In the US, just over half of new patent applications originate from US inventors. (Based on country of first named inventor) That number has changed dramatically since 1965 when more than 75% of US applications had US origins. [Link] If the trend continues, the US will soon issue more patents to non-US inventors than to US inventors.
The EPO has already dropped below the 50% margin — Only 42% of EPO applications originate in Europe. And, the US is the most frequent country of origin for EPO applications when compared country by country. [Link] Japan’s figures make the USPTO & EPO appear overwhelmingly egalitarian. In Japan, 72% of the filed patent applications originate in Japan.
Issues & Notes:
- The graph posted comes from a recent OECD report on patent statistics.
- How will the US patent lobby fare politically when most new patents are held by foreign companies?
- Why are relatively few non-Japanese applications filed in Japan? Does Japan benefit from a structure where few foreign patents are issued or enforced?
Dear USA,
Patents are worthless for the small business man with minimal cash. The foreign companys are backed by their government and cannot afford to protect their patent. I was told at one time on my patent that if I went to court the massive company (Nikon) would crush me like a bug if I attempted to confront them. They have unlimited capital and a million USA attorneys. I think they also control our government with lobbyist and patent office with under the
desk money. Also it is not practical for a small company to spend the money for a worthless document that desn’t work and only makes patent attorney’s money.
America Needs To Wake Up We are in a economic war with foreign companies. They are not our friends. They operate on the Golden Rule. He Who Has The Gold Rules!!!!! They lie cheat and steal. Ask any corporate leader that will state the truth. Look at the TI Jack Kilby Patent. Push aside by the Japenese until it was worthless.
Sad but TRUE!!!!!!!!!!
John Kirkpatrick
LIONEL PLAYWORLD … (a few minutes to harp on your playful world)
i *DONT* need to read anything more closely … you need to get a clue …
you expressly concluded the congress *can* abolish the patent system …
you ignore language that is plain and originalist … the framers did not care about “citizens” in the context you again erroneously carve out … they cared about “writers” and “inventors” there were apparently no “bakers” or “candlestick makers” being demanded in the late 18th century when the framers ratified …
it is well-thought that it is *the people*, *the citizenry*, *the rabble rousers* who *guarantee* the Constitution … let’s see how the “right to bear arms” is interpreted as a *guarantee* … meanwhile, go do what you are told … and grab a history lesson on your way back out to lunch …
By the way, pointing out that the fact that The US Constitution does not guarantee a patent system is not equivalent to advocating the abolishment of such a system. That’s basic logic.
Ironicslip,
You need to read the Constitution more carefully. US Citizens have no right to patents. The Constitution does not say otherwise. It gives Congress the power to promote the science and the arts by granting patents and copyrights, but nowhere does it state that citizens have rights to patents or copyrights.
“There won’t be a problem in technological fields where investors agree to invest at the patent application stage knowing that it is unlikely to get a patent. Therefore, my guess is that whatever rules changes are made, IT patents will be filed in the same or greater numbers.” – erez gur
im not sure the rules changes will ever make it – or stand up to judicial challanges — but that is not really the point of these stats. i agree with you to the extent that more investors are focusing on patents as an asset class. that the applicant is not likely to characterize the patent (what applicant would do that?)and an investor is best served by 3rd party analysis makes the valuation process not as efficient as other types of asset pricing —
but, if we knew what would have the highest ROI we would not need a marketplace or investors. it is the system, including securities & backruptcy law, and culture that feed into the american process … and i agree that IT patents will be filed in greater numbers as it is specifically developed according to the needs and desires of humans — making manifest bits for analog consumption is a very rich field.
where i think focus is lacking is that alleged patent trolls provide liquidity for patents as *securities* – it is hard to believe that without such a marketplace better application of capital will result … there is still too little by way of studies on how to measure or estimate just what innovation/invention is … and the market for ptewnts is still very much a monopsonist’s dream
the estimate on the highend for a price for a patent without any royalties attached versus one with royalties attached is between 3x and 10x difference in valuation — *estimated* –look at the financials of .
“Foreigners take out patents in the American market so they can charge more when selling their products in the American market.” – Mr. French – how apropo
to the extent that you can define what a foreigner is, please explain:
wasnt that the other way around when rimm argued it’s way to the sup ct twice? what was the “american” response to the “canadian” companies claims? do you have a balckberry? do you think you are paying more because of rimm, ntp, or because your carrier decides pricing? what statistics are you citing? do you really think exapnsion of patent filings prevents others from filing? are too many songs released in a year emblematic of poor songwriting? how about too many american movies? There is no zero-sum game here. The point of having a patyent system is to encourage enabling disclosures.
MORE GENERALLY: Can you tell me what makes a company foreign? Is it ttaxes paid in the us? is it the headquarter location? is it the percentage of foreigners employed? is it the place where IP is held? what standard could you possibly be using?
