Do Australian companies value trade marks
and designs? A look at the evidence
Beth Webster
Director, Intellectual Property Research Institute of Australia and
Principal Research Fellow, Melbourne Institute
THE UNIVERSITY OF MELBOURNE
(based on joint work with Paul Jensen, Hielke Buddelmeyer, Bill Griffiths, Kim Weatherall, Jongsay Yong)
OVERVIEW
This seminar presents empirical evidence from surveys and economic
databases on:
 The relative use of trade marks and registered designs over time & by
industry;
 The importance of trade marks and designs for companies competitive
advantage; and

Relation between trade marks, designs and company value.
THE RELATIVE USE OF TRADE MARKS AND DESIGNS
Ratio of trade mark applications to real GDP, Australia, 1906 to 2002,1906=100
120
100
Applications
80
Post OPEC
60
Depression and
war
Post war
reconstruction
40
WWI
20
WWII
0
1906 1911 1916 1921 1926 1931 1936 1941 1946 1951 1956 1961 1966 1971 1976 1981 1986 1991 1996 2001
Year
Ratio of goods and service mark applications to real GDP, Australia, 1906 to 2002,
Goods mark index (1906=100), Service mark index (1979=100)
600
500
Index
400
300
200
100
0
2002
1999
1996
1993
1990
1987
Service marks
1984
1981
1978
1975
1972
1969
1966
1963
1960
1957
1954
1951
1948
1945
1942
1939
1936
1933
1930
1927
1924
1921
1918
1915
1912
1909
1906
Goods marks
Percentage share of trade mark applications by type of owner, Australia, 1985 to
2002.
80
70
Applications
60
50
40
30
20
10
0
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
Year
Foreign companies*
Domestic companies
Individuals+
Annual rate of growth of domestic company trade mark applications by industry,
Australia, 1985-2002
Industry
% annual
growth
1985-2002
Appn 2002
Industry
% annual
growth
1985-2002
Appn 2002
29.8
451
Agriculture, Forestry and
Fishing
6.0
984
Communication Services
Mining
2.6
187
Finance and Insurance
6.0
1,433
Manufacturing
5.3
12,710
Property and Business
Services
4.9
5,332
Electricity, Gas and
Water Supply
8.2
127
Government Administration
and Defence
2.6
567
-0.9
464
Education
10.5
521
Wholesale Trade
8.0
11,803
Health and Community
Services
4.5
826
Retail Trade
5.6
6,464
Cultural and Recreational
Services
6.4
1,334
Accommodation, Cafes
and Restaurants
0.5
409
Personal and Other Services
9.2
1,168
Transport and Storage
7.9
663
Construction
IP stocks (years per company), 1997-2003
Industry
Agriculture, Forestry
and Fishing
Mining
Manufacturing
Electricity, Gas and
Water
Construction
Trade
mark
Design
12
259
33
114
Industry
1 Transport and Storage
Trade
mark
Design
18
1
74
2
3 Finance and Insurance
62
2
Property and Business
Services
14
1
19
6
Communication Services
6
0 Health and Community
Services
9
1
Wholesale Trade
38
3 Cultural and
Recreational Services
32
1
Retail Trade
31
1 Personal and Other
Services
18
1
Trade mark applications per 1000 employees, by Industry and Firm Size, Australia,
1994-95 to 2000-01
Large
Coal Mining
0
Metal Ore Mining
2
Other Mining & Services to Mining
0
Food, Beverage and Tobacco
Manufacturing
Textile, Clothing, Footwear and Leather
Manufacturing
Wood and Paper Product Manufacturing
Printing, Publishing and Recorded Media
Petroleum, Coal, Chemical and
Associated Product Manufacturing
Non-Metallic Mineral Product
Manufacturing
Metal Product Manufacturing
Machinery and Equipment Manufacturing
Other Manufacturing
Electricity, Gas and Water Supply
SME
Large
3 Basic Material Wholesaling
Machinery and Motor Vehicle
1
Wholesaling
Personal and Household Good
2
Wholesaling
SME
3
2
3
1
5
3
4
11 Finance
1
5
1
18 Insurance
1
8
1
1
2
2
1
3
13
4
3
5
2
0
4
1
1
6
3
2
5
5 Services to Finance and Insurance
7 Property Services
14 Business Services
1
7
2
5
4
3
3
9
3
4
Motion Picture, Radio and
Television Services
Libraries, Museums and the Arts
Sport and Recreation
Personal Services
Other Services
Design applications per 1000 employees, by Industry and Firm Size, Australia, 199495 to 2000-01
Large
SME
Textile, Clothing, Footwear and Leather
Manufacturing
0
3
Wood and Paper Product Manufacturing
0
2
Printing, Publishing and Recorded Media
0
0
Petroleum, Coal, Chemical and Associated
Product Manufacturing
1
2
Non-Metallic Mineral Product
Manufacturing
0
5
Metal Product Manufacturing
0
1
Machinery and Equipment Manufacturing
1
2
Other Manufacturing
1
1
Libraries, Museums and the Arts
3
0
Just for interest - Recent trends in trademarking
Actual
125000
120000
115000
110000
105000
100000
95000
90000
85000
Aug-06
Oct-06
Dec-06
Feb-07
Apr-07
Jun-07
Aug-07
Oct-07
Dec-07
Feb-08
Apr-08
Jun-08
Aug-08
Oct-08
Dec-08
Feb-09
In sum – these data give us bare-bones description of use:
• Strong trend growth in trademarks – faster than GDP. Esp.
