Chapter 2
Number:
2015202246
Patent application type:
Standard
Application status:
GRANTED
Paid to date:
2018-04-11
Invention title:
Interactive heating and cooking apparatus and disposable tray system
 

IP Report 2018

Patents

Under Australian law, there are two types of patents available: the standard patent and the innovation patent. Once granted, a patent allows the holder to exclude anyone else from using their patented invention in Australia for a prescribed maximum period of time: up to 20 years for standard patents (or 25 years for some pharmaceutical patents) and up to eight years for innovation patents.1

Patent protection means the invention cannot be commercially produced, used, distributed, imported or sold by others without the patent owner's consent.

For a patent to be successfully granted in Australia, the invention must be examined by IP Australia and be found to:

  • be novel; that is, the idea or technology must not already exist elsewhere
  • be patentable subject matter, as some things cannot be patented (e.g. human beings)
  • demonstrate an 'inventive step' so that the invention is not obvious or minor
  • have a specific, substantial and credible use.

Patent applications: In 2017, IP Australia received 28 905 standard patent applications — a two per cent increase compared to 2016 (Figure 1) and higher than the 10-year average of 26 855 applications per annum. Over the past decade, applications have shown a gradual upward trend, with 2017 filings nine per cent higher than in 2008. There have been two disturbances of the overall steady upwards trend. The Global Financial Crisis (GFC) brought a sharp fall in 2009 applications and it took another three years for them to recover to the level of 2008. Applications then surged to a new peak in 2013, possibly in anticipation of the implementation of the Raising the Bar legislative reforms announced in 2012.2 This growth was followed by a large decrease in applications in 2014, before trend levels were restored during 2015 to 2017.

We estimate that more than 75 per cent of the Australian residents who applied for patents in 2016 were private individuals or small to medium-sized enterprises (SMEs).3

The Patent Cooperation Treaty (PCT) allows applicants to file a single patent application while simultaneously seeking protection for their invention in multiple countries. While non-residents are the main source of PCT applications in Australia, residents also file a small proportion. In 2017, residents accounted for five per cent of the 19 898 applications received via the PCT. Similarly, the majority of direct applications filed with IP Australia are from non-residents. In 2017, 16 per cent of applications (1462 applications) were from Australian residents.

Figure 1: Patent applications filed with IP Australia, 2008-17

  • Purple square Total
  • Yellow triangle PCT - National phase entry
  • Blue circle Direct

World patent filings have been growing strongly since 2010, averaging around eight per cent annual growth to 2016, while Australia's growth has averaged about three per cent over the same period. Global patent filings rose from 2.89 million in 2015 to 3.13 million in 2016, an increase of around eight per cent.4 Australia ranked 10th, ahead of Germany and Denmark, among the Organisation for Economic Co-operation and Development (OECD) countries in terms of average annual growth in patent filings over this period.5

With an average annual application growth of around 23 per cent during 2010–16, China has been the main driver of this world growth in patent filing. Owing to this extraordinary growth in patenting activity, China's share of global patent filings has increased from 17 per cent in 2009 to 43 per cent in 2016.

Patent grants: 22 742 standard patents were granted in 2017, a fall of four per cent from 2016. Since there is a lag of several years between an application and an outcome (granted or rejected), 2017 grants data necessarily corresponds to pre-2017 applications. Moreover, patent grants are a function of the lag of patent applications. For example, comparing Figure 1 and Table 1 reveals that total applications increased from 2010 to 2013 and so did total grants from 2013 to 2016. Similarly, both 2014 applications and 2017 grants fell in tandem.

Patent grants to Australian residents in 2017 fell by 17 per cent compared to 2016 and now make up just five per cent of the total. The majority of grants went to non-residents, although these also dropped 3.4 per cent from last year (Table 1). Given the inevitable lag between a patent application and a grant, it is not surprising that in 2014 resident applications fell by about 35 per cent from their level in the previous year. Non-resident applications also fell in 2014, by 10 per cent.

Table 1: Patents granted by IP Australia, 2013-17

2013 2014 2015 2016 2017

Resident

1 110

1 199

1 614

1 433

1 188

Non-resident

16 002

18 105

21 484

22 310

21 554

Total

17 112

19 304

23 098

23 743

22 742

The provisional application: By filing a provisional application, applicants are able to provide an initial disclosure of their invention in order to claim a priority date6 before they file a standard or innovation patent application. Provisional applications have been in decline, falling by an average of around three per cent per annum over the last 10 years and are now 30 per cent below their peak level of 2004. After stabilising during 2014 to 2016, provisional applications dipped about three per cent in 2017 to 5182 (Figure 2).

Australian residents remain overwhelmingly the primary users of Australian provisional applications, filing 96 per cent (4952) of such applications in 2017.