An example: is an iPod American?
here is a nice study on what the patent system does do and how it affect those who are most vocally opposed to it —
link to tplgroup.net
LIONEL PLAYWORLD — SHALL > TO PROMOTE (and 200 plus years intervening since) … you believe in … hmmm … “starry-deceives-us”
Congress can abolish the PTO tomorrow? (uh huh, and here’s mud in yer eye – so what!), the *individual right* to a patent cannot be ERASED from the Constitution. How about we abolish the Library of Congress while were at it — that sounds positively pro-market! I’m sure when you are president you will suggest such a move or maybe you can start a letter writing campaign for 3/4ths of the states to amend the consitution to do just that. Get REAL!
let’s see you are fearful of foreign companies getting a tariff vis-a-vis patents and now you want to abolish the system? hmm … BATSU XXX
Ironicslip,
You are wrong in your interpretation of the Constitution. The Congress is permitted to promote science and the arts, but not required. Section 8 of Article I states what the Congress is permitted to do, not what they must do. Section 8 sates “The Congress shall have Power … To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;…” The US Congress could legally abolish the USPTO tomorrow and say no more patents.
Further regarding the statistics in Japan,
the mandatory delay in Japan between filing an application and requesting examination may also shift the cost/benefit toward Japanese applicants.
David French writes:
Here’s a short observation.
Foreigners take out patents in the American market so they can charge more when selling their products in the American market.
There are more foreigners than there are Americans. Eventually, filings by foreigners will outnumber filings by Americans by 2:1, 3:1 etc. In Canada, the ratio is 9:1.
Get used to the future, gentlemen. Or renege on granting patent rights to foreigners. Or renege on granting injunctions to foreigners who try to shut-down American businesses.
Ironicslip, my thoughts:
There won’t be a problem in technological fields where investors agree to invest at the patent application stage knowing that it is unlikely to get a patent. Therefore, my guess is that whatever rules changes are made, IT patents will be filed in the same or greater numbers.
In other fields, applicants having enough money will enter the US from the PCT and employ prosecution-delaying tactics to stay in a patent pending status for as long as possible, knowing that issue of a US patent is a matter of random luck. The costs of prosecution will be like the cost of EP annuities.
Applicants who need issued patents to get investment will have to save money. If the USPTO is just a drain on resources with no real chance of getting a patent, and a patent is needed for investment, applicants will have no choice but to redirect their focus (including setting up development centers) to patent friendly jurisdictions, e.g. UK, and not bother with the effort of prosecuting US patents.
erez gur … wouldn’t that be about as helpful as chasing away investors?
drymax … thanks for playing … you are still mischaracterizing japanese *law* but ill leave it alone … think of jpo as “kaizen” more than reward
As to “mercantilist” I guess what Dennis is getting at is that it’s a zero sum game. As soon as the corporations decide for their foreign filing activity that next up after USA is China, then JP and EU slip down the list and don’t get filings any more. Or do they?
Compare design patents and utility patents. Nobody ever files foreign in design patents? Or do they. The EU regime of design patents offers potency out of all proportion to cost and difficulty. Watch that space, as the Chinese begin to collect their own IPR portfolios.
The data presented actually makes sense, and in the words of the OECD report, reflect the market attractiveness of the region where the patent is filed.
Since the whole world is becoming accessible with fewer barriers related to language, transfer of money and information, an applicant can choose to file in the highest valued country, which is almost always the US.
A US patent gives “access” (for the want of a better term) to more paying consumers than any other patent.
Proceedings are all in English. The US is the country where it is easiest to gain investment for developing a product based on patented technology.
That said, the feeling is (also from reading this blog) that the USPTO wants to reduce the attractiveness of a US patent by raising its cost, reducing the chance of getting a patent and making patent allowance unpredictable.
It will be interesting to see if the changes will lead to fewer non-Americans filing in the US.
Ironicslip, thanks for your thoughts. I have run out of replies.
Dennis, in answer to your request for an explanation of the 72% figure in Japan, it is because 1) corporations doing research in Japan are obliged by Japanese law (like DE law) to file an app, each time an employee reports potentially patentable matter, and 2) corporations inventing outside JP do not see as worth it the cost of filing in JP.
Dennis Tan — Malay(sia) is a former *merchantilist* colony of the UK …
DryMax:
specificity versus hasty generalkization:
you made my point … patent attorneys have by-and-large priced themselves out of serving individuals (this may be debatable but is very much a point that has been bandied about in this forum) which is peculiar in that one of the largest *constituencies* of the pto are small entities … so … you take your marching orders from a corporation — great! i remeber the cost of prosecution, even in a messy art like 382 or 380 or 370 was 2-5K only 15 years ago …
that does not mean the same attorneys have the right to bargain away inventor rights vis-a-vis harmonization, alleged improvements to quality, ignoring small entity comment, ignoring objective studies that do not comport with the political view of the moment, et al. etc. blah blah …
the aclu and the nra (whatever your viewpoints on their tactics or positions) do not bargain away 1st and 2nd amendment rights — they are the alleged bulwarks against such “infreingement” — a living symbol of the nature of the ongoing debate over iundividual rights versus that of the state in the us.
the comparable example here is the copyright cabal has successfully built a lobbying machine that has appeared to have extended in a poerverse way to patent reform … dmca, eldred, bono act, increased statutory infringement awards … drm … diminishment of fair use concepts/amendments to the copyright act (rep. boucher proposed one with the dmca, for instance) … my what a difference between these concepts and patronage of the arts of old.
we heard that if content is not *protected*, there will be no content … uh huh … now we hear that we have to limit filings to improve quality … uh huh …
reality is, most of these conglomerates who control say 80% of the world’s music and film (that is commercially viable by today’s standards/business models) would love to overturn universal v. sony — an ironically titled case if there ever was one.
both are absurd fictions and prevent healthy discussion on how to measure and enhance innovation especially now that productivity and by extension economic leadership is based on intangibles … your chinese example is ironic as i had posited in an unrelated thread the emphasis the chinese are putting on developing coding strength, including IPR outside of the known patent pool bullies.
could it be that individual inventors share the same enemy as the chinese? that would be a shame.
