World Intellectual Property Organization (WIPO) has stated that the huge increase in the number of foreign patents filings in countries like India, Brazil, China, Korea, and Mexico reflect the internationalization of markets and production. Companies seeking new export markets or investing overseas are keen on protecting their inventions in these key emerging economies, the WIPO Patent Report 2006 pointed out. However, India did not figure among the top five patent offices where 75 per cent of the patent filings took place till date.

The report, released on Monday, October 16, 2006, shows that the patent system is an integral part of increasing global economic activity, with the increase in patent filings closely mirroring economic growth around the world. It indicated that companies are increasingly using the intellectual property (IP) system to protect their investments in new markets. The report reveals that a total of 5.4 million patents were in force worldwide in 2004, the last year for which complete statistics are available.

The number of patent applications filed worldwide almost doubled between 1985 to 2004, rising from 884,400 to 1,599,000 with an average annual rate of increase of 4.75 per cent since 1995. This is in line with the average annual growth in world gross domestic product (GDP) of some 5.6 per cent.

"Although an increasing number of applicants are seeking protection for their inventions outside their country of residence, and emerging and fast-developing economies have been using the patent system more extensively, its use is still very concentrated. Five patent offices account for 75 per cent of all patents filed and 74 per cent of patents granted worldwide. These are the United States of America (USA), Japan, the European Patent Office (EPO), Republic of Korea and China," the report said.

"This comprehensive report presents a complete picture of worldwide patent activity in an easily-accessible format. It shows the distribution of patent activity around the world and contains detailed information on some of the important trends of the patent system," said Dr. Kamil Idris, director general of WIPO. "Over the past few years WIPO has improved its collection and analysis of industrial property statistics to assist policy makers, practitioners and other interested parties in better understanding the impact of the patent system on economic and inventive activity around the world," he added.

The director general said "The report shows a marked increase in the use of the patent system internationally. It also shows that the patent system is being used for its intended purposes, namely to stimulate innovation and promote economic activity." Dr Idris further noted that the report shows an increase in the use of WIPO's Patent Cooperation Treaty (PCT). The PCT, which provides a simplified system for international patent filing, has become a major tool for companies seeking broad-based patent protection. The number of PCT applications grew at an average annual rate of 16.8 per cent between 1990 and 2005 and topped 134,000 international applications in 2005. The PCT is now used in 47 per cent of all international patent filings.

Since 1995 there has been a continuous increase in the number of filings by patent applicants in their country of residence, reflecting steady growth in domestic inventive activity. The bulk of the increase in total filings is accounted for by international patent applications. The report notes a boom in patent filings in northeast Asia over the past 20 years, most notably with the emergence of China and the Republic of Korea as major industrial economies. For several decades Japan has been the largest patent office in the world with more than 400,000 patent applications filed by residents and non-residents in 2004. In only 20 years, China has become the 5th largest patent office in the world (by number of patent applications filed) and patent filings by Chinese residents grew more than five-fold between 1995 and 2004 to reach 65,786. Today, the Republic of Korea is the 4th largest patent office in the world and is also experiencing very high growth rates with a three-fold increase in patent filings by residents between 1994 and 2004.

The report introduces the concept of patent intensity indicators that weight the number of patents by different measures of country size (population, GDP, research and development expenditure). Indicators of patent intensity show that Japan and the Republic of Korea, in particular, have very high rates of patenting as a proportion of GDP or of research and development activity. Per dollar of GDP, Japan and the Republic of Korea file five times as many patents as the industrialized countries of Europe and North America

These indicators also show that many small industrialized countries have above average rates of patent filing, such as Australia, New Zealand, Finland and Denmark. East European countries such as the Russian Federation, Ukraine and Belarus also have high rates of patent activity when compared with total GDP and with research and development expenditure.