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Brave new world

Brave new world

Lawyers Weekly

Nearly four years after the Intellectual Property Laws Amendment (Raising the Bar) Act 2012 came into full effect, corporate-structured patent and trade mark attorneys continue to infiltrate the brave new world of intellectual property law.

As large corporate organisations become more competitive, legal professionals offering expertise in the IP space are in greater demand than ever.

The main work these lawyers undertake includes, but is not limited to, patents, trade marks, copyright and designs, regulatory, marketing and advertising issues, and acting for clients in significant intellectual property matters, consumer protection and passing off disputes, both domestically and internally.

What makes this practice area unique is its ability to spread across a number of different industries, from entertainment and sport to retail, financial services, construction and property, meaning no two days are the same for legal professionals who specialise in IP law.

On the rise 

With a growth in demand comes a need for greater supply. Some firms are taking a proactive approach by expanding their service offerings to include IP advice, while others are branding themselves as experts in this practice area, partnering with IP companies and offering only IP services.

In 2014 IPH Limited became the first IP services group to list on the ASX, with Spruson & Ferguson as the founding company. IPH is a holding company for IP and associated companies, offering a wide range of IP services and products.

Now, IPH includes Fisher Adams Kelly, Callinans, Pizzeys, Cullens and the IP analytics business Practice Insight.

“This year alone we have opened new offices in Indonesia and Thailand and extended our reach in greater China, with Spruson & Ferguson offices now in Hong Kong and Beijing,” says Spruson & Ferguson CEO Andrew Blattman.

The firm is now the only Australian IP firm with six offices across the region and claims it is the second-largest trade mark filer in the country.

“Under our new corporate structure, Spruson & Ferguson has more flexibility to make business decisions concerning the growth of the business and to act on them, with the support of IPH Limited,” Mr Blattman says.

“Since joining IPH Limited, we have been able to expand Spruson & Ferguson’s direct service offering to our clients across the Asia-Pacific region.”

Up for debate

While the idea of positioning oneself as an independent IP firm has worked for Spruson & Ferguson given the demand for IP services, Mills Oakley partner Blair Beven is not convinced that this model is the best way to leverage the market.

While in his opinion the industry is ripe for change, Mr Beven says the corporated and listed model for IP firms may not turn out to be the reform they crave.

“Their growth strategy is really just buying up other firms,” he says.

“I just don’t know how sustainable that really is. And they’re all rushing to get scale but that’s not a long-term strategy, because there are only so many firms in Australia.”

Ashurst partner Kellech Smith agrees, questioning whether the incorporated model may also have an impact on clients down the track and predicting more movement of lawyers in the short term.

“One of the things that I think about is when you’ve got two of those firms that are in the same listed arrangement, if they’re acting on the opposite side of a matter, how do [they] actually control information flow, given that they both have obligations to disclose information to their listed parent?” she says.

“I think clients will be thinking more about those arrangements and there will be some clients that will have to shift their work as a result.

“And I think if there’s client pressure to do that, we’re going to see practitioners moving around a bit more as well.”

Trends ahead

As the UK deals with Brexit and Trump snubs the Trans-Pacific Partnership Agreement, a brave new anti-globalised world could have a significant effect on the legal space in 2017.

But in the world of IP law, it’s the rapidly developing technology in 3D printing that is on the brink of catapulting IP rights into a new dimension.

“It’s got big implications for IP rights holders, I think,” says Ms Smith.

“One of the things that we’ve been talking to clients about is licensing their design files for 3D printing, so that’s a way of perhaps retaining some control over what people are doing, generating some revenue from those activities.”

The development of technology will make protecting IP more difficult, but as the Turnbull government attempts to pull the Australian economy from its mining and resources base towards technical innovation, IP protection might become more necessary than ever.

“It’s clear I think that the Australian market is benefiting from the effects of innovation, especially in the digital age and particularly in the global markets,” Arnold Bloch Leibler partner Zaven Mardirossian says.

Businesses will not see the difficulties in IP protection ease when the Productivity Commission releases its final report following the Harper Review into the IP sector, Mr Mardirossian predicts.

“[The commission] did think that IP laws were too heavily in favour of rights holders and therefore proposed a number of reforms, which basically
weaken IP protections,” he says.

Growth trajectory

To properly forecast how the future is going to play out in IP law, it is vital to comprehend the trajectory the practice area has taken so far.

2015 saw a record number of trade mark applications, according to IP Australia, up 14 per cent on the previous year. Patent applications also increased, up 10 per cent from 2014.

“It’s been pretty well a growth story globally and domestically for more than a decade,” says IP Australia director-general Patricia Kelly.

“What really dictates the IP market is the global economy, particularly for patents, so if we see a global downturn we tend to see a reduction in patent applications, and if we see a domestic downturn we tend to see a reduction in trade mark applications.”

The split between patent applications filed by Australian and overseas residents has industry experts divided on whether the figures are a cause for concern.

On one hand, the large number of overseas applicants means international businesses see Australia as a growth market. On the other hand, it begs the question of whether Australian businesses are innovative enough by comparison. But Ms Kelly says the high percentage of overseas applications for patents and trade marks in Australia is standard.

“You see it go the other way as well,” she says.

“Australians who seek IP protection in overseas markets are four times more likely to apply for patents in overseas markets, and that makes sense because the big markets are overseas; we’ve got a small domestic market.

“China is driving a lot of the global growth in IP at the moment. It is the largest single source of patents and trade mark applications and continuing to grow quite strongly.

“China has become the top destination for Australians who are looking to file their trade mark applications overseas.”

Mills Oakley’s Mr Beven says that while China is the obvious growth region for the future of the market, the firm is starting to see growing interest from other parts of Asia.

“We’re starting to see some of the Asian countries creeping in there, so Singapore, Taiwan, China, Malaysia, are certainly countries that are coming into the radar of intellectual property protection in Australia,” he says.

In December, the Australian government released a statement saying its first-ever IP counsellor, David Bennett, would depart for Beijing to assist Australian businesses to operate successfully in the Chinese market.

“Whether you’re a start-up, small business or larger firm, safeguarding your intellectual property needs to be a primary consideration around doing
business in China,” Mr Bennett says.

“Australia does an enormous amount of business with China, and this is still increasing. Making sure Australian businesses can navigate the Chinese IP system can be crucial to their success."

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Brave new world
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