“Whether such power to intimidate is in the public interest is useful to debate (isn’t that debate running right now,with Chief Judge Michel right in there scrapping?) but I think it has little to do with the sentimental worship of the private individual as driver of innovation.”
what you call sentimental is what we call an individual right. you are paid by a corporation, so …
a small entity invents outside of that rubric.
“Maybe you agree with me on statistics coming out of China, that the past is no guide to the future? My reading of China is that they are getting to be very enthusiastic about IPR (as long as it’s their own).”
there is always a counterpoint. until the chinese protect the freedoms of individuals, so what if they have alternative coding schemes to mpeg? freedom before toys!
and, it was clearly telling to see yahoo (interesting relationshiup to your example) up on capitol hill apologize to the family of a dissident — who is the bully in that case? who did yahoo answer to? who *paid*?
“Or do you want the patent system to reward those who come up with the first insight, and nobody else downstream of the flash of genius? Interesting idea, but who’s going to implement it?”
absolutely not. i have said this too many times … the answers to these alleged problems are that the examiners & applicants should focus on the mpep including 101, 102, 103, 112 and anything related to 119/120/371 including that which serves your internationalist view point on priority dates.
the inventor should be able to read the mpep, the rules and the law and understand what is expected. whether said inventor *can* or *should* proceed pro se is completely a decision that should be made by that person. but the barriers to entry versus say registration of a copyright AND the random outcome of litigation – 50/50 shot considering appeals (50% are overturned) is not indicative of a system that is tilted in favor of any particular applicant …
it has become increasingly clear that the office fights with the bar and i am not sure who is to blame … this is simply illogical to me … too many boilerplate rejections with cut and paste case law from truly unusual sources without any real thought given to the oa … this goes for applicant replies that are now available for all to see …
the patent system does not *reward* anyone (applicant PAYS his/her way) … it promotes the progress of the arts and sciences – or it should.
the rewards are negotiated between *private parties* with or without litigation.
and yes i believe there are certain people who are simply better inventors just like a-rod is a better baseball player and warren buffet is a better investor. is it fair? YES!! it’s american.
(now about that pesky weakening dollar … that is the real threat to the availability of capital to rabble rousing americans and cowboy inventors)
Afterthought, to my most recent reply (two up from here) to Ironicslip: the data concern filings, on reduced to practice, enabled, sufficiently described to be put into practice across the full width of the claim, thought-to-be-PATENTABLE INVENTIONS. Ironic, are you not pursuing a line of thought about IDEAS, something completely different. We can debate where in the world revolutionary insights are most likely to emerge, but that’s a different debate isn’t it? Or do you want the patent system to reward those who come up with the first insight, and nobody else downstream of the flash of genius? Interesting idea, but who’s going to implement it?
Ah, now I see something dimly: Your thesis is that it all depends who is the client. All over the world, people like me are bent on building the best IPR money will buy, but our clients are corporations, and we do what they order. Only in USA, is the client a private individual, a real inventor. The professional duty of the attorney (to serve the client) leads to qualitatively different results, depending on whether the client is an inventor or the corporate owner of the invention. Don’t see it that way myself, but there you go. The way I see it, USA gives owners of issued US patents a greater power (damages awards) to intimidate, but it gives that power disinterestedly, just as much to owners who are individuals as to corporate owners. Whether such power to intimidate is in the public interest is useful to debate (isn’t that debate running right now,with Chief Judge Michel right in there scrapping?) but I think it has little to do with the sentimental worship of the private individual as driver of innovation. Not sure what examples you want from me but as three private individuals in UK, who bet all their own modest private wealth and are now very wealthy thanks to their patents I would name HICKMAN, DYSON and HABERMAN. There must be loads and loads in Germany but I don’t have the background to give you their names. Maybe you agree with me on statistics coming out of China, that the past is no guide to the future? My reading of China is that they are getting to be very enthusiastic about IPR (as long as it’s their own). Terrorists turn into statesmen, and copyists turn into zealous proponents of strong IP, as they mature, get rich, and catch up with the most advanced coutries.
I agree with Gideon on the issue of who pays and owns the IP. In Malaysia, our scientist and engineers work for foreign companies such as Intel, Motorola, and Agilent. On the employer employee issue, we follow UK’s statute, allowing employers to own IP from work related assignment.
