By Paula Natasha Chavez -
Snapshot
- In 2013, 2 million patents were filed worldwide
- US tech companies defending against patent trolls spent $29 billion in litigation costs for 5842 lawsuits in 2011
- Each type of IP has unique requirements to procure and maintain rights
- Always enforce your rights, or your trademark will be diluted
- Most companies want international patent protection. This is a can of worms. The laws, country to country, are quite different
- Each country’s laws need to be considered in international filings
Making money from patents is not a sure bet, but nothing ventured, nothing gained. The risks in patenting are the costs, the prior art and market conditions. The risks of not patenting are the missed opportunities.
An Australian company, Kambrook, missed a big opportunity, as explained in one of IP Australia’s recent case studies: Frank Bannigan, managing director of Kambrook, developed the electrical power board in 1972. The product was hugely successful and was the basis for Kambrook’s growth to become a major producer of electrical appliances. However, the power board was not patented and Kambrook ended up sharing the market with many other manufacturers. According to Bannigan, “I’ve probably lost millions of dollars in royalties alone. Whenever I go into a department store and see the wide range of power boards on offer, it always comes back to haunt me.”
Australia also has other success stories. For example, the CSIRO earned $430 million licensing its WIFI patent to 23 companies. Australia’s Kia Silverbrook is the world’s most prolific patentee.
IP is big business. Last year, two million patents were filed worldwide. Your mobile phone includes 50,000 patented technologies. Motorola amassed 17,000 patents and Google paid $10 billion for the portfolio. Smartphone patent wars cost $20 billion in two years. US tech companies defending against patent trolls spent $29 billion in litigation costs for 5842 lawsuits in 2011.
Dr Francis Gurry, the Australian director general of the World Intellectual Property Organisation, described the worldwide shift to a knowledge-based economy in a series of lectures delivered around Australia last year. Dr Gurry pointed out that the value of S&P 500 companies’ assets has flipped since 1978 from being mostly tangible to being mostly intangible in 2010.
The centre of wealth creation has shifted dramatically to what the OECD calls knowledge-based capital. For example, 5 per cent of Google’s assets are tangible, while 95 per cent are intangible. Therefore, as Dr Gurry pointed out, “Competition is increasingly targeted at the competitive advantage that is given by knowledge-based capital” and “that knowledge-based capital is expressed as innovation, of course”.
Patents are a barometer of innovation – an indicator being the ratio of resident to non-resident patent filings. Australia’s ratio is very low compared with those of our trading partners. Of the 26,358 patents filed in Australia in 2012, only 2627 were filed by Australian residents, whereas 23,731 were filed by non-residents; the ratio being 10 per cent to 90 per cent. In the US and the European Patent Office, for each office the ratio is 50: 50 (wipo.int/ipstats/en/wipi/). These statistics suggest Australia is only a small player in the knowledge-based economy.
