Wednesday, February 10, 2010

U.S. Patent Activity for the Last 125 Years

The chart above plots the annual number of approved patents in the U.S. from 1883 to 2008, according to data from the World Intellectual Property Organization. It's interesting that it took more than 70 years for patents to double from 40,000 to 80,000 (1914 to 1987), and then only 14 years for patents to double again to 160,000 by 2001. In total, there have been 7,176,477 U.S. patents granted in the 126 years between 1883 and 2008.

The chart below plots both the number of patent applications and patents granted, annually from 1883 to 2008, and shows the same pattern for patent application as for patents granted: almost a 70-year period for applications to double from 100,000 to 200,000, and then another doubling in only 12 years.

Finally, the chart below plots U.S. patents as a share of total world patents since 1883. In total, there have been 31,764,313 patents awarded worldwide from 1883 to 2008, and 22.6% of those (7,176,477) have been in the U.S. It looks like there was a spike during WWI and WWII for U.S. patents, and then a long period of below-average patent activity (relative to the rest of the world) in the 1950s, 1960s and 1970s, followed by an above-average period in the 1980s, 1990s and 2000s. Despite a declining share of world patents since 2000, the U.S. share in 2008 at 21.7% is close to the average share over the last 125 years.

The fact that Americans, with 5% of the world's population, have received more than 22% of the world's patents over the last century, is a testament to American ingenuity and innovation, our entrepreneurial spirit, and the dynamism of our (mostly) market economy.


At 2/11/2010 2:23 AM, Blogger Matthew said...

While your conclusion is intuitively likely, it should be acknowledged that patent activity is a proxy variable for innovation. Moreover, it is one that is most indicative in systems with a highly evolved structure of intellectual property protection. In comparison to economies similar to the US, that can be useful.

However, much innovation occurs in countries without such an advanced patent process. For example, recent research has endeavored to quantify innovation among the poorest in developing countries. The postulate being that they are innovating well, but outside a patent framework. In addition, one could speculate on the degree of macroeconomic impact and value add of the innovation in such and environment.

In my view the take away point from all this is that innovation is very hard to directly measure, and the available proxy metrics are not well adapted to measuring the actual innovation -- only function of the mechanisms in the society for dealing with that innovation downstream.

Other objections to using these metrics to prove innovation include the observation that the US business climate tends to over-patent, as well as apply for spurious patents as compared to other similar economies.

At 2/11/2010 3:49 AM, Anonymous sprewell said...

Was going to say the same as Matthew, patents are an indication of technological rent-seekers more than anything else as the patent application process has been broken for a long time. Completely spurious patents like Amazon's one-click patent routinely get through and this chokes innovation much more than it helps. In fact, the long history of the patent system has been one of snuffing innovation much more than enabling it and we'd be much better off without a patent system altogether, particularly to enable innovation.

At 2/11/2010 8:05 AM, Anonymous Anonymous said...

Indeed, and while I am generally in favor of patents, let us not forget about the immense costs of the tragedy of the anticommons brought about by the myriad of cases in which the marginal cost of some patents can can exceed the marginal benefit.


At 2/11/2010 9:11 AM, Anonymous morganovich said...

while this patent growth does likely have some positive trends underlying it, it is also representative of how much easier it is to get a patent. technology has sufficiently outrun the capabilities of the patent office that they pretty much grant everything. notions of novel, prior art, non obvious etc are barely applied at all. it's left for the courts to hammer out.

this has significant impact for tort law. it's a bonanza for patent lawyers and a minefield for companies.

this patent is a personal favorite:

At 2/11/2010 10:00 AM, Anonymous gettingrational said...

I have tried to patent a few devices and found that they conflicted with some parts of dissimilar devices that had been patented. The cost turned out to be to much to try and nuance the permutations that kept arising in the process. I still believe in the system and will probably try again in the future.

At 2/11/2010 10:35 AM, Anonymous Anonymous said...

The postulate being that they are innovating well, but outside a patent framework ... the take away point from all this is that innovation is very hard to directly measure ...

Surely you can point to the concrete results of their innovation, right? Give us a short list, say 10 things, that are the direct result of innovation in countries without an advanced patent process.

In fact, the long history of the patent system has been one of snuffing innovation much more than enabling it ...

This is just gibberish. To confirm this one need only look at the explosion of innovation following the adoption of intellectual property rights, secured through patents, and compare it to the meager progress evident in the millennia prior to that adoption. Yes, as society has become more specialized the process has become more complex, but that very complexity is evidence of the systems success.

At 2/11/2010 12:03 PM, Anonymous Dharma said...

Look at the tally of Nobel Prizes, particularly for the sciences:

At 2/11/2010 1:07 PM, Anonymous Anonymous said...

Also an expression of the fact that some things are patentable in the US that aren't elsewhere (business processes, software).

I filed for 16 patents as part of my job that, quite honestly, are spurious at best. 9 of the applications went through. I get $1000 per application and $5000 per actual patent, and I console my pride by looking at other stuff that gets patented in my area... most of this is actually not for technological rent seeking, but for protecting against it.

At 2/12/2010 12:20 AM, Anonymous sprewell said...

Anonymous, you may think saying patents snuff innovation is gibberish because it is you who hasn't looked at the evidence. There's always a burst of innovation when a patent expires, showing how much it held back innovation when it was in force. As for claims that patents spurred an "explosion" of innovation when they were implemented, there was a lot of innovation even before patents and whatever increase since is likely correlation not causation. We have hit a critical mass the last couple centuries, accumulating a body of knowledge that allowed us to innovate much more. Invoking patents to explain that innovation is just silly. As for the guy who admits he files spurious patents but claims it is to avoid rent seeking, that's like saying you have to bribe politicians because your competitors are doing it. That's an indication of a broken system and you're only making it more broken by playing the game. I'm not saying some form of property rights are not important for isolated cases, say the xerox copier tech or pharmaceuticals, but patents are definitely not the way to go about that, particularly how pharma has been shoehorned into the already broken patent system.

At 2/12/2010 10:46 PM, Blogger Bloggin' Brewskie said...

This is nice to see, but I feel this is unlikely to last much beyond another decade. We have way too many aging baby boomers in scientific fields who'll be walking out the door this decade, and not nearly enough replacements lined up. As Eike Batista remarked recently, all of our best students got into banking or finance instead of engineering and science fields.


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