Why does an American ICT firm file a patent application in Europe? And how come a Japanese company applies for a patent in the US? Half of the total patent applications nowadays are international patent filings. The JRC analysed the different patenting strategies of global players to improve understanding of why ICT firms seek patent protection in foreign markets.
In its report 'International patenting strategies in ICT', the JRC shows that Japanese and US applicants are well ahead of their European counterparts in seeking ICT patent protection outside their domestic markets. Japan occupies five out of the 10 first positions in the top ten – for both ICT patent applications by country of applicant, and destination patent office – and is responsible for 65% of all the applications in this rank.
The US, Korea and Germany appear to be well behind. The US Patent and Trademark Office (USPTO), the Japanese Patent Office (JPO) and the European Patent Office (EPO) are the main destinations of international patent applications.
Through an empirical analysis of the motivations of ICT patent applicants for seeking protection under foreign jurisdictions, the JRC found that the major drivers for IP owners are either the potential benefit of having secured revenues from relevant markets or the presence of potential competitors capable of copying an invention, or a combination of the two. In addition, the probability of seeking patent protection increases considerably with cultural proximity, while it decreases with geographical distance. Furthermore, having a common language is the single most important driver for an IP owner to apply for an ICT patent in a foreign country.
Japanese and US applicants thus seek protection mostly in industrialised countries, whilst IP owners from European and other Asian countries follow regional rather than global patenting policies. Despite existing patenting procedures facilitating patenting in multiple countries, businesses make little use of them and prefer direct patent filings to selected national offices.
The JRC analysed more than 28.6 million patent applications for the period between 1990 and 2007, using PATSTAT, the European Patent Office's (EPO) dataset which contains information on applications submitted to around 180 patent offices in the world.
The report suggests that a successful international patenting strategy involves an assessment and selection of countries and patent offices whose intellectual property protection is vital to a firm's success. This assessment should be based on the available technological complementary and/or competitive assets in a country, and should result in a portfolio composed of countries ranked according to their importance with respect to the protection of a firm's intellectual capital.