The project has four objectives:

• To develop a database of CII patent applications filed at IP Australia (IPA), European Patent Office (EPO), and United States Patent and Trademark Office (USPTO)

• To conduct comparative analyses of CII patent application outcomes in IPA and in EPO and USPTO. 

• To conduct comparative analyses of the propensity for filing CII patent applications in IPA and in EPO and USPTO. 

• To assess the potential impact on CII patent application outcomes and CII patent filing propensity at IPA of two 2014 court decisions related to CII patent applications: Research Affiliates LLC vs Commissioner of Patents [2014] in Australia (thereafter, “Research Affiliates”) and Alice Corp vs CLS Bank International [2014] in the United States (thereafter, “Alice”).

This project was commissioned by IP Australia. The objective is to investigate the alignment of the scope of patent triplets: those granted by IP Australia a those granted by the European Patent Office (EPO) and the United States Patent and Trademark Office (USPTO). The focus is on assessing the impact of the Raising the Bar (RTB) reforms introduced in Australia in 2013 and aimed at narrowing the scope of Australian patents to align with international standards. For this purpose, a comprehensive methodology was employed, including a manual assessment of 500 patent triplets and the development of a supervised Machine Learning (ML) model to predict patent scope across a larger sample of over 80,000 patent triplets. This innovative approach leveraged labeled data from manual assessments and ML predictions for empirical analysis. Some of the key findings include:

• The RTB reforms significantly aligned Australian patent claims with international standards, potentially reducing the probability of Australian patents being broader than their international counterparts by up to 5 percentage points. 

• Despite the reforms, approximately a third of Australian patents examined after the reforms have claims that appear to be broader than their international equivalents.

• The impact of the reforms was most pronounced in patents within the CHEM and ELEC examination sections of IP Australia, most likely reflecting differential impacts across different technological areas.

These suggest that while the RTB reforms have been effective in narrowing the scope of Australian patents towards international norms, there remains room for further aligning IP Australia patent examination outcomes to those of the EPO and/or the USPTO. The study also demonstrates the potential value from leveraging new AI and ML tools for patent classification and scope assessment in combination with expert input from patent examiners, paving the way for more informed policy decisions and patent quality improvements.

This project was commissioned by Australian Government Department of Industry, Science and Resources. The object is to estimate of the additionality and spillovers achieved by the R&D Tax Incentive program (R&DTI). To identify the causal effect of the R&DTI, we employ regression discontinuity design (RDD) at the $20 million turnover threshold that determines firms’ eligibility for the higher refundable offset value. We find that the higher refundable offset induces statistically significant additional R&D investment, relative to the lower non-refundable offset. If the estimated effect is attributed to the higher offset rate, it reflects additionality of $1.94 of additional R&D per dollar of tax revenue foregone.

To complement this result, we evaluate the impact of the 2016-17 policy reform on innovative activities using difference-in-differences analysis. To do this, we compare the effect of the 2017 reduction in offset rate on the growth in patenting activity by (previously patent active) firms that claim the R&DTI, with the growth among (previously patent active) firms that do not claim the R&DTI. The approach suggests additionality of $2.00 to $2.20 – a similar magnitude to the RDD. The analysis suggests that the reduction in offset rate led to a fall of around $850 million, resulting in approximately 650 fewer patent applications (over the period 2016-17 and 2019-20).

To evaluate the economic benefit of the R&DTI, we modelled the impact of eligible R&D expenditure on firms’ own productivity, and the productivity of proximate firms (i.e., spillovers). We estimate the net present value of the social rate of return to eligible R&D is $2.27 per dollar of eligible R&D investment, and that these benefits are split evenly between benefits to the investing firm and to other firms.

Combining our estimate of additionality and our estimate of the social rate of return provides an estimate the total economic value generated by each dollar of revenue foregone by the R&D tax incentive. We find that every dollar of tax revenue foregone generates approximately $4.4 in economic value.

We evaluated 4,696 organisations receiving export marketing grants and a further 657 organisations receiving both grants and tailored services from Austrade over the period beginning 1 July 2012 through 30 June 2017. These organisations represent the two treatment groups detailed in the report. We use matched difference-in-differences (DID) analysis and found export sales are 157 to 164 per cent higher in the financial years subsequent to a qualifying for the grant.