Sunday, July 10, 2011

World's Top Five Patent Producers

As a follow-up to this recent post on historical U.S. patent activity, the chart above shows the annual number of patents granted for the top five patent-producing countries in 2009 over the period 1995-2009 (data here, note that for Europe, it's the "European Patent Office" that is being used here).   Here are some interesting observations:

1. Following a ten-year period from 1998 to 2007 when the U.S. granted more patents than any country in the world in every year, Japan took the number one place in 2008 and 2009, and produced 15.5% more patents than the U.S. in 2009. 

2. In 1995, China granted only 3,393 patents, about 3% of the number of patents registered in the U.S. (101,419) and Japan (109,100) in that year.  In 2004, China granted more patents than Korea for the first time, and in 2005 more patents than Europe.  By 2009, China granted more patents (128,489) than Korea (56,732) and the European Patent Office (51,969) combined.   

3. Korea registered only half the number of patents in 2009 (56,732) as in 2006 (120,790) and 2007 (123,705).  

Update: The chart below shows the U.S. share of total world patents granted annually from 1883 to 2009.  America's share was above 30% as recently as 2001, 2002 and 2003, has been above 20% in every year since 1987, and was as low as 12.6% in  1979. 


42 Comments:

At 7/10/2011 9:16 AM, Blogger Nicolas Martin said...

Given the destructive nature of patents, the lucky and prosperous country would have none.

 
At 7/10/2011 9:17 AM, Blogger morganovich said...

it would be interesting to see that done as % of overall market.

just eyeballing, but it looks like our share is dropping (though quite high).

the total failure to innovate in the EU is hardly a surprise. other than a couple of huge industrial companies making autos and aircraft, they really have no meaningful tech sector because they have no entrepreneurial base. when you stifle small companies to favor big national champions, that's what happens.

 
At 7/10/2011 9:19 AM, Blogger morganovich said...

"Given the destructive nature of patents, the lucky and prosperous country would have none."

what an absurd statement.

look at the countries that lack protection for intellectual property and you'll see that such a lack completely destroys local industry.

african music and chinese software jump to mind.

why would anyone invest in innovation if they do not get to reap the rewards.

 
At 7/10/2011 9:39 AM, Blogger Rufus II said...

Japan.

Am I the only one surprised by this?

 
At 7/10/2011 9:59 AM, Blogger PeakTrader said...

The U.S. is the most technologically advanced country in the world, regardless of how many patents are awarded in foreign countries:

China’s lead patent filing does not make it an innovation star
October 20th, 2010

The Chinese government has created an ecosystem of incentives for its people to file patents.

Professors who do so are more likely to win tenure. Workers and students who file patents are more likely to earn a hukou (residence permit) to live in a desirable city. For some patents the government pays cash bonuses; for others it covers the substantial cost of filing. Corporate income tax can be cut from 25% to 15% for firms that file many patents. They are also more likely to win lucrative government contracts.

The bureaucrats in Chinese patent offices are paid more if they approve more patents, say local lawyers. That must tempt them to say yes to ideas of dubious originality. And the generosity of China’s incentives for patent-filing may make it worthwhile for companies and individuals to patent even worthless ideas. “Patents are easy to file,” says Tony Chen, a patent attorney with Jones Day in Shanghai, “but gems are hard to find in a mountain of junk.”

 
At 7/10/2011 10:32 AM, Blogger PeakTrader said...

Although this is unrelated, I think, Marco Rubio's speech in the U.S. Senate should be mentioned:

Marco Rubio: Let’s Start Talking About New Taxpayers
July 7, 2011

"We don’t need new taxes, we need new taxpayers, people who are gainfully employed, making money, paying into the tax system and then we need a government that has the discipline to take that additional revenue and use it to pay down the debt and never grow it again.

I want to know how many jobs will be created by the planes tax. I want to know how many jobs will be created by the oil company tax that I’ve heard so much about. How many jobs are created by going after the millionaires and billionaires that the president talks about? I want to know! How many jobs do they create?

