21 June 2020

COVID Update – Likely Hit to Australian and NZ Patent Filings Now Evident

Virus pursuitFor the past two months I have been tracking Australian and New Zealand patent filings to see whether there is evidence of any impact of the COVID-19 pandemic on new applications in either country (see here for my April report, and here for my May report).  Given the relatively short period between lockdown and the end of April, I had been looking at weekly variations, which might give an early indication of any downturn, but at the same time are more susceptible to short-term fluctuations that may obscure an underlying trend.  Now that the economic impact of the pandemic has spanned more than three months, I have switched to looking at monthly filing numbers.  On this time scale, figures for May show clear signs of a decline in patent filings in both Australia and New Zealand, compared to 2019, and it seems possible that there was a COVID-related drop in filings in Australia in April also.

The recent falls in Australian standard patent applications, and New Zealand complete applications – which make up the majority of filings in each country – are substantial.  In Australia, standard patents filings in May were down by over 14%, year on year, while the corresponding drop in New Zealand filings was over 20%.  There was an even larger decline in provisional application filings in New Zealand, at around 43% year on year for May, although the number of provisional filings is so low that this figure is subject to large fluctuations even at the best of times.  (Fun facts: the greatest number of provisional applications filed in New Zealand in a single month over the past 20 years was 141, which occurred in August of 2006; and the last time the number exceeded 100 was in July of 2013.)

Interestingly, filings in Australia of provisional and innovation patent applications show somewhat different behaviour.  As it happens, Australian provisional filings have been below 2019 levels every month, but they have been less below in more recent months than back towards the start of the year.  However, improvements up until April appear to have stalled, and possibly reversed, particularly for new applications filed during May using the services of patent attorneys.

Innovation patent filings have completely bucked the trend.  Every month, the number of innovation patents filed this year has been significantly higher than for the same time in 2019, with total filings year-to-date up by about 50%.  Last month (i.e. May 2020) there were 221 new innovation patent applications filed, which is the tenth highest monthly total since the system commenced in 2001!  (Fun fact: the greatest number of innovation patent applications filed in a single month was 369, in July of 2016.)  However, this innovation patent boom has been driven primarily by Chinese applicants, which may serve to mask any decline in filings by applicants from Australia and other countries.

A decline in filings is obviously not good for patent attorneys, but we should not forget that it is not great for IP Australia, either, which operates on a cost recovery basis such that the overwhelming majority of its operating expenses are covered by the fees paid by users of the patents, trade marks, registered designs, and plant breeder’s rights systems.  Over April and May, I calculate that patent filing fees received by IP Australia were down by nearly A$200,000 on the same period in 2019.  While this is not particularly significant in comparison to its annual budget of just over A$210 million, my guess is that the drop in patent filings is only the tip of the iceberg as IP rights owners make tough cost-cutting decisions.  Furthermore, reduced filings today will have follow-on effects in reduced future revenue from examination, acceptance, and maintenance fees.

14 June 2020

IPH Juggernaut Rolls On in NZ – AJ Park to Acquire Baldwins in NZ$7.9m Deal

Australian Securities Exchange (ASX) listed company IPH Limited (ASX:IPH) has announced that its New Zealand based subsidiary AJ Park has reached an agreement to acquire fellow NZ IP firm Baldwins.  The NZ$7.9 million (A$7.4 million) purchase price includes a deferred consideration of NZ$400,000, with the initial amount paid 65% in cash and 35% in new IPH shares.  The deferred part of the settlement will be paid in cash.  (Read the full ASX announcement here [PDF 247kB].)

The acquisition of Baldwins by AJ Park will see the Baldwins patent attorney practice merged into AJ Park IP, and Baldwins’ legal business into AJ Park’s allied law firm, AJ Park Law.  As a result, the Baldwins brand will become the latest casualty of the transformation that has been ongoing in the Australian and NZ IP profession in recent years.

The official line, as provided in the IPH announcement by AJ Park’s Managing Director, Dr Andrea Dickens, is that:

Baldwins is a highly regarded firm in the New Zealand market and we believe this acquisition will give our merged businesses greater depth and provide our clients with access to a complementary team of experienced IP professionals. We look forward to welcoming the Baldwins partners and staff to AJ Park.

The reality, based on my analysis, appears to be somewhat less rosy.  Both AJ Park and Baldwins have experienced reductions in professional staff numbers and patent filings in recent years, and in these respects the acquisition of Baldwins will do little more than put AJ Park back in substantially the position it was in about a decade ago.  Baldwins, for its part, appears to have been sold to AJ Park on a valuation that looks relatively low compared to past acquisitions in the profession – and particularly so alongside the recent acquisition of Sydney firm Cotters by QANTM IP Limited – suggesting that the firm may not hold a particularly optimistic view of its own future as an independent entity.

09 June 2020

Federal Court Finds Computer-Implemented Gaming Machine Patent-Eligible in Australia

Gaming MachinesOn appeal from a decision of a delegate of the Commissioner of Patents, a single judge (Justice Burley) of the Federal Court of Australia has found that the claims of a number of innovation patents owned by Aristocrat Technologies Australia Pty Ltd, directed to electronic gaming machines (EGMs), are directed to patent-eligible subject matter: Aristocrat Technologies Australia Pty Limited v Commissioner of Patents [2020] FCA 778.  As the judge put it in the first paragraph of the judgment, the central question in the case was ‘whether a claim to an [EGM], which includes a combination of physical parts and computer software to produce a particular outcome in the form of gameplay, is a manner of manufacture’ (referring to the test for patentable subject matter under the Australian Patents Act 1990).

In a series of five decisions relating to computer-implemented inventions issued by Full Benches of the court since 2014 – including one from an expanded bench of five judges – a ‘two step’ approach to assessing patent-eligibility of such inventions has emerged.  The first step is to construe the patent specification, from the perspective of the person skilled in the relevant art, to identify the claimed invention.  This is to be determined as a matter of substance, and not merely based on the particular form of the claims.  If the invention, in substance, comprises patent-ineligible subject matter, such as a mere scheme, idea, or business method, then the second step involves an enquiry into whether the claimed computerisation involves some further contribution sufficient to render the invention patent-eligible.  It is not enough, as the Full Court has made clear, simply to ‘put’ an otherwise unpatentable scheme, idea, or business method ‘into’ a computer.

In the present case, however, the judge effectively short-circuited this enquiry, finding at the first step that Aristocrat’s claims were, in substance, for ‘a machine of a particular construction which implements a gaming function’.  As a result, the question of patent-eligibility was resolved immediately – an EGM is not a mere scheme or a business method, and is thus a ‘manner of manufacture’.  There was, the judge concluded, no need to proceed with step two.

This finding seems straightforward enough, and accords with common sense.  As the judge also observed, there is no dispute that an old-style mechanical gaming machine would be patent-eligible, so why should the outcome be any different if the same functionality is implemented using modern technology?  On the other hand, however, the form of the claims in the present case is not necessarily so different from those in a number of the earlier decisions where the inventions were found not to be patent-eligible.  I therefore suspect that this decision may not yet be the last word on the patentability of EGMs under the ‘manner of manufacture’ test.

06 June 2020

Ten Years of Patentology

TenOn 6 June 2010, I clicked ‘publish’ on the very first article here at the Patentology blog.  Back then I did not even have my own domain name.  The URL was patentology.blogspot.com (which still works, incidentally).  As with any new web site, and particularly a new blog in a world with millions of blogs competing for attention, I do not imagine anyone much noticed the new kid on the block.  And, frankly, that is probably just as well.  That first post was a fairly esoteric piece about how the Venetians in 1474 managed to pack all of the core features of modern patent law into a single paragraph, whereas the Australian Patents Act and Regulations (in 2010) occupied a total of 376 pages (not including the nearly 300 pages of Schedules to the Regulations).

