Intellectual property rights and specifically patents are often seen as a strong indicator of innovation and market leadership. One way of quantifying a country's inventive drive is its number of patent applications, which not only gives an indication of the country's ability to utilize knowledge, but also demonstrates its ability to translate knowledge into potential economic achievements. This article aims at providing an indication of the inventive strengths of major Asian countries, 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 want a broad perspective of the total EPO applications filed by each of the selected countries.

The US represents nearly a quarter of all applications filed with the EPO in 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. The number of filings received from China is expected to continue increasing rapidly over the next few years. Chinese academics are encouraged and funded by the 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—an enormous, sustained increase (National Science and Engineering Board: Science and Engineering Indicators 2010). 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 reported that China aims at reaching two million annual patent filings by 2015. 

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 which do not relate to Hi-tech industries.   

Hi-tech

Other non Hi-tech applications

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 quickly imitated and out-dated.

Inventive Capacity

Finally, to get a better feeling of the inventive drive 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 by volume 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.

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. 

Sources

1) National Science and Engineering Board: Science and Engineering Indicators 2010
http://www.nsf.gov/statistics/seind10/c0/c0s2.htm

2) The World Today – China: New Incentives?
http://www.chathamhouse.org.uk/publications/twt/archive/view/-/id/2161/

3) The IPKat – Why do Chinese academics file so many patents
http://ipkitten.blogspot.com/2011/02/why-do-chinese-academics-file-so-many.html