Trade marks

Trade marks are signs used to distinguish goods or services in the market. Registering a trade mark provides an owner with the exclusive right to use the mark – or authorise others to use it – and seek relief for trade mark infringement¹. A trade mark must be distinctive and not confusingly similar to an existing mark to be registered.

Trade marks serve as badges of commercial origin. They increase transparency between producers and consumers and can help create expectations of quality. When consumers can more easily identify high-quality goods, they are more likely to reward quality in the market².

Businesses often file trade marks to announce new products or services, when there is demand for new and higher quality offerings³. As such, trade marks are a leading indicator of entrepreneurial activity, the commercialisation of innovations and international expansion⁴.

Trade mark applications and registrations

In 2022, total applications in Australia fell 11.2% from their record level in 2021, to 78,832. This follows two years of strong consecutive growth, by 8.0% in 2020 and 8.6% in 2021 (see Figure 2.1).

In Australia, trade mark applications made by Australian residents comprise 56.6% of all trade mark filings. In 2022, applications by residents fell by 16.3% below their level in 2021, to 44,646. Trade mark applications by non-residents fell 3.4%, down to 34,186. The decline in resident applications accounted for 88% of the overall decline in applications.

Trade mark registrations also fell by 1.3% in 2022 from their record 2021 level. The decline was fully attributed to reduced registrations by Australian residents. These fell by 5.3% (to 38,149), while non-resident registrations increased by 4.2% (to 31,563).

Trends in trade mark filing activity tend to be procyclical: they exhibit positive growth during periods of economic expansion and are negative when the economy contracts. Recent economic shocks, though, have elicited counter-cyclical responses. Global economic growth fell by 20% before Easter in 2020, at the onset of the COVID-19 pandemic. However, in Australia and internationally, trade mark application volumes boomed over 2020 and 2021⁵.

The strong growth in trade marks during the first year of the pandemic reflected the massive demand for goods and services to mitigate the pandemic’s impact. In Australia, Canada, Brazil and Singapore, among other countries, residents took risks amidst immense economic uncertainty to introduce new products and services⁶.

Additional filing activity in 2021 was underpinned by growth in demand and household income. In 2022, real consumption growth moderated and consumer sentiment declined⁷. Trade marks react quickly to changes in expected demand and tend to anticipate the business cycle⁸.

International trade mark activity in Australia

For businesses, trade mark registrations are an important ‘entry ticket’ into markets abroad. They help exporters differentiate their goods and services from competitors' and overcome the liability of being foreign and unfamiliar⁹. Research shows that customers are more likely to try unfamiliar products marketed under a familiar brand¹⁰. Trade marks provide the basis for firms to build strong brand associations in customers’ minds and extend into new markets¹¹. Research by IP Australia shows that for Australian businesses, filing trade marks in overseas markets is a significant forward indicator of export entry and performance¹².

Use of the Madrid system

Australia’s 2022 decline in new trade marks aligns with international experience. In 2022, international trade mark applications filed worldwide fell by 6.1% year-on-year. This was the largest drop in Madrid filings since 2009¹³.

However, this followed an extraordinary boom in trade mark applications around one year into the COVID-19 crisis. International trade mark filings worldwide grew by 15% in 2021¹⁴.

A growing share of new trade marks in Australia are filed as international applications via the Madrid system. These comprised 24.8% of applications in Australia in 2022. Madrid filings increased 0.1% above their level in 2021. As such, the overall decline in Australian applications was entirely due to a reduced number of direct applications (14.3% in 2022).

Countries of origin

Australia is the leading country of origin for new trade marks in Australia, followed by the US, China, the United Kingdom (UK), Germany and Japan (see Figure 2.2). US applicants were named on 13.5% of trade mark applications in Australia in 2022. A country’s count of applications include those filed by residents of that country with co-applicants from other countries¹⁵. Applications from US applicants were down 4.5% from their 2021 level.

Trade mark applications submitted by Chinese applicants fell by 2.0% from 2021. However, China’s share of total applications increased over 2020 to 2022, from 5.9% to 7.0%. This follows a period of exponential growth between 2014 and 2017. Since 2018, trade mark applications from China have sat close to their peak level from that year (see Figure 2.2).

A hot spot for growth in Australian trade marks is the United Arab Emirates (UAE). Applications naming residents from the UAE have grown over the past five years at an annual average rate of 20.3%. From 2021 to 2022, they grew by 58.4%, from 101 to 160. This follows the UAE government agreeing to join the Madrid system from 28 December 2021, and revamping its trade mark laws in March 2022 to provide for more effective brand enforcement.

Domestic trade mark activity in Australia

Economic characteristics of trade mark-holding businesses

The use of trade marks is more diffuse than the use of patents throughout the economy. Around 53,900 businesses operating in Australia each year hold a trade mark (based on 2019-20 data), around 1.7% of all businesses in the economy.

On average, from 2010-11 to 2019-20, these businesses accounted for around 34% of Australia’s GDP, 32% of Australia’s workforce, 42% of national R&D spend and 49% of total exports (see Figure 2.3).

Source: BLADE, Australian Bureau of Statistics (ABS), 2022. Notes: All monetary values are reported in real 2020–21 dollars (price index from ABS 5206.0)

Given their role in innovation, trade marks are a leading indicator of growth in revenue productivity for businesses. For example, a recent study estimated that each additional trade mark is linked to an 8% increase in revenue per worker, above that generated by product launches¹⁶.

In Australia, the median business with a trade mark employs around four times the number of workers as the median business without a trade mark. Labour productivity is 7% higher on average in businesses that hold domestic trade marks (see Figure 2.3).

