IP Report 2019

Patents

Patents reward inventors and protect inventions with patent protection an invention cannot be commercially produced, used, distributed, imported or sold without the patent owner’s consent.

There are two types of patents available in Australia: the standard patent and the innovation patent. The owner of an invention protected by a standard patent can exclude others from using the patented invention in Australia for up to 20 years (or 25 years for some pharmaceutical patents).1 The innovation patent is Australia’s second-tier patent, having a lower threshold to acquire protection, lower cost and a shorter (eight-year) protection term than the standard patent.

To be eligible for patent protection, a patent application needs to satisfy a number of criteria under the Patents Act. These include,

  • novelty (the invention must not already exist elsewhere)
  • non-obviousness (for standard patents, the invention must demonstrate an ‘inventive step’ beyond existing knowledge)
  • usefulness (the invention must have a specific, substantial and credible use)
  • patent eligible subject matter (for example, human beings and the biological processes for their generation are not patent eligible subject matter).

Standard patent applications: Figure 1 shows the total number of standard patent applications received by IP Australia between 2009 and 2018, and subtotals by filing route. Patent applications may be filed in Australia directly with IP Australia, or via an international application which is processed in Australia under the Patent Cooperation Treaty (PCT).2

In 2018, IP Australia received 29 957 standard patent applications—up more than three per cent from the previous year. Patent applications in Australia have grown steadily since 2009, except for the sharp fall in 2014. That fall offset the sharp rise in 2013 due to an anticipated legislative change at the time.

Figure 1 is a graph of standard patent applications filed in Australia from 2009 to 2018

In recent years, worldwide patent applications have been growing strongly, averaging around eight per cent annual growth between 2010 and 2016. However, growth slowed abruptly during the year that followed, increasing by just one per cent from 3.13 million in 2016 to 3.17 million in 2017 according to the latest World Intellectual Property Organization (WIPO) data. Applications with IP Australia increased by two per cent over the same period, ranking Australia eighth among the Organisation for Economic Co-operation and Development (OECD) countries in terms of patent growth.

Country of origin: Consistent with recent years, non-residents accounted for 91 per cent of standard patent applications in 2018. Residents nevertheless demonstrated faster growth (nine per cent) in applications than non-residents (three per cent). The moderate growth in non-resident applications is partially attributable to filing behaviour by US applicants, who accounted for 45 per cent of applications but saw no growth in 2018.3 Japan, Germany and the UK are the remaining top five countries of origin by total applications (Figure 2).

States and territories: Figure 3 shows the number of resident applications for standard patents in 2017 and 2018 by states and territories. Unsurprisingly, the three largest states—New South Wales (NSW), Victoria (VIC) and Queensland (QLD)—jointly account for over 80 per cent of all resident filings.

 Figure 2 shows the top 5 technology fields and top 5 country of origin for patent applications in Australia for 2018

 

Figure 3 shows the number of patent applications from each Australian state and territory in 2017 and 2018

Technology: Patents are oriented towards the protection of technologies and are assigned to technology fields according to WIPO’s technology concordance table.4

With 3 663 patent applications, up eight per cent from last year, Medical technology was the leading field in 2018 (Figure 2). Applications for Biotechnology and Pharmaceuticals also grew strongly. Civil engineering, on the contrary, saw a sharp decline. These trends are consistent with global changes—such as an ageing population and the consequent growing demand for medical goods and services—as well as technology life cycles.

Provisional applications: Before inventors file for a standard patent, they may submit a provisional application. This allows inventors to claim the earliest possible priority date without their application automatically being published.5

Over the past decade, provisional applications have been in decline in Australia—falling by around three per cent per annum. They decreased by five per cent in 2018, down to 4 954, continuing the decline in provisional applications from a peak of 7 382 in 2004. Australian residents are overwhelmingly the primary users of this system, filing 96 per cent of all provisional applications in 2018.

The innovation patent: Figure 4 shows that while applications for innovation patents decreased in 2017, they rebounded in 2018—increasing by 24 per cent—and now exceed the demand in 2015.

Figure 4 is a graph showing the numbers of provisional and innovation patent applications from 2009 to 2018

Both resident and non-resident innovation patent applications increased in 2018, by one per cent and 34 per cent respectively. Australian residents are the primary users of the innovation patent, accounting for 51 per cent of all applications in 2018. China (33 per cent) and the US (4 per cent) were the main sources of non-resident applications.6

Innovation patents were introduced in 2001 to encourage innovation among Australian small-to-medium-sized enterprises (SMEs). Research by the OCE has found that the innovation patent system has not fulfilled that policy goal.7 The Government has accepted the recommendation of the Productivity Commission to phase out the innovation patent.8

Patent grants: In 2018, 17 065 standard patents were granted. Table 1 shows the number of patents granted to residents and non-residents in recent years. Grants fell by 25 per cent in 2018 from their level in 2017. The rate of decrease in grants was consistent across resident and non-resident applicant groups.

