30 May 2018

Examination Allocations, Delays and Acceptance Rates at the Australian Patent Office, 2014-2017

Examination under the microscopeIt is perfectly reasonable for anybody who has applied for a patent to want to understand how the application process works, how long it is likely to take, and what are their prospects of actually receiving a granted patent in the end.  Unfortunately, it is not easy to find this information, in part because there are many factors that influence the patent examination process.  These factors include the different laws and regulations that apply in each country, variations that depend upon the field of technology of the invention, and the effect of workloads and application backlogs in the relevant patent offices.

In this article, I will review the application process at the Australian Patent Office, and look at some recent data drawn from the latest 2018 release of the Intellectual Property Government Open Data (IPGOD) to illustrate how delays in examination, and prospects of success, can be dependent upon technology and the way in which examination work is allocated within the Patent Office.  I was initially prompted to conduct this analysis by anecdotal accounts of a patent application ‘death squad’ within a particular team of Australian examiners.  However, since the plural of ‘anecdote’ is not ‘data’, I wanted to see whether there is any evidence to support these accounts within the most recent IPGOD data.  I did find the answer, along with a number of other insights.

The first thing to understand about the Australian patent examination system, for those not already familiar, is that it requires each patent applicant to file a request for examination that is generally distinct from other filing formalities.  This is in contrast to the US system, for example, in which examination fees must be paid at filing of a new application, which is then examined in its turn without further action by the applicant.  In Australia, it is possible to request examination (and pay the corresponding fees) at the time of filing, however most applicants elect to defer this step.  After filing, examination may be requested at any time, but a request must be filed within five years of filing, or within two months of the applicant being directed to request examination by the Commissioner of Patents, whichever is earlier.  This is almost invariably the Commissioner’s direction, since directions are typically issued within three-to-four years of the initial filing date, i.e. well within the five year limit.

As we shall see, what happens next depends strongly upon the field of technology of the invention – or, more precisely, upon how the examination task is allocated within the Patent Office, which is, in turn, largely technology-dependent.

Australian Patent Examination Sections

IP Australia divides its examination teams into 14 sections, namely:
  1. five chemical technology and life-sciences sections – Biotechnology, Chemical Compounds, Pharmaceuticals, Polymers and Applied Chemistry, and OPW Chemistry (historically, ‘OPW’ stands for ‘Out Posted Worker’, and refers to a team of teleworking examiners that covers all of the other four chemical and life-sciences areas in roughly equal proportions);
  2. three broadly ‘electrical’ technology sections – Physics, Electronics and Communications, and Computing;
  3. five broadly ‘mechanical’ technology sections – Mechanical Engineering, Construction and Mining, Process Engineering, Medical Devices, and Packaging and Appliances; and
  4. a ‘Mixed Technology’ section, which cuts across all areas of technology.
It is the Mixed Technology section that I have heard anecdotally accused of being a patent ‘death squad’, in that it allegedly specialises in examining applications within contentious fields of subject matter, and therefore rejects more applications on grounds that they are not directed to patent-eligible subject matter (i.e. are not for a ‘manner of manufacture’, under the Australian patent law).  Certainly there are particular examination groups within the US Patent and Trademarks Office that have a well-deserved reputation as ‘death squads’, so this is not an unprecedented proposition.  However, we shall see whether the data bears out the allegation in the case of the Australian Patent Office’s Mixed Technology section!

According to data from the World Intellectual Property Organization (WIPO), in 2016 Australia received the tenth largest number of patent applications globally (after the ‘IP5’ offices of China, the US, Japan, South Korea, and the European Patent Office, followed by Germany, India, the Russian Federation and Canada).  Even so, the Australian Patent Office processes only about 5% of the number of applications handled by the USPTO, for example, and thus clearly cannot employ a similar number of examiners, or divide its examination corps into highly-specialised teams.  In order to make the most efficient use of examination resources, there is therefore necessarily some overlap in the work handled by the different examination sections, and we should not expect to see a one-to-one relationship between the technology of an application and the section to which it is assigned.  Nor should we necessarily expect to see an identical distribution of workloads between the various examination sections over time.

Examination Delay

As I have already noted, much of the time elapsed between filing and examination of an application in Australia is not due to patent office delay, but is rather a result of the applicant’s choice to defer requesting examination until directed to do so.  True patent office delay arises only in the period between the applicant filing a request for examination, and the application actually being considered by an examiner.

In order to estimate this examination delay, as at the end of 2017 (i.e. the most recent data available in IPGOD 2018) I identified all applications for which a first examination report issued, or a notice of acceptance issued without a prior examination report, during the three month period between October and December 2017, and calculated the average time taken (in days) since filing of the corresponding examination request.  The results, broken down by examination section, are shown in the chart below.
Examination delays
The data shows that there is considerable variation in examination delay across the different sections.  Applications assigned to the Polymers and Applied Chemistry section can expect to wait around six months to be examined.  At the other end of the spectrum, applications assigned to the Mechanical Engineering, Packaging and Appliances, and Process Engineering sections can expect to wait over a year.

It should be noted here that many applications in Australia are eligible for expedited examination, if requested by the applicant.  The threshold for qualification is relatively low, and no additional fees are payable.  The above averages include expedited cases, which would tend to bring the numbers down.  However, over the three month period analysed, only 6.4% of examinations were expedited (a number estimated by using the heuristic of counting any application with less than four months’ delay as an expedited case).  This is consistent with my experience that the vast majority of applicants for Australian patents are content to let the examination process run its normal course, despite possible delays of a year or more.

