WIPO Report Reveals Changing Geography of Innovation with Highest Patenting Growth Rates in North East Asia

Geneva, August 10, 2007
PR/2007/506

The 2007 edition of the Patent Report of the World Intellectual Property Organization (WIPO) (https://www.wipo.int/ipstats/en/statistics/patents/patent_report_2007.html) shows that worldwide filings of patent applications have grown at an average annual rate of 4.7% with the highest growth rates experienced in North East Asian countries, particularly the Republic of Korea (ROK) and China. The report is based on 2005 figures, the last year for which complete worldwide statistics are available. It showed that patents granted worldwide have increased at an average annual rate of 3.6% with some 600,000 patents granted in 2005 alone. By the end of 2005, approximately 5.6 million patents were in force worldwide. 
 
The largest recipients of patent filings are the patent offices of Japan, the United States of America (USA), China, the ROK and the European Patent Office (EPO). These five offices account for 77% of all patents filed in 2005, (a 2% increase over 2004), representing 74% of all patents granted. With an increase of almost 33% over 2004, the patent office of China became the third recipient of patent filings in 2005.
 
Use of the international patent system has increased markedly in recent years and while it remains highly concentrated - 49% of the estimated 5.6 million patents in force are owned by applicants from Japan and the USA - there is evidence of increasing use of the system by newly industrializing nations. 
 
“We have witnessed a significant increase in the use of the patent system internationally in recent years,” said Dr. Kamil Idris, WIPO Director General. “This is clearly one indicator of the level of inventiveness and innovation that is occurring around the world and signals those areas in which technological development is most pronounced.” He added. “While the use of the system remains highly concentrated, we are seeing an historic evolution in the geography of innovation. With increased patenting activity in newly industrializing and emerging countries, we expect the pattern of ownership of patent rights worldwide will become more diversified over the coming years.” 
 
Dr Idris said, “Information contained in patents and better analysis of data relating to patents is extremely valuable and for these reasons WIPO has enhanced its work relating to 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.” He said that these data are useful and relevant to policy makers, scientists, researchers and the business community.
 

North East Asia: Significant Growth

The report reaffirms that the North East Asian region has significantly increased its share of worldwide patenting, both as a source of patent applications and as a target of non-resident patent applications from outside the 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%) and non-resident (+23.6%) filings. 
 
Commenting on this significant shift in the geography of innovation which for the past 250 years has been largely focused in industrialized countries, Mr. Francis Gurry, WIPO Deputy Director General, who oversees WIPO’s work relating to patents, predicted that this trend will continue. Based on this report’s findings, as well as trends in the Patent Cooperation Treaty (PCT), Mr. Gurry said “Countries in North East Asia will most likely continue to challenge their counterparts elsewhere. A few years ago, they took the patent world by surprise, but it is now very much the expectation that countries like China and Republic of Korea will continue their rapid developments in innovation, one indicator of which is the number of patent applications filed.”
 

The Patent Cooperation Treaty (PCT)

The report shows an increase in the use of the PCT, a multilateral pact administered by WIPO which provides a simplified system for international patent filing. The number of PCT international applications increased by 7.9% from 2005 to 2006 to reach 147,500. At present, 137 countries have signed up to the PCT. 
 
Applicants from the United States of America 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% and 56.5%, 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% from 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 efficient and cost-effective option for the international filing of patent applications” said Mr. Gurry. 
 

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. The USA had more than 900,000 patents pending 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 has created a temporary increase in the examination workload in Japan.
 
Mr. Gurry said “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 noting that the number of patent applications pending examination differs significantly from one office to another he said “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% of patent applications are filed by non-residents, and as 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 may be subject to a separate search and examination in each patent office.
 

Patent Filing by Residents

Patent filings by residents increased by 6.6% in the period 2004 to 2005. The patent office of China experienced the highest growth rate in resident patent filings, increasing by 42.1% in 2005. This reflects the country’s commitment to becoming a hub of innovation. In the ROK resident patent filings grew by 16.1% in 2005, in the USA such filings grew by 9.7% and in the EPO a growth rate of 4% 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.
 

Patent Filing by Non-Residents

The number of patent filings by non-residents - individuals who are requesting patents in foreign countries - in 2005 was 7.6% higher than in 2004. This points to the greater internationalization 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. 
 
Patent 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% of non-resident patent filings worldwide, while Germany accounts for 11%. Together, these three countries of origin account for 57% of worldwide patent filings by non-residents. 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% for the ROK, +27.9% for China and +23.6% for India. The increase over 2004 was also notable for Israel (+11.1%), New Zealand (+13.3%) and South Africa (+10.6%).
 

Patents Granted in 2005

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% of patents granted worldwide in 2005. 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% 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% and 21%, respectively, of patents in force worldwide in 2005.
 

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% 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 United States of America followed by the Republic of Korea, the EPO and China. The three fastest growing technical fields from 2000 to 2004 were medical technology (+32.2%), audio-visual technology (+28.3%) and information technology (+27.7%).
 
In 2006, 23% 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%, making this the fastest growing technical field in 2006, followed by information technology (+22%) and pharmaceuticals and cosmetics (+21%).
 

Inventors

The report also 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.
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