While I do not know how many times that first article was viewed (I did not get started with website analytics until a few months later), I do know that the most popular post I ever wrote is Can I – and Should I – Patent My Smartphone App?  This article was published on 4 October 2012, and has since received nearly 65,000 unique pageviews.  It still features regularly in search performance reports from Google, and typically sees a few tens of visits each month.  It was most popular in 2014-2015, when it was viewed over 1,000 times every month.

The second most viewed article is The Story Behind CSIRO’s Wi-Fi Patent ‘Windfall’, published on 5 April 2012, with just over 13,000 unique pageviews.  This article gained popularity as a result of contentious claims that CSIRO was a ‘patent troll’, principally as a result of a hatchet-job published by technology news site Ars Technica (How the Aussie government “invented WiFi” and sued its way to $430 million).  I debunked the Ars Technica piece in a post entitled Five Reasons Why Ars Technica’s Savaging of CSIRO is Appalling, which itself received over 2,000 unique pageviews in under 48 hours after a link was tweeted by celebrity science presenter Dr Karl Kruszelnicki, and gave a boost to views of the ‘windfall’ article itself.  (I recently updated the ‘windfall’ article – which I consider a valuable summary of the history of CSIRO’s Wi-Fi commercialisation efforts, and which still receives a few visitors each month – to repair all of the broken links with references to archived copies of all the now-defunct pages and documents.)

01 June 2020

Case Transfers Show No Preference for Privately Held vs Publicly Listed Firms

File arrowPatent attorney clients are notoriously ‘sticky’ – it is well-known that they rarely change service providers.  Indeed, out of a sample of 279,035 live applications and patents managed by Australian and New Zealand patent attorneys as of early 2019, only 3,854 (1.4%) were transferred away from those attorneys over the past 16 months or so.  Of these. the overwhelming majority (3,813) were transferred to a different attorney/firm, with responsibility for the remainder (230) being taken over by non-attorneys – mostly the owners of the patents/applications.  (In the remainder of this article I am going to use the term ‘cases’ to refer collectively to both pending applications and granted patents.)

Within my sample of active cases, 62% are handled by firms in listed groups, 34% by privately-held practices, and 4% by non-attorneys.  Taking into account the fact that listed group firms have nearly twice as many cases to ‘lose’, I found no evidence that clients are any more likely to transfer work from firms in listed groups to privately-held firms than they are to transfer in the other direction.  The flow in both directions was approximately 0.6% of the size of the respective available pools of cases.  Looking at domestic (i.e. Australian and New Zealand owned) cases in isolation, there was a net flow from listed group firms to privately held firms.  At the same time, however, clients of listed group firms were less likely to transfer their cases away than clients of privately held firms.

Overall, privately-held firms appear to be the most likely to lose clients, collectively seeing around one in 50 cases transferred away during the period that I have analysed.  In comparison, publicly-listed firms saw just under one in 100 cases transferred away over the same time.  However, the largest source of ‘churn’ was transfers between firms within the privately-held sector, with 1,344 cases in this category.  This resulted in privately-held firms also being the most likely to win clients away from their competitors, collectively acquiring nearly one in 40 active cases from other firms.  Publicly-listed firms acquired just one in every 140 of the active cases in their care from competitors over the period analysed.

Patent attorneys generally seem to have a fractious relationship with the kinds of applicants that are inclined to ‘go it alone’.  This is perhaps not surprising, given that a major reason for applicants to choose self-representation is to save on costs, and that fees are a leading cause of disputes between patent attorneys and clients.  Frankly, most of these clients are best avoided, since they are often more trouble than they are worth (the clients might well say the same of the patent attorneys to whose fees they object).  Privately-held firms (which include all the smaller practices) are the most likely to acquire cases from self-represented applicants (220 over the period analysed), and they are also the most likely to part ways with clients in favour of self-representation (185 cases).  Listed-group firms (which include many of the largest practices) appear to have far less contact with these types of clients, collectively gaining and losing just 67 and 45 cases, respectively, over the same period.

Looking at individual firms, big ‘winners’ from transfers of cases include RnB IP, Wrays, and FPA Patent Attorneys, while the greatest net losses were experienced by firms including Cotters Patent & Trade Mark Attorneys, Pizzeys, FB Rice, Griffith Hack.  For the major firms, however, gains and losses due to transfers of existing cases represent a very small proportion of overall business.

24 May 2020

Rokt’s Computerised ‘Marketing Scheme’ Fails Patent-Eligibility Test on Appeal

Web servicesFollowing an appeal by the Commissioner of Patents, a Full Bench of the Federal Court of Australia has overturned a decision of a single judge of the Court relating to the patent-eligibility of a computer-implemented invention.  The Full Court has ruled that a claimed method and system, developed by Singapore-based Rokt Pte Ltd, for providing ‘a dynamic, context-based advertising system, introducing a distinction between an engagement offer, without a direct advertising benefit, and an advertisement designed to lead directly to the sale of the product’ is not patent-eligible subject matter under the Australian ‘manner of manufacture’ test: Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86.

Broadly speaking, the claimed invention provides a mechanism whereby a user has an opportunity to engage with an offer (characterised by the Full Court as ‘click bait’) while accessing a web site before being presented with targeted advertising.  In this way, advertisements are presented only to those users that are most likely to interact with them, and make a purchase.  Since advertisers must often pay for placement of their advertisements within web pages, the invention provides an improvement in that the costs associated with placing advertisements in front of consumers who do not interact with them may be reduced.

In an earlier Patent Office decision, a Hearing Officer had found that ‘the substance of the invention in this case amounts to business innovation’, which was not patentable, and therefore refused Rokt’s patent application: Rokt Pte Ltd [2017] APO 34.  (A previous decision, relating to an alternative set of claims proposed by Rokt, had reached a similar conclusion: Rokt Pte Ltd [2016] APO 66.)

Rokt appealed to the Federal Court, where the primary judge (Justice Alan Robertson) reversed the Patent Office decision, finding that ‘[t]he invention solved not only a business problem but also a technical problem’, ‘… there was a business problem of attracting the attention of the user and having the user choose to interact with the advertiser, but this problem was translated into the technical problem of how to utilise computer technology to address the business problem’, such that ‘use of computers was integral, rather than incidental, to the invention in the sense that there is an invention in the way in which the computer carries out the business scheme’: Rokt Pte Ltd v Commissioner of Patents [2018] FCA 1988 at [205]-[208].

The Commissioner, in turn, appealed to a Full Bench of the Federal Court (composed of Justices Rares, Nicholas and Burley), which has now allowed the appeal, finding that ‘the invention is a scheme or, more accurately, a marketing scheme’, that ‘nothing about the way that the specification describes the computer hardware or software indicates that either is any more than a vehicle for implementing the scheme, using computers for their ordinary purposes’, and that ‘the claim amounts to an instruction to carry out the marketing scheme’ expressed at a ‘level of abstraction [which] demonstrates that it does no more than provide a list of steps to be implemented using computer technology for its well-known and understood functions’: Commissioner of Patents v Rokt Pte Ltd [2020] FCAFC 86 at [108], [109], [115].  As such, the Full Court concluded that Rokt’s claimed invention is not a patent-eligible manner of manufacture, and that ‘the learned primary judge erred in finding otherwise.’