I have never met a job creator who told me that they were waiting for the next tax increase before they started growing their business. I’ve never met a single job creator who has ever said to me I can’t wait ’til government raises taxes again so I can go out and create a job. I’m curious to know if they say that in New Hampshire because they don’t say that in Florida.

So my view on all that is, I want to know how many of these tax increases the president proposes will create jobs, because if they’re not creating jobs and they’re not creating new taxpayers, they’re not solving the problem."

 
At 7/10/2011 10:48 AM, Blogger arbitrage789 said...

I think that the data on the WIPO website (world intellectual property organization) pertains to filings, not issued patents.

^^^^^^^^^^^^^^^

In any case, the increased filings by the Chinese provides some measure of hope that they will begin to respect the intellectual property of U.S. companies.

 
At 7/10/2011 10:50 AM, Blogger arbitrage789 said...

Nicolas Martin,

I frankly don't see how the pharmaceutical industry could exist at all without a means for protecting its intellectual property.

 
At 7/10/2011 10:55 AM, Blogger Gregory (Greg) P Turco said...

This has a lot to do with the culture of the country and the local patent laws. Japan always has had a disproportionate number of patents.

Generally the number of patents are going to follow GDP. The interesting question is why isn't Germany doing better.

 
At 7/10/2011 11:07 AM, Blogger arbitrage789 said...

PeakTrader @ 9:59

Your basic point is probably correct. If one wants to get a good measure of the progress of Chinese innovators over time, one should look at the number of patent applications that originated in China, were filed in the U.S., and subsequently issued as valid patents. (Or the number of applications originating in China and later issued as patents in Japan). No doubt it’s a very small number, but the CHANGE in that number over time may have some value as an indicator.

 
At 7/10/2011 11:11 AM, Blogger arbitrage789 said...

PeakTrader @ 10:32

I think that a big part of the problem is that half of all households in the U.S. pay no Federal income tax. For people in that group, it is a rational decision to vote for politicians who promise ever higher levels of spending, and ever higher taxes (taxes on the other other half,of course).

 
At 7/10/2011 11:46 AM, Blogger PeakTrader said...

Arbitrage789, if Obama really wants "shared sacrifice," then taxes should also be raised, or tax credits and deductions reduced, on lower income households.

Of course, that's politically unacceptable to Obama, although he's already hurt the poor by trying to help them, it's getting even worse for them, and he wants to do even more of the same.

 
At 7/10/2011 11:54 AM, Blogger PeakTrader said...

At this point, it seems, the best way to spur job growth is cutting spending, cutting taxes (from the savings in spending cuts) and deregulating.

 
At 7/10/2011 12:09 PM, Blogger arbitrage789 said...

PeakTrader @ 11:54


But what is best for Obama's political career?

To pile on the debt as quickly as possible.

 
At 7/10/2011 12:29 PM, Blogger Ron H. said...

"At this point, it seems, the best way to spur job growth is cutting spending, cutting taxes (from the savings in spending cuts) and deregulating."

Now, that's the PeakTrader I remember. Who was that guy pretending to be you, who recommended higher minimum wage and income redistribution as ways of making the poor richer?

 
At 7/10/2011 12:44 PM, Blogger Ron H. said...

"I think that a big part of the problem is that half of all households in the U.S. pay no Federal income tax. For people in that group, it is a rational decision to vote for politicians who promise ever higher levels of spending, and ever higher taxes (taxes on the other other half,of course)."

This is a often repeated comment, and has become conventional wisdom of sorts.

While it certainly describes some people who feel no shame in attaching themselves to the government teat and stealing from others, it unfairly stigmatizes those with modest incomes, especially retirees, who through careful planning, have structured their finances to minimize their exposure to taxes.

These are not folks who call for ever higher government spending and taxes on others.

 
At 7/10/2011 1:07 PM, Blogger PeakTrader said...

This recovery looks more like a train wreck.

Trillions of dollars of potential output has been lost forever, over the past three years. Government has compensated, or maintained a floor, by overspending $1 1/2 trillion a year.

While the weak recovery continues, more potential output is lost, more debt is piled-up, more government workers are laid-off, more entitlements are reduced, more taxes, fees, fares, and tolls are raised, etc.

