Australian IP report 2025
Impact on market dynamics and role of the international IP system
The timing of patent outcomes not only influence outcomes for applicants. They have wider implications for market dynamics and competition.
Patent grant delays create uncertainty about whether a patent will be granted and its eventual scope (the extent of technological space that will be excluded from development by others due to the patent right). This uncertainty can deter third parties from investing in certain technologies, undertaking R&D, or entering specific markets.
The Motu/EPFL study found that patent grant delays tend to slow and narrow follow-on innovation by the applicant’s rivals, as reflected in their future patenting activity. These findings raise concern that applicants’ actions to slow examination block and delay their competitors’ most valuable patents. The effect could be to hinder technological advancement and economic growth.
The study highlights several mitigating factors. For example, the sensitivity of a patentee’s competitors to grant delays is weaker among less competitors less experienced in patenting. In addition, the impact of delays is partially mitigated when an equivalent to the Australian patent (a patent for the same or similar invention) is granted overseas. The foreign grant likely reduces uncertainty about the eventual scope of the right – the amount of technological space likely to be excluded from rival development. Competitors can then make better informed technology and market investments.
Getting the balance right
The findings from this study highlight many applicants skilfully use the IP system, taking advantage of its flexibility to apply IP in their strategic development. Carefully deciding when and how to progress their applications can deliver positive economic outcomes.
For IP Australia, managing application timeframes involves a balancing act between the diverse needs of diverse stakeholders – not only small and large businesses, and domestic and foreign firms, but also their market competitors and others who would build on their patented technology.
As reported in the next chapter, the number of patents granted in Australia rose by nearly 24% in 2024, due in part to productivity improvements in examination. This study’s findings imply that faster processing of patent applications is likely to deliver tangible benefits for Australia’s economy so long as applicants retain sufficient flexibility to influence application timeframes.
Further, increased efficiency in foreign patent offices may also benefit Australia’s economy by reducing uncertainty around patent applications filed domestically. This underscores the value of international cooperation and work-sharing, for which Australia is a strong advocate.
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