22 May 2020

IPH Shutters ‘Intellectual Asset Advisory’ Business Glasshouse, with R&D Tax Specialists Picked Up by Grant Thornton

Broken GlassAs reported on 20 May 2020 by the Australian Financial Review, and announced via a media release from business advisory firm Grant Thornton, around 10 staff specialising in R&D tax advice from IPH Limited (ASX:IPH) business Glasshouse Advisory are to transition to Grant Thornton by Monday, 25 May 2020.  I understand that the Glasshouse business itself is to close, with other staff made redundant.  Glasshouse is one of the businesses that IPH acquired – along with IP firms Shelston IP, Griffith Hack, and Watermark – in its takeover of Xenith IP Group Limited (formerly ASX:XIP) back in August 2019.  This is the second significant restructuring of the former Xenith businesses carried out by IPH, following the integration of Watermark into Griffith Hack.

While the AFR headline indicates that Grant Thornton bought the R&D tax division of Glasshouse, my interpretation is that no money has changed hands.  IPH has not issued any announcement to the Australian Securities Exchange (ASX), as would be required if the event were relevantly ‘material’ to the business.  And the Grant Thornton media release appears to be quite carefully worded, referring to the arrangement as a ‘transition’, and quoting IPH COO and acting Glasshouse Advisory EGM, John O’Shea, as saying:

We are delighted to have reached agreement for transfer of the Glasshouse Advisory R&D tax incentive practices to Grant Thornton and we see this as a positive next stage for Glasshouse’s R&D tax incentive business. Since our acquisition of Glasshouse Advisory as part of the Xenith Group in August 2019 we have undertaken a detailed review of the Glasshouse Advisory business and concluded that these aspects of the business would be better placed within a specialist business, more closely aligned to their service offering.

Nowhere is there any mention of a ‘purchase’, or any suggestion of a price paid by Grant Thornton to acquire the Glasshouse R&D tax practice.  Indeed, it is unclear what Grant Thornton would be getting for any money they might pay out – certainly not the Glasshouse brand (which would be of no interest to them), nor any ‘rights’ in relation to the ‘transitioned’ staff (who are not indentured servants, and are of course free to vote with their feet if they are not in favour of the change in employer).  The Glasshouse client list might be worth something (the R&D tax advisory business is reported by the AFR as being worth around A$2.5 million annually), but I suspect that repeat business in this area is patchy, and that only a relatively small proportion of clients might be regarded as a reliable source of future income beyond the short term.

I understand that new roles have not been found for staff in other Glasshouse divisions, and that the business effectively ceases operation after 22 May 2020.

My take on this is that IPH most likely determined that Glasshouse was neither a sufficiently good fit with the other entities in the group, nor a large enough source of revenue, to justify its retention.  No doubt some efforts were made to find a buyer for the business, but in the end the best that could be done was to provide a new home for some of the staff, at Grant Thornton.

It is a dog-eat-dog world out there, especially in the publicly-listed segment of the IP profession.  Another significant stream of the Glasshouse business was patent research, including novelty and freedom-to-operate (FTO) searching.  Commonly an in-house function at many medium-to-large IP services firms, under Xenith’s ownership the patent searching capability was moved out of Griffith Hack into Glasshouse to form part of a broader IP strategy, valuation, and monetisation service offering.  While I feel for all of the people whose roles have been made redundant by the closure of Glasshouse – particularly in these challenging times – my sympathies are especially with the search and analytics specialists who might now be feeling – with some justification – that they would have been more secure had they remained within the traditional patent attorney firm environment.

From the outset, I have argued that the ‘bold experiment’ of public listings and formation of ‘ownership groups’ of firms is, as much as anything else, a response to the demands of achieving growth and improving efficiency and profitability in a challenging, low-growth, market.  In this sense, restructuring and associated redundancies are perhaps inevitable within the IP professions, regardless of ownership arrangements.  Even so, I cannot help feeling that Glasshouse Advisory, and a number of its people, have ended up as casualties of a failed experiment.

21 May 2020

Free Online Seminar – Machine Inventors, Fact or Science Fiction?

TeachingIn August 2019 the ‘Artificial Inventor Project’ team led by Ryan Abbott, Professor of Law and Health Sciences at University of Surrey UK, announced that it had filed a number of patent applications naming an artificial intelligence (AI) as inventor.  The AI, called ‘DABUS’, was developed by Missouri-based physicist Dr Stephen Thaler.  The filings – which garnered significant publicity – were a deliberate provocation, calculated to test patent laws and challenge the conventional notion that only a natural person can be an inventor.  The EPO, the UKIPO, and the USPTO have since rejected the applications for failing to meet requirements that an inventor designated in a patent application be a human being.  Even so, various IP organisations, including WIPO, the USPTO, and the EPO, have been actively exploring the implications of machine learning (ML) and AI for patent law and practice, including the question of whether a machine can invent.

So, have we really reached the point at which machines can challenge humans in the realm of creativity and ingenuity?  And, if so, why are we hearing about it from a law professor and a lone developer, rather than in peer-reviewed publications by leading AI research teams, or in media releases from well-known mega-corporations that have invested billions in this technology?  Furthermore, are we really expected to take seriously claims made by Dr Thaler that his AIs exhibit enhanced creativity as a result of infusing symptoms of ‘mental illness’ into their neural networks

Personally, I have been astonished at the lack of scepticism towards claims of machine inventorship, not only in the media, but also among many patent professionals, and within reputable IP offices.  Even the World Intellectual Property Organization (WIPO), in a recent draft issues paper on ‘Artificial Intelligence and Intellectual Property Policy’, went so far as to accept that ‘it would now seem clear that inventions can be autonomously generated by AI’, noting that ‘there are several reported cases of applications for patent protection in which the applicant has named an AI application as the inventor.’

Nonetheless, whatever I might think of DABUS as a specific example, major national and international IP organisations are responding to broader challenges presented by emerging ML technologies that, inventorship aside, raise genuine questions in relation to subject matter eligibility, obviousness, and sufficiency of disclosure. And since ML technologies can be applied in almost any field of endeavour, from engineering design through to drug discovery, these issues are not confined to inventions in the IT space.

Last month, I presented a webinar on this topic to members of the Institute of Patent and Trade Mark Attorneys of Australia (IPTA).  I have now recorded a version of that presentation, and am making it available as a free online seminar.  It can be viewed on YouTube, or via the embedded player below.  A PDF copy of the presentation slides [1.12MB] is also available for download.

18 May 2020

The 2020 Australian IP Report: Revisited

QuestioningLast month, I wrote about IP Australia’s release of the Australian Intellectual Property Report 2020 (‘IP Report’).  I focused in particular on data included in the ‘Patents’ section of the report, and raised some questions about the methodology and the accuracy of some of the results presented.  I am pleased to say that IP Australia (more specifically, Benjamin Mitra-Kahn, who is the General Manager & Chief Economist in the Policy & Governance Group) reached out to me regarding the issues raised in my article, and we have spent the past couple of weeks working through our respective data sets to identify the origins of the discrepancies between our numbers.  IP Australia will be updating the online version of the IP Report to incorporate a number of corrections.  In this article, I will run briefly through the issues that we identified, and present some updated numbers of my own.

Users of the 2019 release of the IP Government Open Data (IPGOD) will want to take note of a problem with the ‘related patent information’ table (a.k.a. ‘ipgod128’), which records data relating to divisional and additional applications, whereby a number of entries are missing corresponding with applications filed during the final weeks of 2018.  This error resulted in my undercounting of divisional applications in 2018, such that I found an increase in 2019 where the IP Report identified a decline. 

Australian organisations, including a number of universities, that might have felt short-changed by the ‘top-five’ list of applicants presented in the IP Report, should be pleased by corrections that will reflect the true numbers of filings they made during 2019.

To some extent, IP Australia and I have agreed to disagree regarding the merits of distinguishing between ‘original’ and divisional applications, and of ranking applicants on the basis of ‘original’ filings rather than total filings (i.e. including divisional applications).  We do agree, however, that not all divisional applications are created equal, and that a more nuanced approach is necessary to develop a better understanding of how applicants use divisional applications, and what implications this may have for the operation of the patent system, as reflected in this tweet from IP Australia’s Office of the Chief Economist:

While there may still be some minor differences between my numbers and those of IP Australia, due to changes in the live data between the times that we respectively extracted our information, the numbers in this article should be in substantial agreement with those in the revised version of the 2020 IP Report.

