2011 Australian Patent Grants: Microsoft, LG Slide with FMCGs on the Rise

08-Feb-2012

According to analysis conducted by Watermark, IP Australia (i.e. the Australian Patent Office) granted 19471 patents in 2011, up from 15856 in 2010, i.e. a year-on-year increase of 22.6%.  This makes 2011 the fifth consecutive year of growth in patent grants, with the gain over the past year being the largest since 1998.

The total number of patents issued by IP Australia in any year is a measure of the level of examination work conducted by the Patent Office, more than anything else.  The Office already has a backlog of applications, and is therefore limited in the number it is able to examine only by the available resources.  Ongoing investments in hiring and training of examiners, as well as the provision of improved systems and tools to assist with their task, are thus the most significant contributors to increases in patent grants.

In this context, it is notable that the US Patent and Trademark Office (USPTO), in a year in which it was subject to substantial budgetary constraints, saw virtually no change in the total number of patents granted, with just a 2% increase.

Patent grants as a measure of innovation quality, not just quantity

While total numbers depend largely upon Patent Office activity, individual applicants have considerable control over the number of patents they receive.  Many of the applications granted in the past year would have been filed around four or five years previously, and during this period there has been ample opportunity for the applicants to elect to abandon them for a variety of reasons.  For example, weak or low-value applications may be allowed to lapse, or may fail to pass examination.

Culling of underperforming assets may be particularly severe in difficult economic circumstances, as companies seek to maximise return on their investments in R&D, innovation and IP protection.

An issued patent therefore represents a more valuable – and valued – intellectual asset of the patentee than does a pending application.

How individual patentees compare in the rankings, relative to one another, is a function of two main factors.  Firstly, past levels of innovation activity influence the number of applications originally filed, from which granted patents may ultimately result.  Secondly, the top innovating companies generally have sophisticated intellectual asset management programs in place, under which they would continuously assess the relevance and value of applications in their portfolios, to focus on those which best support their business strategies.

We would therefore expect the top-ranked patent recipients to be those which were investing significantly in the ‘right’ kinds of innovation in the past, which continues to support their business in the present.

Top Australian patent recipients

The top ten patent recipients for 2011 are listed in the following table, alongside the equivalent rankings from 2010.  As in the previous year, Microsoft tops the list, followed by LG Electronics, however the number of patents granted to each of these two companies was significantly reduced.

		2011				2010
Rank		Company		Patents		Company		Patents
1		Microsoft		178		Microsoft		282
2		LG Electronics		149		LG Electronics		245
3		Novartis		148		Daikin		138
4		Shell		133		Qualcomm		136
5		Daikin		132		Novartis		114
6		BASF		123		Shell		88
7		Kimberly Clark		113		IGT Reno NEV		83
8		Qualcomm		105		BASF		82
9		Colgate Palmolive		103		Aristocrat		79
10		Bayer		95		Silverbrook Research		69

Of the remaining companies in last year’s top ten, other notable declines were Qualcomm – falling from fourth place with 136 patents granted in 2010 to eighth place and 105 patents in 2011 – along with the sole Australian representatives Aristocrat and Silverbrook Research, both of which dropped out of the list altogether. Gaming machine developer Aristocrat was more a victim of significant rises in the number of patents received by some other companies, with 50 patents granted in 2011.

Yet while inkjet printer technology developer Silverbrook plummeted to having only 15 patents granted in Australia, it actually improved its US ranking in 2011, moving from 34th position to 31st, in the list as compiled by patent research company IFI CLAIMS Patent Services, showing an increase in granted US patents from 752 to 812.  Again, a greater focus on more substantial markets represents sound intellectual asset management in difficult economic times.

As in 2010, the top ten list of US patentees is completely dominated by companies from the information technologies and communications (ICT) sector, while the Australian list is significantly more eclectic.  Once again primary production (Shell), healthcare (Novartis), chemicals (BASF, Bayer) and engineering (Daikin) are all represented, however fast-moving consumer goods (FMCG) producers Kimberly Clark and Colgate Palmolive are two of the fast-rising new entries to the Australian top ten.

Value of Australia as an ‘IP destination’

There have been some significant movements in the Australian patent rankings in 2011.  Overall, however, there is a continuing growth in patenting activity targeting Australia, showing that this remains a significant market for many global companies, and one in which they therefore wish to ensure that their IP is protected as part of a global intellectual asset management strategy.

It will be interesting to see whether Apple’s high-profile selection of Australia as a venue for litigation against Samsung last year has an impact on future patenting activity in this country.  The case – which looks likely to continue at least throughout 2012 – has demonstrated to a global audience just how quickly, and effectively, intellectual property matters can be handled by the Australian Federal Court.

Mark Summerfield