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
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
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
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.
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.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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