Figure 2: Provisional and innovation patent applications, 2008-17

  • Purple square Provisional
  • Yellow triangle Innovation

The innovation patent: The innovation patent is Australia's second tier patent. It has a lower application fee, sets a lower requirement for inventiveness (requiring an 'innovative' rather than an 'inventive' step), and lasts only up to eight years, significantly less than the 20 year term of a standard patent. Unlike the standard patent, the innovation patent does not require examination unless the patentee wishes to enforce it in which case it must be certified by IP Australia. IP rights of this kind are often referred to in other countries as 'utility models'.

After large increases in the previous two years, applications for innovation patents fell 22 per cent in 2017, from their 2016 peak of 2322, to 1816. Both resident and non-resident applications declined in 2017, by three per cent and 40 per cent respectively.

Innovation patents were introduced in 2001 to encourage innovation among Australian SMEs. Our research identified that this policy goal was not being fulfilled in practice by the innovation patent system.7 The Government has recently accepted the recommendation of the Productivity Commission to phase out the innovation patent.8

Australian residents, as expected, have been the main users of the innovation patent, accounting for 58 per cent of all applications in 2017. China (23 per cent) and the United States (US) (20 per cent) were the main sources of non-resident innovation patent applications in 2017.9

Applicant origin: Growth in non-resident filings remained the main driver of the increase in total patent applications in Australia in 2017. Overwhelmingly, non-residents file their patent applications in Australia using the system established by the Patent Cooperation Treaty (PCT).10

While applications grew overall in 2017, applications for standard patents by Australian residents decreased by about five, per cent from 2620 in 2016 to 2503 in 2017. These figures include those who filed directly with IP Australia and those who entered through the PCT route, together accounting for around nine per cent of total patent applications in Australia. The leading Australian standard patent applicants in 2017 (Figure 3) were Aristocrat Technologies (157 applications), the Commonwealth Scientific and Industrial Research Organisation (CSIRO) (45) and The University of Queensland (18).

Non-resident filings increased by two per cent in 2017 to 26 403, which was 91 per cent of all filings. Standard patent applications originating from the US accounted for much of the rise in non-resident filings in 2017. US applicants filed around 46 per cent of applications for Australian patents in 2017, an increase of four per cent from 2016.

Of the other major filing nations, Japanese applications increased by one per cent to 1622, German applications declined by five per cent to 1332, UK increased by six per cent to 1241 and applications from Switzerland decreased by seven per cent to 1076.

Applications from China grew 20 per cent to 1067, making it now the sixth largest source of patent filings in Australia. Altogether, applications from these six jurisdictions (US, Japan, Germany, UK, Switzerland, and China) made up 68 per cent of total applications for standard patents in 2017.

The leading applicants from overseas were Halliburton Energy Services (392 applications), Qualcomm (264) and Samsung Electronics (191). The most active technology fields were pharmaceuticals (3330 applications), where applications grew seven per cent in 2017, and medical devices (3210) which increased by eight per cent.

Figure 3: Patent applications 2017: Top 5

Top 5 AUS applicants: 157 Aristocrat Technologies Australia, 45 CSIRO, 18 The University of Queensland, 15 Bluescope Steel, 15 Monash University. Top 5 international applicants: 392 Halliburton Energy Services, 264 Qualcomm, 191 Samsung Electronics, 139 Novartis, 138 Covidien. Top 5 technology fields: Pharmaceuticals 3,300 (7% growth), Medical
devices 3,210 (8% growth), Polymers and applied chemistry 2,735 (-1% growth), Computing 2,726 (-7% growth), Electronics and Communications 2,608 (2% growth) Top 5 filings in Australia by country of origin: US 12,209 in 2016 to 13,388 in 2017 (4% increase), Australia 2,620 in 2016 to 2,503 in 2017 (4% decline), Japan 1,604 in 2016 to 1,622 in 2017 (1% increase), Germany 1,392 in 2016 to 1,332 in 2017 (4% decline), UK 1,176 in 2016 to 1,241 in 2017 (6% increase)

Applicant origin by Australian states and territories: There was an overall decrease in applications for standard patents across most states and territories in 2017 (Figure 4). Growth in applications occurred only in Tasmania (TAS) and South Australia (SA) while Northern Territory (NT) remained stable. Filings decreased by more than five per cent in Western Australia (WA), the Australian Capital Territory (ACT) and Victoria (VIC). The data show that the three largest states, New South Wales (NSW), VIC and Queensland (QLD), consistently account for around 80 per cent of standard patent filings in Australia.

Figure 4: Patent applications 2016 and 2017, states and territories

Year

TAS

SA

NT

NSW

QLD

VIC

ACT

WA

2016

20

121

5

1 001

444

651

85

293

2017

23

128

5

967

428

609

78

265

Change

15%

6%

0%

-3%

-4%

-6%

-8%

-10%

Australians filing overseas: IP rights granted in Australia do not provide protection in other countries, so in order to protect their IP in other countries, Australian inventors must file abroad. As a result, Australian residents file more patent applications overseas than they do domestically. The PCT is a vehicle for doing this efficiently.

