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Thursday, 16 October 2014

Apples and Oranges in the IP5 Statistics, or how to make your patent filing statistics look more fruitful

Patent filing statistics: a fruitful topic to pursue. Peter Arrowsmith (partner in London-based patent attorneys Cleveland) has been subjecting patent statistics to some careful scrutiny of late. If readers' comments are anything to go by, Peter's two-part post on the Great British Vanishing Act (here and here), on whether British inventors are really a disappearing breed, was very much appreciated. This time round, Peter looks at the presentation of patent filing figures and makes some acute observations. This is what he says:

I was recently reviewing the key IP5 statistical data for 2013, which is released jointly by the five largest intellectual property offices in the world (IP5): the European Patent Office (EPO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), the State Intellectual Property Office of the People’s Republic of China (SIPO), and the United States Patent and Trademark Office (USPTO). In reviewing the report I noticed an inconsistency in the basis on which patent filing data are calculated. The net result is that EPO figures are presented in a more favourable light than they should be. It seems that this is down to the surprising way in which the EPO calculate their filing statistics.

Summary of the IP5 Statistical Data

An extract from the IP5 report reads as follows:
“The IP5 Offices here report a large growth in patent filings in 2013, with altogether 2.2 million patent applications filed. This is an increase of 10.6% compared to 2012. The growth over recent years is shown in the following graph, which demonstrates the need for continued efforts to improve the efficiency of the system”
Patent filings at IP5 Offices
“EPO, USPTO, KIPO, and SIPO each had an increase in patent filings ranging from 2.8% at EPO to 26.4% at SIPO, while JPO had a decrease in filings of 4.2%".
The underlying data from the graph are shown in the table below, also showing the percentage change on 2012 figures: 
EPC states
R. Korea
P.R. China
United States
93 905
52 437
16 857
22 292
64 967
15 232
265 690
- 0.1%
+ 1.2%
+ 14.0%
+ 16.2%
+ 2.8%
- 1.9%
+ 2.8%
20 604
271 731
6 134
2 064
23 481
4 422
328 436
- 1.4%
- 5.3%
+ 7.5%
+ 2.1%
+ 2.4%
+ 4.5%
- 4.2%
11 734
16 300
159 976
1 144
12 977
2 458
204 589
+ 15.1%
+ 1.8%
+ 8.0%
+ 16.5%
+ 14.4%
+ 9.1%
+ 8.3%
33 287
41 193
10 866
704 936
29 992
4 862
825 136
+ 4.7%
- 2.6%
+ 20.9%
+ 31.7%
+ 1.6%
- 1.0%
+ 26.4%
87 314
84 429
33 039
14 702
293 588
58 540
571 612
+ 2.5%
- 4.8%
+ 12.1%
+ 10.8%
+ 9.2%
+ 2.0%
+ 5.3%

I was immediately suspicious of these data because they quote an increase in the number of patent filings at the EPO in 2013, whereas some of my recent research indicates that there has actually been a decrease.

Filing data from the EPO

It is apparent from the EPO’s annual report that the office bases its filing statistics on the number of direct European patent applications plus the number of international-phase PCT applications (EPs + PCTs). This is the case whether or not these PCT applications subsequently enter the European regional phase. Technically, of course, a PCT application that designates the EPO is equivalent to a regular European application (according to Article 153(2) EPC). However, it is also clear that many PCT applications are filed by applicants who ultimately have no interest in entering the European regional phase. Therefore, this seems a perverse basis on which to calculate the total number of European filings.

A more meaningful basis would be the number of direct European patent applications plus the number of PCT applications that actually enter the European regional phase (EPs + Euro-PCTs). These data are available for download from the EPO’s website and, by this measure, it is apparent that the number of European patent applications actually decreased by around 0.5% in 2013. Also, the total number of applications is more than 100,000 less than the number quoted by the EPO. The figure below demonstrates the difference in the trend of applications, depending on whether you use (PCTs + EPs) or (Euro-PCTs + EPs).

The President of the EPO blogged about the statistics on 12 March 2014, saying: “The filing figures for 2013 confirm the trends of the past few years, with an overall increase (266,000 filings, +2.8% versus 2012) resulting once more in an all-time high”. Although not technically incorrect, this statement from the President is, at best, misleading.

Apples from the EPO and Oranges from other offices

The EPO use PCTs + EPs when comparing their filing data with the other IP5 offices. This is a bizarre method of comparison. If other offices were calculating filing data on the same basis then all of the data would be strongly correlated, rendering a comparison pointless. On closer inspection of the underlying data, however, it is clear that the other IP5 offices do not calculate filing data on the same basis as the EPO. This is apparent by looking at data from WIPO regarding the number of PCT applications filed by applicants from different origins. From these data it is apparent that the following PCT applications were filed by applicants from IP5 offices, excluding the EPO: 
PCT applications filed in 2013
United States
Comparing these data with the table from IP5, it is clear that the other IP5 offices do not include international-phase PCT applications. Taking just one example, at KIPO the number of applications filed by Chinese applicants is quoted as 1,144; far less than the 21,516 international-phase PCT applications filed by Chinese applicants.

