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The WIPO report

Photonics Spectra
Jan 2010
Patent filings are decreasing each year, but experts say not to worry

Amanda D. Francoeur,

Francis Gurry, director general, states in the foreword of a 2009 report by the World Intellectual Property Organization (WIPO), “History has shown … that companies and countries which continue to invest in new products and innovation during times of economic recession will be those that will be best positioned to take advantage of the recovery, when it arrives.”

At a time when the intellectual property market is declining worldwide, ultimately affecting innovation and financial growth, he believes it is essential to persevere in human creativity and inventiveness. However, statistics from the report show that the global economy has slowed down patent filings, and although the numbers are still positive, the percentages continue to decline each year. Nevertheless, Gurry and fellow experts from the organization assert that the future looks bright.

WIPO, headquartered in Geneva, is a specialized United Nations agency that promotes intellectual property protection internationally. The organization issued the World Intellectual Property Indicators 2009, including annual trends, based on utilization of patents and other forms of intellectual property in 2007.

Innovation interrupted

Research and development are supported by cash flow, so if funds aren’t available, innovation may come to a standstill.

An estimated 6.3 million patents were in force globally in 2007 with two of the five largest patent offices – the US and Japan – filing 47 percent of the total, according to the report. Yet international patent filings are likely to fall this year by 5 percent, Gurry states.

In 2007, the US Patent and Trademark Office had the largest number of patents in force with more than 1.8 million. Along with Japan and China, the US was also leading in gross domestic product as well as research and development, and the three countries accounted for 59.2 percent of filings in 2007. Thereafter, the US Patent and Trademark Office lost its standing to Japan as 2008 brought zero growth; this year international applications are down by 14 percent. A report by the Organisation for Economic Co-operation and Development claims that total investments in the US for the first quarter of 2009 were down 60 percent from the year before.

Certainly, the US is not the only country affected by the crisis, as figures show a deceleration in patent filings worldwide. In 2006, filings increased by 5.2 percent, while in 2007 they increased by only 3.7 percent. Preliminary figures indicate a further reduction in 2008.

Although the patent filing rate is losing speed, patents are still a primary channel for novel discoveries. “If you look at the number of patent filings around the world in 2008, [they] still show positive growth over 2007,” said Carsten Fink, WIPO’s chief economist.

“Having looked at 2009 data, there has been a decline in research and development investments and a sharp fall in venture capital financing,” Fink said. However, he believes the outlook is promising. “One can be more optimistic – most major economies have emerged from recession,” he said, emphasizing that the economic crisis hit fully in the third quarter of 2008.

Staying positive

In contrast to the US, emerging nations in regions such as East Asia have had strong intellectual property growth. In particular, patent filings in China and South Korea grew exponentially in the past decade. As recently as the first quarter of this year, China’s international filings increased 19 percent. Fink stated that, as companies in China are experiencing rapid growth, their business leaders are becoming increasingly familiar with intellectual property and the patent system.

Another perspective is that some countries are thriving in certain technological areas, Fink said. As stated in the WIPO report, between 2002 and 2006, as the rate for the filing of optical patents grew by 4.2 percent globally, Japan ranked first in number filed. The US, Australia, Israel and the UK prospered mostly from patents in the medical technology industry.

Until data for 2009 has been collected, it remains undetermined as to what direction patent filings have headed this year or where they will go in the future. But according to Fink, the worst of the recession is over; according to Gurry, finding solutions for the recession through investment in innovation should result in a sustainable future.

The technology of generating and harnessing light and other forms of radiant energy whose quantum unit is the photon. The science includes light emission, transmission, deflection, amplification and detection by optical components and instruments, lasers and other light sources, fiber optics, electro-optical instrumentation, related hardware and electronics, and sophisticated systems. The range of applications of photonics extends from energy generation to detection to communications and...
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