Overseas filings by Australian residents increased by just one per cent in 2016, according to the latest data from the World Intellectual Property Organization (WIPO), with a total of 8737 applications filed (Figure 5).11 This was three and a half times as many as the 2503 patents filed directly with IP Australia. Of Australian applications abroad, 33 per cent were filed directly with overseas patent offices while the remaining 67 per cent used the PCT route. This split has remained largely stable over the last 10 years.

Figure 5: Australian patent filings overseas, 2007-16

  • Purple square Patents filed abroad
  • Orange bar Growth in filings abroad

Source: World Intellectual Property Organization, IP Statistics Data Center.

The US continues to be the most popular destination for Australians filing abroad. Although filings there grew only 0.3 per cent in 2016, the US accounts for 42 per cent of total applications abroad. The next biggest destinations are the European Patent Office (EPO) at nine per cent, with China and New Zealand at seven per cent each. Applications from Australians for New Zealand patents rose by 10 per cent in 2016, whereas Australian filings with the EPO and China decreased by five per cent and two per cent respectively.

Box 1: Pre-exam processing of patent applications: improving outcomes one nudge at a time

Patent examination is one of the core operational activities of IP Australia where, in the last 10 years, over 27 000 patent applications are filed, on average, each year. However, the patent examination process is not unproblematic and it is not uncommon for patent applications to encounter adverse examination reports, potentially making the application invalid. The issues raised by such adverse reports can complicate and lengthen the patent examination process, acting as a drag on the productivity of patent examiners.

To address this problem, IP Australia developed and trialled Pre-Examination Processing (PEP) of patent applications, an initiative to notify applicants of known grounds of invalidity and to encourage them to address these issues prior to examination in Australia. PEP is expected to improve the patent process for both applicants and IP Australia.

The PEP project is an example of IP Australia’s ongoing efforts to improve its operational efficiency, in this case through a combination of experimental design and statistical analysis. Such practical initiatives have the potential to raise the productivity of the organisation and improve the efficiency of Australia’s IP rights administration.

End notes

  1. Pharmaceutical substances which have experienced a delay in market approval can receive patent extensions, granting up to 25 years protection.
    An innovation patent must be examined and certified before it can be enforced.
  2. The Intellectual Property Laws Amendment Act 2012 (Raising the Bar Act) came into effect in Australia on 15 April 2013. It has a number of broad objectives, including raising the standards required to support the grant of a patent in Australia and making them more consistent with the standards in other countries. As a result, the 'inventive step' required to receive a patent in Australia is now more closely aligned with that in other major IP jurisdictions.
  3. IP Australia (2017), Australian Intellectual Property Report 2017, Canberra, p.7. IPGOD 2018
  4. WIPO IP Statistics Data Center (December 2017 update); Patent; Indicator: "Indicator 1 - Total patent applications (direct and PCT national phase entries)", Report type: "Count by filing office and applicant's origin"; Select office: "Add all"; Select origin: "Australia"; https://www3.wipo.int/ipstats/index.htm?tab=patent, 22 January 2018.
  5. WIPO IP Statistics Data Center (December 2017 update); Patent; Indicator: "Indicator 1 - Total patent applications (direct and PCT national phase entries)", Report type: "Count by filing office and applicant's origin"; Select office: "Add all"; Select origin: "Australia"; https://www3.wipo.int/ipstats/index.htm?tab=patent, 22 January 2018.
  6. A priority date establishes the applicant as the first to file a new invention with the chosen IP rights office.
  7. Johnson, M, Bialowas, A, Nicholson, P, Mitra-Kahn, B, Man, B & Bakhtiari, S (2015), 'The economic impact of innovation patents', IP Australia Economic Research Paper. https://www.ipaustralia.gov.au/sites/g/files/net856/f/reports_publications/economic_impact_of_innovation_patents.pdf, accessed 25 January 2018.
  8. PC (2016), Intellectual Property Arrangements, Productivity Commission Inquiry Report, Canberra; http://www.pc.gov.au/inquiries/completed/intellectual-property/report/intellectual-property.pdf, accessed 25 January 2018; Australian Government Response to the Productivity Commission Inquiry into Intellectual Property Arrangements, https://www.industry.gov.au/innovation/Intellectual-Property/Documents/Government-Response-to-PC-Inquiry-into-IP.pdf.
  9. Extraordinary growth in Chinese applications resulted in the 2016 non-resident applications outnumbering those from resident applications for the first time. This demand from Chinese applicants reversed in 2017, however.
  10. The Patent Cooperation Treaty (PCT) is an international patent law treaty with 152 parties providing a single route for patent applicants to lodge an application with its members.
  11. WIPO IP Statistics Data Center (December 2017 update); Patent; Indicator: "Indicator 1 - Total patent applications (direct and PCT national phase entries)", Report type: "Count by filing office and applicant's origin"; Select office: "Add all"; Select origin: "Australia"; https://www3.wipo.int/ipstats/index.htm?tab=patent, 22 January 2018.

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