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Australia’s Patent Office, known as IP Australia, has launched its “Strategic Statement” for the period 2007-2012. Like all these things, it’s a bit boring and all motherhood-statement-y – as, indeed, one would expect.

But a couple of things about the Strategic Statement are notable. In particular, it explicitly states its ‘vision’: basically, it sees itself as a branch office, competing for business and trying to make its services more attractive to ‘customers’. But that raises some really interesting issues. Just think about the kind of business IP Australia is ‘competing’ in. On one view, it’s ‘competing’ in the business of granting monopolies. Can anyone see a problem?

Let’s look a bit more closely. The actual vision, as stated by IP Australia, that they see in the medium term is:

One Application, One Search, One Examination – simultaneously streamline and align domestic and international processes, practice and legislation in order to provide systems for obtaining IP Rights in multiple or regional jurisdictions that will:

• reduce unnecessary duplication and resources;
• reduce the overall transaction cost of IP protection for applicants;
• Improve the international quality and consistency of IP rights;
• Increase confidence and certainty in the market and encourage innovation.

This sounds a lot like a suggestion for a global patent: one application and one process. This has, of course, been a topic of rather theoretical discussion for some time, but to make this part of the vision in the next strategic plan for the patent office is, I think, rather interesting.

You won’t find any equivalent discussion in the US Patent Office’s strategic plan. In that statement you will find a single sentence about ‘competitive sourcing’ of PCT applications. The rest of the focus is how to deal with the USPTO’s quality issues: and in that, they see changing the examination system, allowing more information in; getting more information out of the patent applicant, using peer review, and considering departures from ‘one size fits all’ examination as all being methods for improving matters at the USPTO.

IP Australia is – and always will be – a smaller office. A branch office even. They, by contrast, are explicitly seeing themselves as competing in application and examination services with other international offices. This raises a couple of very interesting questions:

1. Just who is the ‘customer’ for IP Australia’s services that they envisage? Are they envisaging that patent applicants, in this global patent world, will choose the office they apply to? Or are they envisaging that the big offices will be choosing branch offices to hive work off to? It is, of course, not at all clear that the two potential customers would be looking for the same kind of thing, after all;
2. What will influence the decision on the choice of office for this group of customers? Better or more lax examination? Higher likelihood of broad grant or higher likelihood of valid but narrower grant? Will the ‘customers’ prefer more rigorous examination, or less?

Fascinating questions indeed. It’s actually very difficult to know, I think, how things would play out.

‘Competing’ Patent Offices: who is the customer, and what do they want?

On one level, if the “customer” you are trying to compete for is the patent applicant, you would expect that patent applicants would want their patents to be valid, not just granted: in other words, you would expect that patent applicants – at least serious ones – would want rigorous examination that will lead to a patent that will stand up in court. That might well be true, for the patentees who anticipate their patents having to stand up in court. The problem with that argument is that not all patentees are anticipating that. Given the cost, expense, and time of patent litigation, another strategy that patentees take is to threaten litigation and seek settlement at license fees considerably lower than what patent litigation would cost. If this is your strategy, then rigorous examination is not necessarily your aim. To some extent, then, whether ‘competition’ like this is a good thing for the Australian patent office, and its standards of examination, might depend on the likelihood and expense of litigation. In fact, that might vary by technology class: patentees might want vigorous examination in pharmaceuticals (where litigation between well-resourced parties can be expected), but less vigorous examination in, say, mechanical patents or IT (where there will be more litigation avoidance going on).

What if your customer is the Patent Office (that is, you are competing to do some of the examination work of the Japanese or US patent office)? Well again, at first blush, you might assume that they, too, would prefer rigorous examination – because after all, the result of the examination is to grant a monopoly in their country. But think that through a little more. what happens when the examination is really rigorous in Australia? What if it is more rigorous than in another ‘competing’ branch patent office, like South Korea? Then patent applicants sending their applications to the major offices might develop a real interest in where the patent was being examined. you might get complaints going back. The more complaints, the less likely future outsourcing. On this thinking, we are actually back to a quite similar analysis as if the customers were directly the patent applicants.

[update: I should have noted, in this context, IP Australia’s already existing moves towards more of this cooperation stuff. In February 2007, Australia and the USPTO announced an extension of a pilot scheme that started in 2005, under which IP Australia provides search and examination services on international patent applications filed with the USPTO under provisions of the Patent Cooperation Treaty (PCT). Over the course of the year March 2007 – March 2008, IP Australia has been processing up to 1,200 PCT applications in a range of technologies. At the time, Ian Heath noted that the project was:

“a significant opportunity for IP Australia to move closer to its vision of being an office of choice and for enhancing its international reputation. It represents a further step towards achieving the goal of reducing re-work between offices and making mutual exploitation of work a reality for the ultimate benefit of Australian innovators and the IP system as a whole.”

Stakeholder Engagement

Another thing I find fascinating about IP Australia’s strategic statement is that there is quite a lot about customers, and a bit about ‘streamlining and refining the IP system’, and a fair bit about ‘customers’ – but only a little bit about ‘stakeholders’ more generally – and only then along the lines that they need to ‘establish effective engagement and consultation mechanisms with our stakeholders’.

So here’s my challenge to IP Australia. If they are serious about ‘establishing effective engagement and consultation mechanisms with our stakeholders’, they need to be … well … serious about it. There are two key things in that context I think they need to do:

1. How about becoming more transparent about how the Office engages in ‘consultation’ with ‘stakeholders’? As I understand things, there are various stakeholder consultation groups that IP Australia operates: a Combined Interest Group, the Patents Consultation Group and unspecified others. I understand there’s also an even higher level group too. But you will be hard pressed to find out anything about these groups from the IP Australia website. So as a first step, I suggest that IP Australia formalise, and publicise, just who it considers its stakeholders to be, and who it consults with.
2. As a next step (dependent to some extent on the first), they might need to expand their consultation groups. But that, of course, would depend on the first step – it’s hard to comment on who the excluded stakeholders might be, unless you know first who the included ones are.