13 January 2013

Australian Patent Grants Plateau in 2012, Microsoft Slips to No. 6

Australian Patents Granted, 1992-2012


The chart to the left shows the total numbers of patents granted in Australia on an annual basis between 1992 and 2012. Having reached unprecedentedly high levels in 2010 and 2011, the number of granted patents appears to have plateaued.

In 2012, the Johnson & Johnson-owned surgical supplies company Ethicon Endo Surgery was the number one recipient of newly-minted patents in Australia, more than doubling the number of Australian patents it received in 2011, to reach a grand total of 250 for the year.  This could hardly have been a more different outcome from the corresponding US results, where not just the top 10, but the entire top 50, is dominated by ICT and other tech-sector companies.

The other notable fact about the number of patents granted in Australia in 2012 is that the total appears to have plateaued at around 19,500 per year.  However, as we have explained previously, since IP Australia still has a significant examination backlog, the number of patents granted is not a function of the number filed in the previous years, but rather of the number and efficiency of examiners working their way through the waiting list.  Apparently, there was little change in the available resources last year, although we understand that IP Australia has recently been recruiting more new examiners.

As for the US results, this week, patent research company IFI CLAIMS Patent Services released its annual list of the top 50 assignees of US patents issued in the previous year.  There are no surprises at the top of the list, with IBM coming in at number one for the 20th successive year.  Samsung is again number two, though this year IBM has actually pulled ahead a little.  Third-placed Canon is not even close to the top two, running nearly 2000 patents behind Samsung.

AUSTRALIAN AND US PATENT GRANTS IN 2012

As in previous years, we have enlisted the services of our helpful colleagues in the Information Services Department at Watermark Intellectual Asset Management to obtain statistics on patents granted in Australia during the 2012 calendar year.  As in 2011, the picture is very different in Australia to that in the US.  Once again, there is only one company – Microsoft – which appears on both top 10 lists.  And while in 2011 Microsoft was a clear winner in the Australian patent grant stakes, in 2012 it has slipped back to number six, having been granted 40% fewer patents than in the previous year.

A comparison of the top 10 patent recipients in the two countries is shown in the table below.  The figures in brackets indicate the change in numbers of granted patents against 2011, while companies highlighted in bold are new entries to the top 10 lists.

United States of America
Australia
Rank
Company
Patents
Company
Patents
1
IBM (US)
6478 (+298)
Ethicon
250 (+180)
2
Samsung (KR)
5081 (+187)
Novartis
177 (+29)
3
Canon (JP)
3174 (+353)
Colgate Palmolive
130 (+27)
4
Sony (JP)
3032 (+746)
Aristocrat Technologies AU
116 (+66)
5
Panasonic (JP)
2769 (+210)
Qualcomm
113 (+8)
6
Microsoft (US)
2613 (+302)
Microsoft
108 (-70)
7
Toshiba (JP)
2447 (-36)
Hoffmann La Roche
106 (+25)
8
Hon Hai Precision Industry Co (TW)
2013 (+499)
3M Innovative Properties Co
104 (+11)
9
General Electric Co (US)
1652 (+204)
Tyco
102 (+33)
10
LG Electronics Inc (KR)
1465 (+54)
Hengdian Group Linix Motor Co
97 (+47)
Falling Out of top 10 in 2012:
Seiko Epson (8–›12),
Hitachi (10–›13)
LG Electronics (2–›27),
Shell (4–›17), Daikin (5–›31), BASF (6–›14), Kimberly
Clark (7–›15), Bayer (10–›21)

Only two companies – Toshiba in the US, and Microsoft in Australia – managed to stay in the respective top 10 lists despite receiving fewer patents in 2012 than in 2010.  All other companies increased their numbers over the previous year.  And while the number of patents received at the top of the table increased in both countries (from 6180 to 6478 in the US, and from 178 to 250 in Australia), US tenth-placed LG Electronics received exactly the same number (1465) of patents as the previous year’s number 10 Hitachi, while tenth spot in Australia was taken by Hengdian Group Linix Motor Co with just two more patents (97) than 2011’s number 10 Bayer.

So all of the companies that moved into the top 10, in both countries, did so by increasing their haul of patents, while those that fell out did so because they received fewer patents than previously.

One thing to be said for Microsoft is that it is consistent in its rankings this year, coming in sixth in the US as well as Australia. In the US, however, it was granted 13% more patents than in 2011 – enough of a boost to get it past last year’s number five, Toshiba, but not enough to get it off sixth position, with Sony leaping from number seven to fourth place.

The top 10 Australian patentees of 2012 also shows significant churn since 2011, with only four companies – Novartis, Colgate Palmolive, Qualcomm and Microsoft – maintaining a place at the top of the table.

WINNERS AND LOSERS

Last year we noted that particular gains (by 50% or more over 2010) were made in Australia by Shell, BASF, Kimberly Clark, Colgate Palmolive, 3M, Fuji Xerox, Ethicon Endo Surgery, and Apple and Google. Of these, Shell, BASF and Kimberly Clark have not continued their rise – all were ranked in the top 10 in 2011, but have fallen away in 2012. Fuji Zerox and Google, too, have slipped back, while Apple has risen slightly (nine more Australian patents granted in 2012, to move from 15th to 13th place).

The one rising star we did identify a year ago was Ethicon Endo Surgery, which has climbed from just 33 Australian patents granted in 2010, to be number one with 250 patents in 2012.