The non-resident share of grants, as with applications, is over 90 per cent and is consistent over the recent years.

Table 1 shows the numbers of patents granted in Australia to residents and non-residents fro 2014 to 2018

Australians filing overseas: IP rights granted in Australia do not provide protection in other countries. In order to protect IP in other countries, Australian inventors must file and be granted applications overseas.

Figure 5 illustrates trends in the number of patent applications filed by Australians from 2008 to 2017 (latest data).9 Overseas applications by Australians increased by one per cent in 2017, continuing the low growth observed in 2016.

Australian residents on average file more than three patent applications overseas for each domestic application. The US continues to be the most popular destination for Australian applications overseas. In 2017, US-destined filings accounted for 43 per cent of all Australian-origin applications overseas and grew by three per cent from their level in 2016.

The next top destination was the European Patent Office (EPO), which received 10 per cent of Australian applications overseas in 2017. China received eight per cent of Australian applications, and New Zealand six per cent.

Figure 5 is a graph showing Australian patent applications overseas from 2008 to 2017

The largest increase in applications from Australia occurred with the EPO, rising by nine per cent in 2017. This was followed closely by China with an eight per cent increase in applications.

Australians can file patent applications either directly at national IP offices or via the PCT. Of Australian applications overseas, 31 per cent were filed directly with foreign patent offices while the remainder used the PCT route. This split has remained largely stable over the past 10 years.

 

Lucy Carol Davis: Facial mask apparatus and method of making

photo of Lucy Davis with her dachshund

An architect by trade, the world of intellectual property protection is not new to Lucy Carol Davis—she is the daughter of an inventor and has a notebook full of her own ideas covering many fields.

When it came to filing her first patent application, she knew she had to do her homework. With the help of a patent attorney, Davis narrowed down her ideas based on their ability to be patentable as well as considering what would have a potentially large market. The invention selected was a facial mask apparatus and method of making it, combining facial scanning technology with 3D printing to create customised masks for an individual face.

‘I was doing research on 3D printing which was new at the time and I was fairly interested in investing in 3D printing companies,’ Davis explained. ‘My husband complained that his sleep apnoea mask was terribly uncomfortable and he hated wearing it. And I thought it could easily be solved—just print a 3D mask. At the time, the technology of 3D printing was not quite up to my ideas. But now it is.’

Australia was among the markets in which she chose to seek protection, with the US and Canada among other markets selected. Davis commissioned research to determine countries that had a significant proportion of the population requiring sleep apnoea technology as well as countries with an affluent population that could afford to buy customised masks. The cost of seeking protection was another important factor, with some countries excluded based on the prohibitive cost of seeking protection.

‘But Australia also happens to be the home of ResMed—a sleep apnoea device manufacturer,’ Davis said. ‘They were an important factor in my decision to seek protection in the Australian market. I was hopeful they would be interested in my idea.’

The entire process for Davis—from applying to being granted protection—took six years. But she believes the effort was worth it. For those seeking to follow her path, she has advice to assist on the journey.

‘It is quite an expensive process—financially and in time—to get a patent. So do your pre-patent application work to find out about the market and determine if there is a good chance of monetising your idea once it has been granted. And to me it was important to have something that wasn’t trivial—an idea that will serve a need. When there is an outcome you can see, it makes the length of the process easier.’

With her patent granted in Australia and the US, and Canada anticipated soon, work now begins on finding partners and clients to work with, including manufacturing and delivery partners in Australia.


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End notes

  1. Pharmaceutical substances for which there has been a delay in market approval can receive an extension of the protection term. As a result, protection may last for up to 25 years.
  2. The PCT is an international treaty which makes it possible to seek patent protection for an invention simultaneously in multiple countries using a single international application. After a patent application advances through the PCT procedure, it enters the ‘national phase’ in which its granting in Australia will be processed by IP Australia.
  3. A total of 13 385 applications came from the US, down slightly from 13 399 in 2017.
  4. The WIPO technology concordance groups various International Patent Classification (IPC) classes and subclasses into 35 technology fields. For details, see https://www.wipo.int/ipstats/en/
  5. The priority date is the date used to identify prior art relevant to establishing the novelty and/or non-obviousness of an invention.
  6. Unusual growth in Chinese applications resulted in non-resident applications outnumbering resident applications for the first time in 2016. Demand from Chinese applicants decreased in 2017; however, it increased again in 2018.
  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 Series. Canberra: IP Australia, , viewed 25 January 2018.
  8. Productivity Commission. 2016. Intellectual Property Arrangements. In Productivity Commission Inquiry Report. Canberra: PC, , viewed 25 January 2018.
  9. IP Statistics Data Center 2018, retrieved January 2019.