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On Wednesday, December 6th, the World Intellectual Property Organization (WIPO) released statistics on worldwide filing activities for patent, trademark and industrial design applications for 2016. One clear takeaway from the data released by WIPO is the growing dominance of China as a forum for patent application filings, underscoring the growing dichotomy of current patent policy regimes between China and the U.S. and how well either country is incentivizing innovation.
Globally, a total of 3.1 million patent applications were filed with patent offices worldwide during 2016, an increase of 8.3 percent over 2015’s filing numbers and the seventh straight year in which saw a year-over-year increase in global patent application filings. About 1.3 million patent applications were filed with China’s State Intellectual Property Office (SIPO), a record number of patent applications received by any patent office in a single year. China’s 2016 patent application total is greater than the combined total of patent applications filed in 2016 in the United States (605,571), Japan (318,381), South Korea (208,830) and Europe (159,358). These five jurisdictions accounted for 84 percent of all patent applications filed during 2016.
Between 2006 and 2016, China’s patent application filing activities have driven the overall growth of Asia as a growing region for filing activity. In that 10-year span, the percentage of patent applications filed with patent offices in Asian countries has increased from 49.7 percent of all filings up to 64.6 percent of filing activity last year. All told, Asian patent offices took in 2 million patent applications during 2016.
In terms of foreign filing activities, U.S. residents filed a total of 215,918 patent applications in foreign patent offices during 2016, the most among residents of any single country that year. As the WIPO news release notes, that’s more than four times the amount of patent applications filed by Chinese residents in foreign offices (51,522). However, what WIPO doesn’t note in the release is that, while U.S. residents are filing many more patent applications abroad than Chinese residents currently, the gap between those two numbers has decreased slightly. U.S. inventors filed 237,961 patent applications worldwide in 2015, so foreign patent application filings have decreased by more than 20,000 year-over-year, a 9.26 percent decline during that time. During that same period of time, the number of foreign patent application filings from Chinese residents increased by almost 10,000, up from 42,154 foreign applications in 2015 and representing a year-over-year increase of 22.22 percent.
The fact that overall U.S. patent applications have gone up even as foreign filings have gone down makes little sense to Erick Robinson, Director of Patent Litigation for Beijing East IP. “Foreign patents are more valuable than U.S. patents these days,” Robinson said, noting the difficulties many patent owners face in enforcing a patent in the United States. “My theory would be that company budgets for patent filings are probably going down largely as a result that patents in the U.S. are worth very little these days, so companies cut budgets for patent prosecution. One of the first things they cut is foreign patent filings. From a strategic sense, I think that’s wrong, but that’s what I think happens.” Robinson noted that he’s been advising most of his U.S. clients to file patent applications in China first, even those U.S. inventors who have no relationship to the Chinese market, because China is a more valuable market right now. In certain sectors like software, inventors are more likely to get a patent issued in China than the United States or Europe. “My guess is that what we’re seeing is just a general malaise and when you have that, budgets get cut. What gets cut is, ironically, not the things causing the malaise but which may be one of the few bright spots.” Robinson opines that inventors who aren’t even considering selling their product in China should definitely patent in China because Chinese competitors will undoubtedly sprout up. “Anyone who’s not considering China is an idiot,” Robinson said.
The statistics released by WIPO do not speak to the quality of the patent applications being filed, and it’s known that many patent applications being filed in China are of poor quality. This is especially true of the patent applications which are only being filed with the domestic office, which are the vast majority of Chinese patent applications. In 2015, 96 percent of all Chinese patent applications were filed domestically with SIPO only and WIPO’s 2016 numbers on China’s total patent applications compared to Chinese patent applications filed abroad don’t change that percentage in any meaningful way.