The WIPO 2009 Report – Interesting Patent Statistics & What Do They Imply To Your IP Intelligence Requirements

September 18th 2009 marked the end of a two day international symposium for IP heads by WIPO. Based on the 2009 World Intellectual Property Indicators report by WIPO which was also recently released we can only guess there were a number of important issues to discuss including the impact of the global economic crisis and recession on the filing of new patents across patent offices around the world. Though the report doesn’t  indicate exact figures, it does mention there was a decrease in the total number of patents filed for the year 2008 although over 760,000 patents were issued during the year and 1.85 million patents filed. Surprisingly, ASIA was more resilient and has been seeing steady growth in South Korea and China which grew 23.9%.

The patent statistics within the report create an insight into the global trends in terms of innovation and highlight several interesting facts around patent activity around the world. This information is particularly interesting for us at Patent iNSIGHT Pro since we work with patent data analysispatent reports and statistics every day. These are the kind of findings which give businesses and innovators the insight needed to know what is going on around the world of intellectual property. It helps draw visible conclusions based on analyzing thousands and even millions of patents and present the findings in a simple easy to understand reports and graphs. Each finding implies something  useful for some business or innovator around the world based on their field or business.  On their own, there are plenty of interesting facts published in this year’s report which you can read here. As the name of the report suggests, the value lies in what the findings of the data analysisindicates and what it implies to your business.  Some of the interesting statistics published in the 2009 WIPO report with regards to patents include:

“The five largest patent offices (China, European Patent Office, Japan, the Republic of Korea and the United States of America) accounted for 69% of total resident filings and 81.5% of non-resident filings in 2007. The high ratio of non-resident filings compared to resident filings is partly due to the fact that all patent filings at the EPO are considered as non-resident filings.

In 2007, the largest number of resident filings originated from Japan, the United States of America, China and the Republic of Korea. Between 2003 and 2007, resident filings of Japan declined by 1.8% per year. In contrast, resident filings of China and the Republic of Korea grew by 28.1% and 9.3% respectively.

There has been a steady increase in the total number of patent families during the past 15 years. The total number of patent families (based on first filing date) in 2006 amounted to 946,498, representing an 8% increase from the previous year.

During the period 2002-2005, patent applications in the fields of computer technology, telecommunications and audio-visual technology had strong growth, with the annualized growth rate surpassing 6%. In contrast, patent applications in the field of biotechnology have gradually decreased over the same period.

Medical technology accounted for the largest share of foreign-oriented patent families for Australia, Israel, the United Kingdom and the United States of America. The largest number of foreign-oriented families originating from France and Germany were in the field of transport.

In the field of telecommunications, applicants from Finland, Sweden, Republic of Korea and China have an above average concentration of foreign-oriented patent families. Applicants from Singapore and the Republic of Korea have a high concentration of foreign-oriented patent families in semiconductors. Applicants from European countries have an above-average concentration in the transport and engines, pumps and turbines fields.

For the first time, a Chinese company (Huawei Technology) topped the list of applicants with the highest number of PCT filings. Panasonic Corporation (Japan) and Philips (Netherlands) were ranked second and third. US universities dominated the list of top PCT applicants for the university sector. The University of California filed 345 PCT applications. Tokyo, Seoul National, Imperial College and Osaka are the four non-US universities in the top 20 list.

All these findings may be viewed to imply something to various businesses and innovators.  To a business located just about anywhere in the world which is looking to protect their IP interests in markets around the world the first finding on the offices with the most non-resident patent filings may imply that these five are top priorities for filing new patents going by the general trend of others. Based on this report they may want to initially file patent applications within these markets to start off with and then review the other countries which accept less than 20% of the total applications.

Similarly, a business or innovator working within the telecommunications technology space, may want to first protect their IP in countries like Finland, Sweden, Korea and China being above average concentration of foreign-oriented patent families. The same report also implies that there could be a much greater potential for licensing patents within these countries for anyone holding patents for telecommunications technology and displays revenue opportunities in these countries for their innovations.

