The geography of innovation is changing. The highest patenting growth rates now witnessed are in countries in North East Asia. Patent filings from China and the Republic of Korea (ROK) have surged in recent years, putting these two countries within the top five highest users of the patent system, alongside the United States of America (USA), Japan and countries that have signed up to the European Patent Convention (EPC).
A recent WIPO report analyses the use of the patent system worldwide, offers cross-country comparisons and provides a comprehensive overview of worldwide patenting activity based on statistics, collected by WIPO from patent offices around the world, up to the end of 2005, the last year for which complete statistics are available. The report contains a number of useful interpretive aids to explain characteristics of different national patent systems. These are particularly useful because, in spite of increased convergence of patent law and practice, important differences still exist in the administration and implementation of patenting rules and procedures in different countries.
Patent statistics are increasingly recognised as useful indicators of inventive activity and of technology flows. Patents are a unique information resource because they contain very detailed, publicly available, information about inventions. This can be matched with other indicators to provide useful insights into the evolution of technology trends. For example, patent applications by residents in their country of residence (‘resident applications’) often represent the first filing of an invention and so filings by residents are an indicator, although approximate , of domestic inventive activity.
While the use of the system remains highly concentrated with 49 percent of the estimated 5.6 million patents in force owned by applicants from Japan and the USA, we are seeing an historic evolution in the geography of innovation. As patenting activity in newly industrialising and emerging countries increases, the pattern of ownership of patent rights worldwide is expected to become even more diversified in the coming years.
Given the value of patent information as a basis for analysing trends in technological development, WIPO is in the process of enhancing its capacity to generate patent statistics. The current report is the most comprehensive yet, including an analysis of patenting activity by field of technology as well as improved statistical data on patent processing and patent life cycles. This data is extremely useful and relevant to policy makers, scientists, researchers and the business community.
Growth in Use of Patent System
The report shows that worldwide filings of patent applications have grown at an average annual rate of 4.7 percent – effectively mirroring global economic growth rates – with the highest growth rates experienced in North East Asian countries, particularly the ROK and China. It shows that patents granted worldwide have increased at an average annual rate of 3.6 percent with some 600,000 patents granted in 2005 alone. By the end of 2005, approximately 5.6 million patents were in force worldwide.
The patent offices of Japan, the United States of America (USA), China, the ROK and the European Patent Office (EPO) handle the largest volumes of patent filings. These five offices account for 77 percent of all patents filed in 2005, (a 2 percent increase over 2004), representing 74 percent of all patents granted. With an increase of almost 33 percent over 2004, the patent office of China became the third largest recipient of patent filings in 2005.
The report demonstrates that there has been a marked increase in the use of the patent system in recent years as seen from the continuous rise in the number of resident patent applications (6.6 percent in the period 2004 to 2005); from a 7.6 percent annual increase in patent filings by non-residents (‘non-resident applications’) as compared to the previous year; and from the growing number of patent filings in emerging economies such as Brazil, China, India, the Republic of Korea and Mexico. The internationalisation of technology and markets and a tendency for patent applicants to seek protection in a growing number of countries is also evident as the rate of increase in the number of filings by non-resident applicants outpaced the rate of increase in the number of filings by resident applicants.
The patent office of China experienced the highest growth rate in resident patent filings, increasing by 42.1 percent in 2005, reflecting the country’s commitment to transforming itself into a hub of innovation. In the ROK resident patent filings grew by 16.1 perccent in 2005, in the USA such filings grew by 9.7 percent and in the EPO a growth rate of four percent was witnessed. In Japan, the level of patent filing by residents remained similar to that of 2004. Japan and the ROK have the highest rate of resident patent applications per capita at 2,876 and 2,530 patent applications respectively per million inhabitants.
The increase in the number of patent filings by non-residents – individuals who are requesting patents in foreign countries – points to the greater internationalisation of commercial activity linked to technology, as well as increasing international competition in innovation. Significant increases in non-resident patent filings were seen in China, India, Mexico, the ROK and the Russian Federation.
Applicants from the USA, Japan and Germany were the largest filers of patent applications in other countries. The USA and Japan each account for 23 percent of non-resident patent filings worldwide, while Germany accounts for 11 percent. Together, these three countries of origin account for 57 percent of worldwide patent filings by non-residents. That said, patent applicants from the ROK, China and India are all rapidly increasing the numbers of applications that they are filing abroad and, thus, extending the coverage of the protection of inventions originating in those countries. These three countries of origin experienced the highest increase in non-resident filings over 2004: +27.3 percent for the ROK, +27.9 percent for China and +23.6 percent for India. The increase over 2004 was also notable for Israel (+11.1 percent), New Zealand (+13.3 percent) and South Africa (+10.6 percent).
Patents Granted in 2005
The WIPO Patent Report indicates that some 600,000 patents were granted in 2005. The largest number of patents was granted by the patent office of the USA, followed by the offices of Japan, the ROK (up 2 places from 2004), China (up 1 place from 2004) and the EPO. These five offices account for 74 percent of patents granted worldwide in 2005. The report further shows that residents of Japan obtain the largest number of the patents granted worldwide, followed by residents of the USA, the Republic of Korea, Germany and France.
