FRAND licensing needs a taxonomy: valuation absent context is misvaluation

The World Intellectual Property Organization's recent report on SEP valuation methodologies provides a useful overview of comparable licences, bottom-up valuation and top-down approaches. However, in my view, the most important issue in FRAND valuation remains underexplored: the need to distinguish between fundamentally different categories of licensing and commercial arrangements.

This article argues that much FRAND analysis suffers from false commensurability. Bilateral licences, cross-licences, collective licensing platforms, patent pools, paid-up lump-sum settlements and royalty-free regimes are frequently converted into common metrics such as ad valorem rates or dollar-per-unit royalties and then treated as directly comparable. In the process, critical commercial context can be lost in translation.

Using examples including Nokia's agreements with Apple and Microsoft, Avanci's $32-per-vehicle automotive licensing model, public licensing programmes from Qualcomm and InterDigital, and recent FRAND decisions including Samsung v ZTE, Optis v Apple and InterDigital v Lenovo, I examine how royalty metrics, payment structures, bargaining conditions and strategic objectives can materially affect negotiated outcomes.

I also discuss the risks associated with cross-licence unpacking, portfolio-strength-ratio methodologies, patent counting, manufactured comparables, and the tendency to treat complex licensing agreements as if they can be translated mechanically into equivalent royalty rates.

My central thesis is simple:

The first question in FRAND valuation should not be "Which methodology should we use?" but "What exactly are we trying to value?"

The resulting rates may appear objective and comparable, but instead still reflect the bargaining asymmetries, strategic objectives, risk allocations and other distortions that shaped the original deal.

Download the full article from SSRN, here.

Report Shows Growth in Investment in Intangible Assets

An article titled, Investment in Intangible Assets Surges, led by Funding for Software and Databases Amid AI Boom, which discusses a report by WIPO and Italy’s Luiss Business School, states, “that in the last year alone, intangible investment across 27 high-and middle-income economies grew by about 3 percent in real terms, reaching USD 7.6 trillion in 2024, up from USD 7.4 trillion in 2023.”  The article additionally states that, “investment in intangible assets has . . . increase[ed] at a compound annual rate of about 4 percent between 2008 and 2024, far outpacing tangible investment growth of just 1 percent.”  The article can be found, here. 

Free WIPO Symposium on Geographical Indications

WIPO is holding its worldwide hybrid symposium on Geographical Indications on June 14-16 in Tbilisi, Georgia.  There are six interesting panel topics.  Here is one:

TOPIC IV – Governance and Quality in Geographical Indications Owing to their nature of collective brands that can be used by a community of individual producers, the success of geographical indication products will depend largely on effective governance and quality control structures. This panel will review and discuss various approaches to this subject and the challenges that exist on the way.

Moderator: Ms. Valérie Pieprzownik, Expert on Geographical Indications, Food and Nutrition Division, United Nations Food and Agricultural Organization (FAO), Rome

Speakers: Mr. Philippe Bardet, Director, Interprofession du Gruyère, Pringy, Switzerland Ms. Nuria Ackermann, Chief Technical Advisor – PAMPAT 2 Project Tunisia, United Nations Industrial Development Organization (UNIDO), Vienna Mr. René Claude Elogo Metomo, President, Group of Producers of the PGI Poivre de Penja, Penja, Cameroon Ms. Adrienne Thompson, Deputy Director, Registrar, Jamaica Intellectual Property Office (JIPO), Kingston

Here is a link to the schedule.  The program is available online, and the price is quite nice: Free. 

USPTO and WIPO on ADR for SEP Disputes

The USPTO has announced a partnership with WIPO concerning utilizing alternative dispute resolution for SEP disputes.  The Press Release states:

The United States Patent and Trademark Office (USPTO) and the World Intellectual Property Organization (WIPO) today agreed to undertake joint efforts to facilitate the resolution of disputes related to standard essential patents.

Standard essential patents, or SEPs, are patents that have been declared essential to a given technical standard. As part of the standards-setting process, patent owners may agree to license SEPs on fair, reasonable, and nondiscriminatory (FRAND) terms. Standards touch all aspects of modern life and include video compression, wireless communication technologies, computer connection standards, automotive technology, and more.