The WIPO database holds a wealth of information which could be extremely valuable for smarter well informed decision making for businesses. This particular report shed some light on what is going in general with IP around the world. A macro view so to speak but there is so much more the data can tell with regards to highly specific areas of interest. With the right analysis software tools you can look into useful facts that pertain directly to your area of interest and gather intelligence that helps make better decisions. The database of over 63 million patents which are already in force around the world is your ocean of data to explore. It’s up to each one to discover what are the indicators they would like to track based on their IP intelligence needs

Patent Licensing in Universities – Extracting value from research investments

Universities in the US encourage researchers with innovative minds to pursure their inventions and invest into patenting promising inventions expecting to generate profits by licensing the developed technology to interested companies. The technology transfer offices of the universities usually get many invention ideas from their researchers and have to decide which ones to invest further time and resources into. Many have already build valuable patent portfolios as a result of academic research and innovations which have become continuous sources of licensing revenue most of which is a lot more that research and legal investments made and so is used to further catalyze the innovation assessment and investment process. Here is an excerpt published by Forbes in a 2008 article on Stanford University:

Stanford University’s fertile breeding ground for breakthrough technology may have spawned the likes of Hewlett-Packard and Google, but little Stevens Institute of Technology in Hoboken, N.J., really knows how to get serious returns on its research and development.

To wit: In 2006, the school took in $4.5 million in research-related income (including licensing revenue and returns on equity stakes in start-ups) while shelling out $28 million on research–a 16% yield. That same year, Stanford pulled in $62 million against a $700 million investment; return on investment (ROI): 8.7%.

While perhaps thousands of universities globally develop valuable IP during the course of their academic research, very few file patents to protect it and fewer still are able to effectively capitalize by licensing their patents. Many US universities hold multiple patents that have failed to find licensees. Many of these are presently marketed by publishing invention details in journals, industry and trade newsletters, conference magazines (AUTM), using agents or brokers. While the culture of investing in research and filing patents has developed and matured in many US universities, being able to spot revenue opportunities within the patent portfolios already held by universities can be accelerated with strong patent analysis support. Much of similar kind of analysis is undertaken by Patent Licensing and Enforcement Agencies (See previous blog) and IP brokers.

Many universities expect not all their patents will be licensed. In fact most rely on a few blockbuster patents to bring home the revenue. Usually only 0.6% of licenses generate in excess of $1,000,000 in annual royalties.

Clearly there is need for universities to be more aggressive on the patent portfolios held by them. Assertive licensing and identification of infringers is important. However a change in research approach is required and universities need to analyze the technology areas their inventions lie in and gather data that can be used to back  their assertive licensing strategies. By improving their internal  patent analysisactivities, universities can:

  • Understand the market place and discover licensing opportunities and spaces in the market for research and technology even before filing for patents
  •  Discovering licensing revenue opportunities and spotting companies that are infringing their IP or those who would like to

In short, these universities can use IP intelligence to work smarter , make fewer more lucrative investments in research, targeting select research areas, knowing where the opportunities lie and filing for patents specifically for IP which they are more certain will yield revenues. Good analysis will effectively help achieve better ROI on their IP investments. Even if a small percentage of the Universities out there follow in the footsteps of the those with large patent licensing revenues, the impact will be big. Only time will tell if they do.

IP Intelligence for Patent Licensing & Enforcement Activity

Most companies hold on to their patents as a defensive means to protect themselves from competition gaining an upper hand from their innovations and development efforts. Their ability to drive maximum revenues for the business comes from their ability to have exclusive access to their innovation and fend off the competition for a stipulated time giving them a clear head start. Then, we have the Patent Licensing & Enforcement Companies (PLECs) who either acquire patent portfolio or partner with the patents holders and then look to license their technology with a completely offensive strategy. They drive revenues from assertive licensing via legal notices or even going to the extents of filing law suits against those who infringe on the patents. Due to the nature and amount of damages being awarded by the courts it may appear that Patent infringement cases can be even more profitable and less cumbersome than manufacturing products and getting them out to market. So it’s little surprise that this is a growing business model. Intellectual Asset Management Magazine online stated in a 2008 article that the IP awards and settlements market in the US is $3.4 billion annually.

