overseas jurisdictions from 2014 to 2015, with a total of 8562 applications filed in 2015.
Figure 4: Australian patent filings overseas, 2006-2015<
As in 2015, the US was the most popular destination for Australians filing abroad, accounting for 43 per cent of applications. This was followed by filings with the European Patent Office (EPO) at 10 per cent and China at seven per cent.
Applications from Australians for New Zealand patents fell sharply in 2015, representing six per cent of overseas applications in 2015, compared with nine per cent in 2014. Similar to the phenomenon experienced in Australia in 2013-14, legislative changes in New Zealand brought about by the Patents Act 2013 (NZ) resulted in an increase in total filings in New Zealand in 2014 and a subsequent decline in 2015.
Of the 8562 applications filed by Australians overseas, 33 per cent were directly filed with overseas patent offices while 67 per cent used the PCT route, which allows a single application to be filed in multiple countries. This level of usage of the PCT route is similar to that observed over the last 10 years.
A trade mark uniquely identifies a product or service and is used to distinguish goods and services from those of competitors. It can be a symbol, letter, number, word, phrase, sound, smell, shape, logo, picture and/or an aspect of packaging. A registered trade mark gives the owner the exclusive right to use and authorise other people to use the trade mark. To remain registered, a registered trade mark must be renewed every 10 years. Registered trade marks are the only marks legally allowed to use the ® symbol, and it is an offence to use ® if the trade mark is not registered.
Trade mark applications: IP Australia received 71 344 applications for trade marks in 2016. This represented a three per cent decline from the record high of 2015, despite exceeding the 2014 figure by 11 per cent. This was almost entirely due to a reduction in filings by non-residents of seven per cent.
The reduction in applications by non-residents in 2016 is due to a fall in applications through WIPO’s Madrid system for filing trade mark applications in multiple jurisdictions. In Australia the Madrid system is used almost exclusively by non-residents. Filings using the Madrid system declined by 14 per cent in 2016, more than accounting for the overall reduction. Direct applications to IP Australia increased by one per cent year-on-year in 2016.
Figure 5: Trade mark applications by origin, 2007-2016
Applicant origin: The majority of trade mark applicants are Australian residents, and the vast majority of these domestic applicants are SMEs and private individuals who filed more than 90 per cent of domestic applications in 2016.6 This has been a consistent feature of trade mark applicants over the last 10 years.7
Non-resident applications made up 34 per cent of total applications in 2016. This is consistent with the last 10 years, where non-resident applications represent between 32 and 37 per cent of total applications every year between 2007 and 2016. The decline in non-resident applications of seven per cent in 2016 is in contrast with an increase of 15 per cent in 2015. As in previous years, the US was the largest source of non-resident applications in 2016 with 7540 applications, representing 11 per cent of total filings and a 12 per cent reduction from 2015.
State level: Applications from residents remained steady in 2016 with 28 fewer applications filed by Australian residents than in 2015 out of a total of 47 053. Applications from New South Wales, South Australia and Tasmania increased by five to six per cent, whereas applications from the other states and territories experienced a decline.
Figure 6: Trade mark applications by state, 2015-2016
|2015||395||16 709||2 794||14 037||3 804||169||8 476||697|
|2016||419||17 678||2 940||13 606||3 654||161||7 961||634|
Trade mark classes: The Nice Classification system is an international classification of goods and services which categorises trade marks into 45 classes. Different firms can protect the same trade mark in different classes. As a trade mark can be requested for more than one Nice class, there are typically more filings in trade mark classes than the number of trade marks filed. In 2016, there were 129 392 classes filed compared to 71 344 trade mark applications, an average of 1.8 classes per application.
Figure 7: Trade mark classes and applications filed, 2007-2016
As in previous years, the three classes with the most applications in 2016 were advertising and business functions with 12 604 applications (Class 35, down four per cent on 2015), apparatus and instruments for various practical purposes with 11 606 applications (Class 9, down eight per cent), and education and entertainment services with 10 426 applications (Class 41, down four percent). Together, these three classes represented 27 per cent of total classes for which applications were made and accounted for a significant proportion of the decline in applications in 2016.
Australians filing overseas: Worldwide, applications for trade marks increased to an estimated 5.8 million in 2015, a fifteen per cent increase on the estimate of 5.2 million of 2014.8 As the IP Report went to press, the latest WIPO figures (2015) for trade mark filings were unfortunately incomplete but the number of classes filed by Australians abroad was complete. Therefore we report the number of classes filed abroad, which was 36 028 in 2015, or a 20 per cent increase on 2014. The methodology WIPO uses to aggregate trade mark applications has changed, meaning the data has changed since last year, but WIPO has updated the entire series so we can compare 2015 to previous years.9
Figure 8: Australians filing trade mark classes abroad, 2006-2015
China has been the main destination for Australians filing trade marks abroad, but it is the United States that is the main destination for trade mark classes filed by Australians. In 2015, Australian applicants claimed protection in 5405 classes in the US, 5316 classes in China and 5216 classes in New Zealand. The fourth and fifth most popular destinations were the EU (2902) and Singapore (1571).