“International standards, and the role of patents that are essential to them, play an important role in promoting a strong national and global economy,” said Under Secretary of Commerce for Intellectual Property and USPTO Director Kathi Vidal. “The USPTO is grateful that Director General Tang recognized the USPTO’s leadership role in advancing discussions on standard essential patent policies. Our work with WIPO underscores the USPTO’s view that SEP policy is an international issue of international importance. This agreement will leverage existing resources at both the USPTO and WIPO, supporting options to enhance the efficiency of licensing of standard essential patents, and promote resolution of disputes related to those standards.”

The signing of the memorandum of understanding occurred during a meeting this week between Director Vidal and WIPO Director General Daren Tang on the sidelines of WIPO’s General Assembly in Geneva, Switzerland.

Under the terms of the agreement, the USPTO and WIPO will:

• Cooperate on activities that will lend efficiency and effectiveness to the resolution of disputed standard essential patent matters by leveraging existing WIPO Arbitration and Mediation Center and USPTO resources, and
• Engage in stakeholder outreach to raise awareness of the services provided by the WIPO Arbitration and Mediation Center through joint USPTO-WIPO programs.

The agreement will continue in operation for five years from the date of signing.

“We appreciate all the work Director General Tang and WIPO have done in this critical area. We look forward to a successful collaboration and engaging stakeholders to ensure we shape dispute resolution that will facilitate participation and implementation of standards by all innovators including small to medium-sized enterprises,” remarked Director Vidal.

“Alternative Dispute Resolution (ADR) has time and again demonstrated its value in the efficient and timely resolution of commercial disputes. In the last few years, the WIPO Arbitration and Mediation Center has been facilitating the resolution of SEP-related disputes and the new collaboration with the USPTO is an exciting development which will contribute to improving the efficiency of standard implementation,” noted Director General Tang.     

Guest Post: Professor Denoncourt's Event Report -- Intellectual property: meeting global business and technology challenges

IP Finance is very happy to offer our readers this guest post by Nottingham Law School professor Janice Denoncourt summarizing the high points of a Montreal Council on Foreign Relations event featuring Francis Gurry, outgoing Director General of WIPO.  

On 15 September 2020 the Montreal Council on Foreign Relations (CORIM) organised a fascinating 30 minute webinar with Francis Gurry, Director General, WIPO.  The event is part of CORIM’s Business Series Online accessible for a small fee of CAD $30.  “Who will finance Innovation?”  is the strapline of WIPO’s Global Innovation Index 2020 https://www.wipo.int/global_innovation_index/en/2020/.  Canada currently ranks 17th overall behind Japan and Ireland, retaining its position from last year, but well out of the top 10 where it aspires to be.

From Geneva, Gurry discussed emerging global business and technology challenges with moderator, Lally Rementilla.  Lally is well-known in the Canadian intellectual property (IP) backed finance world.  In July 2020 she was appointed Managing Partner, IP-Backed-Finance for BDC Capital (www.bdc.ca).      

By way of background, the Business Development Bank for Canada (BDC, French: Banque de Développement du Canada) is Canada’s bank for entrepreneurs.  It is wholly owned by the Government of Canada.    Jérôme Nycz, executive vice president at BDC Capital stated, “Our goal…is to make Canada a leader in the IP space.”  BDC Capital, the bank’s investment arm, has created a new CAD $160 million intellectual property (IP) development financing fund to support IP-rich companies who seek to commercialize their IP, increase their competitiveness and expand globally.  This BDC’s IP finance initiative is a positive reflection on Canada’s comprehensive 2018 National IP Strategy https://ic.gc.ca/eic/site/108.nsf/eng/home. 

The pair discussed several broad topics and set out below are the highlights.  

