Patent Applicants Are the Most Prolific Patent Opponents

A few weeks back I looked at the geographical origins of participants in Australia’s patent opposition system, finding that Australian residents are overwhelmingly the most likely to oppose patents, and proportionately the most likely applicants to be opposed (although, numerically, US-originating applications are opposed slightly more often).  Under the current Australian law, anyone can oppose the grant of a standard patent, or the certification of an innovation patent, for any reason, although it is reasonable to suppose that most oppositions are filed by companies or individuals with concerns about prospective infringement.  It is, of course, perfectly possible to infringe somebody else’s patent without having had any prior involvement with the patent system.  There is certainly no requirement to have any patents or applications of your own in order to be at risk of infringement, or to have reason to wish to oppose a competitor’s application or patent.

Nonetheless, from analysing data available in the 2017 edition of IP Australia’s IP Government Open Data (IPGOD) set, I have found that one thing that the vast majority of patent opponents have in common is that they are also the owners of their own patents and/or applications.  Of 1,234 oppositions to standard patents (under section 59 of the Patents Act 1990) and to innovation patents (under section 101M) between 2004 and 2016, an overwhelming 82% were filed by entities (which I shall call ‘applicant-opponents’) that also filed at least one patent application during this period. 

Furthermore, while applicant-opponents made up only 0.33% of all patent applicants, they were collectively responsible for filing 6.6% of all Australian patent applications between 2004 and 2016.  The top 30 patent filers over this time includes 10 applicant-opponents. 

In one respect, this is not a surprising discovery.  Parties that are engaged with the patent system in one aspect (e.g. as patent applicants) are presumably more likely to be engaged in  range of other aspects, such as searching of patent registers and databases, monitoring their competitors’ patenting activities, identifying and watching applications that may present an infringement concern, and opposing in cases where it is deemed to be worthwhile in order to mitigate risk or curb overly-expansive patent claims.

On the other hand, as I have already noted anybody can become an infringer, whether wittingly or unwittingly.  It is therefore a little disturbing that the opposition data indicates that parties without patents or applications of their own appear to take little interest in the risks potentially presented by their competitors’ patent applications.

Source Data

Unfortunately, mapping opponent information to applicant information within IPGOD not trivial.  While data-matching has been performed for applicants, there is no pre-existing information in the data set linking opponents to applicants, or opponents in different oppositions.  The oppositions table (identified as ‘ipgod108’, for those following along at home) contains only the ‘raw’ opponent name information extracted from IP Australia’s records.  These names are inconsistent, some contain spelling or typographical errors, and a number have had extraneous information added (such as text such as ‘opp 1’, and so forth, to help track cases with multiple opponents).  The opposition data does not contain country or address information that might assist with matching.  Certainly there is no guarantee that the name information for an opponent will match the name information for the same party as an applicant in other parts of the IPGOD data.  Additionally, there are inherent difficulties in mapping between similarly-named entities within corporate groups, and in deciding whether or not is is appropriate to accumulate such entities into a single group applicant or opponent.

Even so, I think I have done a pretty good job of matching names across the opposition and application data.  I mention these issues to provide at least a partial explanation for discrepancies that may be observed by anyone attempting to duplicate my results.  There may, of course, be other limitations to my approach.

Applicant-Opponents Dominate Oppositions

As I noted in my previous article on Australian patent oppositions, a total of 1,234 substantive oppositions were filed against the grant of standard patents or against certified innovation patents between 2004 and the end of 2016, the vast majority which were settled or otherwise abandoned by one or both parties.  At least 51% ended with the opponent withdrawing, and at least 12% with the application being withdrawn.  As at the end of 2016, 18% remained in-progress.

The 1,234 oppositions were filed by 550 distinct opponents, of which 393 (71%) were applicant-opponents.  Furthermore, at least 3.5% of oppositions involved an agent (typically a patent attorney) acting on behalf of an undisclosed principal (an arrangement sometimes called, inaccurately, a ‘straw man’ opposition), which may or may not have been an applicant-opponent.  In the absence of better information, I have counted these as non-applicant oppositions.

Applicant-opponents are generally more likely to have been involved in multiple oppositions.  As a result, in all 82% of all oppositions were filed by applicant-opponents.

Top Opponents

The table below lists the top 30 filers of patent oppositions between 2004 and 2016.  At the top is Innovia Security (formerly known as Securency International), the company responsible for the development and manufacture of polymer banknote technology for Australia and a number of other countries.  In second place is gaming machine manufacturer Aristocrat.  Not coincidentally, another gaming company, IGT, is also in the top five opponents.  Generic pharmaceutical manufacturers, such as Apotex, Alphapharm, and Sandoz, also feature prominently.

Rank	Opponent Name	No. of Oppositions
1	INNOVIA SECURITY	59
2	ARISTOCRAT TECH AUSTRALIA	53
3	MERIAL	36
4	CQMS	32
5	IGT	31
6	FOXTEL MANAGEMENT	29
7	BHP	27
8	APOTEX	21
8	ALPHAPHARM	21
10	SENSIS	19
11	FONTERRA COOPERATIVE GROUP	17
12	CSR BUILDING PRODUCTS	14
12	MARS	14
14	EXXONMOBIL UPSTREAM RESEARCH CO	12
14	CATERPILLAR	12
16	BASF	10
17	VESTAS WIND SYSTEMS	9
17	SANDOZ	9
17	TELSTRA	9
20	ARCH WOOD PROTECTION	8
21	ESCO CORP	7
21	CSIRO	7
21	MINARA RESOURCES	7
21	KONINKLIJKE DOUWE EGBERTS UTRECHT	7
25	JUROX	6
25	CSL	6
25	NUFARM AUSTRALIA	6
28	LAMINEX GROUP	5
28	ALLERGAN	5
28	AMGEN	5

Patent Opponents Are Over-Represented as Patent Applicants

Between January 2004 and December 2016, a total of just over 490,000 Australian patent applications were filed by just shy of 120,000 distinct applicants.  As noted above, 393 of these applicants also opposed one or more other applications/patent, i.e. just 0.33% of applicants were applicant-opponents.

