07 September 2021

Did the Pandemic Affect 2020 Australian PCT Filings?

International CooperationAs I reported back in January, there were some indications of weakening patent filings by Australian applicants in 2020.  Domestic applicants filed 10% fewer Australian standard applications than in 2019.  And while provisional filings overall fell by only 2%, those prepared with professional assistance – which involve greater expense, but are also far more likely to provide a sound basis for valuable future patent rights – fell by nearly 5%.  While perhaps not the sole factor, it is logical to assume that the business impact of the COVID-19 pandemic was somewhat influential in this decline.  Of course, Australian application numbers are not the only indicator of filing activity.  Each year, Australian residents file over 1,500 international applications under the Patent Cooperation Treaty (PCT), representing potential future filings not only in Australia, but also in any of the other 152 (as at the time of writing) contracting states.  So it is also interesting to know whether there was a corresponding decline in PCT filings by Australian residents in 2020.

The short answer is, possibly, but not as large as the decline in standard application filings.  While it is almost certain that some PCT applications filed in 2020 have yet to be published, and are therefore not visible, the worst-case decline in international filings by Australian residents is around 6%.  However, once all applications are published and available to be counted, there may be closer to 2% fewer PCT applications filed by Australians in 2020 as compared with 2019.  This would be consistent with a similar decline in the previous year, and with the recent trend in provisional filings, which predate the pandemic.

Furthermore, the pattern of PCT filings across 2020 was much the same as in previous years, with no indication of applicant behaviour being influenced by the progress of the pandemic.

Decline in PCT Filings Continues a Pre-Existing Trend

The following chart shows the number of PCT applications filed each year since 2010 that name at least one Australian resident applicant.  The data is based on applications published up until the end of August 2021, and therefore only includes those having a priority date at least 18 months prior to this, i.e. earlier than the beginning of March 2020.  In an effort to account for applications that may have been filed in 2020, but which have not yet been published (i.e. those filed without priority, or less than 10 months after the initial priority date) I have calculated the average ratio of such applications each year, and applied this as an ‘adjustment’ to the 2020 numbers.  The adjustment is shown in yellow, and is relatively small – around 96% of all PCT applications claim priority from an earlier application filed more than 10 months prior.Annual PCT Filings

Assuming that the adjustment substantially reflects reality, there was a decline in the number of PCT applications filed by Australian residents in 2020, but not significantly more so that in either of the preceding years.  That is, any decline likely to reflect a pre-existing trend driven by other factors, rather than any specific impact of the pandemic.

PCT Filings Unaffected by Pandemic Across 2020

The chart below shows the number of PCT filings by Australian residents in each month of 2020.  Again, I have calculated an adjustment based on the historical proportion of applications filed soon enough after the priority date that they would not yet have been published by the end of August 2021.  January – when many people down-under take a summer break – was the month in which filings were lowest, by a substantial margin.  Other than this, however, filings were reasonably consistent throughout the year.  Certainly, there is no apparent trend that could be associated with progress of the pandemic.

2020 Monthly PCT Filings

The following chart compares monthly PCT filing numbers over the past five years (using the adjusted values for 2020).  This confirms that there is nothing unusual in the pattern of filings last year.

Monthly PCT Filings - Five Year Comparison

Australian Priority Applications Dominant in PCT Filings

As I have already noted, the overwhelming majority of PCT applications claim priority from some earlier filing.  In the case of Australian resident applicants this is most commonly an Australian provisional application, as illustrated by the chart below, which shows the proportions of PCT applications filed each year claiming priority from Australian, US, and ‘other’ national filings, along with those that do not make any claim to priority.

AU, US and Other Priority Claims in PCT Filings

Notably, in 2013 the proportion of applications filed by Australian residents and claiming priority from an earlier Australian application jumped by 10%, and since 2014 it has remained above 80% of all applications.  Prior to this, as many as 20% or more of applications claimed priority from an earlier US filing.  I hypothesise that this is largely a consequence of the US America Invents Act (AIA), which came into effect in April 2013.  Among other things, the AIA changed US law such that a US patent application would have prior art effect as of its priority date, regardless of the origin of the priority application.  Prior to the AIA, a US application was prior art in the US only from its earliest US filing date, making it an advantage for applicants intending to proceed in that country to file an initial US provisional application, rather than an Australian provisional.  The US remains the second most popular source of priority claims in PCT applications naming Australian resident applicants, although there is no longer any legal advantage in this strategy.

Many PCT applications that claim priority from earlier foreign filings involve collaborations, where an Australian resident is a co-applicant with one or more other applicants residing in a different jurisdiction, where the initial application is filed.

Finally, the very low number of PCT applications without any priority claim in 2020 simply reflects the fact that the majority of these – i.e. those filed after February 2020 – are not yet published, and are therefore not included in the available data.

Conclusion – Expect Continuing Fall in PCT Filing Numbers

In some ways, the minimal impact of the pandemic on PCT filings is not surprising.  Most PCT applications are based on (and claim priority from) national applications filed up to 12 months prior – historically, fewer than 4% of PCT applications filed by Australian residents make no priority claim.  So the basis for most PCT applications filed in 2020 already existed before the pandemic, and applicants would be understandably reluctant to abandon a filing strategy less than one year in.  Similarly, the absence of any effect from the pandemic across the year can probably be explained by the fact that most PCT filings claim priority from an earlier-filed application, which for Australian residents in most commonly an Australian provisional application.  Priority applications filed in 2019 predetermined the deadlines for filing of PCT applications in 2020, well before the outbreak of COVID-19.

Even so, the data indicates that the number of PCT applications filed by Australian residents declined in 2020, continuing an existing trend since 2017.  With the number of quality provisional applications filed in 2020 down by 5% on 2019, and this trend continuing during the first half of the 2021 calendar year, it seems likely that the downward trend in PCT filings is set to continue in 2021 and 2022.  Whether the pandemic is playing any part in this, or whether it is simply a consequence of a general decline in protection of patentable intellectual property by Australian businesses, is unclear.


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