11 May 2020

COVID Update – Still No Downturn in Patent Applications, as Self-Filers Focus on Pandemic Solutions

VirusLast month I looked at Australian and New Zealand patent application filings over the first quarter of 2020 and observed that there were no signs – yet – of any obvious downturn as a result of the COVID-19 pandemic.  With April now added to the tally, this remains true.  So far, there does not appear to have been any significant decline in filings compared to the same period in the past two years, or at least no decline that can be discerned amid the ‘noise’ of normal week-to-week fluctuations.  And this is the case across all application types (standard, innovation, and provisional), as well as across applications filed using the services of patent attorneys, and ‘self-filed’ applications prepared and lodged by the applicant and/or inventor themselves.

One thing that is notable, however, is the number of self-filed applications that seem to be related, in one way or another, to the ongoing pandemic.  Out of 182 applications filed by self-represented applicants in April (mostly provisional and innovation patent applications), at least 60 – i.e. nearly one third – are directed to protective equipment, purported treatments, social distancing technologies, personal hygiene, and other COVID-related products, based upon their titles.

Below, I provide updated charts of filings, including April 2020, and a list of COVID-themed patent applications filed last month, for your information and entertainment.

06 May 2020

Listed Group QANTM IP Acquires Sydney-Based Cotters Patent & Trade Mark Attorneys

GrowthOn 6 May 2020, ASX listed holding company QANTM IP Limited (ASX:QIP) announced that it has reached agreement to acquire the boutique Sydney-based IP firm Cotters Patent & Trade Mark Attorneys.  The purchase price is A$6.3 million, paid in a combination of initial and deferred instalments.  Cotters is a small firm that – according to the Register maintained by the Trans-Tasman IP Attorneys Board (TTIPAB) – currently comprises four registered patent attorneys and three registered trade marks attorneys.  It is responsible for 272 Australian patent applications filed on behalf of clients during 2019.  By way of comparison, to the extent that staff numbers and patent filings are any guide, when Watermark (now integrated into Griffith Hack) was acquired by Xenith IP Limited (now merged into IPH Limited) for approximately three times the price of Cotters, it had filed over five times the number of patent applications (1444) during the last full calendar year (2015) prior to the acquisition and employed around four times as many professional staff.

In the announcement, QANTM (and former Xenith IP) CEO Craig Dower is quoted as stating that:

The Cotters business is differentiated from our existing businesses in Australia – Davies Collison Cave and FPA Patent Attorneys – offering a fixed-price service model, and servicing a client base complementary to our existing practices. Cotters was founded just prior to the GFC, and survived and thrived through that difficult period. Cotters will be a positive addition to the QANTM Group.

Read the full announcement [PDF 405kB].  Read on below for a comparison of the patent filing profiles of Cotters, and the other two firms making up the QANTM Group, Davies Collison Cave (DCC) and FPA Patent Attorneys (FPA).

28 April 2020

Annual Australian IP Report Spins 2019 Patent Filing Numbers by Devaluing Divisionals

ReportingUpdate (25 May 2020): Following publication of this article, IP Australia reached out to me regarding the issues raised, and we spent a couple of weeks working through our respective data sets to identify the origins of the discrepancies between our numbers.  The result of this collaboration was some improvements and corrections on both sides. Rather than update this article, I have written separately about what we found, and what was done to address the issues identified.  One consequence of this is that the online version of the 2020 IP Report was updated with some clarifications and corrections, so a number of the questions and criticisms raised in this article no longer apply.  The following discussion will make more sense with reference to this earlier version of the ‘Patents’ section of the IP Report, which was archived on 30 April 2020.

Last week, IP Australia released the Australian Intellectual Property Report 2020 (‘IP Report’).  As has become customary over the past few years, the launch of the IP Report was timed to coincide with World IP Day, which fell on Sunday 26 April 2020.  As my own analysis, published back in January, indicated, the number of Australian standard patent applications fell in 2019, by just under 1%.  The IP Report also confirms my expectation that Chinese patent applicants would surpass Germany and Japan, and push the UK out of the top five, to take third spot in the annual country rankings. Applications from China experienced year-on-year growth of over 45%!

I anticipated that IP Australia would have difficulty placing a positive spin on the 2019 patent filing numbers, given that the decline in 2019 follows two years of growth in patent applications.  However, this has not stopped them from trying, by introducing a new metric which counts ‘original’ applications – i.e. those based on patent specifications being filed for the first time in Australia – as distinct from divisional applications – i.e. those based on the contents of earlier filings.  The apparent implication of the use of this metric in the IP Report is that divisional applications should be ascribed a lower ‘value’ (in some sense) than ‘original’ applications, such that a decline in divisional filings is somehow less significant than a decline in ‘original’ applications. 

Following this same approach, IP Australia has ranked the top applicants of 2019 according to the number of ‘original’ applications filed, ignoring divisional filings.  On this measure, Australia’s biggest filer, Aristocrat Technologies, drops from fourth place, with a total of 238 standard patent applications, to tenth place, with just 96 of those applications being ‘original’ rather than divisional.  An even bigger loser, however, is Apple Inc, which falls from eighth place, with 152 total applications by the conventional measure, to 41st place on the ‘original filings’ measure (45 qualifying applications), behind Australia’s CSIRO (46 ‘original’ applications, out of 51 total filings).

As I shall explain, I believe that there are a number of problems with the use of ‘original filings’ as a metric.  Furthermore, the ‘Patents’ section of the IP Report unfortunately includes results that I have been unable to reproduce, some significant discrepancies between IP Australia’s data and my own analysis, and statements that do not make sense, even on their own terms.  This is a pity, because the annual IP Report is generally a useful summary of activity during the previous year, and it is important that it should be a trustworthy source of information.

24 April 2020

IP Australia is Providing Free, Streamlined Extensions of Time for Parties Impacted by COVID-19

First aidUpdate 25 May 2020: Availability of streamlined extensions of time has been extended until at least 30 June 2020.

IP Australia has announced that, as of 22 April 2020 up until at least 31 May 2020, most deadlines associated with Australian patent, trade marks, and design rights – including evidence deadlines in opposition matters – can be extended by up to three months, at no charge, if the extension is required ‘due to the disruptive effects of the COVID-19 pandemic’.  Free extensions are also available for many deadlines associated with plant breeder’s rights (PBR), although due to specifics of procedures and the PBR legislation these are being handled differently, and often on a case-by-case basis.

The streamlined process for requesting an extension of time involves filing the request online, via the eServices portal, and specifying that the extension is required for ‘circumstances beyond the control of the person’ concerned.  The only supporting documentation required is a simple declaration stating that the reason the existing deadline cannot be met is ‘due to the disruptive effects of the COVID-19 pandemic’.  IP Australia has provided a proforma document containing standard text that may be used for this purpose.  At present, eServices still requires the usual fees to be paid, however IP Australia will refund the fee, and is working to update eServices so that the fee can be waived.  It anticipates that this change will be in place by the end of April.

This streamlined process, and the waiving of fees, are (to my knowledge) unprecedented.  It is particularly notable that the process and fee waiver apply to extensions of time to file evidence in opposition proceedings, for which the normal extension fees are A$500 per month, and extensions have been significantly more difficult to obtain since commencement of the Raising the Bar reforms in 2013. 

