China Defies Global Trend In Patent and Trademark Applications, WIPO Says

The global economic crisis led to a significant drop in patent and trademarks filings in 2008 and particularly in 2009 but there are signs of recovery, according to the World Intellectual Property Indicators 2010 report released today. China is still showing vigorous growth and demand in intellectual property protection.

Starting in 2008, the slowdown affected research and development (R&D), as well as patent and trademark filings, except for in China, Francis Gurry, director general of the World Intellectual Property Organization (WIPO), told a press briefing today.

The 145-page report gives complete data for 2008 and some data for 2009, said Carsten Fink, WIPO chief economist, and is based on an annual survey of IP offices around the world. The report is available here.

The economic crisis led to a slowdown in 2008 in the growth of patent and industrial design applications, and a decline in the number of trademark applications, said the report. The growth in trademark applications worldwide started to slow in 2006, it said.

Trademarks are more directly affected by economic conditions, mainly because fewer new companies are created and fewer new products are put on the market during a crisis, while budgets for patenting are discretionary, said Gurry. After a drop in 2009, trademark applications through the Madrid system for the international registration of marks have begun to go up in 2010, he said.

Worldwide applications to the Patent Cooperation Treaty (PCT), which allows recognition in other countries of a patent filed in one country, dropped by 4.5 percent in 2009, “the first-ever year-on-year decline since the PCT became operational in 1978,” said a first analytical section in the report. The section is called: the impact of the economic crisis and recovery on innovation.

Industrial designs showed 15 consecutive years of growth in 2008, according to the report. Again China, with 17 percent growth in applications in 2008, is “the main source of this worldwide growth.” France has the largest number of industrial designs in force but China is expected to claim this position once the 2009 data is available.

There is a broad phenomenon of geographical shift, said Fink, with new players in the field, notably in Asia. “We predict” the trend will continue and will have implication on the global competitive environment and IP policies, he added.

In 2008, the growth rate of applications worldwide slowed, with no growth in the US, a drop of 1.3 percent in Japan, and of 6.5 percent in the United Kingdom. But China showed an increase of 18.2 percent of applications filed in the country, “preventing applications worldwide from reaching zero growth in 2008,” the report said.

Asked why China did not show a drop in patents and trademarks applications, Gurry said that “in absolute terms China expenditure on R&D are a reflection of their knowledge economy strategy” and in particular, they are exporting more and that leads to more international applications.

The very high economic growth of China and very high domestic savings available for investments, including investments in R&D led to strong growth in industrial design, trademark and patent applications, with applicants being mainly Chinese, added Fink.

The global patent, industrial design and trademark applications drop had a positive effect on backlog at IP offices, said Gurry. But that is mainly due to greater work-sharing between IP offices around the world, he said, for example through the PCT, the Patent Prosecution Highway, and the so-called Vancouver Group [pdf], established in 2008 between the IP offices of Australia, Canada and the United Kingdom.

“Potentially pending” applications reached 5.94 million in 2008, according to the report, a 0.2 percent increase on 2007, while the total number of pending applications “undergoing examination across the world” reached 3.45 million.

In 2008, there was an increase in the number of energy-related technologies in PCT applications, it said. Those were filed in four energy-related technology fields: fuel cells, solar, wind and geothermal energy.

Data published in the report “are taken from the WIPO Statistics Database,” primarily based on WIPO’s annual IP survey. The data is supplied by national and regional offices “on a voluntary basis.” Some 80 patent offices supplied data, representing 97.4 percent of the world total of patent applications in 2008. The missing data is estimated, said the report.

Preliminary data show that the first six months of 2010 “point to renewed growth of Patent Cooperation Treaty applications”, the report stated.