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The Road to Ten Million U.S. Patents and China’s Growing Influence

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The United States Patent and Trademark Office is rapidly approaching a significant milestone in its productive history of granting patents. Having issued the first patents back in 1790, the USPTO has, by virtue of its unique regulatory authority, been awarding patents to applicants at an increasingly furious pace and is rapidly approaching a tremendous milestone—the award of the ten millionth patent.

At the time of the writing of this article, the USPTO had already issued 9,241,436 utility patents. Given current patent filing trends, it is reasonable to expect to see patent number 10 million issued roughly mid-year in 2018, based on the following projected patent grant rates from a Reed Tech forecast dated January 15, 2016:

2016 – 306,000
2017 – 310,500
2018 – 142,064 needed to reach 10 million

With this as a backdrop, it is quite interesting to look at the evolution of technology and innovation over the history of patents, particularly when we examine the advancing nature of each application represented at intervals of one million patents:

#1 1790 Pot ash
#1M 1911 Puncture resistant tire
#2M 1935 Rail Car Braking System
#3M 1961 Automatic machine language coding system
#4M 1976 Asphalt recycling process
#5M 1991 Ethanol production process
#6M 1999 Data synchronization process
#7M 2006 Polysaccharide Fibers
#8M 2011 Artificial vision system
#9M 2015 Windshield wiper fluid system
#10M 2018 ?

With the issuance of patents in the U.S. accelerating over the last century, innovation has continued to drive a significant growth in filing, with the majority of patent awards (more than eight million) earned after 1911.

“Never before in history has innovation offered the promise of so much to so many in so short a time.” – Bill Gates

Throughout the history of the U.S. and supported by the U.S. Patent system, innovation has also fueled significant economic growth. Given a 225-year history of awarding patents, it is stunning to see that, in the few short years between 2001 and 2014, more than three million U.S. patents were awarded to filers, with half of these awarded to U.S. inventors.

If we take a close look at the originating locations for the most recent three million patent grants, most readers likely won’t be surprised to see which U.S. States hold the most. Outside of the U.S., countries with highest grant rates are also unsurprisingly among the strongest economically:

Figure 1 – U.S. Patent Grants by Country and U.S. State of Origin (All Types), 2001-2013

patent-grants-by-country

China’s Surge

Of interest is the fact that, as the largest issuer of patents in the world, China ranks only eighth out of the top ten countries filing applications in the U.S. The trends in the production of Chinese patents are fascinating and worth watching closely as the global adoption of patents continues. Back in 2012, China’s government publicly stated a goal of granting two million a year by 2015, something that former USPTO Director David Kappos called at the time “mind blowing.” The reality has been less expansive but has regardless resulted in application rates substantially above those in the U.S.

In an effort to spur the filing of applications in foreign countries by Chinese applicants, China’s government instituted subsidies designed to offset filing costs, but applicable only after patents are granted. So while filings in the U.S. and other countries by Chinese applicants are somewhat muted, it is clear there is an aggressive commitment to patent application filing and growth in China.

With global patent application volumes growing roughly 2.5 times since 1995 (figure 2), China had developed a commanding presence with fully one third of the total volume by 2013 (figure 3).

Figure 2 – Patent applications worldwide

patent-applications-worldwide

Figure 3 – Patent applications at the top 10 offices, 2013

top-10-patent-offices

It is also interesting to note that there is a distinct difference between the U.S. and China with regard to the number of patents granted to domestic applicants. In 2012, 80 percent of China’s patents went to domestic filers, while just 50 percent of U.S. patents went to U.S. citizens.

Regardless, one can certainly argue that there is a correlation between the pace of innovation, patent awards and the size of the economies in these countries. Figure 4 below compares 2014 GDP for the world’s top five countries with their respective 2013 application volumes. While clearly an imperfect primer on the true value of IP, it does hint at a measure of proportionality in supporting the assertion that such a correlation exists.

Figure 4 – 2013 Patent applications vs. 2014 GDP, Top 5 Economies

 Country  2013 Patent Applications   2014 GDP (millions) 
 United States (USPTO)   501,903  17,348,075
 China (SIPO)  734,147  10,356,508
 Japan (JPO)  473,259  4,602,367
 Germany  184,843  3,874,437
 United Kingdom (EPO)  51,424  2,950,039

Please keep an eye on Reedtech. We’ll be tracking the progression to the ten millionth patent milestone closely, and look forward to celebrating this tremendous accomplishment with the USPTO and the rest of the IP community.