A patent is an exclusive right granted for an invention. 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 8 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. In exchange for this protection, an invention must be disclosed to the public in full, ensuring public access to new technologies so that follow-on innovation can occur, avoiding wasteful duplication of research effort.

Standard patent applications and grants

In 2020, IP Australia received 29 293 standard patent applications, including divisional applications – a 2 per cent decrease compared to 2019 (Figure P1), but still higher than the 10-year annual average of 28 308 applications.

This filing activity occurred despite the considerable economic impact of the COVID-19 pandemic. Patents are a partial indicator of the output or “success” of research and development (R&D) activity and although R&D investment typically occurs early in the life of a research project it also tends to produce long-run effects on firm patenting. As such, the effects of the economic crisis in 2020 may not be fully observed until beyond 2021.2

Over the past decade, standard patent applications have shown an overall upward trend, with 2020 filings 15 per cent higher than in 2011 (Figure P1). A surge in patenting in 2013 anticipated the implementation of the Raising the Bar legislative reforms announced in 2012, which raised the quality threshold for patent grants.3 Growth in applications prior to the reform was followed by a large decrease in applications in 2014, before returning to their overall mild growth trend until 2019.

Standard patent applications may be filed in Australia directly with IP Australia or simultaneously in multiple countries via the Patent Cooperation Treaty (PCT).4 Around 72 per cent of applications in Australia were processed under the PCT in 2020, reflecting the popularity of the PCT system among firms that operate internationally and file patent applications in Australia. Standard patent applications filed via the PCT increased by 1 per cent from their 2019 levels (to 21 129), while direct applications were down 8 per cent (to 8 164).

Figure P1: Patent applications filed with IP Australia, 2011–2020

Resident and non-resident filings

Most standard patent applications in Australia are filed by non-residents. In 2020, this trend continued with non-residents responsible for 92 per cent of the total applications filed in Australia (a total of 26 894). Of the non-resident filings, 25 083 (93 per cent) were single-party applications and 1 811 were multi-party applications involving two or more non-resident applicants.

Australian residents were named on 2 399 applications, including 2 227 single-party filings, 107 filings by residents with Australian co-applicants only, and the remaining 65 of mixed origin with Australian and international co-applicants (Table P1). Both resident and non-resident applications decreased from their levels in 2019, by 10 and 1 per cent respectively.

Small and medium sized enterprises (SMEs) accounted for 81 per cent of standard patent applications filed by businesses operating in Australia during 2020, while the remaining 19 per cent were filed by large firms. The SME share of total enterprise applications has been steady over the past decade.

Table P1. Origin of single and multi-party patent applications, 2020

Applicant group Single party applications Multi-party applications Total count of applications per applicant group
Common origina Mixed originb
Residents 2,227 107 65 2,399
Non-residents 25,083 1,811 - 26,894
Total 27,310 1,918 65 29,293

aCommon origin applications either involve two or more resident applicants or two or more non-resident applicants.

bMixed origin applications involve at least one resident applicant and at least one non-resident applicant. Mixed origin applications are counted toward the total of resident applications and not the total of non-resident applications.

Countries of origin

In 2020, the top five foreign countries of origin for standard patent applications were the United States (applicants from the US were named in 13 122 applications), China (2 358), Japan (1 643), Germany (1 344) and the United Kingdom (1 253). These countries account for 67 per cent of patent applications in Australia. The US remains the major source for patent applications, with US applicants named on 45 per cent of all applications in Australia, a relatively stable share over the past decade.

The number of applications originating from China has grown substantially over recent years. This growth continued in 2020, rising by 25 per cent year-on-year from 2019, which is lower than the 48 per cent increase in 2018–2019. China’s share of applications grew to 8 per cent in 2020, retaining its position over the past decade as the second-ranked foreign country of origin for standard patent filings.

Applications from Japan grew by 2 per cent from their 2019 level, applications from Germany remained stable, while applications from the UK recorded 6 per cent annual growth. Applications from Japan, Germany and the UK accounted for 14 per cent of total applications in 2020.

Leading applicants

The top five international applicants for standard patent applications in Australia originate from the smartphone manufacturing and telecommunication industries (Table P2). Guangdong Oppo Mobile Telecommunications, a leading smartphone manufacturer in China, maintained its top position from 2019 with 435 standard patent applications in 2020, a 39 per cent increase. LG Electronics, a multinational electronics company headquartered in South Korea, remained in second place with 236 applications. Huawei Technologies, another Chinese smartphone and telecommunications giant, climbed one place from 2019 to be ranked third with 231 patent applications.

Among domestic applicants (Table P2), Aristocrat Technologies maintained the top spot for number of patent applications in 2020 with a total of 99 applications. For Aristocrat Technologies this represented a 59 per cent reduction in filings from its 2019 level. Commonwealth Scientific and Industrial Research Organisation (CSIRO) continued in second place with a total number of 46 applications.