Examination Workloads

In order to obtain some insight into the workloads of the various examination sections, I analysed the IPGOD data to determine the number of examinations actually commenced within each section, over approximately a three-year period.  In particular, I looked at all cases in which a request for examination was filed between the beginning to 2014 and the end of 2016 (I did not continue into 2017 because, of course, based on the delays in the chart above, most examinations requested in this year would not have commenced within the period covered by IPGOD 2018, i.e. prior to the end of 2017).

The chart below shows the number of examinations commenced, broken down by examination section, and by the year (i.e. 2014, 2015, 2016) in which the exam request was filed.  It also shows the work pending at the beginning of 2017, i.e. corresponding mostly with examinations requested in 2016, but not yet commenced at the end of the three-year period analysed.
Examinations commenced
The data shows considerable year-to-year variation in the workload handled by a number of examination sections.  However, the total number of examinations requested and commenced each year does not vary much (it is around 14,000-16,000 cases per year).  This suggests that the variation within examination sections reflects the allocation or distribution of resources within the Patent Office, rather than any significant variations in the applications under examination.

Acceptance Rates

If an application passes examination, it is accepted for grant as a patent – subject to it not being opposed, and the necessary fees being paid.  (Our American friends refer to this step as ‘allowance’ rather than ‘acceptance’, but it is essentially the same thing.)  In Australia, if any objections are raised against an application, the applicant has a period of 12 months from the first examination report within which to overcome the objections and achieve acceptance, otherwise the application lapses (or, to again use terminology more common in the US but meaning essentially the same thing, becomes ‘abandoned’).

An ‘acceptance rate’ can be defined as the number of applications accepted during a given time period, divided by the total number of applications finalised (i.e. accepted or lapsed, or otherwise dismissed).  Since the vast majority of applications that are not accepted simply lapse following the applicant’s failure to gain acceptance within the 12-month allotted period, it is not generally possible to predict the fate of applications for which a first examination report issued during 2017, but which were not finalised by the end of the year (when the IPGOD data ends).  In order to estimate acceptance rates in each examination section, I therefore counted only those applications for which examination had commenced prior to the end of 2016.  The chart below shows the resulting acceptance rates, broken down by examination section and year in which the examination request was filed.
Acceptance rates
A couple of points are notable in the above results.  Firstly, acceptance rates are broadly consistent across examination sections, mostly falling roughly in the range 70%-80%.  The exceptions are Packaging and Appliances, with an acceptance rate closer to 90%, and Computing, with an acceptance rate as low as 50%.  This latter result is not at all surprising, considering the more-stringent approach taken to patent-eligibility of computer-implemented inventions in recent years.  Regarding the anecdotal ‘evidence’ that the Mixed Technology section may be a patent ‘death squad’, there is simply no support for this allegation in the data.  Acceptance rates in the Mixed Technology section are about as average as they possibly could be, by comparison with the other sections!

Secondly, it appears as though acceptance rates have been rising over recent years.  This would be surprising, considering that, if anything, standards of patentability in Australia should have been higher since commencement of the Raising the Bar reforms in April 2013.  However, this effect may be due, at least partly, to a bias in the data.  Specifically, the above results do not include cases that were not finalised by the end of 2017, despite the 12-month acceptance period having expired.  There are a number of possible reasons for this, including that the period may have been extended or suspended to accommodate a hearing or appeal, or simply that there may have been a delay in updating the Patent Office records following expiry of the acceptance period.  In most such cases, the more-likely outcome is that the application would not ultimately be accepted, and so a better estimate of acceptance rate (a ‘worst case’ rate) might be obtained by treating these cases as ‘abandoned’ or ‘refused’.  This approach results in the following chart.Projected worst-case acceptance rates
As expected, this predicts lower acceptance rates, particularly in the more recent cases for which an examination request was filed in 2016.  Even so, in all examination sections except Biotechnology and Packaging and Appliances, acceptance rates appear to be rising.

It is also worth keeping in mind that the acceptance rates in different years and examination sections may be based on very different absolute numbers of finalised applications.  While I do not want to get into this, or a discussion of statistical significance, in this article, I have included charts of the actual numbers of accepted and abandoned applications in each section in an appendix at the end, for those who may be interested.

Conclusion – No Sign of Any Patent ‘Death Squad’!

While patent examinations data from the recent IPGOD 2018 release provides interesting insights into the inner workings of the Australian Patent Office, what it does not do is provide any evidence to support an allegation that there is any one examination section that might be regarded as a patent ‘death squad’!

While the Computing section has had acceptance rates hovering around 50% in recent years – notably lower than other sections – I would not regard this as ‘death squad’ territory.  If you are looking for places where patent applications go to die, in 2016 there were a number of ‘e-commerce’ Art Units at the USPTO with allowance rates in single figures, and one in particular for which the allowance rate was just 1.3%.  By comparison, acceptance rates of 50%-60% are positively encouraging!

Even so, applicants seeking patent protection for computer-implemented inventions would be well-advised to carefully consider their prospects of success, in view of recent developments in relation to patent-eligibility of this type of subject matter.

Appendix: Acceptance and Abandonment Numbers

Total acceptances

Total abandonments


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