"The great majority of Australian SMEs and private inventors appear to gain little benefit from the system," according to a new report on innovation patents from IP Australia.
According to the report, the Economic Impact of Innovation Patents, evidence shows they have some positive effects, although the positive effect of standard patents appears greater.
"The evidence shows that innovation patents have some positive effects, but in the one area of impact, firm survival, standard patents are found to have a bigger positive effect, and there is no effect from certifying innovation patents," it says.
"Firms in the manufacturing sector, who file innovation patents, invested more in R&D than other manufacturing firms, but the same holds for standard patent applicants, both in manufacturing and across broader set of industries."
"The innovation patent by itself has no correlation with firm sales growth and no impact on market entry rates across industries."
The Innovation Patent system was introduced following the Review of the Petty Patent System that was completed in 1995.
It found that there was a role for these 'second-tier patents' as an alternative and more accessible form of industrial right protection for incremental innovations.
However, the report found that only 23 SMEs became moderate users of the innovation patent system, filing at least 5 innovation patents.
"The average SME or private inventor files once and never again (74%) does not receive any enforceable right (83%), and lets their patent expire early because they see its value at less than the $110-$220 cost of renewal (78%)," it says.
As a result of the report, the Commonwealth's Advisory Council on Intellectual Property issued a statement, adding to its 2014 Review of the Innovation Patent System.
"ACIP has given these findings careful consideration," it said. "ACIP considers it likely that the innovation patent is not achieving this objective and the Government should therefore consider abolishing the system."