How Asia's behemoth IT companies boost international patent applications

More international patents are filed in Asia than ever before. But what drives the number of applications?

The number of international patent applications a nation and its inventors churn out appears to be heavily dependent on the appetite of its technology giants as well as research and development spending, new figures confirm.

Asia, and particularly China, emerges as the best horse to bet on.

Latest figures by the World Intellectual Property Organization (WIPO), a global forum for intellectual property policy and services, recorded exuberant growth in volume of Patent Cooperation Treaty (PCT) filings for Asia.

In 2018, more than half of all PCT applications were filed from Asian economies.

Generally, PCT patent applications are not granted under the treaty but can lead to approval of a patent in any of the states contracting to the PCT. India, with an estimated volume of 2,013 filings in 2018, grew at a rate of 27.2 per cent between 2017 and 2018, and overtaking innovation powerhouse Israel, which remained at a fairly horizontal trajectory.

As Asia takes the lion share in volume, the question of what stimulates growth in demand for PCT filings emerges.

China, South Korea and India, where some of the largest technology companies are located, all performed remarkable jumps. China-based telecoms giant Huawei Technologies, with 5,405 published PCT applications, dominated the field and emerged as the top corporate filer for 2018. It was followed by Mitsubishi Electric Corp of Japan with2,812 filings, Intel Corp based in Santa Clara, California, in the US with 2,499, then Qualcomm Inc (US). In fifth place sits ZTE Corp, a Shenzhen-based multinational telecommunications equipment and systems company, with 2,080 applications.

Mosahid Khan, head of IP statistics at WIPO, explains that certain domains in innovation, research and development would heavily depend on patents – computing and IT are two of those areas. The individual profile of countries would determine the volume. “China has two of the largest communication companies, Huawei and ZTE. They tend to file a lot of applications in digital communication and computing,” Khan said. All top five filers are IT-related companies.

Infographic on PCT patent filings

Image credit: E&T

Khan clarified: “The correlation between research and development expenditure is what we would expect. But when it comes to correlation one has to careful, because this is not going to give you the full picture. Even if invention takes place, it does not automatically mean that companies and individuals will use the ecosystem to file international patents.

Larry Cady, senior analyst at IFI CLAIMS Patent Services, said that he recognises similarities to trends seen within US filings. Those would behave similarly as PCT filings and US applications were down in 2018, despite a growing economy.

Certain technical changes in the US patent office caused some confusion among companies and made inventors hold off with their applications until they had more clarity, Cady said. As a result, demand was down across all technology sectors and countries filing in the US – except for China.

“China was the one country that grew their US patent applications,” he explained. The Chinese government encourages both private and state-owned companies to file new patents as the nation wants to grow more technologically independent.”

For PCT patents, China is expected to surpass the US within the coming two years, accordion to WIPO calculations.

“Asia is now the majority filer of international patent applications via WIPO, which is an important milestone for that economically dynamic region and underscores the historical geographical shift of innovative activity from West to East,” said WIPO director general Francis Gurry.

There are multiple factors that can drive PCT patent filings. Yet, according to experts, the impending exit of the UK from the EU – at least technically speaking – may not be one of them. According to Khan, Brexit should not alter the dynamics and relationship between the UK and WIPO. The UK is a member of the PCT system within the boundaries of WIPO; whether Brexit happens or not, the UK remains a member because WIPO is not a part of the EU institution.

Nonetheless, the factor he said could affect filing numbers is potentially looming uncertainty that affects how businesses behave. So far, little was palpable. UK specific growth figures for PCT filings remained at a robust and healthy rate.

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