Thus, the IP5 report compares apples from the EPO with oranges from the other IP5 members. Consequently the IP5 report falsely suggests that EPO filings have increased, whereas they have actually decreased.


It seems that great care is required in interpreting any statistics from the EPO. It is important to check the underlying data to determine precisely what is being represented. In my view it is misleading of the EPO to use PCTs + EPs to represent the number of filings, as this is not a true gauge for actual desire for European patent protection.

The problem is that, once released, the EPO statistics are divorced from their original context. I suspect that this is how they found their way into the IP5 report, with the collators simply assuming that the statistics were accurate representations of the number of European filings. It is troubling that statistics such as these may be relied upon by stakeholders when it comes to important decisions on the patent system.
As usual, readers' thoughts are most welcome!


Meldrew said...

Old news

See also for more indications of who is growing and who is stagnating.

Merpel McKitten said...

Thanks for your comment, Meldrew, and thanks for your links.

Being a fictional Kat, I feel comfortable about taking a gentle degree exception to your "Old news" jibe. While much of this blog's content is news, it is not a news service as such. It's a collective attempt to explain and elucidate IP for a readership that consists of experts and laymen, believers and sceptics, IP owners, licensees, infringers, judges and administrators.

The interpretation of IP statistics is an important and misunderstood topic, as ipnoncredere correctly identifies and valiantly seeks to address. I feel that Peter's guest post -- which does not pretend to be news -- provides a clearly-written and accessible basis upon which readers can build and ideally sustain an interest in this topic.

Meldrew said...

Fair point.
I consider myself KatSlapped.

Anonymous said...

The other four of the IP5 are run by countries, whereas the EPO is "somewhat" independent. The EPO has a much stronger interest in high filing numbers than the others for numerous reasons. It is so far not surprising that they use little tricks (oh no! lets put it: some surprising ways of counting) to increase their filing numbers...

SG said...

A similar point was raised back in May here,, although absent the IP5 discussion.

Old news or not, I feel that light should continually be shone on the EPO's attempts to paint a rosier-than-reality picture! So please keep it up!

Anonymous said...

"Technically, of course, a PCT application that designates the EPO is equivalent to a regular European application "

So, technically there is no issue. It seems reasonable to me. I always file PCT applications when wishing to obtain protection in Europe. If I decide to drop a case before national phase entry, it is exactly the same as my dropping a direct-EP within 31 months from priority. For me, the EP existed.

Aside from the above, if there has been an accounting change by the EPO regarding their figures, it can only be a one-off change. So, there will be a blip for a year or two and then the trend will settle down.

The problem with attacking everything the EPO does is that important issues are hidden amongst the chaff. If I was a conspiracy theorist, I would say the EPO are deliberately attempting to distract everyone from the key issues with all this nonsense. I am, however, not a conspiracy theorist.

Jeremy said...

Thanks SG. There's little harm in revisiting old subjects on this blog, particularly if one considers that there's a substantial amount of churn in the blog's readership as new readers replace those who die, retire, shift from IP to other areas of interest or just get bored with us.

SG said...

Anonymous - I'm not a conspiracy theorist either, but hypothetically if next year it turns out that PCT applications are down but European directs are up do you think the EPO will stick with their present counting method? Or maybe the headline will be the increase in direct EP filings?

I don't think too much criticism can really be laid at the feet of the EPO for this. It's just what large concerns (both public and private) do. My main concern is when EPO press releases get blogged and then reblogged as gospel without anyone really looking into the actual data. Fortunately the IP community tends to be on the ball about these things.

Jeremy - Quite right. And the point above about the IP Kat not being a strict "news" blog is well made too (although I will confess to getting most of my IP news from it!).

Anonymous said...

If PCTs are down with EP-directs up, I think that is something the EPO would rightly be proud to boast about.

In any case, as forum shopping is not a major industry for filing patent applications (if you want a British patent monopoly, file a GB (GB PCT, or EP) patent application) it's just standard self-promotion.

Anonymous said...

Good news - figures up yet again, by 3% or so to 273,000 (provisionally). Makes you wonder what the problems are that the EPO faces which forces it to cut back on staff. Given the low grant rate (ca. 67000 in 2013= less than 25%) you also wonder how the national offices can survive.
Oh, wait,look at the French office which apparently has a surplus, earned from the EPO's grants, of upwards of 100million euros. Even the French auditor recognises that they earn this for doing presque rien so the state can free to swipe it.

Just a suggestion - how about the EPO stopping giving out the cash and spending more on recruiting more staff to do all these filings and examining them. Not sure that attacking current staff helps with getting through the backlog but as long as filings are 270K and only 190K European and PCT searches are done as in 2013 then maybe there is a problem??

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