Patenting ICT innovation in Australia: trends and opportunities
This article first appeared in the December 2009, Chinese-language edition of Managing Intellectual Property. To view the original article in Chinese, click here (PDF).
Information and communications technology (ICT) is a growing area of focus and expansion for Australian business and government. In 2008, the 30,300 ICT businesses in Australia generated revenues totalling in excess of A$120 billion. Australian ICT imports increased during 2008 by around 18% to more than A$34 billion despite the global downturn. Australia’s strong performance in the global downturn is reflected with the strong growth in ICT imports continuing into 2009 at almost 19% per annum.
The value of the overall Australian ICT market is expected to propel upwards with Australian ICT expenditure expected to grow at a rate three times that of Australia’s gross domestic product by the end of 2013.
A major driver of Australia’s demand for ICT innovation is the Australian government’s decision to establish a new company that will invest up to $43 billion over 8 years to build and operate a National Broadband Network (NBN) delivering superfast broadband to Australian businesses and homes. The ICT infrastructure that the NBN provides will have a strong positive effect on the continuing growth of Australia’s ICT market.
Another key driver of ICT in Australia is the Australian mobile phone market which excelled throughout the worst of the global financial crisis. Now with increased optimism returning, the Australian market for mobile phones is expected to continue performing strongly in the coming years. In the first half of 2009, Australian smartphone imports surged 29% year-on-year (Y/Y), with data-centric smartphones (those with a touchscreen or QWERTY keyboard) up 235% Y/Y. Australia’s converged device market is now expected to grow at a compound annual growth rate of 13% over the next five years.
As successful ICT innovators, Chinese ICT companies are important collaborative business partners in the strong growth of the Australian ICT market. Australia’s ICT imports from China accounted for 7% of Australia’s ICT equipment imports in 1998, but China is now the largest supplier with ICT exports to Australia in excess of A$10 billion in 2008 – more than one-third of Australia’s total ICT equipment imports. Australia’s ICT equipment imports from China have increased by more than 26% per annum between 2000 and 2008.
China’s success as an ICT innovator is symbolised by Chinese telecommunications company Huawei which topped WIPO’s PCT filing rankings in 2008. Most of China’s PCT applications are filed in the ICT field, yet they are not currently being converted into Australian national phase entries at a rate which reflects either the value of the Australian ICT market, or China’s status as Australia’s biggest and most important ICT supplier.
Overall, these trends translate into valuable business and patenting opportunities for Chinese ICT companies.
The availability of broad and flexible patent protection for ICT innovation is critical for business success. Patenting data indicates that Chinese PCT applications for ICT innovations are currently mainly being converted into national phase entries in the US, the EPO, Korea, India, and Japan. Unlike most of these jurisdictions, patent protection for ICT innovation in Australia is not limited or tied to ICT equipment and hardware.
Many ICT innovations, particularly those relating to data-centric converged services and devices, involve platform-independent software applications. Such software applications are patentable in Australia if they produce ‘an artificially created state of affairs’. This normally involves a physical effect in the sense of a concrete effect or phenomenon or manifestation or transformation. A data transformation or change in information can be regarded as a physical effect. This means a claim to ICT software is patentable in Australia even if specific ICT hardware elements are not recited in the claim.
The assessment of obviousness in Australia also differs materially from other jurisdictions. Obviousness is determined by considering the claimed invention in view of the common general knowledge in Australia, possibly in combination with one or more prior art references. Any such reference must be one that a skilled person could reasonably be expected to have ascertained, understood and regarded as relevant. Multiple references may be considered a single reference, if a skilled person would treat them as a single reference (for example, if they are cross-referenced). Otherwise multiple references can only combined if a skilled person could be “reasonably expected” to combine them. In practice, this means it is more difficult in Australia to ‘mosaic’ together a number of prior art documents to argue that an invention is obvious than it may be in other jurisdictions. In many cases, this can translate into lower prosecution costs.
Innovation patents with an 8 year term are also available in Australia for ICT developments, and these patents are not subject to an inventive step or obviousness test.
Chinese ICT companies can clearly benefit from the strong positive business trends and opportunities in the Australian ICT market. Australia’s broad and flexible patent protection for ICT innovation is key to seizing these opportunities. Chinese ICT companies can take full advantage of their PCT applications for ICT innovations by converting them into national phase entries in Australia up to 31 months from the priority date.