Rementilla asked for Gurry’s perspective on the role of IP rights in the new world order.  Gurry noted that a number of tendencies have been accelerated by Covid-19 virus and pandemic, not to mention worrisome trade wars and cyberwarfare, resulting in further complexity in the IP world.  Nevertheless, despite the gloom and doom ‘IP is a vector for collaboration’ said Gurry.  Indeed, 2.1% of the world’s global gross domestic product (GDP) is tied to research and development.  Gurry hopes that despite the decline in foreign direct investment, international collaboration in innovation will continue.  He cited the example of innovation hotspot Silicon Valley, where the majority of inventors are foreign.  

A key geopolitical change of course is the rise of Asia and in particular the People’s Republic of China (PRC) as a patent powerhouse.  Gurry noted that the PRC is buoyed by its national focus on IP leading to it overtaking the United States in filing patents overseas.  Indeed, I would add that the PRC announced earlier this year that it is preparing the outline for its second National IP strategy for the 2021-2013 period.  According to Gurry, a successful national IP strategy involves a focus ‘from the top’ on science, technology and innovation and further that ‘success comes when there is an awareness at the very top of the importance of protecting a nation’s competition advantage’. 

Turning to finance for IP-rich tech start-ups, Gurry surmised that ‘With a start-up you are basically backing an intangible asset’.  Further, as author of Intellectual Property, Finance and Corporate Governance (2018) I was delighted to hear that Gurry supports re-thinking the gaps in traditional accounting to better support valuation intangible IP rights.  In December 2019, I had the pleasure of attending a meeting with the BDC’s C-suite in Montreal alongside Lally and other IP experts.  I shared my views and IP in the boardroom research to raise awareness of the potential of IP-backed financing, which has now come to fruition.  

Gurry acknowledges that there are changing perceptions about IP rights.  However, he cautioned that the alternative, a scenario where no one uses IP rights, could lead to a lack of transparency.  The publication of patent information is ‘the most systematic record of humanity’s technology’, he said.   

In response to Professor Isolde Gendreau’s (Université de Montreal, Faculté de Droit) question regarding the potential for supra-national enforcement of IP rights, Gurry recognized that counterfeiting and piracy are now global issues.  These behaviors affect both developed and developing countries alike and require a global response.  Thus, WIPO’s focus is on ‘building respect for IP rights, rather than putting teenagers in jail’.  WIPO will look to ‘build capacity to take action internationally’. 

The CORIM webinar, ‘Intellectual property: meeting global business and technology challenges’ may have flown under the radar for many outside Canada.  However, it is a timely reminder of Gurry’s wisdom and contribution to the global IP landscape as WIPO’s Director-General since 2008.  His term will end this month. Join me in wishing him every success in the future. 

Dr Janice Denoncourt

Associate Professor

Nottingham Law School

Nottingham Trent University

WIPO Intellectual Property Indicators Released

The World Intellectual Property Organization (WIPO) recently released its World Intellectual Property Indicators information for 2017.  Global intellectual property filings are at an all-time high with patent filings up 5.8% from the prior year.  Notably, patent filings in China have increased substantially both by Chinese citizens and foreign residents.  U.S. patent filers continue to lead globally.  Concerning patents, WIPO notes:

China’s IP office received the highest number of patent applications in 2017, a record total of 1.38 million. China in 2017 refined its method for compiling statistics for patents and industrial designs applications, counting only those for which application fees have been paid. China’s IP office was followed by the offices of the United States of America (U.S.; 606,956), Japan (318,479), the Republic of Korea (204,775) and the European Patent Office (EPO; 166,585).

The top five offices accounted for 84.5% of the world total. Among these offices, China (+14.2%) and the EPO (+4.5%) saw strong growth in filings, while Japan (+0.03%) and the U.S. (+0.2%) saw negligible growth. The Republic of Korea (-1.9%) received fewer applications in 2017 than in 2016.

Germany (67,712), India (46,582), the Russian Federation (36,883), Canada (35,022) and Australia (28,906) also featured among the top 10 offices. Australia (+1.8%), Canada (+0.8%) and India (+3.4%) saw growth in filings, while Germany (-0.3%) and the Russian Federation (-11.3%) experienced a decline in filings.

. . .