In ‘normal’ times, a party requesting an extension of time is required to provide substantive evidence, in the form of a declaration along with any supporting documentation, which may be subject to close scrutiny by IP Australia to determine whether the extension is justified.  Depending on the circumstances, and the type of extension being sought, other interested parties may have the opportunity to comment and/or oppose the grant of an extension.  In oppositions, in particular, it is common for other parties to the opposition to challenge requests for extensions of time.

In these ‘abnormal’ times, however, I suspect that challenges to COVID-19 extension requests are unlikely to be entertained by IP Australia. Requests for extensions under section 223 of the Patents Act 1990, need not be advertised for opposition purposes if they are for no more than three months – as is the case under the streamlined process.  Regarding extensions to patent opposition deadlines under regulation 5.9, it appears that IP Australia intends to accept at face value requests based on the standard text, without requiring any further evidence or documentation, which may leave other parties with no real basis to challenge the justification for the extension.  In any event, if challenges to streamlined requests are permitted, they will cease to be streamlined, which would defeat the purpose of the process!

06 April 2020

COVID-19 Pandemic Yet to Bite Australian and New Zealand Patent Filings – But It’s Just a Matter of Time

VirusDespite the huge economic and social impact of the COVID-19 pandemic, the latest data shows that there has yet to be any significant change in rates of filing of patent applications in either Australia or New Zealand, compared with the same period in the past two years.  In fact, the only notable change in filing patterns in the first quarter of calendar year 2020 was not a decrease in applications, but an increase!  Specifically, the number of innovation patent applications filed using the service of patent attorneys appeared to spike briefly, by about 50%, coincident with the news that the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 had become law.

Other than this, however, it has been ‘business as usual’ up until the end of March 2020 for filings of standard and provisional applications in Australia and New Zealand, while self-filing applicants have continued to do their thing across all categories of application (including innovation patents).  Overall, the rate of standard application filings, including national phase entries (NPE) of international applications filed under the Patent Cooperation Treaty (PCT), in both Australia and New Zealand look to be on par with the first quarters of 2018 and 2019.  Provisional filings in Australia appear to be slightly down on the past two years, although there is no evidence of this being due to any effect of COVID-19.

None of this is greatly surprising.  The real impact of the global pandemic, with the introduction of restrictions, lockdowns, and shuttering of businesses in developed nations – including Australia and New Zealand – did not really start to hit until the beginning of March.  Most non-provisional patent filings are based on priority applications filed up to 12 months previously, or PCT applications typically filed between 18 and 31 months prior.  The incremental cost of these filings is relatively low, and applicants have not yet had time to assess the repercussions of the current crisis and make adjustments to their filing budgets and strategies.  Meanwhile, work on originating applications for new inventions, i.e. the majority of provisionals, filed in March would have commenced well before the seriousness of the COVID-19 pandemic became apparent.

But I expect that it may be only a matter of weeks before the crisis starts to manifest itself in patent filing rates.  As such, the data set out in this article might best be viewed as a baseline, i.e. a snapshot of what we might regard as ‘normal’ before the global economic downturn starts to take effect.

31 March 2020

Why it is Unlikely that the Australian Government Will Invoke Crown Use Provisions in COVID-19 Crisis

CrownOn 19 March 2020, Australia’s Shadow Minister for Employment, Industry, Science and Small Business, Brendan O’Connor, wrote to his counterpart, Industry Minister Karen Andrews, to ask if the government had ‘explored how Crown use of patents may be invoked, particularly for urgent manufacturing of supplies such as facial masks’.  While the country’s response to the ongoing coronavirus pandemic has been, for the most part, blessedly free of blatant political point-scoring, this action appears to have been a rare exception.  Fortunately – though not surprisingly, considering the esoteric nature of the topic – the media mostly ignored O’Connor’s primarily self-promoting announcement. 

One exception to the media silence was InnovationAus, which was happy enough to bumble ineptly through an effort to explain what it was all about, stating that ‘[u]nder the Patents Act, the federal government can use intellectual property without the permission of the copyright owner and does not have to obtain permission or provide compensation during a national emergency.’  Setting aside the tediously common confusion between patents, copyrights, and other forms of IP, this statement is also wrong in asserting that a national emergency excuses the government from providing compensation.  One thing the article does get right, however, is to note that the Crown use provisions of the Australian Patents Act 1990 have ‘virtually never been used before’.  And I do not really expect that to change in the foreseeable future.

Somewhat ironically, in this context, the name ‘coronavirus’ derives from the appearance of such viruses, which have a characteristic ‘fringe’ of rounded or petal shaped projections – reminiscent of the solar corona, the name of which is itself derived from the Latin ‘corona’, meaning ‘wreath’ or ‘crown’.  But no matter how linguistically apposite it might be to invoke Crown use in the fight against the SAR-CoV-2 coronavirus, and the disease COVID-19 that it causes, this is unlikely to happen.  The reason for this is that, in practice, there are at least three circumstances that would need to combine before the government would have any basis to engage ‘emergency’ Crown use provisions:
  1. there would have to be a patent or pending application, in Australia, covering a product required for the country’s response to the COVID-19 pandemic;
  2. the owner of the patent/application would need to be unwilling to meet the requirement by supplying the product itself, and/or by voluntarily licensing other manufacturers or importers to do so; and
  3. for the emergency provisions to apply, the requirement would also need to be so urgent that there was insufficient time for the government to engage in any discussions with the owner to secure the required supplies of the product.
The following discussion relates to the new Crown use provisions that only recently came into effect, on 27 February 2020.

22 March 2020

Interactive Map: New Zealand Patent Applicants, 2017-2019

NZ Map PinIn my two previous articles I looked at patent activity in New Zealand: firstly, filing trends by domestic and foreign applicants over the past two decades; and secondly, leading patent applicants, recipients, and attorney firms in 2019.  While the data shows that patent filings by New Zealand residents have been in decline, I was curious to see how the domestic applicants that have still been using the system in recent years are distributed, geographically, around the country. 

By searching via the online patent search system provided by the Intellectual Property Office of New Zealand (IPONZ), it is possible to obtain tables of results that include addresses of applicants.  Usually these are physical addresses, although they can be distinct postal addresses (e.g. a post office box) or, more rarely, an ‘address for service’ such as a patent attorney or law firm.  Even so, in the vast majority of cases, the address returned is either an accurate representation of the applicant’s location, or a fairly good approximation to it.  I used the Google Maps Geocoding API to convert addresses into coordinates (i.e. latitude and longitude), and then into an interactive map using the Google Maps JavaScript API.

I am not sufficiently familiar with the geography and demographics of New Zealand to comment in the data with any authority.  However, it is fairly obvious (and unsurprising) that there is more activity on the North Island than the South, and that the highest densities of applicants and applications arise in the main centres of population and economic activity, i.e. Auckland and Wellington on the North Island, and Christchurch on the South Island.

20 March 2020

US Companies Dominate NZ Patent Applications and Grants in 2019

NZ ThumbprintIn my previous article I looked at data on New Zealand patent filings and grants over the past 20 years.  The news was not great for domestic innovation, with the number of applications filed by New Zealanders in 2019 being more than 50% below peak levels achieved back in the early 2000s.  Over the same period, the proportion of US applicants each year rose from around 35% to nearly 45%.  It is therefore not surprising that US companies feature prominently in a list of the top applicants for New Zealand patents in 2019, making up 11 of the top 20.  By contrast, Auckland UniServices Ltd is the only New Zealand resident in the top 20, and this is only on the strength of a relatively large number of provisional applications.

Considering only trans-Tasman (i.e. Australian and New Zealand) applicants, the leader by a considerable margin in 2019 was Australia’s ResMed Pty Ltd.  And while New Zealanders featured strongly among those trans-Tasman applicants that filed six or more applications in 2019, this was again largely based on provisional filings.  The top seven trans-Tasman non-provisional applicants – collectively responsible for 132 filings – were all Australian.

