This article presents a comparative analysis of research and development (R&D) expenditures and intellectual property (IP) policies across China, the USA, Japan, South Korea, and Europe, drawing on economic data from the IP5 offices. The IP5, a collaborative forum of the world's five largest intellectual property offices, aims to enhance the efficiency of patent examination processes globally. By examining trends in patent applications, grants, and R&D investments, and exploring the strategic priorities of these IP offices, the study reveals significant shifts and advancements in the global innovation landscape.
R&D is a fundamental driver of economic growth and technological progress. Insights into how these major IP offices allocate R&D resources and formulate IP strategies offer a clearer understanding of their innovation commitments. This article investigates China’s strategic expansion, the USA's robust private sector engagement, Japan’s emphasis on company-led R&D, South Korea’s substantial investment in R&D, and Europe’s varied investment patterns and advancements in patent administration. In terms of the percentage of GDP allocated to R&D, South Korea leads with 5.2%, followed by the USA at 3.4%, Japan at 3.3%, China at 2.4%, and the European Union at 2.24%. These figures highlight the varying levels of national commitment to fostering innovation through R&D investments
Trends in Patent Applications and Grants (IP5 between 2013-2023)
The comparison of patent applications and grants across the IP5 offices between 2013 and 2023 highlights significant shifts in the global innovation landscape. The total number of patent applications increased by 2.9%, rising from approximately 2.2 million in 2013 to 3.0 million in 2023. CNIPA (China) emerged as the dominant player, with applications soaring from 2013 to 2023. This surge in applications allowed CNIPA’s share of total applications to increase dramatically. In contrast, the USPTO (USA) and JPO (Japan) experienced stability in application numbers, with slight declines in their global shares. KIPO (Republic of Korea) saw a moderate increase of in applications, while the EPO (European) experienced a slight decrease in its share of total applications, despite a stable number of applications.
In 2022, the IP5 Offices received a total of 2,934,231 patent applications, marking a 1 % increase from the previous year’s 2,893,143 applications. Notably, patent applications rose by 2 % at both the European Patent Office (EPO) and the China National Intellectual Property Administration (CNIPA), while remaining stable at the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), and the United States Patent and Trademark Office (USPTO).
The CNIPA saw a 3 % increase in domestic applications, whereas domestic filings declined by 2 % at the JPO, 1 % at the KIPO, and 3 % at the USPTO. The EPO maintained a steady number of domestic applications. Conversely, foreign applications increased at the EPO, JPO, KIPO, and USPTO, but decreased at the CNIPA.
The IP5 Offices collectively granted 1,540,119 patents in 2022, a 5 % increase of 77,345 from 2021. Granted patents surged by 9 % at the JPO and 15 % at the CNIPA, while they fell by 25 % at the EPO, 7 % at the KIPO, and 1 % at the USPTO.
China’s substantial increases in both applications and grants indicating a strategic push to lead in intellectual property and technological advancement. Meanwhile, the stable trends at the USPTO and JPO, alongside moderate growth at KIPO and significant improvements at the EPO, reflect the evolving and diverse nature of global innovation efforts.
China:
China’s R&D expenditure data from 1995 to 2021 reveals a substantial increase in total investment, from 348.69 million yuan in 1995 to 27,956.31 million yuan in 2021. This dramatic growth underscores China’s strategic focus on enhancing its scientific and technological capabilities. The proportion of GDP allocated to R&D increased from 0.57% in 1995 to 2.43% in 2021, reflecting a growing emphasis on innovation.
Basic Research expenditures saw significant growth, rising from 18.06 million yuan in 1995 to 1,817.03 million yuan in 2021. However, Basic Research consistently accounted for a smaller proportion of total R&D expenditure, reaching 6.50% by 2021. Applied Research expenditures increased from 92.02 million yuan to 3,145.37 million yuan, maintaining a steady share of approximately 10-12% of total R&D spending. Experimental Development emerged as the largest component, with expenditures rising from 238.60 million yuan in 1995 to 22,995.88 million yuan in 2021, averaging around 70-80% of total R&D expenditure.
From 2013 to 2022, R&D spending continued its robust growth trajectory, increasing from 11,846.60 million yuan in 2013 to 27,956.31 million yuan in 2021. Basic Research spending climbed from 554.95 million yuan to 1,817.03 million yuan, with its share of total R&D slightly increasing to 6.50%. Applied Research rose from 1,269.12 million yuan to 3,145.37 million yuan, with its share stable between 10.27% and 12.68%. Experimental Development saw a significant increase, from 10,022.53 million yuan in 2013 to 22,995.88 million yuan in 2021, consistently representing around 82-84% of total R&D spending. The percentage of GDP dedicated to R&D grew from 1.98% in 2013 to 2.43% in 2021, emphasizing R&D's escalating role in China’s economic framework.