Asia going strong

Asia has strengthened its position as the region with the greatest activity in patent filings. Offices located in Asia received 65.1% of all applications filed worldwide in 2017 – a considerable increase from 49.7% in 2007 - primarily driven by growth in China.

Offices located in North America accounted for 20.3% of the 2017 world total – six percentage points below its 2007 share. Europe’s share declined from 18.1% in 2007 to 11.2% in 2017. The combined share of Africa, Latin America and the Caribbean, and Oceania was 3.4% in 2017.

Patenting activity beyond borders

In filing abroad, which is an indication of a desire to expand in new markets, U.S. residents continue to lead with 230,931 equivalent patent applications filed abroad in 2017. The U.S. was followed by Japan (200,370), Germany (102,890), the Republic of Korea (67,484) and China (60,310).

Among these five origins, China reported a 15% growth in filings abroad, which is far above that of Japan (+2.1%) and the U.S. (+2%). Both Germany (-0.6%) and the Republic of Korea (-4.1%) had fewer filings abroad in 2017 than in 2016.

Patents in force worldwide grew by 5.7% to reach 13.7 million in 2017. Around 2.98 million patents were in force in the U.S., while China (2.09 million) and Japan (2.01 million) each had around 2 million.

WIPO has also released data concerning trademarks, plant variety applications, industrial design and geographical indications, available here.  For the first time, WIPO has collected and released data on the creative economy:

Revenue generated by the three sectors (trade, educational and scientific, technical and medical) of the publishing industry of 11 countries amounted to USD 248 billion. China reported the largest net revenue (USD 202.4 billion), followed by the U.S. (USD 25.9 billion), Germany (USD 5.8 billion) and the U.K. (USD 4.7 billion)[3].

Digital editions generated 28.3% of the total trade sector revenue in China, 23.5% in Japan, 18.4% in Sweden, 13.2% in Finland and 12.9% in the U.S.

The U.S. sold 2,693 million copies of published titles in 2017, followed by the U.K. (647 million), Brazil (617 million) and France (430 million).

Gender Diversity in IP and Technology Policy: A New Resource and Way to get Noticed

The most recent WIPO Magazine is devoted to women and IP.  There are a number of fascinating articles concerning women involved in creating in various technology and artistic spaces.  One interesting story involves Sybilla Masters.  She “developed a way to process Indian corn in 1715 and her achievements were recorded in the patent document, the associated right was issued to her husband.  At that time, the prevailing laws stated that women could not own property.”  WIPO also discusses the gender gap in patent filings—only about 4% to 20% of patent applications include a female inventor depending on the country.  The United States is at 10%.  Interestingly, WIPO points to several causes of the gap: 1) fewer women in STEM fields; 2) “Female scientists and engineers are less likely than their male counterparts to think about commercializing their inventions, and are less comfortable marketing themselves and their work to potential business partners.;” and 3) Female scientists and engineers “are less likely to be invited to sit on prestigious scientific boards or advisory panels where they could meet potential innovation partners.” 

The Brookings Institute recently announced the creation of Sourcelist.  Sourcelist is a database of women who are experts in technology policy, and coming soon—a database of other diverse groups who are also experts in technology policy.  Sourcelist states that it was created because:

Recognizing that women and underrepresented genders in technology policy—a field at the intersection of Silicon Valley and the Washington Beltway—face a particular set of institutional barriers, we dedicated the first Sourcelist database to Women+. Issues associated with underrepresentation have not gone unnoticed, and countless organizations have made important progress in raising awareness of the problem and educating stakeholders on the importance of greater gender diversity. Sourcelist seeks to help in the last mile of those efforts; it is a resource for those looking to put good intention into practice.

This looks like a great idea!  If you are female, sign up to get on the list! 

