Asia leads global patent filings, but maturity needed

Rising tide of innovation from region fueling patent applications, particularly in mobile apps and social media, but companies still need better understanding of patent system to benefit from it, observers note.
Written by Kevin Kwang, Contributor

Asia, particularly East Asia, is leading the charge in innovations, having overtaken Europe as the biggest Patent Cooperation Treaty (PCT) filing region. However, the region will benefit more from its innovations if businesses become better acquainted with the patent system, observers note.

According to the World Intellectual Property Organization's (WIPO) PCT Yearly Filing review released in February this year, Asia became the biggest patent filing region with companies such as Japan's Panasonic and China's ZTE topping the list of patent applications published. Overtaking Europe for the first time, most of the filings originated from East Asia, which include China, South Korea and Japan, with the sub-region clocking an annual growth of 18.4 percent. This figure was more than other top sub-regions such as North America and Western Europe, the report stated.

This growth, to some degree, could be attributed to economic fundamentals as rising PCT share went hand in hand with growing GDP (gross domestic product) and research and development (R&D) shares--for instance, in the case of China and Korea--although growth rates might not always be proportionate, WIPO noted.

Japan, on the other hand, stood out for the fact that even though its share of global output and worldwide R&D expenditure fell, its share of PCT filings almost doubled from 9.1 percent in 1998 to 17.6 percent in 2008. Comparatively, the United States, Germany and France saw declining shares for all three performance indicators, the report noted.

"Japan's experience thus demonstrates that strategic decision-making can have a more pronounced impact on PCT use than that predicted by economic fundamentals," WIPO stated.

In terms of applicant demographics, Panasonic continued to hold top spot for the number of patents published at 2,154, while ZTE ranked second at 1,868 and U.S.'s Qualcomm placed third with 1,677 patents filed.

Digital communications witnessed the fastest growth and accounts for the largest share of total PCT applications published while almost every other field of technology experienced declines or modest growth, the study showed.

Understanding of patent system vital
WIPO also predicted that fundamental economic forces would continue to shape the geography of the PCT system. With the current climate, this heralded a period of growing dominance by Asia, it stated.

That said, Asian countries still relied less on the PCT system for their filings abroad, compared to others such as the U.S. and Germany. China's participation, for example, was still relatively young, WIPO noted. "As China's economy further develops and applicants gain experience with the international patent system, its PCT filings may well generate more entries," it said.

A Singapore entrepreneur, Lim Chuin Kiat, gave a slightly different perspective, however. The founder and CTO of startup Third Wave Power told ZDNet Asia that most companies, while free to start the application process in any country, would apply for patents in the U.S. first as this would likely be the primary market they would ship to.

Lim, who holds eight U.S. patents, also noted that since patent applications could be a costly affair, many would select the biggest economic markets such as the U.S. and Europe in which to protect their innovations.

Asked if markets such as China and India were increasingly destinations where innovators were looking to file patents, he noted that there was "definitely an increase" in IP (intellectual property) created in Asia. However, he also pointed out that there were still markets that "do not respect patent rights as much as others".

He also noted that innovations focused on mobile and games were "getting hot", while social media was another notable hotbed.

Protecting intellectual assets
Two legal experts chimed in to offer tips for companies looking to protect their ideas via patent filings.

According to David Llewelyn, professor at Singapore Management University's School of Law, developers should adopt an IP strategy that suits their budget and business plans as one size does not fit all.

Some of the questions they need to ask include why they want a patent in a particular country, whether they have the money to enforce it if someone infringes on the IP, and whether they will be able to license it to others for a fee.

Llewelyn added: "Developers all around the region are learning to play the IP game, but it's an expensive game to play and collaboration is often the best way forward."

Howard Yap, patent attorney at law firm ATMD Bird & Bird, added that applicants should file for a patent as soon as possible to secure a priority date and expedite the process.

Also, they should not disclose their inventions until the application had been filed, the lawyer added.

If applicants were looking to file in more than one country, Yap suggested they should first file a PCT application to buy more time to decide whether to file in other countries participating in the treaty. Singapore, China and India, for example, have signed up to support the PCT but Taiwan has not done so, he noted.

Applicants should also think ahead about what happens after their patents are approved, Lyon Poh, partner of management consulting at KPMG Singapore urged. "Companies with patents should put in place a program to ensure their licensees are complying with the terms of any patent licensing agreement they have signed to."

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