TransTasman risks

I heard from a patent attorney about the effect of the TransTasman legislation. Australian patent attorney firms will lose the income from the New Zealand side of their practices, and New Zealand firms their Australian income.

I was told that for IPH Sprusons it may be 2% reduction in total revenue and possibly a 4% reduction in profit. For other firms it is likely to be much worse, 10% or higher as they have a greater proportion of New Zealand work as direct filings. Apparently the percentage can be worked out from conducting searches of the patent office databases.

Sprusons gets 70 to 80% of their income from patent filings, and most of that money comes from direct filings in Australia, New Zealand and Singapore. Although they may file in other jurisdictions those other filings use foreign agents who do most of the work.

Most of the profit from the direct filings is made at the filing stage as it is highly automated. Some profit is made during prosecution but there are higher operational costs due to the involvement of employee attorneys.

Once the Trans Tasman patent comes into operation, attorney firms will only file one patent application to cover Australia and New Zealand instead of two separate applications and there will be only one prosecution to grant instead of two. Patent owners will benefit from significantly reduced overall costs at the expense of the attorney firms.
The New Zealand practice of IPH Sprusons is a smaller percentage of their direct work so IPH Sprusons should be effected to a smaller amount than their other divisions such IPH Pizzeys or their listed competitor XenithIP or the privately owned firms.
The effect may be more than simply the loss of the profits from the New Zealand side of the business. The Australian and New Zealand marketplace is already competitive and when it happens it may trigger a price war as firms try to maintain profit ratios.