The economic impact of the COVID-19 pandemic receives constant press coverage. Indeed, the June 2020 quarter corresponded to the steepest fall in Australia’s GDP in our history. It was surprising (and, of course, pleasing) that Australian trade mark filings bucked the trend throughout 2020, rising 8% over the previous corresponding period.
IP Australia released its Australian Intellectual Property Report 2021 (the Report) on 29 April 2021. The Report captures local market trends across all principal IP sectors including patents (down 2%), trade marks (up 8% as noted above), designs (down 4%) and plant breeder’s rights (up 12%, albeit on a small sample size of 316 filings). This article focuses on trade mark applications/registrations and what the Report tells us about how trade marks shape exporter behaviour.
A total of 81,702 trade mark applications were filed in Australia in FY20, which corresponds to an 8% increase in 2019. This increase is set against the steepest economic downturn in our history – a 7% reduction on GDP during the June quarter, and the overall GDP was down 1.1% over the year. As for trade mark registrations, these also increased over 2019 data, up 10% throughout 2020, to 64,068.
The uplift in filing activity is indicative of the ever-increasing awareness of the importance of an IP strategy. Individuals and businesses are now better equipped to appreciate and anticipate the value in their brands and consequently the importance in securing protection. This contrasts significantly with what we saw only 12 years ago during the GFC which saw a substantial contraction in new trade mark filings.
The data shows that domestic applicants out-file foreign applicants by nearly 2:1 (51,662 versus 30,040). Our top local filers come from the mining, gambling, alcohol, food, cosmetics and pet care industries. By comparison, the most prolific foreign applicants are tech companies, big pharma and healthcare companies.
Across Australia, the origin of local trade mark filers corresponds largely with population. New South Wales (+14%) and Victoria (+21%) contribute the lion’s share, whereas Queensland (+17%), Western Australia (+17%), South Australia (+15%) and Tasmania (+12%) all experienced sharp growth. The Northern Territory (-6%) was the only region that saw a decrease in new trade mark filings.
The US continues to be the largest source of foreign applicants, followed by China, the UK, Germany and Japan. The number of new applications from each of these countries actually decreased throughout 2020 with the exception of Japan, which remained stable and appears to be an exception to the rule.
IP Australia has introduced a new chapter in this year’s Report, which provides an interesting analysis on the relationship between foreign trade mark filings (i.e. Australians seeking trade mark protection abroad) and exporter behaviour. IP Australia has generated this information through an analysis of customs activities in certain jurisdictions, new filing activity and tariff information.
According to the research, trade mark activity is an important predictor of export entry and performance. Exporters backed by trade mark protection tend to prosper when the Australian dollar rises in value, when tariffs drop and when trade barriers are reduced. One scenario mentioned by the Report is that businesses with an established trade mark portfolio are able to capitalise on reduced costs in marketing and advertising during times when the Australian dollar is high relative to local currency.
While the ownership of a trade mark in foreign jurisdictions may not be a silver bullet for exporters, it certainly opens doors for opportunities to capitalise, modify behaviours and build resilience in response to exchange rate fluctuations and changes in tariff implications.
IP Australia intends to issue a full report on this topic later this year, which should provide some further insights on this fascinating microeconomic interplay.
The data confirms not only that there has been an increase in Australian trade mark filings, and that it is domestic filers that are largely driving this increase. During the pandemic, which industries are people turning to in order to meet consumer demand? The answer seems obvious – medical, surgical and general healthcare (e.g. face masks, hand sanitisers), pharmaceutical and veterinary preparations (vaccines, etc.), then non-medicated cosmetics and toiletries.
The data also indicates that while new applications in the boom tech industry (computer hardware, software, apps, etc.) are still strong, businesses are responding to and making the most the realities and opportunities presented by the pandemic.
Although we like to think of Australia as “the lucky country”, steady growth in trade mark filings has been displayed in other jurisdictions. For instance, the US and UK both enjoyed a steady increase in trade mark filings across 2020. This is impressive in a global context, given the devastating effects the pandemic has had on economies and political and social unrest, which may otherwise serve as a blow to consumer confidence.
China has yet again proved to be a juggernaut, experiencing phenomenal growth in trade mark applications throughout 2020 with nearly 9 million applications filed. Taken in conjunction with the exporter information provided above, the need to file in China (even if there is only a slight possibility of doing business there) has never been more important.