WIPO (and others) Release Global Innovation Index—A Wealth of Interesting Information

The World Intellectual Property Organization, Cornell University and INSEAD released the 417 page Global Innovation Index (Report) recently (here).  The Report attempts to measure and evaluate innovation by country and includes discussions concerning regional hubs, innovation clusters and enterprise champions.  The Report also includes specific country data reports on innovation as well as various data rankings such as YouTube video uploads, National Feature Films Produced, Royalties and License Fee Receipts, Daily Newspaper Circulation, Venture Capital Deals, Expenditure on Education, Press Freedom, Scientific and Technical Publications and Wikipedia edits by country (and so much more).  The press release for the Report states: “Despite the economic crisis, innovation is alive and well. Research and development spending levels are surpassing 2008 levels in most countries and successful local hubs are thriving. A group of dynamic middle- and low-income countries – including China, Costa Rica, India, and Senegal - are outpacing their peers, but haven’t broken into the top of the GII 2013 leader board.”  The top ten countries are:

1. Switzerland (Number 1 in 2012)
2. Sweden (2)
3. United Kingdom (5)
4. Netherlands (6)
5. United States of America (10)
6. Finland (4)
7. Hong Kong (China) (8)
8. Singapore (3)
9. Denmark (7)
10. Ireland (9)

While the United States of America moved up from 10 to 5 this year compared to 2012 and Singapore dropped from 3 to 8, the Report notes that the criteria for ranking changed this year and that:

Singapore and the United States of America (USA) would have kept their 2012 rankings (3rd and 10th, respectively) had we kept the 2012 framework unchanged while updating the database; Singapore drops five spots and the USA gains five as a result of adjustments to the framework in 2013.

The changes are noted in Table 1 on page 50 with discussion on following pages. 

In discussing research and development expenditures, the press release paints an upbeat picture:

“On the research and development (R&D) front, GII 2013 brings a dose of cautious optimism: despite adversity and tightened budget policies, R&D expenditures have grown since 2010. On the business front, the R&D expenditures of top 1,000 R&D spending companies have grown between 9 and 10 % in 2010 and 2011. A similar pattern has been observed in 2012.

A most remarkable characteristic of that trend is that emerging markets have increased their R&D faster than high-income countries. Over the last five years, China, Argentina, Brazil, Poland, India, Russia, Turkey and South Africa (in that order) have been at the forefront of this phenomenon. Emerging markets, and notably China, are also largely driving the growth in patent filings worldwide.

“Growing research and development investments and the rising number of intellectual property patents filed are tangible examples of a growing commitment to innovation,” said Mr. Li Yingtao, Head of Huawei’s 2012 R&D laboratories. “In the global economy, innovation from anywhere can drive change and create new opportunities everywhere. Everyone concerned with innovation as a catalyst for economic and social development needs to remain focused on how the value of innovation is to transform industries, businesses and people’s lives, not just locally but across the world.”

In examining the BRIC countries compared to the rise of other “emerging middle-income nations”, the Report states that:

The BRICs have experienced a relative stagnation or mostly a drop in innovation ranks in 2013 as compared to 2012, repeating the experience of last year (2011 to 2012): China (35th; a decrease of one spot from 2012 and six from 2011), the Russian Federation (62nd; a decrease of 11 positions from 2012 and six from 2011), Brazil (64th; a decrease of six spots from 2012 and 17 from 2011), and India (66th; a decrease of two positions from 2012 and four from 2011). In this context, other emerging middle-income nations are increasing their innovation ranks rapidly: Mexico (63rd; an increase of 16 positions from 2012 and 18 from 2011), Indonesia (85th; an increase of 15 from 2012 and 14 from 2011), and others (the Plurinational State of Bolivia, Cambodia, Costa Rica, Ecuador, Uganda, and Uruguay) all increased their rankings by more than 15 positions this year . . . .

As a big fan of “The Land of Enchantment” (a truly special place), I was pleased to find that:

Top world R&D investing countries host top world R&D investing regions. The top region for R&D in the OECD is New Mexico (United States of America, or USA). This state devotes more than 7% of its GDP to R&D, followed by Massachusetts (USA), which invests slightly less than 7% of its GDP in R&D.

