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Innovation patents ‘of limited value’ to SMEs

innovation, systems, ideas, creative

Australia’s peak intellectual property protection body has refuted claims from lawyers that SMEs will be hard done by should the innovation patent system be scrapped, claiming they are of limited value to businesses.

Following news that the federal government planned to abolish the system, the Institute of Patent and Trade Mark Attorneys of Australia (IPTA) interjected with a warning that its removal would “seriously disadvantage Australian SMEs attracting finance to commercialise their innovations”.

The proposed abolition of the IPS comes at a time when its use is flourishing, with over 2,000 applications for innovation patents filed in Australia in 2016, the majority by Australian SMEs and inventors, for which the system is principally intended,” it said.

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However, commenting on the story, IP Australia director general Patricia Kelly suggested that, for whatever reason, SMEs were not inclined to use the patent system, and therefore its abolishment will have little to no adverse impacts on the business community.

“Our analysis of the innovation patent suggests that most Australian SMEs and private inventors gain little from the innovation patent,” she said.

“Over its first 14 years, only 23 SMEs had become moderate users of the innovation patent. The majority of SMEs and private inventors: file once and never again (74 per cent); do not receive any enforceable right (83 per cent); and let their patent expire early (78 per cent), suggesting it is of very limited value.”

My Business has heard many conflicting opinions on the value of patents by SMEs. Some, such as Mat Collett of Solar D Sunscreen, swear by patents as a means of protecting new ideas from being poached by larger or more established competitors.

Others, like Mike Lelliott of Saint, claimed that IP protection is simply unaffordable for SMEs, given that the application process is “fraught with delay” and that enforcing patents once they are in place is “stupidly expensive”.

Adam Zuchetti

Adam Zuchetti

Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016. 

The two-time Publish Awards finalist has an extensive journalistic career across business, property and finance, including a four-year stint in the UK. Email Adam at This email address is being protected from spambots. You need JavaScript enabled to view it.

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