The 2009 edition of the annual World Intellectual Property Indicators report (formerly the annual patent report) shows that, until 2008, companies continued to view the filing process as an economic lynchpin. Only the unusual circumstances of the recession have forced IP activity into a slowdown.
While the report has used complete figures for 2007, the lengthy task of gathering information from member states has led WIPO to rely on preliminary data to provide a snapshot of the state of the IP industry in 2008. However, these estimates still demonstrate how IP growth has been reined in by the recession.
According to the report, patent filings increased 3.7% during 2007, compared to a 5.2% increase in 2006. Yet the global total of 1.85 million patent applications for 2007 shows that innovators regarded patenting as a key process, even as the economic climate began to worsen.
In the light of data from previous WIPO annual patent reports, the overall growth rate of international patent filings through the Patent Cooperation Treaty (PCT) has been slowing since 2005. However, the estimated total PCT filings throughout 2008 stands at 163,600 – a 2.3% increase on 2007. As 32.7% of those filings came from US applicants, the world's main industrial power continued to show high enthusiasm for IP last year.
When non-PCT activity is factored in, though, the general picture is less encouraging. In his introduction to the report, WIPO director general Francis Gurry notes that 760,000 patents and 2.2 million trademarks were issued around the world in 2007. But early figures for 2008 indicate 'that growth rates in the numbers of applications for new IP rights [were] tending towards zero, or declining', in line with the dawning recession.
In the trademarks field, record growth in applications could be giving way to a slump. While trademark filings around the world in 2007 stood at 3.31 million – a growth rate of 1.6% over the previous year – available figures for 2008 'show a trend toward zero growth'. Based on data obtained for 2009, WIPO expects 'that total worldwide trademark applications will decrease'.
A glance at some key developing economies, though, reveals a reassuring sub-plot to that trend. From 2003 to 2007, Turkey, the Russian Federation, Mexico and China all experienced growth in annual filing rates in excess of 10%, highlighting consistent efforts to harness the value of their brands. From 2002 to 2006, Indonesia showed a similar growth rate.
IP Review Online asked Brigitta Best, head of trademarks at leading IP services company CPA Global, to comment on these trends. 'Through our watching company, TMDS, we see all applications from around the world, and estimate that, in 2009, we will have handled well above three million applications,' she said.
'The biggest growth we are seeing is from China. However, many national applications are stagnant for two reasons: In Europe the Community trademark is very popular, since you have protection in all 27 EU member countries through one trademark. International registrations for 84 countries are another easy way to register.
'The second reason for the global decline is clearly the economic situation. We are seeing a 20-30% budget cut in many companies, and therefore people are much more careful when it comes to trademark filings. Instead of filing new applications, they look into their existing trademark portfolios and use trademarks that are already protected and available. Therefore, watching becomes more important – you protect the assets you have instead of creating new ones.'
Further findings in the report hint that a slowdown in official processes could be working in tandem with the economic decline to cast a negative influence on IP activity. In 2007, 'there were at least 4.2 million pending applications around the world', says the report. 'The patent office of the US had the largest share of this backlog, with around 28% of the total, and it is growing at a faster pace than that of other large offices.'
One of the most significant findings shows that investment in innovation can help to support a country's wider finances. 'There is a strong relationship between the volume of patent filings and the level of GDP and investment in research and development [R&D],' says the report. 'China, Japan and the US are the top three ranked countries in terms of GDP and R&D. In 2007, about 59.2% of world patent filings were filed in these three countries alone.'
In Gurry's view, 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.
'With the increasing importance of knowledge as a driving force of innovation and economic growth worldwide,' he added, 'IP rights are becoming central to the modern economy. This is particularly true in the context of current global challenges, which include … climate change and public policy issues such as health and food security.
'In all of these cases, human creativity and inventiveness will be essential to finding solutions for a sustainable future, and IP rights are an important tool for stimulating and rewarding that creativity.'
