Trade mark filings heed to economic trends

The Australian Intellectual Property Report 2023

IP Australia released its Australian Intellectual Property Report 2023 (the Report) on 26 April 2023. The Report summarises the trends across key IP sectors. Patent applications reached their highest level on record in 2021 and hovered around this record in 2022. Trade mark applications fell by 11.2%, design applications fell by 3.6%, and plant breeder’s rights rose 1.3% from their 2021 level. These figures indicate that innovation investments and trade mark filings remained a priority during the pandemic. The decline in trade mark filings in 2022 demonstrates a reluctance to invest in new products during times of economic uncertainty.

Australian trade mark applications and registrations are down

FY22 in summary:

• Australian trade mark applications fell to 78,832, which bucked the strong consecutive growth trend of 8% in preceding years.
• Australian trade mark registrations fell by 1.3% from 2021.
• The decline in trade mark applications was also seen internationally.
• International trade mark filings rose by 15% in 2021, followed by a decline of 6.1% in 2022. This is the largest decline in new Madrid trade mark filings originating from Australia since 2009.

Trade mark filing activity is considered procyclical as it has a tendency to fluctuate during the economic cycle. That is, an increase in trade mark filing activity can be expected during periods of economic growth and rising GDP, whereas negative economic outlook typically results in a drop in new trade mark filings.

The growth of trade mark filings in Australia and internationally is a countercyclical response. In 2020, new products and services were introduced as residents embarked on new business ventures despite economic uncertainty and this led to the growth in trade mark filings seen over the last few years. In 2022, the rising cost of living, high interest rates and decline in capital value have had an impact on consumer sentiment, which has fallen to levels not observed since the onset of the pandemic.

Trade mark filing activity

The data shows that Australian applicants are the top filers for Australian applications, followed by the United States (13.5%), China (7%), United Kingdom (3.5%), Germany (2.3%) and Japan (1.7%). The leading filer in Australia is a retail beverage and hotels business created by the Woolworths Group.

Across Australia, all states and territories experienced a decline in trade mark filings from the previous year. New South Wales was the top filer in 2022 and fell -12.2%, Victoria (-19%) and Queensland (-8.4%). South Australia (-11.7%), ACT (-12.2%), Tasmania (-15.8%) and Northern Territory (-7.4%) also all experienced a decline. Western Australia was the region that saw the largest decline at -19.9%.

Key take away messages from the Report

• The data suggests that innovation is a key factor for revenue growth for businesses. Businesses with a higher number of trade marks are more likely to employ more people and experience revenue growth.
• The growth of domestic and international trade mark filings in 2020 and 2021 was largely due to residents introducing new products and services. This rise tapered in 2022 due to the rising cost of living, increase in household consumption and declining consumer sentiment.
• Trade mark filings react quickly in line with economic uncertainty and anticipated consumer demand. Trade mark filings will grow when consumer confidence stabilises.