Are innovation patents going?

Last year, ACIP ducked the question of keeping or abolishing the controversial innovation patent system. Last week, ACIP issued an “updated” statement in which it recommended abolition of the innovation patent system.

What happened?

According to ACIP, in the intervening period, IP Australia’s Chief Economist took advantage of data that became available through the Government’s Intellectual Property Government Open Data (IPGOD) “to undertake a comprehensive analysis of the economic impact of the innovation patent system”. That study disclosed:

The great majority of Australian SMEs and private inventors appear to gain little benefit from the system… Only 23 SMEs have become moderate users of the innovation patent system … The average SME or private inventor files once and never again (74%), does not receive any enforceable right (83%) and lets their patent expire early because they see its value at less than the $110-$220 cost of renewal (78%).

Further

While 94% of innovation patent applications are made by private inventors or SMEs and they incur 95% of the regulatory costs of the system, larger firms who are already well served by the standard patent system tend to reap a disproportionate share of the benefits.

Taking into account regulatory costs and costs to public welfare generally, ACIP considers that the costs of the innovation system outweigh the benefits and so recommends abolition.

ACIP Review of the Innovation Patent System: Final Report May 2015 (updated to include new statement) (pdf)

The Statement

At the time of writing, the link to the comprehensive analysis of the economic data does not appear to be working.

Dr Summerfield takes a different view.