Australia’s Patent Landscape: Decline, Realignment and Growth 

In this article, we will dive into the trends of the Australian Patent industry, the national origins of patents and the innovations they protect.  

Number of Australian Filings 

The bigger picture for Australian patents shows a slow decline in the total number of filings following the pandemic era surge.  

While the total number of applications has slightly decreased in the post-pandemic years, we see that the number of applications filed by Australian residents has instead slightly increased during this period.  

Despite increasing cost of living pressures domestically, it appears that Australian innovators continue to consistently seek patent protection.  

International Breakdown 

While there has been an overall decrease in the number of patents filed from international applications, the changes in filing numbers vary in major jurisdictions.  

We can see that the number of applications originating from the United States has been consistently dropping post-pandemic. This decrease is primarily responsible for the net decrease in application numbers from international filers. Despite this decrease in filings, United States remains a dominant country of origin.  

In contrast, the number of Chinese originating applications has been dramatically increasing in Australia. While these increases are not enough to offset the lost applications from the United States, it cements China as an increasingly relevant jurisdiction in the Australian Patent landscape.  

Factors Leading to These Changes 

In the post-pandemic years, United States companies have been facing headwinds which have limited their budgets for IP expenditure.  

Following the pandemic era of low-interest rate loans, a tightening of United States monetary policy has required United States companies to reevaluate their non-critical expenditures.   

This period has also facilitated a significant increase in the number of mergers and acquisitions occurring in the United States market. While the long-term effects of mergers and acquisitions on patent filings can be inconsistent, the short-term effects tend to reduce the number of Patents actively pursed. This short-term reduction can take the form of the abandonment of duplicate defensive Patents, rationalisation of R&D departments and acquisitions solely for killing off an upstart competitor.  

In contrast, the number of technically driven Chinese companies that prioritise competition against each other has been increasing over this same period. Concurrently, Chinese companies have swiftly become SoTA in many renewable energy technologies.  

Between the existential requirement for technological advantages over their local competitors and the rapid development of these technologies, these Chinese companies are aggressively pursuing patent protection.  

We can further see this transition when breaking down the filing numbers by technology group.  

The transportation sector includes new EV technologies and battery storage technologies. While it is still far behind the biggest technology groups, in both yearly percentage increase and raw numbers, the transport sector represents the fastest growing sector in filing numbers in Australia.  

Future Trends, Resident Filings 

When looking to macroeconomic factors in the Australian economy, stubborn inflation, low real wage growth and cost of living pressures would have suggested a decrease in resident applications. As noted above, the number of Australian resident applications has continued to increase despite these headwinds.  

There are also recently introduced national policies that we expect to encourage further research and development to take place within Australia. A few examples of this include the Australian Government’s “Future Made in Australia” plan, which seeks to encourage critical mineral and renewable energy production and the “National Quantum Strategy” to encourage a competitive quantum computing industry.  

We also expect the US-Australia critical mineral framework, discussed in detail here, to encourage further innovation in the mining and minerals industries in Australia.  

We therefore expect the number of indigenously filed patent applications to continue increasing over the coming years.  

Future Trends, United States Filings 

In the post-pandemic years, we have seen United States foreign policy shift to an increasingly protectionist stance. This transition has accelerated with the current administration, including dramatic increases in tariffs and both isolationist and interventionist geopolitical actions. 

While the US-Australia critical mineral framework and intense investment into LLM technologies will also likely lead to increasing United States originating patents in these sectors, this increase is unlikely to offset the reduction in patent filings from other technologies.  

We therefore expect the current downward trend for total United States originating patents to continue.  

Future Trends, Europe, Canada and other Middle Powers 

With the changing stance of the United States in geopolitics, middle powers like Canada and Europe have sought to further strengthen their relationships with other middle powers.  

This includes Canadian Prime Minister Mark Carney’s visit to Australia with the intention to further develop Australian-Canadian economic and defence ties. This continues from Canada’s purchase of Australian JORN, an over the horizon radar system, last year.  

Europe is also seeking to revisit the potential of a European-Australian Free Trade Agreement in an effort to diversify European exports away from their reliance on Chinese and United States markets.  

While the post-pandemic era for middle power originating patents has been quite stable, we do not expect this trend to continue in the coming years.  

It is unclear how much Australia’s relationships with other middle powers will change, but we expect that there will be a notable increase in the number of patents originating from middle powers in the coming years.  

Future Trends, China 

As discussed above, there has been a significant increase in the number of Chinese originating patents in Australia.  

Chinese company innovation in renewable technologies currently shows no signs of slowing. Chinese companies have also prioritised exporting their technologies to Australia, particularly in batteries, EVs and other renewable technologies.  

Additionally, the United States’ intention to restrict Chinese access to some United States technologies, such as advanced GPUs, is already leading to Chinese substitution, likely leading to another source of Chinese innovation.   

We therefore expect that the current rapid increase in Chinese originating applications will continue or accelerate in the coming years.  

Key Takeaways 

In the post-pandemic years, we have seen a notable shift in the origin and technology areas of patents filed in Australia.  

With the current geopolitical and economic environment, we expect these trends to continue or accelerate. In particular, we expect: 

1. United States applications to continue to decrease; 
2. European, Canadian and other middle power applications to start to increase;  
3. Chinese applications to continue their rapid increases; and,  
4. Australian applications to increase.  

While there has been an overall decrease in the number of patent filings in Australia in the post-pandemic era, we expect this trend to reverse in the coming years. Nonetheless, we still expect that the United States will be the largest national origin of patent filings.  

Further Advice 

If you have further queries about the drafting and prosecution of patents, infringement proceedings, or recent patent law developments in Australia, please contact MBIP via email on mail@mbip.com.au or via our online form. Our experienced team of patent attorneys would be glad to assist.