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Friday, 22 March 2013

A first look at WIPO's statistics on PCT applications in 2012

During a lovely press conference on Tuesday, the WIPO unveiled some interesting statistics on international filings for patents, trademarks and industrial designs in 2012, under the IP systems administered by the Geneva-based organization. Trade mark applications under the Madrid system and industrial design applications under the Hague system grew by 4.1% and 3.3% respectively (for the latter, 62.8% of the applications were filed by French, German and Swiss applicants). Applications for patents under the Patent Cooperation Treaty (PCT) saw a year over year growth of 6.6 %, as 194.400 PCT filings reached the WIPO's offices in the past year. About half of the PCT applications came from the United States and Japan: the top eleven applicants [why eleven and not ten? Well, Merpel loves pasta and wanted to include Italy in the list!] included France, Germany, Italy, Netherlands, Sweden, Switzerland, United Kingdom, China and Korea.


This Kat took some time to browse through the PCT applications' data, longing for interesting statistics to feed the readers' feline curiosity. At first, he was struck by the WIPO's website statement: 'Strong growth 
in Demand for Intellectual Property Rights in 2012'. Merpel was passing by and immediately suggested comparing the year over year growth in PCT applications since the PCT's entry into force, in 1978. How could the IPKat not follow Merpel's kind suggestion?


The comparison confirms that the PCT filings' growth in 2012 was steady, albeit not as strong as in 2011. More generally, it appears that, since 2002, the growth in PCT applications has never been able to reach the levels of the 1990s, thanks, in no small part, to two economic recessions in less than ten years. It is certainly interesting to note, however, that different countries exhibit highly variable rates of PCT applications' growth. In 2012, applications from China, Netherlands, Korea and Japan grew by more than 10%, while filings from the UK and Germany grew by less than 1% and applications from Canada were almost 7% less than in 2011. 

The data led this Kat to formulate two hypothesis:
(1) as PCT applications are the result of years of research and development, different rates of growth may be linked to the asynchronous effects of the economic crisis on each country;
(2) as each field of technology shows a different rate of growth, the overall differences in total PCT applications' growth may depend on the relative weight of different industrial sectors in each country. 
Let's put these hypothesis to test. 

Country
GDP growth in:
2006
2007
2008
2009
2010
2011
France
2,47
2,31
-0,08
-2,75
1,48
1,70
Germany
3,70
3,27
1,08
-5,13
3,69
3,00
Italy
2,04
1,48
-1,32
-5,22
1,30
0,40
Netherlands
3,39
3,92
1,80
-3,54
1,69
1,00
Sweden
4,30
3,31
-0,61
-5,33
5,69
3,90
Switzerland
3,68
3,70
2,04
-1,91
2,71
1,91
United Kingdom
2,61
3,47
-1,10
-4,37
1,76
0,90
Japan
2,04
2,36
-1,17
-6,29
3,97
-0,80
United States
2,62
1,89
-0,38
-3,52
2,99
1,78

The Gross Domestic Product growth of the top eleven PCT applicant countries confirms that the effects of the last recession were not uniform. However, are they sufficient to justify the different rates of growth of PCT applications? If the answer was positive, the decrease in total filings, which normally follows the reduction of expenditure for research and development in periods of recession, should not have taken place simultaneously in the PCT countries. 

Although the growth of PCT applications per country exhibits some relevant differences, all the top PCT applicant countries, with the exception of Japan, Netherlands and France, saw a marked decline in total filings in 2009, a significant growth in 2010 and a less steep growth in 2011. The rate of growth may vary, but the trend appears to be similar for most of the countries involved. If the correlation with the asynchronous effects of the economic crisis is not particularly strong, the different ratio of growth could have something to do with the development (or underdevelopment) of specific industrial sectors?

Before answering the question, we must turn our attention to the WIPO's statistics concerning the PCT applications per fields of technology. In 2012, as in previous years, the top three fields of technology, each amounting to about 7% of the total applications, were 'Electrical machinery, apparatus and energy', 'Digital communication' and 'Computer technology'. Year over year, the fields experiencing the highest growth were ''IT methods for management' (+ 22.8 %), 'Micro-structural and nano-technology' (+ 21.2 %), 'Computer technology' (+ 18.2 %), 'Transport' (+17.5 %) and 'Electrical machinery, apparatus and energy' (+ 17.1 %). The ICT sector, in particular, amounts to almost 20% of the total filings and its growth is proceeding steadily.
Going back to the second hypothesis, which aimed at examining the correlation between a country's industry composition and the PCT applications' growth, this Kat decided to focus on the relative weight of PCT filings in the fields of 'Digital communication' and 'Computer technology' for each of the top applicants (with the exception of Italy, as relevant data were not readily accessible at the WIPO's databases). The comparison thus runs between the PCT applications' growth in 2012 per country, and the share of PCT applications in the above fields over total applications for each country (based on 2011 data).

Once again, the comparison does not allow to confirm the hypothesis [this Kat is now starting to understand why he chose to study law, rather than economics - Merpel meowed in agreement]. However, it suggests that some correlation may indeed exist, as both Germany and the UK show a slow growth in PCT applications and feature a relative low share of ICT applications among their total filings. On the other hand, Japan, Korea and China, which file a higher number of ICT patents among their total applications, exhibit a stronger growth in PCT filings. It is probably correct to affirm that the development of the UK and Germany's ICT sector could lead to a parallel growth of total PCT filings, even if the relative weight of other industrial sectors would decline.

