30 April 2021

March Madness? A Patent Filing Boom Month Defies Recent Trend

BoomI had just finished writing, yesterday, about the latest annual Australian IP Report, and the continuing decline in patent filings in Australia, when I decided to take a look at the numbers for March 2021.  To my immense surprise, March was a boom month for Australian patent applications!  The total number of filings, across all application types (provisional, standard, and innovation patent applications) for the month was 3,906.  To find a month in which more applications were filed in Australia it is necessary to go back eight years, to April 2013, when 7,062 applications were filed.  And that only happened because of the large number of applicants bringing filings forward by up to 18 months in anticipation of the Raising the Bar law reforms, which raised the threshold for the grant of a valid patent and commenced on 15 April 2014.  The only other month that comes close is September 2015, when 3,827 applications were filed.

Of course, part of the reason for the high filing numbers in March is the current surge in innovation patent filings, which are presently running at about four times their ‘natural’ level (based on historical behaviour).  In large part, this is driven by Chinese applicants collecting granted patents in order to claim government subsidies, but also by other users in anticipation of the impending phase-out of the innovation patent system from 26 August 2021.

But innovation patents are not the whole story.  As data presented below demonstrates, there were more standard applications filed in March 2021 than in any month since September 2015.  Even in 2018 – which was a peak year for standard applications – there was no individual month in which more applications were filed.

Nor can the boom month be attributed to Chinese applicants – or any other particular country of origin.  Applicants from seven out of the top 10 countries of origin filed more applications in March 2021 than during the same period last year.

So what is going on here?  I have no idea!  This could be a one-off.  It could be some sort of ‘bounce-back’ from the COVID-19 pandemic (which is, let us not forget, far from over globally).  Or maybe there is something else going on here.  Time – and perhaps a more detailed analysis – will hopefully tell.

29 April 2021

In 2021 Annual Report, IP Australia Makes the Best of Declining Patent Filings

ReportingToday (29 April 2021) IP Australia released the Australian Intellectual Property Report 2021 (‘IP Report’), its annual round-up of filing statistics and other facts and figures from the previous year.  As always, my interest is primarily in the Patents chapter of the IP Report and, this year, much of the data presented in that chapter will not be news to readers of this blog.  Notwithstanding small variations – due to the volatile nature of ‘live’ patent records – the IP Report substantially confirms the figures that I published back in January.  The total number of standard patent applications filed in Australia fell by 2%, mostly due to an 8% decline in ‘direct’ filings, while the number of applications filed via the PCT (Patent Cooperation Treaty, a.k.a. international application) route rose by 1%.  Innovation patent applications increased massively – by a factor of around two and a half – driven largely by Chinese demand for granted patent certificates.  Unfortunately for the state of Australian innovation, provisional application numbers continued on a downward trend, with the IP Report noting that they have fallen by an average of 1% per annum over the last 10 years.

The leading Australian resident applicants for standard patents in 2020 were casino gaming machine developer Aristocrat Technologies, national research institute Commonwealth Scientific and Industrial Research Organisation (CSIRO), innovative electrical appliance maker Breville, the University of Sydney, and Monash University.  The top foreign applicant, for the second year running, was Chinese telecommunications device manufacturer OPPO, followed by LG Electronics, Huawei, Apple, and Qualcomm.  The IP Report also confirms that the top countries of origin for Australian standard patent applications were the US, Australia, China, Japan, Germany, and the UK, and that Chinese applicants came within a few dozen applications of knocking Australian residents off second position on the ladder.

As I have pointed out on numerous occasions, the trends in Australian patent filings have not been good for some time.  Not only are Australian residents making less use of the patent system – standard patent filings by domestic applicants in 2020 were down by 10% on 2019 numbers – but Australia is apparently becoming a less-favoured filing destination for many foreign applicants.  The IP Report tries valiantly to be upbeat, noting that standard patent applications have shown an overall upward trend over the past decade, with 2020 filings 15% higher than in 2011, and that despite the decline (for the second year running) in 2020, application numbers remained ‘higher than the 10-year annual average’.

It is important, however, to view that 15% growth figure in context.  Over the decade from 2010 to 2019 (the most recent year for which data is available from the WIPO Statistics Data Center) filings in the US grew by 27%, in South Korea by 29%, at the European Patent Office by 20%, and in China by an unprecedented 260%.  Of the major patent offices, only Japan experienced a decline in filings – and this is hardly a standard against which Australia should be measuring itself.  It is an easy observation that much of the recent growth in filings has been driven out of China, and that this may not be sustainable, however that is hardly positive news for Australia.  Without significant growth in filings from China, standard patent applications in Australia would have fallen by over 3% in 2020.

The next few years are unlikely to bring a turnaround.  As the IP Report points out, a relatively small decline in filings in 2020 ‘occurred despite the considerable economic impact of the COVID-19 pandemic’ but, because patent filings tend to be a lagging indicator, ‘the effects of the economic crisis in 2020 may not be fully observed until beyond 2021’.


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