Innovation patents: Are they really worth it?
14th July 2015
While the concept of innovation patents certainly isn't a new development, a recent study exploring its long term impacts on businesses has offered some compelling new findings.
In "The economic impact of innovation patents", IP Australia found that the majority of SMEs gained "little to no benefit" from participating in this system. The scheme's goal of increasing innovation among SMEs appeared to have not been met due to low rates of repeated applications - only 23 SMEs had regular (five or more) applications for innovation patents.
Introduced in 2001, innovation patents offer a lower cost, lower inventive threshold and a shorter term for the intention of boosting innovation and allowing the faster turnaround of products with a short lifecycle.
Despite these good intentions, the system has only created a wider gap in innovation between SMEs and larger firms, the latter of which were more likely to make repeated applications and also certify their innovation patents for longevity.
One of the challenges that the innovation patent system inadvertently introduced was the high regulatory costs. These included cost of time spent filing and renewing patents, seeking examinations and disputes related to patents. IP Australia monetised these time costs and found that innovation patents cost SMEs a total of $3,508,000.
Taking into account the numbers of SMEs that applied for patents, this works out at an average cost of $1192 per firm in time lost. For many small Australian firms with limited resources, this is not a sustainable cost.
If these types of businesses are considering applying for innovation patents, it may be wise to consult asset management software to determine if the pay-off is worth the time cost to the company. Although harder to obtain, standard patents may be the better choice in the long term for providing value to the business.
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