Dry Max:
very simple … it is clearer for an attorney to identify WHO he is zealously protecting in the case of an individual who has the IDEAS.
it is less clear when it is an employee of a corporation whose counsel answers to the corporation, presumably, which itself may have little loyalty to said inventor. i wont mention the number of defensive patents filed by industry versus offensive (in many ways) patents filed by small entities …
for society the question is whether the environment within a corporation leads to more invention or does the fire and desire of someone who has chosen to risk failure by going it alone lead to more invention … america is an experiment particularly concerned with individual rights that does not mean special interest groups and corporations cannot still push in the opposite direction. and, it is likely that many foreign inventors feel the same way about the us system — would love to see that data assembled in some objective manner.
your cowboy image is hardly fitting in say, public key encryption, where the US government was clearly against the rabble rousers. up to that time the nsa worked strctly with ibm … that said, even with diffie-hellman and rsa, the brits actually acomplished public key even earlier … and germany banded steganography in many respects for reasons peculiar to germany — so chose your model and you will still not be guaranteed a successful INVENTOR or INVENTION …
oh btw, you still need to pick a patent that fits your criteria …
ps your comment on korean filings is also a non-event and 10 years ago they had just beaten the time to market share for autos and memory chips that was previously the success story of Japan Inc (so is that innovation or copyist behavior? depends on your point of view) … as i said, filings are a non-event in a vacuum … well, china needs GM crops and they have a horrible track record for protecting IP, as with most communist systems, so why not focus on the problem and still rely on the us system … your example of how information is FREE is one of my basic points for emphasis on the individual … so your logic has a natural extension to the circumstances you fail to provide …
Ironicslip, I think you are pulling my leg. I still have no idea what you are going on about. Try this one: UK law pronounces an invention made by an employee in the course of his/her employment to belong ab initio to the employer. Employer doesn’t have to secure an assignment of ownership, for that was his all along. Conversely, German law proceeds on the notion that a patentable invention is so rare and precious and extraordinary that it cannot belong to anybody except its inventor: the employer must take assignment of inventions made by employees, one by one, after creation. But does that legal difference have any consequences for commercial or business practice? I can see is that it results in three times as many patent applications BY EMPLOYERS (as the owners of the patent applications) in Germany than in UK. The peculiarity of US law, that apps have to be filed “in the name of” the inventor, strikes me also as a sentimental anachronism, that panders to the self-image of rugged American individuals out on the wild frontier battling against the rest of the world, but actually of no significance for innovation or for business. Now, as to China, it already has 50% of the world’s research effort in GM crops(enormously important to the southern hemisphere) and the biggest investment by far in virtual world trading, where avatars of Western consumers will do their shopping in China, no longer in the mall round the corner from where you live. Remember how, 10 years ago, Korean companies were nowhere to be seen on the USPTO filing statistics?
max
i needed to break away from some tedious work, family feud is a classic american game show … the premise :: two families compete to figure out the results/answers of a survey … what makes the game interesting, besides the survey questions themseleves, are how the families get together to figure out the “no. 1” answer — more points or simply one of the answers commensurate with the number of responses … so, given the wildly different interpretations of family feud Q&A and the commonality with the unpredictable nature of innovation/invention — i bit on giving you some good ole american culture feedback.
Survey Says :: DING! (that’s better than the “batsu” or infamous X, btw)
Your questions, on point:
1) exactly … in an information economy it is hard to argue that patent filings, being accessed by anyone with an internet conection, have anything to do with merchantilism — the information is net-net neither good nor bad but important in providing “liquidity” to the patent instruments … whether they are the result of vanity on the part of the inventor (“look what i got”) or serious corporate direction (“uh-oh, we need to file to cover that”) does not change this fact. as stated, information wants to be free …
2) correct, with the caveat that the usa has the *oldest* government in the world (not talking about *non-states*)… so the actions of the us government do impact others … that each country has very different systems of promotion and how or why that relates to patents and patent applications in general, to me, is fairly unimportant. i believe schumpeter got it right – creative dstruction is messy. i believe that property rights (which i believe patents are, pardon me grammar), confidence (such as a *fair* legal system) and liquidity (the ability to buy and sell fairly in real time, as a general but not all-encompassing definition) is sorely lacking despite all of the claims of harmonization. i do not believe patents acheive value in and of themseleves and that people must buy and sell products and services to determine, ultimately, a value for any given claim. that being said, if you hope for a bigger bully be careful what you wish for … the central plains of germany are flat … and it get’s mighty cold in the east …
3) i dont see it as an obsession. i see the “zealous” protection of inventors has to some extent become a bargaining chip to change rules instead of allowing the courts to provide insight/direction and holding the patent office to the bargain made via law with appropriate congressional oversight. i share the idea that one person can make all the difference. i am not a spectator in life. the us is a nation built on individual rights not minorities, not majorities but individual rights. the us patent system too has emphasis on the inventor for that very reason (my opinion).
LAST how about this, name some “important” patents with some criterion — you choose — and explain to me how a corporation, which RIGHTLY places emphasis on profit (or in the short term market share) over the individual, can be considered to be an “inventor” — what are the oldest companies in the world, (another way to frame that question) … banks? arms manufacturers? (probably and probably) —
i am convinced more inventors have been screwed by corporations than the other way around. your comments seems to support that fact.
the beauty of the “obsession” you speak of is that you too are entitled to your own opinion … DING DING DING
I wonder if the increasing number of foreign origin applications is related to the shrinking dollar?<<< I'm sure that's part of it. From a foreign pov, it is now a whole lot cheaper to file in the USPTO.
I wonder if the increasing number of foreign origin applications is related to the shrinking dollar?
You’ve lost me there, Ironicslip. No idea what you are going on about. The earlier contributor who noted that Taiwan companies file in US and CN, but not in EU and JP, hit a good point. Taiwan corporations are calculating that they need “something to trade” in i) CN, where the local way of resolving disputes might favour those playing at home, and in ii) USA, where the legal landscape is so utterly complex that it undoubtedly favours those playing at home.