How much damage will take place before the country recovers?

 
At 7/10/2011 1:17 PM, Blogger Ron H. said...

"...more government workers are laid-off..."

Did you mean to include this positive result with all those negatives?

 
At 7/10/2011 1:22 PM, Blogger PeakTrader said...

Ron, the trend is less services for more taxes. We'll all pay more for less, one way or another.

 
At 7/10/2011 3:34 PM, Blogger Benjamin said...

When the federal income tax was instituted, there was no intent to lay taxes on average families, and nice-sized deductions were granted for children.

Due to the the Social Security program, typical wage earners pay very heavy payroll taxes.

Why the GOP wants to be seen as catamites for plutocrats is beyond me. Balances out the warmonger image, I guess.

 
At 7/10/2011 4:58 PM, Blogger Shane Leavy said...

I'm always suspicious when I see data for "Europe". Do you mean the European Union? If so, say so, "Europe" is something quite different.

I look at the WIPO source and I don't see any reference for Europe or EU. Did I miss it? Or did you simply add up the number of patents for every single one of the 27 EU member states?

So I looked up this WIPO Patent Report 2007:
http://www.cetraonline.it/file_doc/285/wipo_pub_931.pdf

It shows that there is a "European Patent Office", but there is also Germany, UK, France, Poland and Russia (which, after all, has the bulk of its population on the continent of Europe - if it's the continent you're talking about rather than the EU).

So I think this needs to be much clearer about the source for its claims about "Europe".

 
At 7/10/2011 5:11 PM, Blogger Mark J. Perry said...

Yes, for Europe, it's the number of patents granted by the European Patent Office, and that's been clarified in the graph and text in the post.

 
At 7/10/2011 5:12 PM, Blogger Shane Leavy said...

You're right Mark, I missed that - sorry! D'oh!

Still, it seems that the European Patent Office does not make up all EU patents, and so is not a very useful source for comparison.

 
At 7/10/2011 5:16 PM, Blogger Mark J. Perry said...

To keep the graph understandable, I was using the top five patent granters in 2009, which are Japan, USA, China, Korea, and Europe. Germany, Russia, Italy, U.K., etc. are all below the European Patent Office for the number of patents granted in 2009.

The main point of the chart I think is to show the incredible rise of China vs. the other major patent-granting nations. If I added Germany, Russia, etc., the main point would be the same.

 
At 7/10/2011 5:17 PM, Blogger Shane Leavy said...

A fair point, indeed.

 
At 7/11/2011 6:07 AM, Blogger geoih said...

Quote from morganovich: "look at the countries that lack protection for intellectual property and you'll see that such a lack completely destroys local industry."

So, you're saying that without arbitrary monopoly protection granted through the largesse of government, nobody will be creative and everything will be produced somewhere that has monopoly protection. Now that is an absurd statement.

First, which do you think came first? Creativeness or government monopoly protection? Second, what about all the industries that seem to get along just fine without government monopoly protection (e.g., fashion)?

Try thinking outside your statest mindset.

 
At 7/11/2011 11:48 AM, Blogger Ron H. said...

"Second, what about all the industries that seem to get along just fine without government monopoly protection (e.g., fashion)? "

Fashion may not be a good example of industries that are free of monopoly protection. Are you ignoring trademark protection?

 
At 7/11/2011 12:09 PM, Blogger Che is dead said...

"So, you're saying that without arbitrary monopoly protection granted through the largesse of government, nobody will be creative and everything will be produced somewhere that has monopoly protection."

Get back to us when you've actually created something, say, a blockbuster drug that has cost you tens of millions in research and development or some technological innovation like the ratchet wrench or the intermittent windshield wiper.

 
At 7/11/2011 12:11 PM, Blogger Che is dead said...

"The main point of the chart I think is to show the incredible rise of China vs. the other major patent-granting nations."

Yes, so many patents and so few actual products. Can you name a single product that has been conceived, engineered, produced and marketed in China that the rest of the world wants to buy?

 
At 7/11/2011 1:07 PM, Blogger Mike said...