The one we missed, however, was Hengdian Group Linix Motor Co, which received 50 Australian patents in 2011, and has now jumped into the top 10 with 97 patents granted in 2012.  There is just one Chinese company in the US top 50 for 2012 – Hong Fu Jin Precision Industry (Shenzhen) Co Ltd at number 40, with 782 patents – and it therefore seems significant that, for the first time, a Chinese company has made the top ten recipients of Australian patents.  In doing so, it has displaced (among others) a Japanese company (Daikin) and a Korean company (LG Electronics).

We expect China to rise as an economic power, and a source of innovative technology.  We just did not expect to see it at this level quite so soon!

APPLE AND SAMSUNG

Apple received 85 Australian patents in 2012, up from 76 in 2011.  However, 26 of these were innovation patents (which are granted without substantive examination), only seven of which have so far been examined and certified as valid.  In comparison, Apple received 19 innovation patents in 2011, all but two of which have been examined and certified.  We have written before about Apple’s strategic use of innovation patents, both on this blog, and over on the IP Watchdog blog.  It is apparent that Apple is continuing with this strategy.

Samsung was granted only 21 Australian patents in 2012, down from 42 in 2011.

However, it is likely that the number of patents granted to both companies will grow in the future, since they appear to have escalated their Australian filings in parallel with their escalating litigation.  Samsung filed 156 new standard applications in Australian in 2012 (combined direct filings and PCT national phase entries), up from 120 in 2011, while Apple filed 214 new standard applications, up from 143 the previous year.  These numbers suggest that over the coming years both Apple and Samsung will enter the top ten Australian patent recipients.

CONCLUSION

With a market less than one tenth that of the US, Australia will never be a ‘first tier’ filing destination for a majority of international applicants.  Nonetheless, there are a number of companies each year being granted on the order of 100 or more Australian patents.

Furthermore, while the US patent system appears to generate a very high proportion of patents in ICT and other high-technology areas, there is a far greater diversity of industries represented at the top end of the Australian patent charts.

At the same time, the number of new standard applications entering Australia (combined direct filings and PCT national phase entries) has changed very little, rising slightly from 25899 in 2011 to 26389 in 2012.  With new applications being filed at a greater rate than patents are being granted, it is not surprising that IP Australia has continued to recruit new examiners. 

We will be keeping an eye on filing activities, particularly during the first part of 2013.  We anticipate that the commencement of the reforms introduced by the Raising the Bar Act on 15 April 2013 will influence the behaviour of applicants, with the likely results on some anomalous filing and examination strategies in the lead-up to this date (see Is IP Australia Ready to ‘Raise the Bar’?)

Overall, the Australian patent system appears to be attracting applicants in healthy numbers, which shows encouraging optimism for the future of the nation’s economy.

4 comments:

Sylvia said...

thank you for your sharing!
but Hong Fu Jin Precision Industry is a unit of Hon Hai in China,
basicly Hong Fu Jin is a Taiwan-capital enterprise,
not really a "chineses company"

Stan E. Delo said...

Very interesting article Mark-



It reminds me of what has been happening here in the US
for at least a decade, wherein larger corporations tend to get stuck in
committee before they can get anything done at all. As you might imagine, it
would allow smaller and more adaptable entities to be more innovative in perhaps
several different ways. Diversity, if you will.



Stan~

Mark Summerfield said...

Hi Sylvia,

Thanks for the clarification. This distinction is obviously not one which was recognised by IFI CLAIMS, the firm responsible responsible for the US top 50 list. However, if Hong Fu Jin is domiciled in China, and applies for patents which are ultimately assigned to it, and not to the parent company Hon Hai in Taiwan, then all patent databases and analysis software will treat these patents as belonging to the Chinese company.

Legally, then, this is technically the correct position even if, from a business perspective (e.g. support and flow of profits) it is not the whole story.

This is where personal knowledge and insights, such as yours, come into the picture.

Mark

Mark Summerfield said...

You may be right about agility, Stan, however getting to the top of the patent charts is largely about size rather than efficiency! The most innovative small company in the world cannot afford to acquire 6478 US patents per year (or 250 Australian patents), even if it can generate that many inventions.

For this reason, no matter how inefficient the big corporations may be, they will always dominate the annual haul of patents.

However, the total numbers of patents are smaller in Australia. Filing also tends to be more strategically directed to the characteristics of the market, in the sense that while a multinational company will tend to file everything in the US, it will be selective about what it files in smaller markets. It is therefore not surprising that we would see more volatility and variety at the top of the Australian charts.

But none of those companies is especially small, by Australian standards. You should bear in mind that while the US definition of an SME is having up to 500 employees, the Australian definition is based on an annual turnover of up to A$20 million. Most viable companies can achieve this with no more than 100-200 employees.

Our population is less then 10% of the US, giving us a much smaller domestic market, and our standard of living is high, making it just as difficult for us to compete in export markets. The strong dollar is also making life very hard for Australian exporters at the moment (among whom I would include patent attorneys -- as a profession we are net exporters of services, since 85% of applications are filed by foreign entities, although my personal practice is almost exclusively Australian clients). It is therefore difficult for Australian companies to grow to the same level as their US, European, Chinese and South Korean counterparts.

It is therefore pleasing to see any Australian company in our own top 10, even if it is one in the business of gambling!

Mark

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