We who add comments should first read the OECD Report that is the source for Dennis’s item. He provides a link. There we will find other graphs which show filing activity normalised for GDP. USA is not top of the list of most innovative nations (Reminds me of those graphs of Olympic gold-medal winning nations, normalised for population size and GDP per citizen.) Does all this “mean” anything. Not much. But, to be boring and repeat myself, the law of Germany and Japan imposes obligations on corporations to compensate employee inventors fairly, and to file on their inventions. Most corporations in Germany and Japan are law-abiding. The Nichia payout hit the headlines but there are hundreds of thousands of smaller payouts, every year, to every employee inventor in Germany and Japan. I repeat: has such a law done those countries any good, say i) in the 1960’s ii) in the 1990’s?
More points:
1) Can we not revert to the real word MERCANTILIST. What the heck is merchantilist, when it’s at home?
2) The OECD counts patents according to country of priority filing. USA (like Henry Ford “Any colour so long as it’s black”), says you can file your priority application anywhere in the world you like but (Hilmer) if you want a level 102(e) playing field, you’d better file it first in the USPTO. Maybe that’s why some non-USA corporate filers augment the US filing statistic by making their priority filings at the USPTO rather than in their local Patent Office. The biggest boy in the schoolyard can impose his will on all the other boys (robbing sweets with impunity) only until some other bigger bullyboy emerges. USA has 300 million citizens but there’s a 1300 million pound gorilla emerging out of the shadows of the deepest corner of the schoolyard. One hopes that, by the time it starts punching its weight, there will by then be some higher international authority, punching at a heavier category than a mere 300 million, to restrain it.
3) Some contributers here seem obsessed with the idea that inventors, unaffiliated to any company, and their US patent applications, are what has made the USA great and will keep it great. I got into trouble with another contributer some months ago, when I expressed doubt about that, and suggested there was wishful thinking involved. Hit a sore point I think. But, seriously, where’s the evidence that inventors who are not working for a company are of decisive importance to the future existence of the USA?
DRIED MAX:
I’m doubling down with Richard Dawson and the Family Feud …
“200 hundred people were surveyed and the top 6 answers are on the board”
“good answer good answer”
and, as Richard walks away with that big pinkie ring and smirk (knowing full well the answer puts the Adamms family over the top) DING DING DING
Bloggers try this one for size:
1) patent filings are driven by corporate filing budgets not sentimentality.
hardly … they are driven by know-it-alls and tinkerers … corporations react as they do when trying to retain talent — give enough to stay but not enough to “impact” margins. DING
2) Corporations file in USA because you need “something to trade” when the other fellow asserts.
no … america has the best means for vetting (active schumpeter capitalism at its best) … an emphasis on risk-taking and until recently an abiulity to boot strap without fear of becoming a social pariah — like maybe the country you come from (NO DISRESPECT – but this is a very important point with first to invent) … and, of course, attorneys (for the unique american system) who are perceived as being fair … DING
3) Corporations file in Japan because they have to. Under Japanese employee inventor law. When the invention is made in Japan.
nope … from experience … ill leave that alone. 1/2 DING
4) Imagine your employer labouring under such a law in USA. Every time a lab notebook notes something interesting, it’s a trip down to the USPTO to file on it.
hmmm … who is going to sue you to enforce your imaginary law to compell you to comply? see the nichirei example i mentioned above. plus, have you ever read a Japanese patent application? didn’t think so … DING
5) Ever wondered why JP-owned USPTO filings recite so many inventors and so many priority dates during the Paris year.
to be extra cautious and emphasis the group over the individual dare say? DING
6) Japan got its employee inventor law from Germany. Now look at German corporations and their filing patterns. Anything there (at an EPO level) remind you of Japan?
nope … they had the meiji period before they went abroad and adopted those silly military outfits as school wear … the EPO is about rules (germanic?) … the JPO is about status quo (the nail that sticks out … ware ware nihonjin, blah blah) … they can be the same but are not … DING
7) The interesting question is whether a JP/DE employee inventor law in force for 50 years now has done anything for innovation in those two countries.
YES . YES . YES . the cornerstone question that should revitalize your sense of self — it is the inventor who invents … see again Dr. Nakamatsu — i am not familiar with the German equivalent …
8) Don’t get excited. The stats are explained by quite boring and rational behaviour, by trans-national corporations, who file where they need to file and nowhere else.
YES . YES . YES . but at least people have an idea what merchantilism is?
GREAT POST! Thank you.
We can compare unemployment in europe with unemployment in japan on another unrelated topic at your leisure 😉
GuyBig – you must be kidding me!