A design right protects the overall appearance of a product and allows the holder to exclude others from using the design in any commercial way in Australia for up to 10 years. The protection covers the shape, configuration or pattern that gives a product its unique visual appearance but excludes the feel of the product, what it’s made from or how it works. Only designs that are found to be both new and distinctive are protected in Australia. Examples of Australian registered designs include the Sand Wedge beach chair, Speedo’s Fastskin swimsuit, and the shape of the Holden Monaro.
Design right applications: IP Australia received 7202 applications for registered designs in 2016, which was the highest on record and a three per cent increase on filings in 2015. This figure is in line with recent growth in designs filings in Australia; the average rate of growth in filings over the last five years was also three per cent.
Non-residents filed 62 per cent of design applications in 2016, which is the highest proportion over the last 10 years (which have ranged from 50 to 60 per cent of total applications during this period). Of applications from Australian residents, approximately 90 per cent were filed by private applicants and SMES.10
Figure 9: Design right applications by origin, 2007-2016
The latest data from WIPO shows a global increase in applications for industrial designs of two per cent from 2014 to 2015.11 As with the Australian figures, world filings have fluctuated over the last five years, with world filings peaking in 2013. The general trend has been upwards over the last 10 years with an average world growth rate of eight per cent per annum.
Box 1: The Hague Agreement on international designs — cost and benefits to Australia
The Hague Agreement is an international system for filing design rights administered by WIPO with over 60 signatories that allows for a streamlined application system. In 2015 the Government accepted a recommendation, by the Advisory Council on IP (ACIP),1 for IP Australia to undertake a cost-benefit analysis of joining the Hague Agreement.2 In its inquiry, the Productivity Commission noted this intent to undertake a cost-benefit analysis as a “positive step”, and noted that IP Australia would complete this analysis in 2017.3
We have completed a draft of this cost-benefit analysis and will look to share the draft and seek feedback on the research later in 2017.
1. ACIP. 2015. Review of the Design System. Canberra: ACIP, recommendation 2 [accessed 1/3/17] https://www.ipaustralia.gov.au/sites/g/files/net856/f/acip_designs_final_report.pdf
2. Government response to ACIP review available at https://www.ipaustralia.gov.au/sites/g/files/net856/f/government_response_-_acip_designs_review_-_final_pdf.pdf [accessed 1/3/17]
3. PC. 2016. Intellectual Property Arrangements. Canberra: PC; p. 331 & p. 354 [accessed 1/3/17] http://www.pc.gov.au/inquiries/completed/intellectual-property/report/intellectualproperty.pdf
Applicant origin: Design right applications by non-residents increased by six per cent in 2016, in contrast with a two per cent decline in applications by Australian residents. The US remained the largest source of non-resident applications, with 39 per cent of non-resident applications and 24 per cent of all applications.
Japan, China, the UK and Germany accounted for 18 per cent of all applications, with five per cent originating in Japan and China and four per cent in the UK and Germany.
Enforceable design rights: A design right is only enforceable if, after registration, the design is examined and certified by IP Australia. The owner of a certified design has exclusive rights to use, license and/or commercialise the design for up to 10 years. Applicants do not usually opt for voluntary examination of design rights; often being comfortable with the shielding effect of a registration until there is a need to enforce their design right. The data consistently shows a lower number of certifications relative to registrations of design rights. In 2016, IP Australia registered 6644 applications and certified 978 designs.
Figure 10: Design right registrations and certifications, 2007-2016
Plant breeder’s rights (PBRs) are used to protect new varieties of plants that are distinguishable, uniform and stable. Examples of PBRs in Australia include water-efficient wheat and bullseye lettuce.
As well as meeting a set of criteria to pass examination, a PBR must also:
- be distinct from other varieties of the same plant
- be uniform and stable
- not have been exploited or sold outside certain time limits
- have an identified breeder and an acceptable name.
A PBR gives the owner exclusive rights to exclude others from commercially using or selling a variety. This provides the opportunity for the right holder to collect royalties while directing the production, sale and distribution of varieties. Other plant breeders can freely use parts of a registered PBR to experiment with, use non-commercially or develop a new variety for commercial use.
PBR applications: The number of PBR applications received in Australia increased by eight per cent in 2016, from 359 to 387 applications. This growth was driven by a 22 per cent increase in applications by non-residents. Australian resident applications decreased by 16 from 2015, and as a result, the share of PBR applications by Australian residents decreased to 36 per cent of the total.