Table P2. Top domestic and international applicants for standard patents (incl. divisionals) in Australia, 2020

Rank Top domestic applicants Top international applicants
Applicant Total applications Rank change Applicant Total applications Rank change
1 Aristocrat Technologies 99 - Guangdong Oppo Mobile Telecommunications 435 -
2 Commonwealth Scientific and Industrial Research Organisation (CSIRO) 46 - LG Electronics 236 -
3 Breville 24 new Huawei Technologies 231 ↑1
4 The University of Sydney 20 ↓1 Apple 194 new
5 Monash University 18 new Qualcomm 161 ↓2

States and territories

The largest share (36 per cent) of resident applications was filed from New South Wales (NSW) – applicants from NSW were named on 866 applications in 2020 (Table P3). Victoria and Queensland were ranked second and third for total patent applications in 2020. South Australia and Northern Territory were the only state or territory to record positive annual growth, at 14 and 20 per cent respectively.

The Australian Capital Territory (ACT) was the highest performer in terms of patent intensity, with an average of 0.15 patents filed for every 1 000 persons in the state, followed by NSW and Western Australia (WA). In NSW and WA, the ratios were 0.11 and 0.10 respectively.

Table P3. Patent applications, states and territories, 2019–20 5

NSW VIC QLD WA SA ACT TAS NT
Total 2020 866 616 443 276 132 66 22 6
Change, 2019–20 -15% -5% -12% -5% +14% -24% -19% +20%
Per capita (thousands) 0.11 0.09 0.09 0.10 0.07 0.15 0.04 0.02

Source: IP Australia; Australian Bureau of Statistics. Australian Demographic Statistics, March 2019. Retrieved 27 January 2020.

Technology classes

Patents protect technologies, which are assigned into technology classes. We analyse application trends across classes using a scheme maintained by the World Intellectual Property Organization (WIPO).6

As in previous years, Medical technology was the leading class with 3 701 applications in Australia (Table P4). Applications in Pharmaceuticals were up, by 21 per cent (3 106 applications), as were those in Biotechnology (2 865). Organic fine chemistry (1 830) and Civil engineering (1 516) rounded out the top five technology classes. Computer technology (1 410 applications) and Digital communication (1 363) remained the sixth and seventh most filed classes for standard patent applications in 2020.

Table P4: Top 5 Patent technology classes

Medical technology
Pharmaceuticals
Biotechnology
Organic fine chemistry
Civil engineering
Applications 3,701 3,106 2,865 1,830 1,516
Annual change 2019–20 1% +21% +4% -1% -12%

The COVID-19 pandemic has generated unprecedented demand for innovations that will help end the crisis or mitigate its costs. These include innovations directed at making public places safer by reducing the likely spread of infection, and digital tools that facilitate more efficient long-distance communication and collaboration. Most critically, studies have shown, the rate of pharmaceutical research on coronavirus vaccines and treatments increased substantially as the pandemic became global in March 2020 and reached an order of magnitude greater than during previous epidemics. New pharmaceutical research has focused largely on quick-to-develop projects involving repurposed drugs, with a high share of drug development conducted by small firms.7

Pharmaceutical patent filings have significantly increased in 2020, well above their historic growth trend of the past decade (Figure P2). While applications in Medical technology remained stable year on year, those in Pharmaceuticals and Biotechnology grew by 21 and 4 per cent respectively. Developing a new drug comes with significant R&D expense, inherent risks and long lead times, but once a new active compound is identified others can often reproduce the drug without incurring the same R&D costs.8 By providing temporary exclusionary rights, the patent system encourages innovators to perform costly research and bring new products to market, allowing for further development and innovation by other companies.

Figure P2: Share of patent applications in medical technology, pharmaceuticals and biotechnology

Notes: Figure P2 depicts change over time in the share of patent applications across five technologies groups. The technologies shown exhibited the greatest change (growth or decline) in application levels in 2019–20; excluded from consideration are low-volume classes, defined as those which on average have received less than 2000 applications per year over the past decade.


According to innovation researchers, the current pandemic can be expected to change the landscape of innovation and R&D across the science and technology sector.9 Some technology areas may be adversely impacted, in contrast to those discussed above, for example as a result of research projects having been put on hold during periods of lockdown. In Australia, applications for patents in Organic fine chemistry and Civil engineering fell by 1 and 12 per cent in 2020. R&D tends to be procyclical, increasing during economic booms and decreasing during recessions.10

Provisional applications

By filing a provisional patent application, applicants can provide an initial disclosure of their invention in order to claim a priority date11 before they file a standard or innovation patent application. Filing the provisional application allows applicants up to 12 months to decide whether they want to file a full patent application.12

Provisional applications have seen an overall declining trend, falling by an average of 1 per cent per annum over the last 10 years. In 2020, provisional applications dipped by 2 per cent from their 2019 level to 4 863 (Figure P3). Australian residents remain overwhelmingly the primary users of Australian provisional applications, filing 95 per cent (4 620) of such applications in 2020.

Figure P3: Provisional applications filed with IP Australia, 2011–2020

Innovation patents

In Australia, two types of patents have been available, standard patents and innovation patents. The latter provide a shorter (8-year) protection term for ideas that meet a lower inventive threshold than needs to be met to obtain a standard patent.