Small innovators can see PLECs as a necessity to help them license their patents and take on a large companies who may be potential infringers while traditional R&D houses see these as Non-practicing Entities (NPEs) or in some cases as Patent Trolls i.e., those that buy up patents only to benefit from suing companyies having established products in the market. While there are both arguments for and against these intermediaries, they are very much a part of the innovation industry as licensing as well as return on patent investments become a concern for many. As long as businesses and inventors will need help in these two areas, there will be a market for those who can help provide this support.

Whether you are on the side that is looking to license and protect your patents or the side that needs to steer clear of PLECs, patent trolls and other businesses who may have patent portfolios that overlap yours, your intelligence will primarily come from patent databases in addition to secondary online information such as company and products literature.

In a previous post titled Unlocking value from your IP using Patent Citation Intelligence  we discussed at length ways to discovering licensing options to maximize revenue. Searching for infringing companies is not too different from searching for potential licensees. The process of assertive licensing usually involves demonstration of infringement and so technologies present in your patent sets need to be matched with either the claims of the other party or the infringement must be evident from the products functioning or product literature. Tools to fast search, lookup, rank claims help save a lot of time as part of this process.

Analyzing patents for infringement and being able to navigate around potential infringement suits are two sides of the same coin where information in patent data can come to the rescue. For both parties who need to enforce patents and those that need to safeguard their development activities against potential law suits, you should create a list of those working in the same domain who may have a need for the technology in question or those who may benefit from using the technology. The same set of companies form a watch list which PLECs analyze closely to look out for a infringement.

A 2006 EETimes article speaks about how a small company avoided going bust from patent enforcement:

Patriot Scientific Corp. had spent nearly a decade trying unsuccessfully to establish a new microprocessor architecture when it decided it needed to do some soul-searching. It hit paydirt when that process revealed its real products: patents.

The six-person company netted more than $24 million in 2005 from Advanced Micro Devices, Casio, Fujitsu, Intel and Hewlett-Packard by licensing seven U.S. patents it considers fundamental to CPUs. And it’s just getting started.

“Hundreds of companies have been put on notice as potential infringers,” said David Pohl, CEO of the Carlsbad, Calif., company, which hopes to collect royalties on sales of all microprocessor-based systems–sales that are estimated at $200 billion a year. “Virtually every electronic product that a consumer or business comes into contact with is touched by this portfolio.”

The extract above demonstrates how important it is to be able to identify potential licensors for a patent as well as knowing who potential infringers are- an activity that has been mastered by PLECs. While identifying companies such as AMD, Casio, Fujitsu, Intel and HP may be more obvious, being able to identify and list the hundreds of smaller companies which in this case could benefit directly from the microprocessor architecture requires an even more efficient process. Whether relying on a third party company to which the task of enforcement is delegated or done in-house, the ability to create a solid watch list and keep a close eye on infringement activity relies heavily on having good intelligence at the push of a button. Being able to view graphical representations of relationships by citation data, being able to track the use of a certain technology within various industries and also to compare phrases within the patent text of a group of similar patents to detect similarities help facilitate the process.

As the ecosystem of patents filed grows and the list of competitors or possible infingement liabilities is on the rise , it can become increasing difficult to track all the developments and cover all bases without the support of good analysis tools. Luckily patent data analysis tools have advanced in leaps and bounds giving businesses the tools needed to protect their business interests through protecting their most valuable assets – their IP. Licensing and enforcement activity is todays vanguard for a IP portfolios held by businesses and we can expect to continue seeing developments in this space.