Environmental and policy factors

In 2022, trade mark applications by Australian residents fell by 16.3% to 44,646. Some of this involves a correction from disproportionate growth in resident applications in recent years. These recent increases include 16.7% in 2020 and 3.2% in 2021 (see Figure 2.4).

Studies show that trade mark filing activity is positively linked to changes in average real household income¹⁷. Australia’s economy displayed a strong expansion over 2022. However, rising living costs weighed on demand and consumption growth moderated in late 2022¹⁸. Survey research indicates that, once adjusted for inflation, average household income in Australia declined by 3.1% from April to October 2022¹⁹. This placed it significantly lower than at its highest level during the pandemic (November 2020). Rising interest rates have added to the effect by reducing real spending power.

Trade marks react quickly to changes in expected demand and can anticipate the business cycle. Resident applications fell most notably below trend in the September quarter of 2022, as shown in Figure 2.5. In that quarter, applications in 2022 (in red) fell below the average quarterly level observed pre-pandemic (in grey) and in the pandemic’s first two years (in purple and blue).

Consistent with these observations, Chapter 6 of this report previews new research by RBA economists, who find that domestic trade mark filings in Australia are sensitive to changes in macroeconomic conditions and monetary policy.

• Read this report's feature chapter on monetary policy, investment and innovation.

Trade mark activity is also linked to the level of opportunistic entrepreneurship in a country – start-up activity directed at creating high-growth businesses²⁰. Australia’s business entry rate declined 16.6% between the 2022 June and September quarters in seasonally adjusted terms²¹. Fewer product and service introductions by new businesses may help explain the below-trend level of resident applications in the late half of 2022.

States and territories

All states and territories experienced a decline in applications from their 2021 levels. These declines ranged from a 7.4% drop in the Northern Territory to a nearly 20% decline in Western Australia (see Figure 2.6). New South Wales (NSW) was the leading source of trade mark applications in 2022 (with 15,730), followed by Victoria (12,892).

The most trade mark-intensive state or territory in 2022 was the Australian Capital Territory (ACT) with 22.6 applications per every 1,000 businesses in the territory, followed by Victoria, Queensland and NSW.

Trade mark classes

Trade mark activity is concentrated in a variety of goods and service categories. High-tech manufacturing industries are heavy users of trade marks, as are information-intensive services such as advertising and education. 

Trade mark applications are assigned to product and service categories using the Nice Classification, an international system of 45 product and service classes²². On average, applicants file around 1.9 classes for each application; in 2022, class filings reached 153,054 in total.

Internationally, trade mark applications have grown strongly across goods and service classes over recent years. However, a year into the pandemic, growth in trade marks for new services outpaced those for new goods²³. In 2022, services inflation remained high, driven by resilient demand, even as goods inflation started to decline²⁴. In Australia, consumption growth slowed in late 2022, concentrated in discretionary goods categories²⁵.

Consistent with these trends, growth in trade marks continued for new services, even as it moderated in goods classes. In 2022, the only top class for trade mark applications that received an increase in filings was Scientific and technological services, up 1.7% on their 2021 level (see Figure 2.7). This class includes services related to computer security, medical research and other science and technological fields.  

Financial services saw the greatest increase in its share of total filings in 2022. The accelerated adoption of digital technology has widened the scope for new financial products, payment systems and mobile and web applications. The number of enterprises in the sector is increasing through entry by foreign banks, neobanks and financial technology providers²⁶.

A decline in trade mark filings was observed across key discretionary goods classes. These included Clothing, footwear and headgear; and Printed paper, cardboard and stationery. Growth in trade marks for new pharmaceutical and personal care products has also tapered after spiking in 2020.

Leading applicants

Global pharmaceutical manufacturer Glaxo Group retains its position as the lead international trade mark filer in 2022, with 136 applications (see Figure 2.8). Ranked second, with 88 applications, was Amazon Technologies. In Australia, the company doubled its production capacity and expanded its product range by 60% in 2022²⁷.

Healthcare and consumer packaged goods company Johnson and Johnson returned to the list of top filers, with 78 applications in 2022, having last exited in 2020. The Hyundai Motor Company is a new entrant, with 77 applications, as global automotive markets recover after the pandemic.

Source: IP Australia; ABS. Australian Demographic Statistics, June 2021. Retrieved 27 January 2022.

The leading domestic trade mark filer in Australia (with 116 applications) was Endeavour Group, the retail drinks and hotels business formed by Woolworths Group in 2019. Gaming machine manufacturer Aristocrat Technologies ranked second (112 applications).

A new entrant into the ranks of top filers was Pharmacor (63 applications), an Australian-operated company focused on generic medicines.

Australian filings overseas

In 2021, Australians filed 22,893 trade mark applications abroad, up 11.9% from the 2020 level, based on the latest available data from WIPO²⁸. Total trade mark classes filed by Australians abroad increased by 18.6% to 56,289.

The leading destination markets for Australian trade mark filings were New Zealand, the US, China, the UK and the European Union Intellectual Property Office (EUIPO; see Figure 2.9). From 2015 to 2020, China was the lead destination for Australian class filings abroad. However, class filings in China fell 8.8% in 2021. In contrast, Australian filings abroad rose by 16.7% in New Zealand and 7.5% in the US in 2021.

Source: WIPO IP Statistics Database

Trade mark applicants can obtain protection for their marks in multiple countries by filing a single international registration via the Madrid system. There are now over 138 member countries of the Madrid system, more than 64% of all countries worldwide. As the system has expanded to cover more countries over the past decade, its use by Australians has intensified. In the five years to 2021, Australian class filings via Madrid abroad have grown an average of 49.6% per annum. The Madrid share of class filings has climbed from 52.0% in 2020 to 60.0% in 2021.