IPAustralia has released a new report on the economic impact of innovation patents (see link below). As noted in the Executive Summary, “the great majority of Australian SMEs and private inventors appear to gain little benefit from the system.” Research published in the report indicates that innovation patents have “some positive effects” but standard patents are found to have a bigger positive effect on firm survival, which was the one area of significant impact. The majority of SMEs and private inventors were found to file innovation patent applications once and never again, do not receive any enforceable right, and let their patent expire early because they see its value at less than the $110-$220 cost of renewal. Overall the report concludes that “the innovation patent is not fulfilling its policy goal of providing an incentive for Australian SMEs to innovate, and the evidence shows a reduced likelihood of patenting after participating in the innovation patent system”.
The Innovation Patent system was introduced following the Review of the Petty Patent System that was completed in 1995. It found that there was a role for ‘second-tier patents’ as an alternative and more accessible form of industrial right protection for incremental innovations. In our experience, innovation patents have been quite valuable for many clients as enabling quick and enforceable protection of smaller inventions and for strategic use as a litigation tool. However, the success of the innovation patent system has been limited by the fact that the cost of enforcing an innovation patent is ultimately similar to the cost of enforcing a standard patent. While most practitioners acknowledge the need for a more accessible form of IP protection for smaller invention, innovation patents are not often considered as part of an overall IP strategy. As Australia moves towards its “innovation economy”, an innovation patent (or equivalent) has a place in encouraging smaller, incremental innovations. The form that this takes remain to be seen.
by Sarah Herbert
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