The Constitution, Article 1 – The Legislative Branch, Section 8 – Powers of Congress: “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”
am i missing something? this comes before the articles of incorporation and is the only mention of a “right” in the entire text — point me the way — the rights of inventors are INVIOLATE, my friend — maybe you need to read “to promote” and the actionable “by securing” — as ONE positive step limitation 😉
… comes before the 1st amendmentd, the 2nd amendment … these too are subject to a wide spectrum of viwpoints, no?
now explain to me how this is not a “mandate” on second thought, what exactly are you objecting to in the comments about what a MERCHANTILIST SYSTEM is? even more peculiarly, what does “permitted” mean? that is classic merchantilist thinking — “you are permitted to invent mr. reardon” … mr. reardon then shrugged … if we could only harness that permission and create a fixed pricing scheme than all the rabble rousers would go away !
no inventor or american citizen should view any of the patent act as a “permission” — they own the labors of their mind, patents, discoveries, copyrights, writings, thus in exchange the Congress legislates — “by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries”.
a “monopoly provider” means the only source to provide (i differentiated the type of monopoly in my response) — you must not be using a PC (ibm trademark) with an intel inside (trademark/copyright) running windows …
simple example: a monopoly provider is not an exclusionary monopolist, per se. if you exclude — people invent around you but more to the point of merchantilism — exclusion generally hurts the patent holder — no market means what damages ? — when was the last time a big monopolist sued a small entity (no, not a counterclaim)? (there are a small number of examples)
We’ll be happy a couple of years from now after the Israelies put Iran back into the Stone Age- problem solved. So what if gas will be 6 bucks a gallon- its the cost of doing business.
Bloggers try this one for size:
1) patent filings are driven by corporate filing budgets not sentimentality.
2) Corporations file in USA because you need “something to trade” when the other fellow asserts.
3) Corporations file in Japan because they have to. Under Japanese employee inventor law. When the invention is made in Japan.
4) Imagine your employer labouring under such a law in USA. Every time a lab notebook notes something interesting, it’s a trip down to the USPTO to file on it.
5) Ever wondered why JP-owned USPTO filings recite so many inventors and so many priority dates during the Paris year.
6) Japan got its employee inventor law from Germany. Now look at German corporations and their filing patterns. Anything there (at an EPO level) remind you of Japan?
7) The interesting question is whether a JP/DE employee inventor law in force for 50 years now has done anything for innovation in those two countries.
8) Don’t get excited. The stats are explained by quite boring and rational behaviour, by trans-national corporations, who file where they need to file and nowhere else.
If you want to see a very dramatic effect of country/region on filing rates, look at what some Taiwanese companies do. 30% US, 30% Taiwan, 30% China, 0% Japan, 0% EU.
See table 4 of “Introducing Patents Into a Major Service Industry” link to marketsandpatents.com
ironicslip,
“Constitutionally mandated system”? I think you might want to review the Constitution again. Constitutionally permitted is more like it. However, if you’re arguing that our patent system is a means for implementing policy, then the fact that this is optional is a good thing.
The “tariffs” on patents are certainly not limited to the royalties and/or settlements collected by patent pools. How about the premium price that a monopoly provider can demand?
Mr. Lionel
not sure if we are talking about the same thing.
a patent is a monopoly (but an exclusionary right). monopolies exist in both capitalist and merchantilist systems.
a merchantilist would bring capital back to it’s own state: the state with the mostest wins. the merchantilist assumes a zero sum game. the basis of capitalism was the rejection (by adam smith and others) that mercantilists can perform the functions of an invisible hand (the marketplace).
you cannot take a patent back with you to your state and prevent others from learning what was taught. once information or disclosure is freely accessible it contributes to the general market (and, so long as the patent applicant pays his way, information net-net is neither good nor bad). thomas jefferson was famous for his waffling on just how to do the patent thing in the us and came out on the side that information “wants to be free” (not as in free beer, though).
so, the assumption that foreigners as an increasing percentage of patent applications is largely a non-event, we hold no monopoly over ideas or patents. but if we harmonize the process and lose the edge in encouraging a wide spectrum of *novel* and *non-obvious* ideas under 101, 102, 103, 112, etc. — however whacky, crazy, ridiculous, rabble-rousing — then there is surely the potential that each patent system will take the side of it’s governments.
and, i cant hear the sound of patents being dropped as a first line of defense…
the american patent system is unique for the same reasons capitalism wins out over merchantislism. the system gains from the inputs — it is not zero sum.
as for this notion that americans pay some sorta tariff as a result of patents — well look at the patent pools that the members of the coalition for patent fairness have created — hmmm hd-dvd, blu-ray, dvd, mpeg, should i go on? these “pools” exclude small entities in almost any example and the counterpoint is that the chinese, for instance, develop their own standards … the total revenues in one study to the coalition is $1.7 trillion with 0.11% paid out for infringement — successfully litigated settlemetns —
the tariff we pay is the gap of trade we have in sucking lots of imports into this country on borrowed dollars — worry about the strength of the dollar not the number of foreign patent applications.
once *they* (those who have to settle trade with dollars) say bye-bye to the dollar as the settlement currency (for say, oil) guess what, then we will really be paying the piper his due.
cant have it both ways … our patent system is properly focused on the individual who does the thinking and labor … not on the national champion who preys on individuals and misap[prprioates that labor for “the good of the state”.
And one more thing… from what I can see most US patents granted to foreigners are not in software/business methods and tend recite relatively narrow claims. I also have not seen many foreign companies act in a trollish manner and they tend not to be as litigatious even when defending their US patents.
bighairyrat,
The reason there are so many foreign filing in the US is that we have the largest economy / market in the world. Thus, companies such as Toyota, Panasonic, Canon, Siemens, Samsung, etc., file here. It’s not because our system is more lax.
gideon, everything but the “most likely to” comment, is *kosher* … if a billion or so of your neighbors hated you or denied your existence (and that applies to both countries, btw) … i digress …
the new rules, patent reform act, et al. are all “progress” towards merchantilism // harmonization // rule making by the highest bidder — industry favored over individuals …
Ironicslip,
I do not understand your response to big Hairy Rat.