service marks & foreign applicants
• Fastest growth in communications; education; personal services
• Mining has most trade marks & designs per company, EGW also
high (function of size)
• SMEs have more trade marks per employee
• TCF , Petroleum, Coal, Chemical etc Manufacturing; Motion
Picture, Radio TV Services are highest users per employee
• Manufacturing (esp. Non-metallic mineral products), the highest
users of designs per employee.
IMPORTANCE OF TRADE MARKS AND DESIGNS FOR COMPANIES
COMPETITIVE ADVANTAGE
Enterprises with general commercial interests in IP
Commercial interest in:
No. enterprises
% enterprises
(weighted by annual
turnover)
68,169
32.1
Trade marks
144,780
54.2
Copyright
150,218
40.0
Design
131,950
38.5
18,929
6.7
Trade secrets
114,858
32.7
Total (any of the above)
259,942
66.4
Total enterprises in Australia
837,078
100.0
Patents
Plant breeder’s rights
Average Rated Effectiveness of Mechanisms to capture profits 2001-2006
Likert scales , 1= not at all important, 7=very important
Mechanism
Australia
US
Switzerland
Patents
3.1
4.3
3.4
Secrecy
3.5
3.6
3.3
Lead time
4.2
5.4
5.4
Moving quickly down the
learning curve
4.1
5.1
4.6
Distribution & brand names
4.2
Organisational know-how
4.7
5.6
5.2
Sales and service efforts
Percentage of top 500 listed companies disclosing common labels for intangible
capital in Annual Reports, 1992-2004
30
Percentage of Firm-Years (n=6,702)
25
20
15
10
5
0
1992
1993
Intellectual property
1994
1995
1996
Human capital
1997
1998
1999
Organisational capital
2000
2001
2002
Infrastructure assets
2003
2004
Market assets
TRADE MARKS, DESIGNS & COMPANY VALUE
• Regression analysis: What determines co. profits?
• 2700 large & medium Australian companies over 16 years
• Estimate the effects on profits of last years:
- Patent stocks (+)
- Trademark stocks (+)
- Design stocks (zero)
- New patent applications (+)
- New trademark applications (++)
- New design applications (+)
DOES NOT REFLECT THE VALUE OF IP PER SE BUT IP+PRODUCT.
• Regression analysis: What determines value of listed co.?
• 300 listed Australian companies over 14 years
• Estimate the effects on (equities & liabilities) of last years:
- Patent stocks (+)
- Trademark stocks (+)
- Design stocks (+)
IP registration reflects underlying innovative activity. IP
registration does not cause profits per se.
What causes firms to apply for trade marks and designs?
• Regression analysis, 270 companies over 12 years
• Trade making applications
- Patent applications
- Design applications
- Past R&D expenditure
• Design applications
- Larger firms
- Higher past profits
- Patent applications
- Past R&D expenditure
SUMMARY
• Trademark reg./GDP ↑ since mid-1970s. Esp service marks and OS co.
• Fastest growing industries: telco and education – but low numbers
• Mining and manufacture still largest trademark industries
• > ½ firms have commercial interest in trade marks; 1 3 designs; 1 3 patents
• Trade marks more important for profit capture than patents, secrecy
• Past IP related to profits after controlling for tangible assets.
• Trademark reg. associated with patent & design reg. & past R&D.
• Design reg. associated with patent reg. & past R&D.