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.
‘Standard’ Applications
The chart below shows the number of Australian standard patent applications (including PCT NPE) filed by patent attorneys/firms each week during the first quarter of calendar years 2018, 2019, and 2020. Self-filed applications, and applications filed by non-attorney agents, are not included in this chart. The week numbering follows the ISO-8601 standard – you can view the corresponding dates here. Week 1 is excluded, because it generally includes the final days of the prior year. Week 13 of 2020 ends on 29 March, so filings on the 30th and 31st of March this year are not included in the data. As far as possible, however, the periods covered in all three years are directly comparable.While there are, of course, week-to-week fluctuations, and we already know that there was a slight decline in annual filings in 2019 as compared with 2018, it is fair to say that there is no evidence of any specific reduction in filings in the most recent weeks of 2020. Within normal variations, filing patterns appear substantially identical across the three years.
Provisional Applications
The following chart shows the number of Australian provisional applications filed by patent attorneys/firms each week. Again, self-filed applications, and applications filed by non-attorney agents, are not included in this chart.Most provisional applicants are Australian resident individuals and companies. The steady increase over the first few weeks of each year reflects the fact that the period between Christmas and mid-to-late January is the main summer holiday (vacation) time in Australia, when many businesses have reduced staffing and activity. The annual dip in week 11 is unusual, and my best guess is that this coincides with public holidays in Victoria (Labour Day), Tasmania (Eight Hour Day), and the Australian Capital Territory (Canberra Day). The lack of a dip around week four or five, which would correspond with the national Australia Day holiday, is most likely because businesses had not returned to full operations after the summer break anyway.
At a glance, it appears that 2020 was off to a slower start in provisional filings, compared to the previous two years, even before the COVID-19 pandemic struck. As yet, however, there is no evidence of any additional slow down in the most recent weeks.
Innovation Patent Applications
The chart below shows the number of Australian innovation patent applications filed by patent attorneys/firms each week. Once again, self-filed applications, and applications filed by non-attorney agents, are not included.A couple of things are notable about this data. Firstly, there is no ‘ramp-up’ through January, as with the provisional filing data. For 2020, at least, this is partly because Australians have not been the primary users of the innovation patent system during the first quarter. There have been 137 innovation patent applications filed by Chinese nationals, compared with 93 by Australians (distantly followed by the US on 44, and Taiwan on 10). Keep in mind that these are not ‘junk’ applications, that have been self-filed, or filed by non-attorneys providing an Australian address – these are only applications filed using the services of Australian and New Zealand patent attorneys. During the same period in 2019, the equivalent figures were 48 filings from China and 114 from Australia, so this is a significant change in activity by Chinese applicants. Additionally, around two-thirds of all innovation patents claim an earlier filing or priority date, i.e. they are based on some prior application that may not have been prepared or filed during a ‘slow’ period of the year.
Secondly, there appears to be a ‘spike’ in innovation patent filings at around weeks 9 and 10. While this could just be a statistical blip, the fact that it happens to coincide with commencement of the Intellectual Property Laws Amendment (Productivity Commission Response Part 2 and Other Measures) Bill 2019, which included provisions to phase out the innovation patent system, is at least suggestive. To be honest, there is no good reason why applicants should have been encouraged or advised to accelerate innovation patent filings as a result of this event, since the legislation includes an 18-month ‘sunset’ period during which innovation patent applications can still be filed without restriction. But people do not always behave in entirely rational ways!
Self-Filers
The chart below shows the number of Australian patent applications of all types filed by unrepresented applicants (i.e. self-filers) each week. While week-to-week variations are fairly volatile – in part because of the relatively small volume of filings – there is no evidence that self-filing numbers are strongly influenced by the time of year, phase of the moon, or anything else.The following chart shows the weekly self-filing numbers broken down by application type for the first quarter of 2020. Unsurprisingly, the largest numbers of self-filed applications are provisionals – which also show the greatest volatility.
Interestingly, among self-filers – who presumably do not have the benefit of receiving advice or information about legislative developments from patent attorneys – there was no spike in innovation patent filings around weeks 9 and 10 of 2020.
New Zealand Filings
Finally, the following chart shows the number of New Zealand complete patent applications (including PCT NPE) filed by patent attorneys/firms each week during the first quarter of calendar years 2018, 2019, and 2020. As with the Australian data, self-filed applications, and applications filed by non-attorney agents, are not included in this chart.Consistently with the equivalent Australian data, there is no evidence of any specific reduction in filings in the most recent weeks of 2020. Indeed, there is no reason to expect that there would be.
I have not generated charts of New Zealand provisional applications, or of self-filing activity in New Zealand. While both exist, the numbers are too low (less than one filing per day, on average) to be remotely meaningful.
Conclusion – Hard Times Ahead for Patent Attorneys
The full impact of COVID-19 on the patent attorney profession will only gradually reveal itself over the weeks, months, and years to come. The first concern for many attorneys and firms will be when, or whether, they will get paid for work already completed and invoiced before the crisis struck, and in its early, less brutal, days. Next, I expect we will see a fall in originating filings, i.e. provisionals and other applications without earlier priority claims, as domestic businesses cut back on R&D and other expenditure relating to the generation and protection of new IP.At the same time, it is likely that there will be a smaller decline in non-provisional filings, and an increase in abandonment of pending applications, as both domestic and foreign businesses tighten their belts and reassess priorities in their international filing strategies. Sadly, too, there will be businesses that do not make it through this challenging time.
And the effects will continue to be felt by patent attorneys for years after the COVID-19 crisis finally passes. All over the world, levels of R&D and rates of innovation and new filings will be suppressed during this period. This will mean fewer national and international filings for at least 12 months after businesses start to ramp up again, and fewer PCT national phase filings for at least a further 18 months after that.
In ‘normal’ times, patent attorney businesses are relatively robust to economic cycles. Often a downturn in one country is offset by increased activity in another, keeping the overall level of available work relatively stable. But these are not normal times. Just as in the global financial crisis (GFC) of 2007-2008, the impact of COVID-19 is being felt everywhere at once. The months and years ahead are going to be difficult ones for Australian and New Zealand patent attorneys.
Tags: Australia, COVID-19, New Zealand, Patent analytics
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