International Patent Filings Begin To Bounce Back; China Rocketing, US At Half-Mast

The storm appears to be subsiding for international patent filings as 2010 showed a cautious recovery in growth, the head of the World Intellectual Property Organization said today. After the first-ever drop in applications in 2009, 2010 filings almost returned to their 2008 level. And China holds pole position in growth numbers.

The impact of the crisis has been quite severe, WIPO Director General Francis Gurry told a 9 February press conference, but “the arrow is pointing in the right direction.”

The patent system has been rattled for the last five years by “the meteoric rise of northeast Asia,” said Gurry, with China showing an “astonishing” 20.5 percent rise. South Korea shows a comfortable 20.5 percent rise while Japan took the lead among developed countries with 7.9 percent growth.

China now holds the fourth place in the top 15 countries list, just passing South Korea at the fifth place. The top 10 countries for PCT filings in 2010 were the United States, Japan, Germany, China, South Korea, France, the United Kingdom, the Netherlands, Switzerland, and Sweden.

The WIPO-managed Patent Cooperation Treaty (PCT), which saw filings increase by 4.8 percent in 2010, allows international applicants to file one application under the PCT simultaneously in the 142 countries signatories to the treaty.

“The arrow is pointing in the right direction.” – WIPO Director General Francis Gurry.

The US is still the largest user of the PCT system but demonstrated “poor performance” with a decline of 1.7 percent in international patent applications, compared to 2009, Gurry said.

US President Obama stressed the importance of spurring innovation during his annual State of the Union speech in late January (IPW, US Policy, 28 January 2011).

On PCT applications by universities, the US is still the leader with the four top university PCT users, according to a WIPO press release. The US legislation to encourage applications of inventions developed under federal government funding, known as Bayh-Dole, is an explanation of this performance, along with the fact that the US is the country that invests the most in research and development around the world, Gurry said.

Carsten Fink, WIPO chief economist, said that the “staggering” growth rate in international applications from China was larger than the domestic growth rate in the Chinese patent office, showing a greater internationalisation of Chinese interests seeking protection for their products in foreign markets.

If one was wondering “how far can the growth go” in China, he said, it is important to point out that the proportion of international patent applications from China still represent a relatively small share of the national applications, thus leaving room for further growth in international applications.

US applications seem to have reached a floor in early 2010 before stabilising, Fink said, giving hope to renewed growth for 2011.

The technology fields which reveal the fastest growth are digital communication (+17.3 percent), and the sharpest decline happened in the field of telecommunication (-15 percent). Most areas lost ground compared to 2009 applications, with pharmaceuticals (-7.4 percent), computer technology (-7.1 percent), textile and paper machine (-10 percent), and IT methods for management (-7.1 percent) being in the most hit. Some areas showed modest growth rates such as semiconductors (4.2 percent), and metallurgy materials (3.8 percent), according to the WIPO release.

The top applicants are electronics or telecommunications companies, led by Japan’s Panasonic Corporation, Chinese telecom equipment company ZTE, US-based Qualcomm, and another Chinese telecom company, Huawei Technologies Co., Ltd.

Answering a question about the relatively low number of applications from Latin American countries, with an estimated 144 applications from Mexico, and 442 from Brazil for 2010, a decrease compared to 2009, Gurry said the construction of a knowledge economy is a long process and a long-term strategy. There are different industrial situations across countries but also across industries, added Fink.

India seems to be showing a steady increase in PCT applications, but Gurry said it was a little early to say that it was a trend.

Gurry also addressed whether growth in PCT applications resulted from economic growth or an increase with the use of the system. Gurry answered that applications getting into the PCT system were the best applications. Applicants believe that their invention has a good commercial international prospect. The PCT is an established filing route and has a relatively mature growth rate, he said, that is not dissimilar from growth rates observed in countries.

WIPO continues to receive PCT applications filed with national offices in 2010 throughout the first half of the year

WIPO recently released an economic survey on expected growth in domestic and international patent filings in 2010 compared to 2009 (IPW, WIPO, 7 February 2011).