The majority of Australian residents who apply for PBRs are SMEs who are responsible for half of Australian resident applications, while private applicants and large firms historically file a quarter each of the remaining applications. In 2016 that pattern appears to be repeated, with SMEs and private applicants accounting for approximately three quarters of total resident applications.12
Figure 11: PBR applications by origin, 2007-2016
The US remains the largest non-resident origin of PBR applications, maintaining a steady share of 21 percent of applications in 2016. The other top non-resident filers were the Netherlands, New Zealand, France, UK and Germany, which is similar to 2015.
PBR registrations: IP Australia registered 111 PBRs in 2016, a decrease of 51 per cent compared to 2015. It is important to note that there should not be any correlation between filings in a year and registrations in the same year as most applications take more than 12 months to register. A reduction in the number of staff at IP Australia who can register PBRs in 2016 accounts for the fall in registrations per se, but the examination processes prior to grant continued as in previous years, and where applicants wanted registration to be expedited they were advanced to registration if they met the requirements for registration.
Australian resident and non-resident registrations decreased by 30 per cent and 68 per cent respectively. The largest numbers of non-resident registrations were from the US and Netherlands, together accounting for 70 per cent of non-resident registrations.
Figure 12: PBR registrations by origin, 2007-2016
Plant varieties: The development of plant varieties was largely in ornamentals and fruit crops which made up 35 per cent and 25 per cent, respectively, of total applications in 2016. Field crops and vegetable crops accounted for 19 per cent and nine per cent of PBR applications in 2016.
University—Industry Collaboration, not a crisis
Patent application type: Standard
Application status: GRANTED
Paid to date: 2017-12-18
Invention title: Method of producing polyhydroxyalkanoate compounded plastics having improved mechanical properties
Applicant: Veolia Water Solutions And
Technologies Support and University
The general consensus is that Australia has a problem with collaboration between the business and research sectors.13 The evidence for this comes from an often cited Organisation for Economic Co-operation and Development (OECD) statistic which measures how often innovative firms collaborate with publicly funded research organisations. On the OECD measure, Australia ranks last among OECD countries.14 But using data on technology collaboration, where universities have co-filed an application for a patent or other IP right shows a different, and more collaborative, picture of Australia.
The accepted consensus sprung from a single Australian data-point: A survey used by the OECD where the Australian Bureau of Statistics asked innovative firms in 2013 how often they collaborate with research organisations. It is this single surveyed datum that we use to compare ourselves to other OECD countries.15 It may be that, in a country with a small number of universities and a relatively large number of firms, asking those firms how often they collaborated with a university is likely to under-estimate the totals. There are other issues with this measure, which others have critiqued.16
We have sought to turn this question around, and ask the universities how often they collaborate. Rather than undertake a survey, we used IPGOD and our technology-level experts to look at jointly filed IP applications.
There is an important policy motivation for undertaking this data-driven work. If it were to be the case that Australian universities are actively collaborating, then additional pressure to do more is likely to have disappointing returns: the universities may have already reached capacity. The economists would argue there are diminishing returns if this were to be the case.17
The Australian Government has an established policy interest in collaboration between industry and the research sector, as such collaboration has been found to more than triple the likelihood of businesses reporting annual productivity growth and increases in other performance measures.18 That said, the evidence base regarding causal links between collaboration and productivity is still weak, and so it is vital to encourage an evidence-driven debate.
The Australian network of collaboration
All IP rights are statements that their applicants wish to protect an idea they have developed. When a university files a patent application together with a private sector company, it implies there has been some collaborative effort - in funding, development, marketing or some other mechanism - because both parties will become registered claimants to the IP. Using IPGOD we can identify all applications co-filed with Australian universities, as the data identifies universities and tech transfer offices, allowing us to map out their collaborative IP rights.
Looking at the last 15 years of records we find every university in Australia undertook at least one collaborative IP application. They collaborated with more than 400 organisations over this period, connecting 2212 times with each other across 1037 connections, and many collaborative arrangements feature more than one collaboration partner.
Figure 13 shows the university collaboration network in Australia, including all IP rights filed by universities with a third party between 2000 and 2015. The circles in the figure, or “nodes”, represent entities. Universities are highlighted as purple, government collaborators, such as the Commonwealth Scientific and Industrial Research Organisation (CSIRO) are grey, while all private sector and third party co-applicants are white. The size of the bubble indicates the number of IP rights co-filed by the entity.
The lines which connect the nodes are called “edges”, and represent a joint application for an IP right. Patents are indicated as blue lines, trade marks are red, design rights green and plant breeder’s rights are yellow. The thickness of the edge indicates the number of joint applications between a university and their partner, with the thinnest line indicating one joint application. Where multiple types of IP rights have been filed in the course of collaboration, the colour reflects the IP right most frequently filed. Figure 13 demonstrates a remarkably active collaborative university ecosystem in Australia.
Figure 13: Australian University Collaboration through co-filed IP applications, 2000-2015