In May, the Australian Treasurer Jim Chalmers handed down the 2023-24 Australian Federal Budget with updates to key economic forecasts.
This article specifically looks at some of the budget announcements to see if any emerging or future intellectual property (IP) trends can be predicted for Australia’s IP profession. I do wish to emphasize that IP filing metrics alone are not the only indicator of innovation. However, IP filing data can provide some useful insights on technology trends.
The budget announced some key initiatives which seem to be very relevant from the point of view of generating new IP in Australia:
– $2 billion Hydrogen Headstart for accelerating large-scale renewable hydrogen projects
– $14.8 million to establish the Powering Australia Industry Growth Centre, which will support Australian businesses looking to manufacture, commercialise and adopt renewable technologies;
– $400 million Critical Inputs to Clean Energy Industries stream of the Powering the Regions Fund will provide grant funding to support the development of clean energy industries
– $392.4 million Industry Growth Program will support Australian small to medium‑sized enterprises and startups to commercialise their ideas and grow their operations.
– Abandonment of Patent Box measures for medical and biotech sectors.
The focus areas in the budget are in stark contrast to the current IP trends as reported in IP Australia’s Intellectual Property report which was released on 26th April 2023, a few weeks before the announcement of the Budget. Aristocrat Technologies which is an ASX listed gaming and technology company specializing in slot machines was the leading patent filer among Australian applicants. Aristocrat was followed by CSIRO (Commonwealth Scientific Research Organisation). Major technology companies, IBM and Australian ‘unicorn’ start-up Canva, also entered the ranks of lead patent filers. Trade mark and design applications have increased in technology sectors and financial services, where digital technology has created scope for new products, payment systems and platforms. Among trade mark applicants, Endeavour Group (which is an Australian alcoholic drinks retailer and poker machine operator) and Aristocrat were among the top two leading filers.
IP Australia’s report confirms that in Australia, healthcare (pharmaceuticals, medical technology and biotechnology with well over 35% of all Australian filings) dominates other fields for the volume of standard patent applications received each year in Australia as shown below. Interestingly, most of the IP in this key area originates outside Australia making Australia a new importer of IP.
In contrast, the top fields of technology for US patent filings are dominated by computer and digital communication technologies. While healthcare related IP plays a key role, the spread of technologies is a lot more diverse.
As far as the recent budget is concerned, the biggest investment for new technologies seems to be focused heavily towards renewable hydrogen generation related projects. Back in March 2022, I had written an article looking at the world-wide patenting landscape for hydrogen related technologies. In that report, we had uncovered that Australia with 157 patent families was well behind some of the leading countries like China, Japan, South Korea, USA and Germany who have filed well over 10,000 patent families. With the recent budget announcement on hydrogen generation related projects, we expect more hydrogen related IP to originate in Australia which is likely to result in an uptick in hydrogen related patent filings originating out of Australia.
Similarly, a renewed focus and funding for commercialization of renewable technologies should also result in generation of new Australian intellectual property which will eventually be reflected in patent filings. Generation of new intellectual property will also play a central role in international trade. For Australian companies looking to export, securing foreign patent protection provides legal security by giving patent holders the right to exclude others from exploiting their invention in markets where the patent can be enforced. Australian companies such as Tritium (who build fast DC chargers for electrical vehicles) had an early mover advantage. As many readers know Tritium ended up listing on the NASDAQ in 2022 after signing a deal with Decarbonization Plus Acquisition Corporation II and Tritium continues to be an Australian success story largely due to greenification of the word economy.
The previous Federal Government had announced in the 2021-22 budget that the ‘Patent Box’ regime would support medical and biotech sectors with a concessional tax rate which would tax corporate income derived from eligible Australian patents in the medical and biotechnology sectors, at a concessional rate of 17 per cent, effective from 1 July 2022. This measure is not yet law. Treasury Laws Amendment (Tax Concession for Australian Medical Innovations) Bill 2022 was introduced to Parliament on 10 February 2022 but not enacted. It has now lapsed and is being reconsidered by the government.
The government indicated that consultations with industry will be carried out to determine the design of the Patent Box and also ascertain whether a patent box would be an effective way of supporting Australian industries. The Patent Box concept is not new, and widely used in Europe to incentivize in-country research, with the reduced tax rates provided under the patent box regimes ranging from 0% to 12.5%. There had been an expectation that the patent box regime would make Australia a more compelling destination for locating investment in science and innovation. It is disappointing that this initiative is not being progressed.
In summary, reading IP Australia’s Intellectual Property report and then looking at the key measures in the Australian federal budget 2023 presents opportunity for Australia to improve their global standing in becoming a more important contributor for new technologies.