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Bio Technology : October 2009
Volume 19 • Number 3 • October 2009 Australasian BioTechnology 31 AusBioFEATURE By Alyssa Grabb, Phillips Ormonde Fitzpatrick Innovate or invalidate? A review of patent filing trends in medical technology Although susceptible to irregularities due to changes in national laws, fee regimes and other factors, patent activity has long been recognised as an indicator of innovative activity. Patent filing, granting and maintenance statistics can provide a range of information such as geographic regions of heightened innovative activity, technology areas experiencing concentrated growth and the direction of technology transfer. According to the World Intellectual Property Organization (WIPO) 2008 Worldwide Patent Report, the mean yearly growth rate in new patent filings from 1996 to 2006 was 5.3%, lagging behind economic markers which showed a 7.2% rate of growth in the volume of world trade over the same periodi. This period of economic growth was followed by the sub-prime banking crisis in the US (who can forget the collapse of Fannie Mae, Freddie Mac and Lehman Brothers?) with global flow on effects and a crash in stock prices leaving a diminished pool of funds available to medical technology companies, and a higher bar to access them. Consequently, some companies are limiting non-essential spending by reducing R&D costs and pruning IP portfolios to protect their core, cash-flow-positive products only, aban- doning protection for products that are not yet commercially successful. Conversely, some forward-thinking medical technology companies see the benefits in protecting their commercial advantage in anticipation of a market rebound. These companies are generally robust because of the ongoing drive for improved and efficiently adminis- tered healthcare. IP Australia reported a steady increase in Australian patent filings of about 4% per annum after the 2002--2003 year (where there was a modest dip) until 2007--2008. Over 2007--2008 there was a drop in filings of about 7%. Patent filing data for the 2008 calendar year is still incompleteii but the available data suggests a relatively steep decline in the number of Australian patent filings. Looking more closely at Australian patent filings by technol- ogy, historical data shows a steady proportion of all patent applications filed in Australia relate to medical technologyiii. Between 2004 and 2006 medical technology related filings in Australia represented around 35% of all Australian patent applications filed. This figure began to fall in 2007, although available data suggests patenting activity in the sector is still strong. This correlates with an IP Australia report which ranked 'Medical Engineering' highest in its 2006 analysis of top five growth technologies for standard patent applications filed in Australia since 2000. At the time of the report, information technology was ranked second and sliding in popularity since 2004iv. Although a significant proportion of patent applications filed in Australia originate from overseas, Australian innovators are also showing high activity in the medical technology sector; IP Australia's 2006 report also named medical engineering as the second fastest growth technology for Australian resident patent applicants. Although widespread, medical technology innovation (as measured by patent filing activity) varies significantly from country to country, as do patent filing levels generally. The total number of patent applications filed in the United States from 2000 to 2007 peaked in 2005 with just under 435,000 applications filed. The proportion of US patent applications relating to medical technology has been consistent (around 13%) over that period. Of the US patent filings for medical-technology-related inventions, just under 60% claimed the benefit of priority from an earlier US filing, indicating a high level of medical technology innovation. However, US priority data over- estimates the level of US resident activity because of the number of foreign applicants who, for commercial and strategic IP reasons, seek to establish their earliest priority date in the US. Like the US, Japanese organisations are known for their aggressive approach to patenting, so it is not surprising that Alyssa is a Partner & Patent Attorney based in Melbourne and heads Phillips Ormonde Fitzpatrick's Medical Technology Group