The WIPO's data allow further observations in relation to the investments in research and development which are needed to reach the patented innovations. At first, it should be highlighted that the 2012 applications plausibly arise from researches initiated after the beginning of the current economic recession: their continued growth suggests that an initial phase of decreased investments was soon followed by an increase in R&D expenditure, in an attempt to secure the technological advantage conferred by patents. The year over year growth of PCT applications shows that, on average, a reduction in the number of filings takes place one to two years after the break out of an economic crisis and that it is soon followed by a new growth. It is also possible to find alternative explanations for these effects. On one side, the investments on R&D may be reduced or increased in anticipation, and not in response, to the economy's evolution, as enterprises adjust their output and resource allocation on the basis of an expected market's development. On the other, it is possible that R&D investments reached a plateau just before the beginning of a recessive cycle, due to the saturation of the market's capacity and the flattening of the demand. 


Correlating the R&D expenditure of the top PCT applicant countries with their total applications, it is possible to estimate the unitary cost for patent. These data should be handled with extreme caution, due to the difficulties of estimating actual R&D expenditure and to the fact that the latter may be destined to research activities which do not necessarily lead to patentable innovations. A more significant comparison would take into account the single components of the total R&D expenditure and compare them with the total patent applications per sector. The simplified graph below (which takes into account a two or three years delay between R&D and patent filings) shows some uniformity among R&D expenditure per patent application in different countries. The majority of the applicants exhibit a similar ratio of investments over patent applications (differences range between +/- 25% - actual costs are likely to be very different from the data shown in the graph, but the ratio should be comparable).
Abandoning the economic analysis, we can relax by taking note of the top 10 applicants, which reassuringly show little to no changes from year to year. The 2012 top ten features:

Top ten of PCT applicants
in 2012
Position in:
2011
2010
ZTE CORPORATION
1
2
PANASONIC CORPORATION
2
1
SHARP KABUSHIKI KAISHA
4
7
HUAWEI TECHNOLOGIES CO., LTD.
3
4
ROBERT BOSCH CORPORATION
5
6
TOYOTA JIDOSHA KABUSHIKI KAISHA
7
10
QUALCOMM INCORPORATED
6
3
SIEMENS AKTIENGESELLSCHAFT
12
11
KONINKLIJKE PHILIPS ELECTRONICS N.V.
9
5
TELEFONAKTIEBOLAGET LM ERICSSON
10
8
(c) Michael Gil
The IPKat ready to fall asleep!

This Kat, exhausted by the amount of data examined, is already dreaming about a nice CJEU's judgment to comment. But he is sure that our highly-educated readers will find more 'food for thought' in the WIPO's statistics, which they are invited to share with the IPKat's community.

WIPO's statistical data for PCT applications here.
GDP statistics here (UNCTAD).
R&D expenditure data here (UNESCO).

8 comments:

Anonymous said...

UK = PATHETIC!
Nation of shopkeepers!

NotCanadian said...

I'd be interested to know why there is such a marked drop in PCT applications from Applicants in Canada - has this country been hit harder by the economic climate or is there some other reason for the decline?

Stefano Barazza said...

@NotCanadian: There may be other reasons that explain the drop in PCT applications from Canada, but a decline in R&D spending (see here and here) and a peculiar patent specialisation (have a look at this study) probably played a role in it.

Lukáš C. said...

Thanks for your refreshing analysis. I think the WIPO's data are in line with the EPO's statistics for 2012. The latter show that industry specialisation is indeed a factor worth assessing: applications from the US and EU in the field of medical technology are almost on par, whereas EU applicants are predominant in transport and mechanical technology, and US and Asia file the majority of IT's patents. The EPO's press release is at http://www.epo.org/news-issues/news/2013/20130306.html.

Anonymous said...

What's PPP $ in the R&D expenditure histogram?

Anonymous said...

Purchasing power parity (PPP) is frequently used to compare economic data, such as GDP, by taking into account (not the market rate, but) the relative purchasing power of each national currency (http://en.wikipedia.org/wiki/Purchasing_power_parity).

Mike O'Keeffe said...

I am with anon, to understand the trends in PCT filing you need to consider the other options: Local filing, country by country filing, patent filing strategy... In a scenario of "File now, and figure out later if we want to pursue it", the PCT is attractive to Japanese applicants for its "placeholder" and low cost, with a tinge of lets hide here so that nobody will find us (PCTs get an English abstract at 18 months, but dont need to file a translation to English for 30 months:That's an economic advantage if you file a lot of patents *e.g. Panasonic). However, I believe the more fundamental question is, if the PCT route is so good/convenient/cost effective, why do only US and Japanese applicants use it ? I would have expected higher rates of adoption of PCT since years ago, so I wonder what WIPO is doing wrong ?

MaxDrei said...

Mike, why do you suggest that "only" US and JP use PCT. Looking at the pie, I see 80% coming from just 5 countries: US, JP, DE, CN and KR. But those 5 countries account for 80% of any other sort of (non-PCT) filing activity as well, don't they?

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