IP Australia Official Fee Changes – For Better or Worse…?

Official fees payable to IP Australia are changing as of 1 October 2020.  In this article, we cover off the changes in relation to patent fees only.  However, trade marks, designs and PBR fees will change also and will no doubt be the topic of other articles across our local industry.

 

Whereas the economic rationale for the increases appears sound, the timing of the changes is perhaps less than ideal.  That said, with a little forward thinking and proactive engagement from your patent attorney, the impact of the changes can perhaps be minimised.

Background

Following a fee structure review and public consultation in 2019 where over 80 submissions were made to IP Australia, a number of changes to official fees have made.  The fee changes are based on the feedback from public consultation and in accordance with the Australian Government Charging Framework and the relevant Productivity Commission recommendations.

An updated fee schedule will commence from 1 October 2020 affecting the gamut of Australian IP rights including patent, trade mark, design and plant breeder’s rights.  You can find the full list of changes to IP Australia’s fee schedule here.

The new fee schedule has been developed by IP Australia by considering at least the following factors:

  • Supporting innovators by balancing fees with costs of doing business;
  • Increasing flexibility and efficiency for IP Australia and stakeholders; and
  • Exploring the impact fees have on the quality of IP applications and competition in the marketplace.

The changes to fees will have the greatest impact on patent applicants.

Changes to patent fees

i) Excess claim fees

From 1 October 2020, excess claim fees will now be payable at acceptance at two tiers:

  • $125 for each excess claim greater than 20 and equal to or less than 30 claims; and
  • $250 for each excess claim greater than 30 claims.

Further, the official excess claim fee will be $250 for each additional new claim over 20 if the claims are added after acceptance (post-acceptance amendments).

These changes replace the previous excess claim fee of $110 for each excess claim over 20 which is an increase of over 200% in some cases.

The changes to excess claim fees are surprising only insofar as they have not closed off an exploitable (and indeed regularly exploited) loophole which allows for an applicant/attorney to rationalise the number of claims immediately prior to acceptance, thereby minimising the fee payable.  In an extreme situation (for instance, in the case of a large biotech specification) the Office may have to examine up to 200 claims, only to end up receiving payment for 20.  The economics of leaving this loophole open are a little puzzling – and we note that as recently as February 2020, the Intellectual Property Office of New Zealand (IPONZ) brought in a claim fees regime deliberately addressing this practice, whereby claim fees were made payable upon the maximum number of claims at any stage throughout prosecution.

ii) Renewal fees

While the majority of renewal fees will increase come 1 October 2020, the most significant hike will affect patents which have a pharmaceutical extension of term granted upon them (i.e., those extended beyond their regular 20-year term).

Pharmaceutical patent extended term Old fee* New fee*
20th Year Renewal $2,550 $4,000
21st Year Renewal $2,550 $5,000
22nd Year Renewal $2,550 $6,000
23rd Year Renewal $2,550 $7,000
24th Year Renewal $2,550 $8,000
*online payment through IP Australia’s portal ($50 extra for other means of payment).

 

Again, the economic rationale behind these changes is understandable.  Any patent worth extending for up to five additional years should be able to readily absorb the increased annuities; this is, after all, the fabled “windfall” period of pharmaceutical patents. Of course, the increased fees can be avoided altogether by pre-paying all future annuities prior to 1 October 2020.

iii) Search fees

In good news for Australian innovators, IP Australia has significantly reduced the search fees for complete applications (patent voluntary preliminary search and opinion) from $2200 down to $950.

Commentary

As noted above, nobody appears to be questioning the need for IP Australia to better recover its overheads.  However, with the world in the grip of a pandemic, the timing of the changes may have raised one or two eyebrows.  That said, fee increases during times of COVID are not unprecedented, and it was only recently that the USPTO announced fee increases having effect from 2 October 2020.

Due to the significant impact the COVID-19 pandemic has had on business in Australia, it is not yet clear what impact these fee changes will have on Australian businesses in their IP strategy and management going forward.

Foreign applicants and instructors should look out for additional detail in otherwise “standard” letters being generated from Australian attorneys.  The new claim fees regime may take some getting used to at both your end and ours – and “claim-heavy” applications having an acceptance deadline in, say, October or November 2020 may require some proactive engagement and emergency surgery on your Australian attorney’s part.

If readers have any questions about the fee increases, please do not hesitate to contact any of our Shelston IP patent attorneys.