Focus: Australian Intellectual Property Report 2013
Services: Intellectual Property & Technology

Australian businesses are becoming increasingly conscious that innovation is essential for our country's future prosperity. Whether strengthening our primary resources sector through 'value adding' in the global supply chain, or developing new technologies that benefit both society and our balance sheet, investment in new ideas is vital.

In light of this, IP Australia's recently released Australian Intellectual Property Report 20131, provides some food for thought.

More applications for trade marks, patents and designs were filed in Australia during 2012 compared with the previous three years, indicating growth in innovative activity and an increased awareness of the commercial benefits offered by intellectual property (IP) rights.

As in recent years, the vast majority of patents (around 90%) are granted to residents of other countries. By comparison, around a third of trade mark applications were made by non-residents.

Reflecting the focus of many local businesses, almost a third of patent applications filed by Australian residents overseas were in Asia. China is now the top destination for Australians seeking trade mark protection in other countries, with the number of filings doubling over recent years.

Australia is a net importer of IP rights, with about three to four times the value of licensing royalties and other payments flowing out from our borders than into them. This of course is not necessarily an issue, provided the technology being imported will bring benefits to the Australian economy, people or environment.

What is of concern is Australia's low level of investment in innovation, compared with other developed countries. This is emphasised in IP Australia's report, which indicates that the proportion of Australia's national stock of intangible to tangible assets is a mere 4%, compared to 91% in the United States.

This rather alarming statistic may in part be due to underreporting of capital expenditure by private enterprise.2 However, the fact remains that as natural resource stocks become depleted and the global economy shifts to renewable energy sources, Australian businesses need to get serious about IP and innovation to remain competitive on the world stage.

What does this mean for business?

While Government policy and initiatives will always play a vital role in encouraging innovation, business leaders also need to foster not only innovation, but also an appreciation of the value IP can bring to their organisation. IP management needs to be aligned with product and brand development processes, not to mention part of overall corporate strategy.

First steps may include conducting an audit of your existing IP assets, to identify gaps in coverage and opportunities for extracting greater value through licensing or divestment. Consider offering incentives to employees for innovative ideas and provide training, particularly for those staff involved with product development and procurement. More importantly, boards should ensure that their business plan also includes strategies for maximising innovation and the value of intangible assets.

Footnotes

1IP Australia, Australian Intellectual Property Report 2013 (18 April 2013) http://www.ipaustralia.gov.au/about-us/corporate/reports/?doc=139839&view=Detail

2Annual capital expenditure on IP and intangibles by Australian private companies in 2012 has been reported as increasing to almost 12%. Phil Ruthven, IP: The Asset Heavyweight (2 May 2013) BRW 32. This figure is also likely to be low due to underreporting.

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