However, applicant-opponents are far more likely than average to be repeat filers.  In all, 32,345 applications were filed by applicant-opponents, or 6.6% of all Australian patent applications.

The table below lists the top Australian patent applicants among the applicant-opponents.  The first column shows each company’s rank among all patent filers, so the ‘gaps’ correspond to applicants that did not file any oppositions during the period covered by the data.  Even so, a third of the top 30 patent applicants were also opponents, with six of the ten opposing on multiple occasions.

Rank	Applicant	No. of Applications	No. of Oppositions
1	NOVARTIS	2492	1
3	COVIDIEN	2204	1
5	ARISTOCRAT TECH AUSTRALIA	1808	53
7	BASF	1698	10
8	CSIRO	1692	7
17	3M INNOVATIVE PROPERTIES CO	1219	1
18	E I DU PONT DE NEMOURS & CO	1197	5
25	GENENTECH	964	1
29	WYETH	883	3
29	ALLERGAN	883	5

Opponents Are Often Highly-Ranked Applicants

Finally, the table below lists the ranking, among patent applicants, and the total number of Australian patent applications filed between 2004 and 2016, for all of the top 30 applicant-opponents.  Clearly, many applicants filed only one or two applications during this period – filing a single application resulted in a ranking of equal 48,578^th, while filing two applications placed an applicant at equal 27,088^th.  Nonetheless, many of the top opponents are highly-ranked as applicants,e.g. within the top 1,000 out of 120,000.

Rank (Oppn’t)	Name	Rank (Appl’t)	No. of Applications
1	INNOVIA SECURITY	231	180
2	ARISTOCRAT TECH AUSTRALIA	5	1808
3	MERIAL	249	170
4	CQMS	631	81
5	IGT	3611	15
6	FOXTEL MANAGEMENT	11174	5
7	BHP	346	132
8	APOTEX	3885	14
8	ALPHAPHARM	1714	31
10	SENSIS	9277	6
11	FONTERRA COOPERATIVE GROUP	765	68
12	MARS	98	370
12	CSR BUILDING PRODUCTS	238	175
14	EXXONMOBIL UPSTREAM RESEARCH CO	80	420
14	CATERPILLAR	60	505
16	BASF	7	1698
17	TELSTRA	48578	1
17	SANDOZ	672	77
17	VESTAS WIND SYSTEMS	468	103
20	ARCH WOOD PROTECTION	11174	5
21	MINARA RESOURCES	48578	1
21	KONINKLIJKE DOUWE EGBERTS UTRECHT	27088	2
21	ESCO CORP	613	83
21	CSIRO	8	1692
25	CSL	711	73
25	NUFARM AUSTRALIA	1372	38
25	JUROX	1243	42
28	ES CELL INTL	2065	26
28	E I DU PONT DE NEMOURS & CO	18	1197
28	IPSEN PHARMA	718	72

Conclusion – Where Are All the Non-Applicant Opponents?

The following conclusions can be drawn about the relationship between applicants and opponents in the Australian patent system:

1. hardly any patent applicants are opposed – as I showed in my earlier article, just over 2% of all applications filed by Australians are opposed, however the overall opposition rate is only around 0.5%;
2. hardly any patent applicants file oppositions – out of nearly 120,000 distinct applicants that filed applications between 2004 and 2016, only 393 were applicant-opponents;
3. conversely, however, the majority – 71% – of patent opponents are also patent applicants, and an even greater proportion – 82% – of all oppositions are filed by applicant-opponents.
4. oppositions are rarely filed by parties with no other involvement in the patent system.

There could be good reasons why some non-applicants do not become involved in patent oppositions.  For example, if a business is not engaged in technical innovation then it is unlikely to find value in the patent system as a means to protect its intellectual property and, by the same token, is unlikely to be doing anything that would infringe any competitor’s patent rights.

However, I suspect that the primary reason for the low participation of non-applicants in the patent opposition system is simple ignorance.  Most patent applicants engage patent attorneys to assist them with their applications and, as a result, typically receive more wide-ranging information and advice regarding the operation of the patent system.  At the very least, an applicant needs to be aware of the possibility that its own applications may be opposed.  IP professionals also typically advise clients on the advantages of patent searching, and monitoring their competitors’ patenting activity.

From a policy perspective, the primary justification for a pre-grant opposition system is to enable further scrutiny of applications by persons actually involved in the commercial and technical field of the invention, beyond what is possible for a patent examiner, before a patent is actually issued.  It seems, however, that very few organisations other than those already involved with the patent system are participating in this process.  This could be unfortunate for them, as a result of the potential infringement risk from improvidently granted patents.  But it is also unfortunate for the system itself, which is missing out on the full benefit of pre-grant review of patent applications.

Tags: Australia, IPGOD, Opposition, Patent analytics