In 2022, the China National Intellectual Property Administration (CNIPA) advanced the implementation of the Outline for Boosting China’s Competitiveness in Intellectual Property (2021-2035) and the National Plan for Protection and Utilization of Intellectual Property During the 14th Five-Year Plan Period. These initiatives aimed to enhance high-quality IP development, support innovation-driven progress, and foster high-level international engagement. CNIPA recorded 1.619 million invention patent applications in 2022, a 2.1% increase from the previous year. Of these, 1.465 million were domestic (90.4%), and 154,663 were foreign (9.6%). Domestic applications rose by 2.6%, with 71.2% filed by enterprises. Utility model patent applications reached 2.951 million, up by 3.5%, while industrial design patent applications totalled 794,718, representing a 1.4% decline.
In terms of patents granted, CNIPA issued 798,347 invention patents in 2022, a 14.7% increase. Of these, 695,591 were granted to domestic applicants (87.1%) and 102,756 to foreign applicants (12.9%). Domestic service inventions accounted for 98.1% of grants, showing a 20.8% increase, while non-service inventions saw a decrease of 37.7%. Utility model patents granted totaled 2.80 million, down by 10.1%, and design patents granted numbered 720,907, a decrease of 8.2%. By the end of 2022, there were 4.212 million valid invention patents in China, reflecting a 17.1% increase. Domestic patents constituted 79.6% of this total, a rise of 20.8%, while foreign patents made up 20.4%, increasing by 4.5%. The number of high-value invention patents per 10,000 population stood at 9.4.
The average examination pendency for invention patents was reduced to 16.5 months, with high-value inventions examined within 13 months. CNIPA introduced a new intelligent patent examination system, with over 99% of patent and trademark applications filed electronically. User satisfaction with patent examination quality remained high at 85.7%, maintaining a satisfactory level for 13 consecutive years. On May 5, 2022, China enacted the Hague Agreement Concerning the International Registration of Industrial Designs. That year, 1,286 applications for international design registrations were filed by Chinese applicants under the Hague Agreement, and 607 international design registrations were received from abroad.
USA:
Real Gross Domestic Product for Research and Development (R&D) in the United States saw significant growth, increasing from $476 billion in 2013 to $715 billion in 2022. Real Government Gross Investment in Federal Intellectual Property Products for R&D also rose, from $125 billion in 2013 to $148 billion in 2022. Overall, Real Government Gross Investment in Intellectual Property Products for R&D increased from $142 billion in 2013 to $173 billion in 2022. In nominal terms, Government Gross Investment in Intellectual Property Products for R&D grew from $144 billion in 2013 to $214 billion in 2022, and Federal Gross Investment in these products increased from $127 billion to $188 billion over the same period. Investment in Government Fixed Assets for structures related to Intellectual Property Products for R&D increased from $144 billion in 2013 to $194 billion in 2021. Additionally, Federal Investment in National Defense Intellectual Property Products for R&D rose from $59 billion in 2013 to $70 billion in 2021. The Gross Private Domestic Investment in Nonresidential Intellectual Property Products for R&D saw a substantial rise, from $347 billion in 2013 to $713 billion in 2022.
In 2022, the United States Patent and Trademark Office (USPTO) implemented its latest Strategic Plan, focusing on five key goals: enhancing inclusive U.S. innovation and global competitiveness, ensuring efficient IP rights delivery, safeguarding IP against emerging threats, making a positive impact through innovation, and optimizing agency operations. Key achievements included a slight decrease in utility patent filings by 0.5%, totaling 592,714, a 6.1% increase in pending applications, and a 1.2% rise in granted patents. The USPTO achieved an 80% compliance rate with Patent Term Adjustment targets for mailed actions but fell short for pending cases. The office also launched the Climate Change Mitigation Pilot Program to expedite green technology patent examinations and integrated AI into its Patents End-to-End search tool to enhance examination efficiency. Despite high volumes of trademark applications, the USPTO did not meet its pendency targets but exceeded quality standards. New Pro Bono programs were introduced to offer free legal assistance to inventors and small businesses. The USPTO continued its global IP training initiatives and established partnerships with international IP offices. Additionally, the USPTO joined WIPO GREEN to support the exchange of environmentally friendly technologies.
Japan:
Japan’s R&D expenditure from 2010 to 2020 shows a consistent rise, from 17110 billion yen to 19237 billion yen. Company-led R&D expenditures grew from 12010 billion yen to 13861 billion yen. R&D spending by research institutions increased from 1666 billion yen to 1700 billion yen, maintaining a stable share of the overall budget. Adjusted for inflation, real total R&D expenditures expanded from 17283 billion yen to 18878 billion yen.
