Upcoming review of Australia’s patents system

In brief 3 min read

The Federal Government has launched a review of the accessibility of patents for small and medium sized enterprises (SMEs), which follows the phasing-out of the innovation patent system in Australia.

Key takeaways

• Being able to secure intellectual property rights – and, often, to secure patent rights specifically – can be crucial to SMEs succeeding.
• The review will commence in the coming months and a final report will be delivered in May 2021.
• In the meantime, SMEs should take advantage of the tailored SME support services IP Australia has rolled out, including the fast track examination pathway, dedicated case management, SME web portal and dedicated outreach program.

IP rights are crucial to the success of SMEs

The ability to secure intellectual property rights – and, in many industries, to secure patent rights in particular – can be crucial to the success and growth of SMEs. Apart from conferring competitive advantages, patent rights can eg be utilised in licensing or collaborative arrangements, and to raise capital, or even potentially to secure debt (see our Unlocking the potential in IP assets as collateral for finance).

A recent report, produced jointly by economists from the European Patent Office and the European Union Intellectual Property Office, examining data from European SMEs in manufacturing industries, found that SMEs that have filed at least one intellectual property right are 21% more likely to experience a subsequent growth period and 10% more likely to become a high‑growth firm. Considering the impact of patent filings alone, the report found the likelihood that a firm will become a high-growth firm is 9% higher for SMEs that have filed at least one patent in the preceding three years.

Review of the accessibility of the patent system

The Government's review of Australia’s patent system will consider how the system's accessibility can be improved for SMEs, and will be led by Professor Raoul Mortley AO, with the support of the Department of Industry, Science, Energy and Resources. The review will examine, among other things, the cost of applications for patents, processing times of patents, advice the Government has provided on the patent application process, and awareness of the patent application process.

The review follows the Government’s controversial decision to phase out Australia’s second-tier innovation patent system. After 25 August 2021, it will no longer be possible to file any new innovation patent applications (except in very limited circumstances, which you can read about in our IP reform update – demise of innovation patents, and government powers in a crisis). The Government considered that the innovation patent system has not achieved its intended objectives because it fails to incentivise research and development, and allows big business to block SMEs from innovating.

Dedicated initiatives for SMEs

In response to the phasing-out of the innovation patent system, in 2019, IP Australia announced it would roll-out a number of tailored initiatives better to support SMEs to secure and utilise IP rights. These include:

• SME fast track – SMEs will continue to have access to IP Australia’s fast track examination pathway.
• SME case management – dedicated case managers will be made available to support Australian SMEs through the patent application process.
• SME portal – a purpose-built platform to support SMEs, which will offer tailored products and services, industry advice and an IP portfolio management tool.
• SME dedicated outreach program – a program to provide patent education services for regional areas.

Have your say

The review will commence later this year and run for six months. It will welcome submissions from SMEs that use, or are considering using, the Australian patents system, and other interested stakeholders. A final report will be delivered to the Government by May 2021.

We will keep you updated on the review's progress.