Benji,
Funny thing is: the very people who pay "heavy" payroll taxes due to the evil republican military industrial complex (ya know, the one the democrats seem to enjoy at least as much) are the same idiots who refuse to allow discussion of the policy to be amended in a way that may cost them less and....gasp....ensure the money goes to the programs they fight to protect instead of the very military that you seem to believe holds no value.

Everyone should pay something if anyone is to pay something. The equilibrium of taxation to maximum capital flow can be debated, but when taxes are raised, they should be raised for all - that is if one even moderately agrees with the theory of tyranny of the majority.

Maybe then, the argument of taxation would become the argument of revenue, they way it should be in the first place.

 
At 7/11/2011 4:20 PM, Blogger juandos said...

"Yes, for Europe, it's the number of patents granted by the European Patent Office"...

Hmmm, is it a wrong assumption on my part that you're only talking about the European Union here?

 
At 7/11/2011 5:13 PM, Blogger geoih said...

Quote from Ron H.: "Are you ignoring trademark protection?"

Really? Calvin Klein trademarks their logo and you're comparing that to patent monopolies enforced by the state? Anybody can get into the fashion industry tomorrow without worrying about whose patent they might be 'stealing' by making a dress or a pair of pants. Yet the industry doesn't crumble.

 
At 7/11/2011 5:20 PM, Blogger geoih said...

Quote from Che is Dead: "Get back to us when you've actually created something, say, a blockbuster drug that has cost you tens of millions in research and development or some technological innovation like the ratchet wrench or the intermittent windshield wiper."

Post hoc ergo proptor hoc. Get back to me when you have a real argument.

 
At 7/11/2011 5:58 PM, Blogger state of innovate said...

a patent is a property right, NOT a monopoly. A patent is granted because someone created an invention, it is not granted based on bureaucratic whim and it is not some sort of Wallstreet bailout. The source of ALL property rights is creation and patents can be bought, sold, leased, subdivided, without the approval of our government (except for recording for enforcement purposes). Because this is the case, it doesn't meet the criteria for monopoly. The only way we increase our standard of living, is by increasing our level of technology. Patents are the CRITICAL property right neccessary in order to create new, disruptive technologies. It is no coincidence that the Industrial Revolution (escaping from the Malthusian Trap) occurred when England first secured property rights in inventions and THe U.S. improved on that system. Note: there is NO coincidence that these two countries led the Industrial Revolution. Every time we have weakened our patent system, we have suffered long periods of economic downturn (ie. 1970's. Starting in 2000, we began to re-weaken patent rights again, and are suffering the consequences of this action. The America Invents Act (HR1249, S23) will further weaken our property right protections for our inventors.

 
At 7/11/2011 6:38 PM, Blogger Ron H. said...

geoih

"Really? Calvin Klein trademarks their logo and you're comparing that to patent monopolies enforced by the state? Anybody can get into the fashion industry tomorrow without worrying about whose patent they might be 'stealing' by making a dress or a pair of pants. Yet the industry doesn't crumble."

This from the UK Intellectual Property office:

"If you use an identical or similar trade mark for identical or similar goods and services to a registered trade mark - you may be infringing the registered mark if your use creates a likelihood of confusion on the part of the public. This includes the case where because of the similarities between the marks the public are led to the mistaken belief that the trade marks, although different, identify the goods or services of one and the same trader."

I would expect to hear from a trade mark owners attornies if my product was similar enough to a well known brand to cause possible confusion.

I agree that this isn't as strong a protection as a patent, but I'm not free to do whatever I please in this space, either.

 
At 7/11/2011 7:35 PM, Blogger Che is dead said...

"Post hoc ergo proptor hoc. Get back to me when you have a real argument."

Vescere bracis meis. Just because you either do not understand or do not agree with it the argument for the protection of intellectual property is as sound as the argument for the protection of physical property.