Looking at grants, the top recipient of New Zealand patents in 2019 was Australian (ResMed again), while the remainder of the top 10 was made up of eight US companies and one Swedish company.

The leading patent attorney firm for New Zealand filings was A J Park, which filed a sufficient number of New Zealand applications to displace Madderns from the top 10 list of trans-Tasman attorney firms on a combined count of Australian and New Zealand patent filings.

18 March 2020

New Zealand Patent Filing Data Shows a Two-Decade Decline in Applications by Domestic Residents

NZ FlagSince 24 February 2017, patent attorneys in Australia and New Zealand have been subject to a single regulatory regime, under which there is no such thing as an ‘Australian’ or ‘New Zealand’ patent attorney.  Rather, we are all ‘Trans-Tasman’ patent attorneys, qualified and registered to practice in both countries.  Looking just at Australian patent filings, as I have up until now, therefore provides only a partial picture of the market in which trans-Tasman attorneys operate.  However, I am now able to analyse New Zealand patent information, using data sourced from the online patent search system provided by the Intellectual Property Office of New Zealand (IPONZ).

Of course, Australia and New Zealand are separate countries, with their own distinct governments, policies, laws, and economies.  The behaviour of patent applicants in each country is obviously more strongly influenced by these factors than by the regulation of the patent attorney profession!  There is, accordingly, no reason to expect that filing patterns in New Zealand should mirror those in Australia, and in fact they do not.  I have previously bemoaned stagnation in patent filings by Australian residents, and the poor outcomes achieved by self-represented applicants.  However, it turns out that the situation is even worse in New Zealand, where filings by domestic applicants have been in serious decline for most of the past two decades, and a larger proportion of applications are filed without professional assistance.  Between 2005 and 2019, the proportion of non-provisional New Zealand patent applications filed by New Zealanders fell from around 15% to less than 6%, while in 2019 nearly a third of provisional applications and over a sixth of non-provisional applications made by domestic applicants were self-filed.

At the same time, foreign residents – most particularly from the US, but also from Australia – have become proportionately larger users of the New Zealand patent system.  Overall, and in contrast with global trends, there has been no growth in New Zealand patent filings over the past two decades, and New Zealanders have become ever more minor users of their own national patent system.

27 February 2020

Countdown to the End of the Innovation Patent: Abolition Legislation Signed into Law

Like sands through the hourglassOn 26 February 2020, the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019 received Royal Assent (i.e. was signed into law by the Governor General of Australia), becoming Act No. 9 of 2020.  I reported passing of this Bill in the Senate, with amendments, in November last year, noting that its passage through the House of Representatives (which eventually occurred on 5 February 2020) was a mere formality.  The full text of the Bill, as passed, can be found on the Parliament of Australia website, and should soon be available as the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Act 2020 on the Federal Register of Legislation.

The main feature of the Act, about which I have written a number of times over the past few years, with varying degrees of ambivalence, is the abolition of Australia’s second-tier innovation patent system.  I briefly reviewed the history of the innovation patent’s downfall when reporting passage of the Bill through the Senate, and will not rehash this here.  The key point to note, however, is that the legislation provides for an 18 month window, commencing on the date of Royal Assent, before the phase-out of the innovation patent begins.  The following timeline has therefore now been established:
  1. 26 February 2020 – Act receives Royal Assent;
  2. 26 August 2021 – no longer possible to file new innovation patent applications, other than divisional applications based on applications filed on or before 25 August 2021; and
  3. 25 August 2029 – final expiry date of all innovation patents (i.e. eight years after the last possible filing date of 25 August 2021).
The Bill originally provided a 12-month sunset period, however this was extended to 18 months by amendments in the Senate proposed by the Labor opposition, along with provisions requiring that a statutory review be undertaken to assess the impact on Australian small to medium enterprises of abolishing the innovation patent system, and make recommendations to facilitate access to standard patent protection for small business in Australia.  The review must commence within three months (i.e. by 26 May 2020), and provide a written report to the Minister for Industry, Science and Technology (currently the Hon Karen Andrews MP) within 12 months of commencement (i.e. no later than 26 May 2021).

To assist people with keeping track of the time remaining to file new innovation patents, I have added a countdown timer to the sidebar of this blog.  (You’re welcome!)  Notably, because 2020 is a leap year, and the Act received Royal Assent prior to 29 February and during daylight savings time, everyone has 25 hours more than would otherwise have been the case to file their final innovation patent applications!

While abolition of the innovation patent is, for most people, the big ticket item in the Act, it introduces a few other changes to Australia’s IP laws.  Read on for a brief summary of these.

17 February 2020

New Practices Arise, as Over 20% of Australian and New Zealand Patent Attorneys Change Jobs in Just Two Years

DoorsI have been writing about upheavals in the trans-Tasman patent attorney profession for a number of years now, including: the public listing of IP firms; the acquisition of firms by the listed groups; regulation of the profession in response to changes in ownership structures; the demise of long-standing brands such as Fisher Adams Kelly Callinans, Cullens and Watermark; mergers and acquisitions among the listed groups; shifts in market preferences in favour of smaller, privately-held firms; and a legal stoush over the alleged breach of restraint clauses by two former partners of a listed group firm.  It has certainly been an eventful period for the profession!

For the most part, my analysis has focused on developments at corporate and firm level, such as how listed group firms are faring compared to privately-held firms, or how larger firms are performing relative to smaller firms.  And while there is no lack of upheaval among IP firms in the Australian and New Zealand markets, when I drill down to the level of individual attorneys, the rate of staff turnover seems quite remarkable. 

I have performed an analysis of the movements of individual registered trans-Tasman patent attorneys over a 25-month period, and found that during this time just over 200 attorneys have changed jobs.  This may not sound like many, but because the patent attorney profession is small, it actually represents nearly 22% of all attorneys.  To put this in perspective, the most recent National Profile of Solicitors, published by the Law Society of NSW, put the number of members of the legal profession in Australia at 76,303 in October 2018.  Thus if lawyers had been churning over at the same rate as patent attorneys over the past two years, that would be over 16,500 people moving to new jobs!  By way of further comparison, a recent long-term study of a cohort of US lawyers found that 35% had changed jobs over the decade between 2006 and 2016, i.e. a period five times as long as that covered by my data.

A significant proportion of the turnover of attorneys has been into new practices.  There are now 47 pre-existing attorneys, and five recently-registered entrants to the profession, working in patent practices that did not exist in January 2018.  A few of these are practices that have been established within existing legal or other advisory firms.  The majority, however, are new micro practices comprising three attorneys or fewer.  In particular, there are now 22 more solo practitioners than there were at the start of 2018.  Whether you regard this as a strengthening of competition, or a worrying fragmentation of the profession, probably depends upon your point of view.  (I am pessimistically inclined to the latter interpretation.)

A number of the newly-emerging practices have made a solid start in terms of Australian patent filings, with four making it in to the top 50 firms for total filings over calendar year 2019.

12 February 2020

IP Australia Proposes Minor Fee Changes, Major Changes to Opposition and Other Hearing Costs Awards

Balancing the booksJust prior to Christmas, IP Australia announced that it is seeking feedback on its draft Cost Recovery Implementation Statement (CRIS), which outlines proposed fee changes that would take effect from October 2020.  It is also taking the opportunity to review the hearing costs that may be awarded for Patents, Trade Marks and Designs.  The public consultation process closes this Sunday, 16 February 2020.  In this article I will look briefly at proposed fee changes in relation to patents, none of which strike me as unreasonable or contentious.  I am, however, more concerned about proposed increases in the costs that may be awarded in relation to contested hearings, and most particularly patent oppositions.