And, as a resident of California, it was nice to hear that inventors in the state are collaborative folks with strong networks:

The regions that invest the most in R&D and account for most of the world’s patent applications adopt different innovation modes. In fact, some rely more on networks than others. For instance, the propensity to carry out research with multiple inventors located in different regions varies across sectors and countries. The possibility that inventors located in one region may collaborate with others located elsewhere is shaped by several factors, including the institutional environment of the countries involved. In general, however, collaborations are increasingly important for innovation. In the telecommunication sector, the share of patents with at least two co-inventors located in two different regions increased from 7.9% in the late1970s to 16.2% in 2005–07. In this sector, California performs like a star; the share of patents applied for by residents of California with at least one co-inventor located in another region, in the USA or abroad, is around 24%, but the region has the world’s widest network in terms of the geographic location of partners.

For the patent focused folks, there are PCT patent application rankings by region within specific countries on page 95.  The top five are Southern Kanto in Japan, California in the United States, Capitol Region in South Korea, Kinki in Japan, and Guangdong in China.

The Report also notes the relationship between public policy and the growth of a technology hub by examining Huawaei’s development in depth:

 In 1980, Shenzhen was a small fishing village on the Chinese mainland close to Hong Kong (China). To fuel the growth of the city, public policies were enacted to ease the movement of talent, expertise, and investment into the area, both from across China and from over seas. International corporations were encouraged to invest and create operations in Shenzhen. Policies supported the construction of public and private infra- structure, from business parks and transportation and communication links to hotels and residential developments. The city’s population has grown from 20,000 to 15.5 mil- lion people in just over 30 years; Shenzhen is thriving as a high-technology innovation cluster and sup- porting markets around the world.3 Huawei was established in Shenzhen in 1987 as a sales company, reselling technology developed by a third party.

The Report discusses the importance of intellectual property rights to Huawei:

The idea that innovation is a fundamental input to socioeconomic development is a strong belief held within the corporate culture of any successful innovative company. Commercial companies that invest significantly in R&D do so on the basis that their innovation will have the opportunity to earn a return on those investments. Without a return on innovation, the ability to continually innovate diminishes. This ability requires that IPRs be both respected and protected. This is a key factor in establishing a culture of innovation and achieving scale.8 As an example, Huawei has entered into numerous cross-licensing agreements with industry peers since 2002 and has paid a large amount in patent licensing fees to use third-party intellectual property. In 2012 alone, Huawei paid some US$300 million in patent licensing fees. Huawei also licenses its own intel- lectual property. In fact, Huawei is one of the leading IPR holders in the ICT industry. By December 2012, Huawei had filed 41,948 patent applications in China, 12,453 inter- national Patent Cooperation Treaty patent applications, and 14,494 patent applications outside China.

Huawei attaches greater importance to the commercial value and quality of its IPRs than to their actual quantity, however. Huawei takes the lead in holding patents in such technical fields as long-term evolution, next-generation wireless communications technology, fibre- to-the-home networks, optical transport networks, and the G.711.1 audio standard on fixed broadband networks worldwide. Huawei strategically maintains its patent application level at 3,000 to 4,000 applications annually.

The Report includes other specific case studies concerning Uruguay, India, Tunisia, and Morocco.  On page 327 on the Report, there is a ranking of University and Industry Collaboration by country.  The top ten include: Switzerland, United Kingdom, United States, Finland, Singapore, Belgium, Sweden, Israel, Qatar, and the Netherlands (with Germany at 11) (in response to a survey question).  Enjoy!

Dogs and Cats Living Together? The New WIPO, WTO and WHO Book.

On February 5, 2013, WIPO, the WTO, and the World Health Organization issued a jointly authored book titled, “Promoting Access to Medical Technologies and Innovation – Intersections between public health, intellectual property and trade.”  The 253 page book is an ambitious one—tackling the intersection of innovation and access.  The press release states:

Today’s health policy‑makers need a clear understanding both of the innovation processes that lead to new technologies and of the ways in which these technologies are disseminated in health systems. This study captures a broad range of experience and data in dealing with the interplay between intellectual property, trade rules and the dynamics of access to, and innovation in, medical technologies.

