10 July 2020

How Many Patents Are There?

AbacusA question that I see asked from time-to-time is: ‘how many granted, enforceable patents actually exist?’  The answer obviously changes almost every day, as old patents cease or expire, and new patents are granted.  That being said, as of 6 July 2020 there were, according to IP Australia’s records, 160,822 standard patents in force in Australia, along with 1,254 certified innovation patents.  Of these, the enforceable standard patents were most likely to be around seven years old (in the sense that the mode of the distribution of patents by effective filing year was 2013), while certified innovation patents were most likely to be around five years old.

There were, additionally, 76,634 pending standard patent applications, of which 6,260 were already accepted, i.e. almost certain to become granted patents within the next few months.  There were also 6,974 innovation patents registered, but not certified.  However, based on past performance it is likely that somewhat less than 10% of all of innovation patents that are not yet certified will ever be certified.

In this article I present annualised charts of all the Australian patents and applications that had a ‘live’ status on 6 July 2020.

Granted Patents

The chart below shows the number of granted Australian standard patents, grouped by ‘effective filing year’, i.e. the year in which the patent term commences (by default this is the year of filing, but for divisional patents it is the year of filing of the parent, or ultimate ancestor, application).

Live Standard Patents

The mode of the distribution of live patents by filing year is 2013, i.e. around seven years ago.  Six-year-old patents come a close second, however there is then a significant drop-off in 2015 and more recent years.  This simply reflects the fact that most recently-filed applications have yet to be examined, and remain pending.

Maintenance (i.e. renewal or continuation) fees are payable on all Australian standard applications and patents from the fourth anniversary of the effective filing date.  Over time, therefore, patents that are no longer of sufficient value to their owners tend to be allowed to cease, by non-payment of these annual fees, prior to the normal maximum term of 20 years.  This explains the steady decline of patents having an effective filing date from 2012 back to 2000.  In this context, it is notable that IP Australia recently proposed an increase in renewal fees in the later years of the patent term, based on a recommendation of the Australian government’s Productivity Commission, designed to encourage earlier abandonment of relatively low-value patents.

Finally, a very small minority of patents relating to pharmaceutical products subject to time-consuming clinical trials and regulatory approval processes are eligible for an extension of term of up to five years in compensation, which explains why there remains a handful of live patents with effective filing dates extending back to 1995.

It should be said that the above figures may slightly over-estimate the number of patents remaining in force.  There tends to be a delay between a deadline passing that results in ceasing or expiry of a patent (or, for that matter, the lapsing of an application) and an update to the status in IP Australia’s records.  Thus a small number of patents that may have recently ceased or expired may still be showing a ‘live’ status.

Pending Applications

The following chart shows the number of pending Australian standard patent applications, again grouped by effective filing year.  The bars in the chart are colour-coded to indicate the proportion of applications each year that have been accepted, relative to those that have not.

Pending Standard Applications

Consistent with the distribution of granted patents in the previous chart, the largest numbers of pending applications have an effective filing date between 2016 and 2018.  The majority of standard patent applications in Australia are filed via the international application system, under the Patent Cooperation Treaty.  By the time a PCT application enters the national phase in Australia, it is already up to 31 months after its original filing date (which becomes the effective filing date in Australia).  This explains the relatively low numbers of applications with an effective filing date in 2019 or 2020 – these numbers will eventually be boosted by PCT applications that have already been filed, some of which will enter the national phase in Australia over the next couple of years.

The largest numbers of accepted applications have an effective filing date between 2015 and 2017, while relatively few applications remain with a filing date earlier than 2014.  This provides a fair indication of the typical period of pendency of an Australian application. 

There are, however, a number of applications with effective filing dates in 2013 and earlier, including some dating back to the early 2000s that may not be granted before their 20-year term expires!  The most common explanations for such long periods of pendency are lengthy chains of divisional applications, and/or protracted opposition proceedings.

For example, Australian application no. 2018250468 (which is pending) is a divisional of application no. 2016250357, which was in turn divided from application no. 2012241170, which was divided from application no. 2008202567, which was divided from application no. 2004242550, which was divided from the original ancestor application no. 2000035194, which was filed on 9 March 2000.

A more interesting case is application no. 2010202253, which is accepted (and has been since October 2013), and is a divisional of application no. 2003303599.  This divisional application has an effective filing date of 31 December 2003.  The original application was accepted in February 2010, but was subsequently opposed and eventually withdrawn.  The divisional application was also opposed, and the opposition outcome was appealed to the Federal Court of Australia, where it has been the subject of two judgments: Meat & Livestock Australia Limited v Cargill, Inc [2018] FCA 51, and Meat & Livestock Australia Limited v Cargill, Inc (No 2) [2019] FCA 33.  It appears that further appeal proceedings are ongoing, in relation to amendment orders made by the court, so there seems to be little prospect of a patent being granted any time soon.

Similarly to the situation with granted patents, the figures above may be a slight over-estimate, due to a small number of recently-lapsed applications still showing a ‘live’ status in IP Australia’s records.

Innovation Patents

The chart below shows the number of granted innovation patents, grouped by effective filing year.  Since innovation patents are not subject to substantive examination prior to grant, almost all innovation patent applications are granted within a few weeks of filing, and the number of pending innovation patent applications is typically relatively low (there were 151 on 6 July 2020, when the data for the chart below was retrieved, most of which will end up contributing to the 2020 figures).  The bars in the chart are colour-coded to indicate the proportion of patents each year that have been certified, relative to those that have not.

Live Innovation Patents

Renewal fees become payable on innovation patents from the second anniversary of the effective filing date, which largely explains the abrupt decline in survival of innovation patents having an effective date prior to 2017.  Having said that, an innovation patent that is maintained beyond its second anniversary stands a relatively good chance of surviving its full eight-year term (the sharp further decline in 2012 in the above chart is artificial – since patents filed in the first half of that year have already expired at full term, we are really only looking at a half-year of data).  This contrasts with standard patents, which show a steady and consistent year-on-year decline in numbers beyond the eighth anniversary.

Certified innovation patents, in particular, have a high survival rate, with the proportion of innovation patents that have been certified being generally higher among older patents.

Conclusion – Certainty and Uncertainty in the Patent System

In contemplating the above numbers, it is worth keeping in mind that granted standard patents, and certified innovation patents, provide ‘certainty’ to owners and prospective infringers alike, in the sense that the maximum scope of the claims (subject to the nuances of interpretation) is essentially fixed and a matter of public record.  Pending applications and uncertified innovation patents, on the other hand, represent uncertainty and risk, since the scope of any claims that might ultimately become enforceable is unknown and subject to constraints that are only partially foreseeable (e.g. the scope of support provided by the disclosure in the patent specification, and the state of the prior art).  Even accepted applications, the claims of which are fixed, in principle, following examination, represent uncertainty for at least three months, during which time they may be opposed, and divisional applications may still be filed.

According to a very simplistic measure, therefore, the state of patent rights in Australia is approximately 33% uncertain, i.e. about a third of all patents and applications are of indeterminate future scope and/or effect.  That seems like quite a lot, and goes some way to explaining why IP Australia, through the 2012/2013 Raising the Bar reforms to Australia’s patent laws and regulations, sought to reduce uncertainty through such measures as increasing the pace of opposition proceedings, reducing the period during which an application may be under examination, and imposing additional restrictions on the filing of divisional applications.


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