IP Australia conducts its regulatory role in administering Australia’s system of registered rights (patents, trade marks, designs, and plant breeder’s rights) on a cost recovery basis, i.e. it seeks to cover the costs of these aspects of its activities from the fees charged to users of the system (which these days, for better or worse, it calls ‘customers’).  To do this, it uses various financial and economic systems and models to forecast expected demand and cost of service delivery, and reviews and adjusts fees on this basis every few years.  IP Australia last undertook a fee review in the 2015-16 financial year.

Cost recovery does not require each individual fee to reflect the cost of the nominally associated service.  The fee for requesting examination of a standard patent, for example, is (and will remain, under the proposed fee structure) A$490, which doubtless falls far short of the actual cost of examining an application.  Patent maintenance fees, on the other hand, correspond with minimal and highly automated administrative tasks, and currently rise as high as A$2550 annually, for pharmaceutical patents extended beyond the standard 20 year term.  This reflects the fact that fee setting can serve broader policy purposes, such as providing an incentive for patentees not to maintain patents that no longer hold corresponding commercial value, thus freeing up the patented technology for public use.

Costs in contested hearings, on the other hand, have nothing to do with the operations of IP Australia.  They are amounts, set by regulation, that can be awarded by designated officers of IP Australia against unsuccessful parties in administrative proceedings such as patent oppositions.  They are paid directly by the ‘loser’ to the ‘winner’, and are intended to offset the actual costs of the proceedings incurred by the successful party.  IP Australia is proposing to increase the costs that may be awarded significantly (by more than four times in some cases), on the basis that this will ‘better reflect the actual costs incurred’, and that the proposed costs ‘are based on the practice of the Federal Court’.  Both of these justifications may be true, though that does not automatically make them relevant!

Universities and Research Institutes Dominate Australian and New Zealand PCT Filings

PCT Contracting States (153)In earlier articles I have looked at data on Australian patent filings and grants, as well as associated attorney firm performance.  While these numbers give us a good picture of application activity in Australia, they provide no information on the filing activities of Australian applicants in other jurisdictions.  Many innovators that are ultimately interested in securing patent protection in multiple countries choose to do so by first filing an international application (IA) under the Patent Cooperation Treaty (PCT).  In this article, therefore, I examine some recent PCT filing data for applicants, and patent attorney firms, resident in Australia and New Zealand.

As most readers will be aware, the PCT is an international treaty administered by the World Intellectual Property Organization (WIPO) that enables residents of any member country (of which there are currently 153, illustrated by the map at the top of this article) to file a single IA that has the effect of establishing a corresponding filing date in all of those countries, and associated regional patent systems.  While the PCT system is sometimes presented as a mechanism for improving efficiency and/or saving money, whether or not it achieves such benefits depends very much on each individual case, and the extent to which its centralised search, ‘preliminary examination’, and amendment processes enable subsequent national applications to be streamlined.  In practice, it remains necessary to file further applications in all countries of interest within 30 (or, for some countries, 31) months of the initial priority date, which must then each be examined under the corresponding national patent laws and procedures before any patent is actually granted.  All else being equal, therefore, a PCT application represents an additional cost, incurred prior to the various national costs, and may delay the examination and grant of national patents by up to two and a half years.

Despite this, the PCT system is popular with many Australian and New Zealand applicants.  In 2018, for example, Australian residents were named as applicants on over 1,700 IA’s, which compares favourably with the 2,756 domestic standard patent applications filed by Australian applicants in that same year.  The reason for this popularity is clear – even though it represents an additional cost, an IA defers a final decision on the jurisdictions in which patents will be pursued, along with the substantial further costs of filing and examination in multiple national and/or regional patent offices, for up to an additional 18 months.

This benefit of the international application system is clearly reflected in the most enthusiastic users of the system.  Of the top 20 Australian and New Zealand applicants named in PCT applications published over the three years between the beginning of 2017 and the end of 2019, 14 are universities or other public research institutions.  Of the remaining six, three are medical device manufacturers.  All of these are organisations that can particularly benefit for the deferral of further filing decisions and costs that the PCT system provides.

28 January 2020

Interactive Maps II: Where do Leading Patent Attorney Firms Find New Clients?

Australia Map PinIn my previous blog post, I explained how preparing articles looking at patent applicants, patent recipients, and attorney firm performance over calendar year 2019 had got me thinking about where ‘new’ Australian patent applicants come from, in the literal sense of where they are located geographically?  I also noted that IP Australia’s annual IP Government Open Data (IPGOD) release includes geographical information, in to the form of latitude and longitude coordinates, for Australian-resident applicants.  In particular, the most recent release, IPGOD 2019, includes location data for most Australian applicants going back over more than three decades, up until the end of 2018.

From this data, I have generated two interactive maps.  In the previous article I presented the first, showing the geographical distribution of new applicants that used the services of a patent attorney versus those that filed their own applications.

In this article, I present the second map, showing the distribution of new client acquisitions by ten leading Australian patent attorney firms.  The maps shows that, unsurprisingly, metropolitan applicants that engaged an attorney showed a distinct – though not universal – tendency to choose a firm with a local physical office.  Interestingly, comparing with the other map of self-filers versus those that engaged an attorney, an absence of local patent attorneys does not appear to be a major influence on whether applicants chose to self-service, rather than tracking down an attorney – the distributions of self-filers and those who engaged an attorney look very similar.  On the other hand, among leading firms it is clear that some do a better job than others of reaching out to acquire clients in regional areas.

Interactive Maps I: Where Do New Australian Patent Applicants Come From?

Australia Map PinIn my recent articles looking at patent applicants, patent recipients, and attorney firm performance over calendar year 2019, I noted (from all three perspectives) the disappointing showing of Australian applicants.  That being said, there are, nonetheless, thousands of applications filed by Australian residents every year, which got me wondering – out of idle curiosity as much as any expectation that it would be especially enlightening – where do ‘new’ Australian patent applicants come from?  I mean this in the most literal sense: where are Australian companies and individuals, filing for the first time, located geographically?

Fortunately, IP Australia’s annual IP Government Open Data (IPGOD) release includes geographical information, in to the form of latitude and longitude coordinates, for Australian-resident applicants.  In particular, the most recent release, IPGOD 2019, includes location data for most Australian applicants going back over more than three decades, up until the end of 2018.  I thought it might be fun to turn some of this data into interactive maps.

I have generated two such maps.  In this article I will present the first, which shows the geographical distribution of new applicants that used the services of a patent attorney versus those that filed their own applications.  Unsurprisingly, the data shows a concentration of applicants in the major cities of Sydney, Melbourne, Brisbane, Adelaide, and Perth.  However, a significant number of applicants is also located in regional Australia.

In a separate article, I present the second map, showing the distribution of new client acquisitions by ten leading Australian patent attorney firms.

22 January 2020

Samsung Tops Australian Patent Grants for 2019, with Local Innovators Nowhere to be Seen

BinocularsIn my previous two articles I looked at entries to the Australian patent system in 2019, i.e. who filed new applications last year, and which patent attorney firms were the ‘winners’ and ‘losers’ in the filing stakes.  These numbers tell us something about the current state of the market, and which companies are innovating – and seeking to protect their innovations – right now.  Many people, however, are more interested in who has been obtaining granted patent rights, rather than who might obtain granted rights in a few years’ time.  Indeed, the unveiling of the top recipients of US patents by IFI Claims Patent Services has become something of an annual event, generating considerable media interest, and the now-familiar sight of IBM sitting at the top of the list (for 27 consecutive years).

According to IFI Claims, there were 333,530 new US patents issued in 2019.  Patently-O’s Dennis Crouch, on the other hand, puts the number at 354,507, while a search on the USPTO’s own database (using the query string ‘ISD/20190101->20191231 and APT/1’) returns a count of 354,446.  Who to believe?!  Whichever number is correct, 2019 established a new all-time high, at about 10% above the previous record set in 2017.