First, the characterization of our patent system as a “Consitutionally mandated system to provide the inventor (typically an individual) rights of patent as a balance against incumbents and industry” sounds mercantilist to me, although I am missing some nuance in the description.
Second, Big Hairy Rat pointed out that by allowing concepts and inventions to be patented that would be unpatentable elsewhere, we may be doing harm to the country. One way in which we could be doing harm is shifting wealth from the US to outside the US. If foreign companies can obtain patents on, for example, algorithms and business methods here that they could not obtain in their own country, they may do so. Why? Because America has a large consumer base. Yes, US inventors and companies (and I believe the majority of patents are filed on behalf or busineses and corporations) can obtain the same patents, but that diminish the fact that US consumers may be paying tariff on goods sold in this country through the patent system.
Further, as foreign entity applications increase percentage-wise, this becomes more likely.
Someone wrote:”he proper goal of every national government is the protection and development of its domestic industries and workers – i.e., their own people. If the Japanese are better at this than we, more power to them – literally”
I have no issues with what their government is doing. My issue is with my govt is doing.
If I was running the show, I’d refuse to allow Japanese companies to own patents in the U.S., I would exclude Japanese-only documents as art, and I’d put a tariff on every item coming into the U.S. from Japan until they either . . .
adopted a U.S./EPO approach, or,
until we adopted theirs.
Either way, the present system is massively skewed in their favor, and that’s not right.
Don’t confuse this with a nationalistic rant – I’m no big fan of American foreign policy/domestic policy – I just don’t like inside games, which is what this is.
All I can say is, thank God the Japanese don’t have nukes – I’d put them right behind Israel on the “most likely to use nukes with no regrets” list of countries.
big rat harry
no, the opposite is true.
without the us patent system we would need a merchantilist industrial policy. instead we have consitutionally mandated system to provide the inventor (typically an individual) rights of patent as a balance against incumbents and industry, including *foreign* companies —
“lax patentability standard” means what exactly? the patent still has to be litigated — so the vetting is in the litigation not a baseless assertion that anything is “lax”.
under your logic, it would seem that foreigners would either create their own similar systems or would try and prevent similar harm to their “national champions” (which is what most of them really do).
why would foreigners pursue patents in the us? the us system is apparently more accessible than other systems as with many other rights that are accessible to individuals seeking the “american dream”.
do you really believe the japanese would sue koreans in korea and get a fair shake? what about china? how about france? and, the facts that many foreign companies litigate in the us, inherently influencing the *quality* of the system, is further proof that the system is fair.
“And what does the fact that the USPTO issues patents to many foreign inventors have to do with “mercantilism”?”
Many of the arguments in favor of the status quo are essentially merchantilist arguments. That a lot of US patents are going to foreign owners is a warning that the merchantilist effects of the patent system may in the long run be the opposite of what the defenders of the status quo are arguing.
Suppose that lax patentability standards in the US permit the patenting in the US by foreign companies of concepts that are considered obvious and non-patentable everywhere else in the world. That could result in American firms and consumers paying a Dane Geld to, for example, Chinese companies. Not exactly a good result for the American economy.
The proper goal of every national government is the protection and development of its domestic industries and workers – i.e., their own people. If the Japanese are better at this than we, more power to them – literally.
Mercantilism and Innovation>>
And what does the fact that the USPTO issues patents to many foreign inventors have to do with “mercantilism”?
re: japan
fairly nationalist comments about japan … the issue is that japanese industrial policy is to reduce risk for industry NOT the *consumer* or the *inventor* for that matter. japan is not a nation of individual rights. but it is a democracy, unlike china.
with regards to patent practice a variety of issues: formation of companies is far more expensive and respurce intensive; until fairly recently, international law firms had to practice in concert with a local “benrishi” (patent agent which is not necessarily an attorney) and only advertise said partner’s name (not the firm’s international name – “red” & case would be “john smith esq” and in small letters (“red & case”) ); even if you can be admitted to todai (tokyo university) — admittance into the bar in japan is one of the hardest tests *ever* designed — fractions of a percent pass and so very few attorneys in japan (this too is changing, at the demands of the big japanese exporters); patent litigation can take literally decades see texas instruments settlements after over 20+ years of litigation (“discovery” or lack thereof is a mess); etc.
it is not your grandfather’s japan but hey, don’t you want the us government to protect the us??? isnt this the harmonization our congress thinks is so great?
the exceptions :: as with sadaharu oh (a taiwanese) who is the “home run” king is an example of an outsider done good — and Dr. Nakamatsu — one of the most prolific inventors in the world — even got hefty royalties FROM ibm.
however, the case of nichirei (blue leds) and it’s most famous inventor is quite telling of japanese industrial policy and how inventors are treated by their japanese employers …
“How will the US patent lobby fare politically when most new patents are held by foreign companies?”
That question is a huge leap from the facts presented in the post. From my own experience, a very large proportion of the patent applications I file have one or more inventors who are citizens and/or residents (you didn’t specify which is referred to for “country of first inventor”) of foreign nations, but are assigned to large U.S. corporations.
