Contents
Introduction
In our December 2022 article, ‘Trade Mark Trends in Australia,’ we explored how trade mark activity often mirrors the economy’s fluctuations. Typically, a booming economy leads to more new businesses and an increase in trade mark applications. Yet, 2021 marked an unexpected shift in this trend, with both trade mark and patent filings increasing, even amidst the economic challenges of the COVID-19 pandemic. This article explores what has happened since the upsurge in intellectual property applications during the pandemic.
Recent studies, including those by the Reserve Bank of Australia, highlight a complex relationship between economic conditions and innovation. Economic downturns and rising interest rates can greatly impact business innovation and the pursuit of intellectual property rights, but not all businesses respond equally.
Since the pandemic, despite a slowdown in growth across advanced economies, the decline in innovation was less severe than expected thanks in part to robust business investments and government policies supporting post-COVID recovery. These factors have created a favourable climate for innovation and intellectual property (IP) investments.
Trade Mark Applications And Their Impact
Trade marks are signs used to distinguish goods or services in the market. Registering a trade mark provides an owner with the exclusive right to use the mark for their goods and services in the market.
After consecutive growth in 2020 and 2021, with increases of 8.0% and 8.6% respectively, 2022 saw a decline of trade mark applications in Australia by 11.2%. The surge in trade mark registrations during the early stages of the pandemic included heightened demand for pandemic-related goods and services. According to research by the US Patent Office, trade marks react quickly to changes in expected demand and tend to anticipate the business cycle. The decline in trade mark applications, primarily among Australian applications, likely reflected changes in economic conditions, including reduced household incomes and spending power.
The Scientific and Technological services sector showed resilience, with a 1.7% increase in trade mark filings, underscoring growth in fields like computer security and medical research. Financial services also experienced a rise, likely fuelled by the rapid adoption of digital technologies and an influx of new players like foreign banks and fintech companies.
The Australian IP Report 2023 suggests that each additional trade mark correlates with an 8% revenue increase per worker, with businesses holding domestic trade marks exhibiting 7% higher productivity on average. For more information on trade marks and to check the registrability of your mark, visit IP Australia’s website or use their free TM Checker tool.
The Value Of Patents For Small Businesses
For small business owners, it is important to understand the patent landscape as patents protect inventions, offer exclusive rights to the inventions, and serve as indicators of where innovation is focused.
In 2022, Australia nearly matched its 2021 patent application levels, with only a slight 0.5% decrease. A significant portion, 92.3%, of these applications were from non-resident entities, showing strong global interest in the Australian market. Despite an overall increase in non-resident filings, domestic applications declined by 16.8%, a reversal from the 24.8% growth in 2021. According to IP Australia, this shift was partly due to changes in Australian patent law, especially the phasing out of the ‘second-tier’ innovation patent, which led to a surge in filings in 2021.
For small business owners, it’s encouraging to see that small to medium enterprises (SMEs) are increasingly engaging in the patent application process. In 2022, SMEs contributed to 69.6% of all domestic patent applications, a promising trend considering that typically, larger businesses dominate patent ownership in Australia (IP Australia).
Conclusion
Patents, categorised by technology fields, reflect the intensity of innovative activities in various sectors. The COVID-19 pandemic spurred significant growth in patents related to digital and health technologies both internationally and within Australia. Healthcare has become the most dominant field for standard patent applications in Australia, with pharmaceuticals showing continuous growth since 2016, further accelerated during the pandemic years. Medical technology and biotechnology sectors also saw an increase in their share of overall filings. In contrast, traditional technology fields have experienced a decline in patenting, which the pandemic further exacerbated.
For Australian small businesses, understanding the nuances of IP amidst economic uncertainties is vital. The resilience in patenting is encouraging, but the decline in trade mark applications reflects the broader economic challenges. As Australia navigates through these times, small businesses must remain agile, strategically using IP to foster innovation and growth in a rapidly evolving economic environment.
If you would like a consultation on intellectual property for your small business, you can reach us at 1800 730 617 or team@sprintlaw.com.au for a free, no-obligations chat.
Get in touch now!
We'll get back to you within 1 business day.
Top 3 Legal Mistakes
Book in a free consultation with us to discuss your legal needs.