I do not expect there to be quite as much interest in the fact that 17,007 Australian standard patents were granted in 2019.  This was not a new record.  In fact, it was slightly lower than 2018, when 17,065 standard patents were granted, and well below the 2016 peak of 23,774.  It should be kept in mind, however, that a surge in patent grants between 2014 and 2017 was driven largely by the behaviour of applicants bringing forward requests for examination prior to commencement of the Raising the Bar reforms on 15 April 2013, so the past couple of years should represent a more normal rate of patent issuance based on the underlying filings and examination requests.

Samsung topped the list of patent recipients in Australia with 203 patents, followed by Covidien (150), Apple (137), LG Electronics (132), and Huawei (119).  Not one Australian patentee appeared in the top 50, although New Zealand’s Fisher & Paykel Healthcare just squeezed in at number 48, albeit with just 35 patents.  By way of comparison, in 2019 Samsung obtained 6,469 US patents (ranked 2nd), Covidien 92 (68th), Apple 2,490 (7th), LG 2,805 (6th), and Huawei 2,418 (10th).

A notable absence from the top end of the rankings is Aristocrat which, despite filing a total of 722 standard patent applications between 2015 and 2018 received only 13 granted patents in 2019, in second place among Australian patentees behind national research organisation CSIRO with 25.  In fact, the top 30 Australian patentees combined received only 162 patents in 2019, or 31 fewer than Samsung.

Overall, despite being consistently the second largest filing group (after US residents) Australians were only the fifth most numerous recipients of Australian patents in 2019, with just 908 patents, behind Germans (937), Chinese (1,035), Japanese (1,257), and US residents (8,139).  So it seems that Australians are shunning our own patent system, which might not be such bad news if there were any sign that Australian applicants were securing patent protection in major export markets.  This does not, however, appear to be the case.  IFI Claims lists only the top nine countries in its public summary of US patent trends, from which Australia is absent, placing the country somewhere behind ninth-placed Canada, which received 4,651 US patents in 2019.

21 January 2020

Winners & Losers in Patent Filings – Why 2019 Was a Bad Year for Many Major Attorney Firms, and for Australia

You win, you loseIn my previous article, I looked at the top applicants for Australian patents in 2019.  In this article, I turn the spotlight on the Australian patent attorney firms that were responsible for handling many of those filings.  Having identified a 1% decline overall in standard patent filings, a nearly 20% decline in innovation patent filings, and essentially no change in provisional applications, it stands to reason that the Australian patent attorney profession as a whole has not experienced any growth in patent filing work over 2019.  However, as we shall see, the pain has not been shared equally across the profession.

Based on total patent filing numbers alone (which is, of course, not the whole story – although for many firms it is a significant part of it) the big winners in 2019 were, by and large, smaller independent firms, which appear to have beaten out a number of larger firms in acquiring new filing work.  Among the bigger and better-known brands, however, there is little evidence that ownership status – i.e. whether a firm is privately-held, or a member of either of one the listed IPH (ASX:IPH) or QANTM IP (ASX:QIP) groups – was a significant factor in securing filing work.  Size, rather than ownership, appears to correlate more closely with whether filing numbers grew or declined in 2019.

Comparing with my analysis for the 2018 calendar year, the top 10 firms for overall patent filings in 2019 remained unchanged, with Spruson & Ferguson, Davies Collison Cave (DCC), Griffith Hack, FB Rice, Phillips Ormonde Fitzpatrick (POF), Pizzeys, Shelston IP, FPA Patent Attorneys, Watermark (soon to be merged into Griffith Hack), and Madderns all taking their places in the same order as the previous year.  However, all but DCC experienced a decline in overall filings, and in standard application filings.

Aside from DCC’s gain in standard application filings, and a strong showing from Spruson & Ferguson on innovation patent filings, listed-group firms generally went backwards in 2019, with the winners across all application types (i.e. standard, provisional, and innovation) being privately-held firms.  However, this seems to have had less to do with ownership structure than size, and a general trend in favour of smaller firms over larger ones (which I have previously noted with respect to Australian SME clients, but which appears to be true more broadly).  With the notable exception of a significant growth in provisional application filings by FB Rice, the larger privately-held firms (which also include POF, Wrays and Madderns in Australia, and New Zealand based James & Wells) also failed to make gains in filing numbers in 2019.

While most people outside the profession probably care little for the business challenges faced by patent attorneys, I would argue that a bad year for attorney firms is also a bad year for Australia.  It is well-established that innovation underpins improvements in productivity and a rise in the standard of living (preferably with a reduced environmental impact), and demand for patent attorney services is (or should be) linked to levels of innovative activity.  Logically, then, stagnation in demand for such services is not good news for the nation.

17 January 2020

Chinese Mobile Tech Company OPPO Comes from Nowhere to Top Australian Patent Filing Table for 2019

2019Last calendar year, the number of standard patent filings in Australia fell by 1%, from 29,957 in 2018 to 29,666 in 2019.  While this represents only a small decline, it follows two years of growth, by 1.8% for 2016-2017 and 3.6% for 2017-2018, and thus represents a reversal of the recent upwards trend.  While international data on 2019 patent filings is not yet available, I think it doubtful that when IP Australia releases the 2020 edition of its annual Australian IP Report later this year it will be able to claim a high ranking for Australia among the Organisation for Economic Co-operation and Development (OECD) countries in terms of patent growth, as it did in last year’s report.  The 2019 result reflects a decline in both direct filings, and filings resulting from national phase entry of international applications previously filed under the Patent Cooperation Treaty (PCT).

Demand for Australia’s second-tier patent right, the innovation patent, also fell in 2019, with 1702 applications for innovation patents being filed, compared with 2121 in 2018.  Legislation to phase out the innovation patent system passed in the Senate late last year, and now merely awaits the formality of passage through the House of Representatives before becoming law, although it seems unlikely that the decline in filings is in any way related.

Provisional filings – mostly by Australian residents – remained steady, with 4,947 provisional applications filed in 2019, compared with 4,943 in 2018.  This is mildly positive news, following as it does a fall of 5.2% between 2017 and 2018. 

It is also encouraging to see that self-filing of new patent applications declined yet again in 2019.  The number of originating applications (i.e. those that claim no earlier priority date, and are thus in most cases freshly-drafted) filed without the assistance of a patent attorney or other agent dropped to 1,702 from 1,870 in 2018.  This is now less than half of the nearly 3,500 originating applications that were self-filed each year between 2002 and 2007.  I regard this as a positive trend because the available data establishes, beyond any doubt, that outcomes for self-represented applicants are consistently far inferior to those of applicants that engage professional assistance.

As in previous years, the list of top applicants for Australian standard patents is dominated by foreign companies, with Aristocrat Technologies once again the only Australian company to appear in the top 30.  Aristocrat fell two places, to number four in the rankings, despite filing 238 standard patent applications (only just shy of the 252 it filed in 2018), and a significant decline in filings (from 314 to 244) by last year’s top applicant, Qualcomm, which now stands third.  LG Electronics was a big mover, increasing its filings from 175 to 245 to grab second spot.

The big surprise in the rankings is first-time entrant Guangdong OPPO Mobile Telecommunications Ltd (‘OPPO’), which leapt straight to number one with 314 standard patent applications.  OPPO had never filed more than 19 Australian applications in any previous year (that was in 2017), and had filed a grand total of just 47 applications up until the end of 2018.

Among Australian residents, universities and public research institutions once again feature prominently, taking half of the top 20 places in the local rankings of standard patent applicants, and 12 of the top 20 in the provisional filing chart.

For all the numbers, and further commentary, please read on.

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The Patentology Blog by Dr Mark A Summerfield is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 3.0 Australia License.