The Hague Agreement: a cost benefit analysis

IP Australia has published a cost benefit analysis for Australia joining the Hague Agreement for registration of designs.

You are no doubt thinking that sounds very exciting (not). But, even if you are not into registered designs, you SHOULD READ IT. This is the Government’s first attempt at applying the Productivity Commission’s call for any proposals to reform intellectual property laws to be economically justified. As the Report says in the first paragraph of the Executive Summary:

The report assesses the impacts [i.e., the costs and benefits to Australia of joining the Hague Agreement] with reference to the Productivity Commission’s (PC) guiding principles of effectiveness, efficiency, adaptability and accountability. This report is intended to form part of the evidence base in relation to whether Australia should join the Hague Agreement.

So, unless it involves an acronym that is like TPP, this could well be a harbinger of things to come.

And what does it conclude find:

  • IP Australia’s best estimate of the net benefit for Australian designers is $1.7 million;[1]
  • IP Australia’s best estimate of the net cost to Australian consumers from higher prices resulting from the longer term of design protection is $58 million;[2]
  • to add a little bit more spice to the debate, IP Australia’s best estimate of the net cost to Australian IP professionals is $2.5 million;[3] and
  • IP Australia’s best estimate of the net cost to the Australian government of implementing new systems etc. to comply with Hague is $2.8 million.[4]

The big question IP Australia is asking you is how realistic are these estimates?

Now, in arriving at these numbers, the Report does include quite a lot of hard data.
For example, most Australians who file designs overseas do so in the EU, the USA, NZ and China. On the other side of the coin, most incoming design registrations were from the USA, the EU, Japan, NZ, Switzerland and China.[5]

On the other hand, the Productivity Commission reported that less than 20% of registered designs are renewed beyond the first 5 year term.[6] According to IP Australia, however, approximately half of all design registrations are renewed for the second 5 year term and non-residents are more likely to renew than Australians.[7]

Will we become better at designing if we “stick” with our current settings – 19th out of the top 40[8] – or should we “twist” and sign up? Of course, there is an anterior question: do we even care about good design in the first place?

IP Australia is seeking feedback on its cost-benefit analysis and its proposed methodology to elicit additional evidence and views with the aim of finalising the analysis in 2018. You should get your say in by 31 May 2018.

The Hague Agreement Concerning the International Registration of Industrial Designs: A cost-benefit analysis for Australia March 2018


  1. This represents the costs savings from the simplified application procedure and the increased profits from taking new designs overseas. IP Australia estimates the range of benefit is from $0.03 million to $6 million.  ?
  2. This represents how much Australian consumers would pay to overseas owners of registered designs if the term of a registered design was extended from 10 years (currently) to the minimum 15 years required under Hague. IP Australia estimates a resulting range of net outflows from $23 million to $114 million.  ?
  3. IP Australia anticipates that “IP professionals” will garner some extra work at the examination stage but will lose work at the filing stage as the Hague Agreement provides for one central application to WIPO rather than multiple individual application to each separate jurisdiction. IP Australia estimates a range from a benefit of $0.3 million to a cost of $12 million.  ?
  4. The Government (presumably that means IP Australia) will incur costs between $2.3 and $3.4 million in upgrading its IT systems.  ?
  5. Report p. 10. It’s not clear from this part of the Report whether Australian applicants filed in all, some or only one of those destinations.  ?
  6. Productivity Commission, Intellectual Property Arrangements: Final Report, p. 337. These were the figures from ACIP as at 2013.  ?
  7. Report p. 11. In 2010, 66% of non-residents renewed. How the discrepancy between the Productivity Commission’s figures (i.e.,
    ACIP’s figures) came about is not clear.  ?
  8. Report Appendix 3 table 4.1.  ?