This would obviously diminish the potential for anti-free-trade sentiments to gather force against policies that promote effective patents.
As for the relative insularity of Japanese patents, I think one reason might be, it seems like Japanese corporations lag behind American & European ones in acquiring foreign subsidiaries, opening foreign research labs, and recruiting foreign engineers and scientists, behaviors that as I indicate above are probably responsible for a lot of the foreign inventors for U.S. and European patents.
Just another example of how anti-American the entire Bush administration is. More Americans have died, lost jobs, been incarcerated, lied about, spied on, denied federal funds in times of emergency that in any other time in United States history. Even President Grant at Appotmattox had the foresight and compassion to understand he was dealing with Americans when he granted the isurrectionists generous terms. These people in this administration are nothing less than subversives seeking to undermine the rights of Americans. Maybe it is the plan of the USPTO to drop the number of applications filed by Americans to be below 50%.
Gideon,
I won’t argue with you with regard to Japanese inventors and Japanese companies (that also employ many Americans), however, my comments were with regard to the comparison of US statistics overtime generally and not with regard to your comments on Japan and the Japanese, etc. Employment of foreign nationals by US companies have significantly changed since 1965 and the statistics comparing 1965 to 2005 based on nationality of the inventor do not reflect this trend and therefore are highly suspect.
David wrote:”The numbers shown do not accurately reflect who is paying for and owning the IP”
I disagree as your comment relates to Japan.
In the U.S., at least, there are very few Japanese inventors.
I have filed maybe 400 applications in my career, and I can’t recall one Japanese inventor, whether naturalized or not.
I can remember 50 Chinese/Taiwan, 30 Indian/Pakistan, 30 EU, and several others.
Japanese engineers don’t come to the U.S. to get jobs.
Based on my sampling, what the numbers in Japan reflect is what I wrote, above – “No outsiders welcome.”
Seems to me the numbers are skewed and don’t mean much. I have prepared many patent applications for US companies where the first named inventor was an employee of a US company, but was a citizen of a foreign country. US companies hire many foreign engineers and scientists, located both here and in their home country. The numbers shown do not accurately reflect who is paying for and owning the IP which I believe is the more signficant and relevant issue.
1. The EU bar and EU member state’s bars are redundant. I think both were included so that you could see the whole EU filing number without having to add up (or even know) the member states.
2. Why aren’t application’s filed in Japan? Tom got it right, but he was much too kind about it. I’ll add that there is NO DOUBT that the “patent system” in Japan exists solely for the purpose of improving the standing of Japanese companies. The Japanese are some of the most fiercely nationalistic people on the planet. For example, Japan allows only very limited immigration from asian countries compared to non-asian countries. Why? Because it’s much harder to water down the national stock if you’re an ethnic Norwegian than if you’re a Korean.
If you want to understand patent practice in Japan, the first thing you need to do is understand a culture that required two atomic bombs prior to surrendering. Prior to the dropping of the first bomb, the Japanese were arming their women and children with sticks and instructing many of them to commit suicide before allowing themselves to be captured by Americans.
In Iwo Jima, the Japanese casualty rate was about 90% dead, and the rest too injured to fight.
In other words, the Japanese “patent system” exists only because not having one at all would be an obvious invitation to foreigners (and particularly the U.S.) to enact retaliatory legislation. So, instead of that, they implemented a system where, other than for a very few exceptions, no patents get issued or enforced that would seriously undermine any large Japanese companies.
To sum it up, if you think the Japanese government is going to let a Korean or an American company come into Japan and receive a patent on a technology that would result in a major competitive disadvantage for one of Japan’s Fortune 1000 companies, then you just don’t understand the Japanese.
Regarding the number of applications in Japan, there are a number of factors, including:
1. The strategy of many Japanese companies appears to be defensive filing – file an application, let it be published but never request examination. The published application is thereby defensive, constituting prior art against the whole world, but partially hidden by the fact it is only in Japanese, not a common language;
2. It is quite expensive to file and prosecute a patent application in Japan;
3. The chances of successfully prosecuting a patent application in Japan are low than either the US or Europe, although the USPTO has recently been doing its best to reduce the rate of allowances; and
4. As a result of (3), Japan acquires for itself much of the world’s technology, conveniently translated into Japanese and freely available to Japanese companies, but without having to provide its side of the quid pro quo bargain.
I think the “EPO” figure is actually the combination of all EPO countries since your 70% + 26% US + 17.9% JP gives a bit of a problem!
In fact, it has generally long been the case that almost 50% of EPO files are US or JP origin, hence 60+% of files are in English (or as near as they can manage…)
Don’t forget to add the EPO-Members UK, Germany, France…) to the EPO-percentage as they are part of the EPO.
If you sum up the countries the EPO graph is somewhere around 70%.
Are the figures for Europe and Japan really based on the location of *inventors* or are they merely a mirror of where the *applicant* is seated?
Are the figures for Europe and Japan really based on the location of *inventors* or are they merely a mirror of where the *applicant* is seated?
Does anyone here know how common it is, given tax law, for patents to be transferred to Asian companies and then licensed back, so that the asset isn’t held by the US entity? I can imagine this becoming a political issue too, or magnifying the one DC is discussing.
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