The study is intended to inform ongoing technical cooperation activities undertaken by the three organizations and to support policy discussions. Based on many years of field experience in technical cooperation, the study has been prepared to serve the needs of policy‑makers who seek a comprehensive presentation of the full range of issues, as well as lawmakers, government officials, delegates to international organizations, non‑governmental organizations and researchers.

The book has four parts: 1) Medical Technologies: The Fundamentals; 2) The Policy Context for Action for Innovation and Access; 3) Medical Technologies: The Innovation Dimension; and 4) Medical Technologies: The Access Dimension.  The study is very complete and attempts to tie together a lot of different concepts, and generally does so well (although I know I need to spend more time with it).  Some interesting items in the report include: a statement that a goal of the report is to find some “policy coherence” between the three organizations and that the report was made in a spirit of cooperation began by the Doha Declaration, the WIPO Development Agenda, and the WHO Global Strategy and Plan of Action for Global Health; a specific section on traditional medicine and knowledge; a statement that “[t]he overarching condition for providing access to needed medical technologies and health services is a functioning national healthcare system”; a dizzying chart concerning Tanzania’s medical supply systems; placing the human right to health within the intellectual property law context; and a helpful table breaking down pharmaceutical related provisions in FTAs.

On the Bayh-Dole Act and similar policies, the report states:

Such policies, and a general trend towards more active management of technologies created through publicly funded research, are leading to the steady accumulation of publicly held patent portfolios, including on key upstream technologies that provide platforms for a range of new medical technologies.

This report appears to be a great step toward harmonizing a lot of concepts in public health and intellectual property.  There is no question that trying to find solutions to the problems outlined in the report requires expertise in a lot of different areas and much collaboration. 

Aggregate IP Data is Nice, But What About All Those Other Countries?

I guess I am a micro-man at heart, and I have never quite understood what one is to make of macro data on IP filings and registrations. Even without seeing the most recent data international data, most of us can usually predict in which countries most patents and trade marks are being filed and registered. More challenging are the implications of these data. I thought about this again in reading the blogpost of my fellow IP Finance blogger, Eva Lehnert, who brought to the readership's attention a WIPO Report on trends in intellectual property activity here. As noted, the report brings various data on filing and registration patterns for patents and utility models, trade marks and industrial designs.

Let's consider some of additional results to those previously reported in Lehnert's earlier blogpost:

1. Patent fillings were down in 2007; 59.2% of applications were filed in China, Japan, and the USA.

2. The patent offices of Japan, USA, Republic of Korea, China and the EPO accounted for 74.4% of the total patent grants.

3. There are at least 4.2 million pending patent applications, with the USA accounting for 28% of the backlog.

4. Trade mark registrations were up 6% in 2007, with the most noticeable increase being in Brazil Nearly one-fifth of trade marks were filed in China in 2007.

5. Japan, USA, France and Germany account for nearly 20% of trade marks in force. and nearly 125,000 trade marks in force were registered before 2007.

6. France accounted for the largest number of industrial designs in force in 2007.

Keeping these data in mind, I found a bit curious the statement made in the report's forward by the WIPO Director General Dr. Francis Gurry:

“History has shown … that companies and countries which continue to invest in new products and innovation during times of economic recession will be those that will be best positioned to take advantage of the recovery, when it arrives. IP statistics help us to understand the role of the IP system in stimulating and diffusing innovation, promoting markets for new products, and rewarding creativity.”

With all due respect, I do not quite see how these macro data tell us very much beyond the fact that registered IP is still the purview of the traditional filing countries plus China. If growth is what we are concerned about, then what about such countries as India, Brazil (trade marks aside), Russia, Indonesia, Taiwan, Australia, Mexico, South Africa and Singapore? Even if the aggregate filing and registration data do not approach those of larger countries, what is the rate of increase in these countries? Do we observe any relationship between IP activity, on the one hand, and innovation and economic growth, on the other, on a country by country basis?

If WIPO has made these kinds of information available to the public, I would be grateful for further guidance how to obtain them. If not, where is this kind of information available? I, for one, would find this kind of information to be of particular interest.