Over the last few years research by the Productivity Commission and IP Australia’s Office of the Chief Economist has shown that the innovation patent was not meeting its policy objective of supporting SMEs.13 After extensive industry consultation, and parliamentary approval, the amendments relating to the innovation patent come into force on 26 August 2021.14 The final date to file an innovation patent in Australia is 25 August 2021, and existing innovation patent holders will maintain their rights.

In 2020, we saw a large increase in the total number of innovation patent applications filed in Australia, reaching 4 586, approximately 2.5 times their 2019 level. This total (which includes standard patent applications converted to innovation patent applications) was almost wholly comprised of non-resident applications, which reached 3 573, an increase of 3 times their level from 2019, while resident applications remained relatively stable with 1 013 applications. China and India were the 2 major sources of the surge in non-resident innovation patent applications.

Applications from China totalled 2 640 in 2020, representing an increase of 4.4 times their 2019 level, while India filed 527 innovation patent applications, a 52 times increase on 2019.15

Australian filings overseas

IP rights granted in Australia do not provide protection in other countries. To protect IP in other countries, Australian inventors must file patent applications abroad. Australians can seek patent protection in other countries by filing applications via the Patent Cooperation Treaty (PCT) or directly with other IP offices. In 2019 (latest data), Australians increased their number of patents filed overseas by 6 per cent, with a total of 9 533 applications (Figure P4), nearly 4 times as many applications as Australians file domestically. Of the total Australian applications filed abroad, 27 per cent were filed directly with overseas patent offices while the remaining 73 per cent used the PCT route.

Figure P4: Australian patent filings overseas, 2010–2019

Source: World Intellectual Property Organization, IP Statistics Data Center. Retrieved 15 January 2020.


The United States continues to be the most popular destination for Australian filings abroad in 2019, with 3 528 Australian-origin applications, accounting for 37 per cent of total Australian filing activity abroad. The next-ranked destinations were the European Patent Office (EPO), China and New Zealand at 10 per cent, 8 per cent and 7 per cent respectively.

Endnotes

  1. Pharmaceutical substances which have experienced a delay in market approval can receive patent extensions, granting up to 25 years protection.

  2. Pakes, A., & Z. Griliches (1984), “Patents and R&D at the firm level: A first look.” In Griliches, Z. (ed.), R&D, patents and productivity. University of Chicago Press, Chicago: 55–72. For a review of existing literature and new evidence on the gestation lag of patented knowledge production, see: Wang, N., & J. Hagedoorn (2014), “The lag structure of the relationship between patenting and internal R&D revisited.” Research Policy, 43: 1275–1285.

  3. The Intellectual Property Laws Amendment Act 2012 (the Raising the Bar) Act came into effect 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 those applying 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.

  4. 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 patent prosecution will be undertaken by IP Australia.

  5. The adding-up total of patent applications by states and territories does not equal to the total number filed by residents because for any application filed by more than one state or territory will be counted for each state or territory repeatedly. This applies to other IP rights counted by states and territories.

  6. 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/>.

  7. Bryan, K., J. Lemus, & G. Marshall (2020), “Crises and the direction of innovation.” Available at SSRN: https://ssrn.com/abstract=3587973.

  8. Gans, J. (2020). The Pandemic Information Gap: The Brutal Economics of COVID-19. MIT Press, Cambridge.

  9. Foray, D., G. de Rassenfosse, G. Abi Younes, C. Ayoubi, O. Ballester, G. Cristelli, M. van den Heuvel, & L. Zhou, G. Pallegrino, P. Gaule, & E. Webster (2020), “Covid-19: Insights from Innovation Economists,” Working Papers 10, Chair of Innovation and IP Policy.

  10. Foray, D., G. de Rassenfosse, G. Abi Younes, C. Ayoubi, O. Ballester, G. Cristelli, M. van den Heuvel, & L. Zhou, G. Pallegrino, P. Gaule, & E. Webster (2020), “Covid-19: Insights from Innovation Economists,” Working Papers 10, Chair of Innovation and IP Policy.

  11. A priority date establishes the applicant as the first to file a new invention with the IP rights office.

  12. The priority date is the date used to identify prior art relevant to establishing the novelty and/or non-obviousness of an invention.

  13. Johnson et al. 2015. The economic impact of innovation patents. IP Australia Economic Research Paper 05. http://www.ipaustralia.gov.au/about-us/what-we-do/economics/

  14. The Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 passed in the Senate on 5th February 2019: <https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;page=0;query=BillId:s1216%20Recstruct:billhome>.

  15. A new report published by the United States Patent and Trademark Office (USPTO), “Trademarks and Patents in China: The Impact of Non-Market Factors on Filing Trends and IP Systems,” discusses how the high rate of Chinese patent and trademark filings may be influenced by government subsidies and other non-market factors. India has similar policies (https://www.meity.gov.in/content/support-international-patent-protection-electronics-information-technology), but further investigation may be needed to explore the reasons.


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