International Patent Filings Drop for First Time in 32 Years

10 February 2010

The World Intellectual Property Organisation (WIPO) has reported a 4.5 percent decrease in international patent filings under the Patent Cooperation Treaty in 2009, marking the first time in the PCT's 32-year history that filings have dropped. But according to Francis Gurry, Director General of WIPO, “The decline in PCT filings [was] not as sharp as originally anticipated.”

While sharp declines were seen in many industrialised countries, a number of East Asian countries posted growths. Japan, the second largest user of the PCT registered a growth of 3.6 percent while China posted the largest growth, an increase of 29.7 percent.

As expected, the United States remained the country of origin for the most patents with 45,790 patents filed, or just under one third of all patents. Despite this, the filing rate in the United States dropped 11.4 percent. Additionally, Germany's filing rate dropped sharply, falling 11.2 percent from 2008. However, the largest decline by one of the top 15 countries of origin was realised by Israel, which saw a decrease of 17.2 percent.

The drop in patent filings could have a significant impact on WIPO's finances. Over 95 percent of WIPO funding comes from the sale of services to the private sector. The PCT system accounts for about three quarters of this funding.  However, the Secretariat is optimistic and believes that the cost-cutting measures have left WIPO well prepared for dealing with the situation.

Carsten Fink, Chief Economist at WIPO, predicted that there will be a modest recovery of patent filings in 2010 but he conceded that there are "great amounts of uncertainty" attached to that forecast.

Despite the fact that developing countries make up 78 percent of the membership to the PCT, they only accounted for 14 percent of the patent filings. Of these 14 percentage points, 10 of them are shared between China and South Korea alone. According to Director General Gurry, "[the maximisation of] participation in the PCT is a key priority" of the Organization.

The Patent Cooperation Treaty was launched in 1978 as a tool to streamlines the act of filing patents worldwide.  An estimated 155,900 patents were filed via the PCT in 2009, a decline from the 163,249 that were filed in 2008.

SCP meeting stumbles on ‘non-exhaustive list'

The announcement on PCT filings comes after extensive discussions on patent issues at the meeting of WIPO's Standing Committee on the Law of Patents (SCP) which met during the last week of January. The SCP meting witnessed important discussions on a number of issues selected among a "non-exhaustive list" that was agreed upon in 2008. Major topics discussed at the meeting included standards and patents, technology transfer and a new proposal by Brazil to create a programme to examine limitations and exceptions to patent rights.

However, the most contentious subject related to the future plans of the SCP. At issue was whether to include certain topics in the "non-exhaustive list" to be discussed at later meetings. Brazil proposed the inclusion of a new programme of work to debate its proposals on exceptions and limitations to patent rights. However, developed countries disagreed with the inclusion of Brazil's proposal for future discussions. Divergences also focused on how discussions on technology transfer and IP should be addressed.

A text by the chair that emerged from informal consultations had called for a study on how the patent system supports technology transfer prompted a proposal by Asian countries suggesting that such study should be about how the patent system can impede technology transfer. Developed countries indicated their preference for a more neutral formulation. At one point, African and Asian countries proposed two add two new issues to the list: the impact of the patent system on developing countries and patents and food security. However, developed countries were reluctant to expand the ‘non-exhaustive' list and indicated that the issues suggested were already addressed under the broader topic of patents and public policy.

As the meeting came to a close, negotiations broke down as to what to add to the ‘non-exhaustive list'.  The next meeting of the SCP will be held on 11 to 15 October 2010.

ICTSD reporting; "First-Ever Drop In Filings Under Patent Cooperation Treaty Seen In 2009," IP-WATCH, 8 February 2010; Breakdown In WIPO Patent Committee Could Symbolise Deeper Differences," IP WATCH, 1 February 2010.

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