"With regard to monopolies they are justly classified among the greatest nuisances in Government. But is it clear that as encouragements to literary works and ingenious discoveries, they are not too valuable to be wholly renounced? Would it not suffice to reserve in all cases a right to the Public to abolish the privilege at a price to be specified in the grant of it? Is there not also infinitely less danger of this abuse in our Governments, than in most others? Monopolies are sacrifices of the many to the few. Where the power is in the few it is natural for them to sacrifice the many to their own partialities and corruptions. Where the power, as with us, is in the many and not in the few, the danger can not be very great that the few will be thus favored. It is much more to be dreaded that the few will be unnecessarily sacrificed to the many." -- James Madison

 
At 7/12/2011 5:47 AM, Blogger geoih said...

Quote from state of innovate: "a patent is a property right, NOT a monopoly."

You're just being obtuse, now. Which existed first? Property or patents? If the state disappeared tomorrow, would we still have property? Would we still have patents? When the first person invented a stone spear point, did he have a "patent" on it? When this spear point was copied by another tribe, did somebody step in and stop the other tribe from using it because the first guy invented it first?

Patents are inventions of the state. They are arbitrary monopoly rights enforced by the state.

 
At 7/12/2011 5:54 AM, Blogger geoih said...

Quote from Ron H. "This from the UK Intellectual Property office:"

So, the creator and enforcer of a monopoly (i.e., the state) has a wonderful definition of their arbitrary monopoly. The fact that it is almost impossible to enforce this monopoly ("trademark") on all the various forms of clothing that exist is an argument that the whole concept is a fiction.

 
At 7/12/2011 5:58 AM, Blogger geoih said...

Quote from Che is dead: "-- James Madison"

I can quote authority too. It still isn't an argument.

 
At 7/12/2011 1:52 PM, Blogger Ron H. said...

geoih

"The fact that it is almost impossible to enforce this monopoly ("trademark") on all the various forms of clothing that exist is an argument that the whole concept is a fiction."

I agree. Maybe I wasn't clear. I'm not defending trademark protection, only pointing out that it exists, and firms will attempt to use government force to advantage themselves, and disadvantage their competition.

I merely pointed out that you might have selected a better argument than the one you did:

"Second, what about all the industries that seem to get along just fine without government monopoly protection (e.g., fashion)?"

The fashion world isn't free of government interference.

 
At 7/12/2011 2:52 PM, Blogger Che is dead said...

"I can quote authority too. It still isn't an argument."

You haven't written anything here that rises to the level of a coherent argument.

The protection of intellectual property has given rise to entire industries whose produce has benefited all of us. These industries invest billions in R&D with the understanding that the fruits of this investment will be protected for a period long enough to allow them to recover their costs and make a profit thus providing the incentive for further investment. Large, cooperative efforts focused on intellectual products - like the pharmaceutical or materials industries - requiring thousands of man hours and substantial capital investment would be impossible without such protection. Individuals would have little to no incentive to spend their time working out the solutions to problems that stifle productivity or increase the quality of existing goods, or to create works that make our intellectual lives richer without such protection. Intellectual property rights provide the incentive to broadly share one's creations instead of hoarding or sequestering them for the purpose of individual or group advantage thus making the benefits readily available to all. The fact that others seek to benefit from the theft of intellectual property confirms that such property has value, something that you seem to deny.

Since the protection of private property is a core function of the legitimate state, the imposition of temporary monopoly rights for the protection of intellectual property is not the arbitrary use of state power it is the exercise of it's legitimate mandate.

 
At 7/13/2011 6:12 AM, Blogger geoih said...

Quote from Che is dead: "The protection of intellectual property has given rise to entire industries whose produce has benefited all of us."

Slavery has given rise to entire industries whose produce has benetitted all of us. Consequentialist arguments are rarely sufficient justification for imposing limits on liberty.

Quote from Che is dead: "Since the protection of private property is a core function of the legitimate state, the imposition of temporary monopoly rights for the protection of intellectual property is not the arbitrary use of state power it is the exercise of it's legitimate mandate."

I think my slavery analogy still applies. The key issue is what can logically be considered "property".

How can it be logical that one person has property rights in an idea that exists in another person's head, even if the second person didn't think of it first? How can it be logical for one person to have property rights in a specific arrangement of matter, when that matter is owned by another person?

It is completely arbitrary, else why is it that the monopoly interval granted changes periodically based on an arbitrary political process?

 

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