PART 3: OVERSEAS ORIGINATING FILINGS – FOREIGN ASSOCIATES
In my last post, we looked at the most significant source of overseas originating filings, the overseas corporations (often multinationals) who file directly in Australia. Let’s now look at the other source of filings into Australia from overseas – foreign associates.
Foreign associates are overseas based patent attorney firms who act for clients who do not have the in-house capacity, or choose not to have the in-house capacity, to file directly into overseas jurisdictions. This is not to say that these clients are insubstantial – for example, CSIRO, the largest Australian research institution files a large number of PCT applications – 53 have been published in the last 12 months. This number of PCT applications is comparable to some of the smaller multinationals. However, CSIRO uses patent attorney firms in Australia to draft and file their applications rather than having an in-house function.
The vast majority of patent applications filed into Australia by foreign associates are filed by US, European and Japanese firms with the US predominating. There are a smattering of cases filed from other countries. Surprisingly, China does not file much into Australia at all – although this is beginning to change.
The revenue from any individual foreign associate can rarely compete with the larger multinationals. However, in aggregate, the revenue from foreign associate firms is a significant part of the larger patent attorney firms’ revenue base.
For foreign associates from the main three jurisdictions, the same principles apply as apply to overseas corporates, ie:
- Australia is not a high priority jurisdiction from a market perspective.
- They are going to pay more attention to patents in more important jurisdictions.
- They are relatively price insensitive – although they do pay attention to price .
- If they have a history of filing patents then they expect Australia to be a relatively straightforward jurisdiction. In short, they don’t need to pay too much attention to their Australian patents.
In respect of the last item, I remember one European attorney telling me that when they wanted to file a case into Australia they just asked their foreign filings department which Australian firm they had used last and asked them to go with that one – this may be an extreme case…and it was before the GFC, the advent of which changed the perspective of a number of foreign associates.
So, in the main, the same factors that I referred to in my last post for overseas corporates also applies to foreign associates. There are a few differences, however…
The main difference is that Australian patent attorney firms must file their clients‘ patent applications in other jurisdictions through foreign associates. This provides a degree of reciprocity to the relationship of Australian firms with their foreign counterparts
Arguably as a consequence, foreign associates are easier to access and a good source of introductions or referrals to larger corporate clients as well as being a source of work in their own right.
In terms of business development, foreign associates are more willing to try relationships with different Australian patent attorney firms. In part, and in contrast to overseas corporates, this is because they have a constant stream of new clients who may benefit from the expertise of a different firm.
Foreign associates are also usually more receptive to business development attempts than overseas corporates – although this is still not an easy proposition for Australian firms.
That’s enough for now on foreign associates. I may come back to them later if it makes sense.
Next time, I’d like to circle back to one of the listed Australian patent attorney firms – IPH Limited – and discuss how the generation of revenue from overseas originating filings feeds into their business model.