Of the 5.6 million patents in force (the standard international rule provides that a patent may remain in force for up to twenty years), 90 percent are accounted for by ten offices – USA, Japan, Germany, the ROK, United Kingdom, France, Spain, China, Canada and Russian Federation. Applicants from Japan and the United States of America owned 28 percent and 21 percent, respectively, of patents in force worldwide in 2005.
North East Asia: Significant Growth
The report reaffirms that the North East Asian region has significantly increased its rate of patenting activity, and is both an expanding source of patent applications and ever more popular focus of attention by non-resident patent applicants seeking patent protection in that region. Patent filings by residents doubled in the ROK and increased by more than eight fold in China between 1995 and 2005. The patent office of China has the highest growth rate for resident (+42.1 percent) and non-resident (+23.6 percent) filings.
The report points to the continued competitiveness of countries in North East Asia and suggests that these countries will most likely continue to challenge their counterparts elsewhere. For example, it is expected that countries like China and ROK will continue their rapid developments in innovation one indicator of which is the number of patent applications filed.
The Patent Cooperation Treaty (PCT)
The greater internationalisation of the use of the patent system has fuelled a rapid increase in the use of WIPO’s Patent Cooperation Treaty (PCT). The PCT offers inventors and industry an advantageous route for obtaining patent protection in multiple countries by filing a single international application. Throughout the 1990s, the PCT matured into a truly global patent filing system as the geographical coverage of the system expanded and international commerce intensified. From 1990 to 2000, PCT membership rose from 43 to 105 and currently stands and 137. In the same period, the number of international patent applications rose from 19,809 to 93,237 with an average annual growth rate of 16.8 percent. Indeed, the year 2000 marked a milestone in the history of the PCT as the millionth international application was filed under the PCT. The number of PCT applications filed in 2006 rose to 147,500.
Applicants from the USA are the largest filers of PCT international applications, followed by applicants from Japan and Germany. The number of PCT filings from North East Asian countries is increasing rapidly. Filings in the ROK and China increased by 26.6 percent and 56.5 percent, respectively, from 2005 to 2006. Together, member states of the European Patent Convention account for 50,016 PCT international applications, representing an increase of 5.6 percent over 2005.
The PCT has now become the major route for international patent filing and WIPO is fully committed to further enhancing the system to ensure that it remains the most efficient and cost-effective option for the international filing of patent applications.
Growth Sectors
In its analysis of patent trends around the world, the report reveals an increase in filings in the electricity and electronics sectors. Patent applications filed in these areas represented 32 percent of worldwide patent filings between 2000 and 2004. Patent filings in this field of technology are concentrated in the patent offices of Japan and the USA followed by the ROK, the EPO and China. The three fastest growing technical fields from 2000 to 2004 were medical technology (+32.2 percent), audio-visual technology (+28.3 percent) and information technology (+27.7 percent).
In 2006, 23 percent of published PCT international applications were classified in three technical fields, namely telecommunications, pharmaceuticals and cosmetics, and information technology. PCT international applications published in the field of semiconductors saw an increase of 28 percent, making this the fastest growing technical field in 2006, followed by information technology (+22 percent) and pharmaceuticals and cosmetics (+21 percent).
Increasing Workloads
The report evokes the question of the incremental workload at certain patent offices which, in some cases, has increased faster than their capacity to examine patent applications. For example, the more than 900,000 patents were pending at the United States Patent and Trademark Office (USPTO) in 2005. The Japanese Patent Office also had more than 800,000 patents pending in 2005, although this is largely due to changes in the time limit for request for examination which created a temporary increase in workload in Japan.
Increasing demand for patents has led to a marked expansion in workload in some patent offices and this has created a number of challenges for the patenting community. The added pressure under which many patent offices are operating has highlighted the extent of duplication of effort in the system. While the number of patent applications pending examination differs significantly from one office to another, finding common ground within the international community on how to overcome these bottlenecks is clearly a priority for users of the system who are seeking affordable and efficient IP services.
Worldwide, 38 percent of patent applications are filed by non-residents. These applications are usually preceded by prior applications in the country of residence of the applicant and often by parallel applications in other countries. Each of these applications, therefore, may be subject to a separate search and examination in each patent office representing a significant duplication of effort. Clearly, international agreement on a way to reduce this burden on the international patent system through greater mutual recognition of examination results and the adoption of standardised processes would present a great opportunity for improved efficiency and cost-effectiveness.
Inventors
The report further examines the percentage and composition of foreign inventors in PCT international applications. It shows that companies of Switzerland, the Netherlands, Belgium and Sweden have an above average number of foreign inventors and that researchers from Belgium, Austria, Great Britain, Canada, Israel and India constituted the largest percentage of inventors working in foreign companies.
Conclusion
While the interpretation of patent statistics presents a number of challenges, research into the use and interpretation of patent statistics is an on-going activity at WIPO. Future editions of the WIPO Patent Report will reflect improvements in the interpretation and use of patent statistics and their relationship to other indicators, as well as new statistics such as technology indicators.
The data and analysis provided by the annual release of the WIPO Patent Report provides a mine of useful information for users of the system as well as for policy makers, researchers and scientists responsible for elaborating policy objectives and innovation strategies for the future.
1 The 2007 edition of the Patent Report of the World Intellectual Property Organisation (WIPO) (http://www.wipo.int/ipstats/en/statistics/patents/patent_report_2007.html).
2 Not all inventions are patented and companies may choose alternative methods of IPP such as trade secrecy or marketing techniques