It has often been said that intellectual property rights and specifically patents are a strong indicator of innovation, inventions and market leadership. Applying for a patent opens up the invention to the public, but simultaneously it gives protection.
One way of quantifying a country's inventive drive is by counting the number of patents it applies for. Not only does the number give an indication of its ability to utilize knowledge, but it also shows its ability to translate its knowledge into potential economic achievements. This article aims at providing an indication of the inventive strengths of the major Asian players, the United States, and Germany as far as their patent applications for 2009 at the European Patent Office (EPO) are concerned.
Number of Applications
Firstly, we wanted to get a broad perspective of the total applications filed by each of the selected countries with the EPO.
The US represents nearly a quarter of all applications filed with the EPO during 2009. Second is Europe's biggest economy, Germany, with 18.6% of the applications. Japan, traditionally a leading applicant is third with 14.8%.
Korea, China and Taiwan follow with smaller percentages.
However, keep in mind that these percentages represent filings for 2009. It is expected that the number of filings received from China will continue to increase rapidly in the next few years. Chinese academics are encouraged and funded by government to file patents in order to drive innovation. In addition, companies are rewarded with cash bonuses and tax breaks for generating patents.
China's R&D/GDP ratio more than doubled, from 0.6% in 1996 to 1.5% in 2007, a period during which China's GDP grew at 12% annually(National Science and Engineering Board: Science and Engineering Indicators 2010)—an enormous, sustained increase. The gap in China's R&D/GDP ratio relative to those of developed economies suggests that China's R&D volume can continue to grow rapidly.
According to Su Hsing Loh in "The World Today: China New Incentives?", China plans to allocate 2.2% of its GDP to research and development within the next 5 years. Furthermore, Su also reported that China aims at reaching two million annual patent filings per year by 2015.
Taiwan
Japan
Korea
China
Germany
US
Other
Total
Number of EPO applications filed in 2009
1006
19933
4193
1631
25107
32966
49706
134542
Percentage of total
0.75
14.8
3.1
1.2
18.6
24.5
36.9
Application by technical fields
Since Taiwan is a leading exporter of computer chips, LCD panels, DRAM computer memory devices, networking devices, and consumer electronics, this section specifically distinguishes between patents filed in the Hi-tech fields (including patents relating to electricity and semiconductors, handling and processing, audio and video and media, electronics, computers, telecommunications) and those who do not relate to Hi-tech industries.
Hi-tech
Taiwan
Japan
Korea
China
Germany
US
Others
Total in EU
Number of EPO applications filed in 2009
631
9104
2676
1096
8237
12722
18415
52881
Percentage of total
1.2
17.2
5
2
15.6
24
34.8
Other non Hi-tech applications
Taiwan
Japan
Korea
China
Germany
US
Other
Total in EU
Number of EPO applications filed in 2009
375
10829
1517
535
16870
20244
31291
81661
Percentage of total
0.5
13.3
1.8
0.65
20.65
24.7
38.3
As expected, Taiwan's share of the total number of Hi-tech patents filed at the EPO is much higher than its total share of patents filed at the EPO.
The same trend can be observed for Japan, Korea, and China – all of whom are also Hi-tech oriented economies.
Germany's contribution to the total number of Hi-tech patents is less than its contribution to other technical fields and the US have made more-or-less equal contributions to both Hi-tech and non Hi-tech (percentage wise).
The fact that the US and Germany, respectively the biggest and second biggest contributors to EPO patents, lean over to non Hi-tech patents, might be indicative of their traditional industries. On the other hand, given the rapid pace of technological development coupled with the rate at which competitors are able to imitate and bring those technologies to the market, it is perhaps not unexpected that many businesses opt for investing in continued innovation rather than spend time and resources to protect products that possibly will be imitated and become old-fashioned soon.
Inventive capacity in relative terms
Finally, to get a more real feeling of inventive drive of each of the listed countries within the scope of the EPO, we have decided to express the number of patents filed at the EPO relative to the population.
In relative terms, Germany outranks its nearest competitor, Japan, by double the amount of patents per million. The leading applicant in the EPO, the US, falls to a third place.
Korea, with double the size of Taiwan's population, also seems to be filing double the amount of patents per million people.
China, having the largest population on earth, falls far behind when it comes to patenting per million people. However, as mentioned above, China is spending vast amounts of money on R&D, hence a steep rise in the number of applications from China can be expected in the course of the next five years.
Taiwan
Korea
Japan
China
Germany
US
Population estimate 2009 (million)
23
48
127
1339
81
311
Number of EPO applications filed in 2009
1006
4193
19933
1631
25107
32966
Patents per million people
43.7
87.3
156.9
1.2
309.9
106
Conclusion
The above comparisons relate only to patents filed with the EPO. The number of patents granted to the respective countries was not considered. It is thus a purely quantitative rather than qualitative enquiry.
Nevertheless, these numbers should be indicative of some measure of competitiveness in the European market.