In 2022, the Japan Patent Office (JPO) focused on achieving the fastest and highest-quality patent examinations globally. Average pendency times were 10.1 months for First Action Pendency and 14.9 months for Total Pendency. The JPO offered accelerated examination options, including a super-accelerated system for high-priority applications, with average pendency times of 2.3 months and 0.6 months, respectively. The JPO introduced a restriction on Multi-Multi Claims and updated its Examination Guidelines and Handbook. The Green Transformation Technologies Inventory (GXTI), launched in June 2022, catalogues technologies contributing to greenhouse gas reduction. The JPO also improved information dissemination and engagement with international users through various channels.
Europe:
From 2012 to 2021, research and development (R&D) expenditures across European Patent Convention (EPC) states demonstrated notable growth trends, reflecting diverse investment patterns and sectoral advancements. In the European Union (EU) (27 countries), total R&D spending rose from €202.27 billion in 2012 to €250.09 billion in 2021. Within the Euro Area (20 countries), expenditure increased from €176.37 billion to €211.68 billion over the same period, indicating slightly more conservative growth compared to the broader EU average.
Germany led the way with its R&D expenditure rising from €68.47 billion in 2012 to €81.91 billion in 2021. This growth was driven by substantial industrial investments and strong government support. France also saw significant increases in its R&D spending, from €37.52 billion to € 40.43 billion, buoyed by strategic national investments and the development of innovation clusters. Italy’s expenditure grew from €17.39 billion to €20.55 billion, supported by policy reforms and enhanced university-industry collaboration. Spain experienced a moderate increase from €12.94 billion to €15.31 billion, driven by economic recovery and EU structural funds. Additionally, smaller economies like Bulgaria and Czechia also benefited from EU funding and national innovation strategies, resulting in notable growth.
In the realm of business enterprise R&D, the EU’s expenditure rose from €126.99 billion in 2012 to €164.17 billion in 2021. The Euro Area showed similar growth, with expenditure increasing from €112.01 billion to €138.61 billion. Germany's business R&D expenditure grew from €46.55 billion to € 54.71 billion, reflecting the country’s high industrial R&D investment. France’s expenditure rose from €24.23 billion to €26.52 billion, influenced by national innovation policies and tax incentives. Italy saw an increase from €9.42 billion to €12.62 billion, aided by government initiatives. Smaller economies such as Hungary and Portugal also demonstrated growth, driven by strong innovation focus and supportive policies.
Overall, these trends underscore Europe’s robust and consistent investment in R&D, driven by effective national policies, private sector contributions, and EU funding. To further enhance R&D capabilities, European countries are encouraged to strengthen innovation ecosystems through improved collaboration between universities, research institutions, and the private sector, and to invest in emerging sectors such as digital technologies and green energy.
In 2022, the European Patent Office (EPO) continued its mission to foster innovation and economic growth by processing approximately 193,460 patent applications, a 2.5% increase from the previous year. Key advancements included improvements in search and examination processes, with search timeliness averaging 4.9 months and 79% of grant intentions issued within 36 months. The EPO also introduced new digital tools, including MyEPO Portfolio for procedural submissions and a new Central Fee Payment platform.
Environmental sustainability was a priority for the EPO, which achieved a record low in greenhouse gas emissions and reduced paper consumption by 30%. The Unitary Patent system, aimed at simplifying patent protection across participating EU countries, advanced closer to implementation with Austria’s ratification and a major conference held in Brussels.
On the international front, the EPO welcomed Montenegro as a new EPC member, expanding its reach and influence. The Office managed 85 international agreements, extending its global influence to over 2.12 billion people and focusing on patent classification harmonization. The EPO also contributed to global IP5 and IPC revisions. With a self-financed budget of approximately €2.7 billion for 2022, primarily funded by patent and procedural fees, the EPO directed any surplus towards long-term sustainability.
Republic of Korea:
From 2012 to 2021, South Korea exhibited a remarkable commitment to research and development (R&D), with total R&D expenditures increasing dramatically from 554,501 million won to 1,021,352 million won. This surge underscores Korea's sustained investment in bolstering its R&D capabilities. Government-funded R&D grew from 138,221 million won to 240,950 million won from 2012 to 2021, maintaining a steady proportion of the total R&D budget. In contrast, non-government R&D expenditures, predominantly from the private sector, soared from 414,378 million won to 777,421 million won for the same year, highlighting the critical role of private sector investment. Foreign expenditures rose from 10 million won in 2012 to 2,982 million won in 2021.
R&D expenditure by institutions also saw significant increases: public research institutions' expenditures rose from 69,503 million won in 2012 to 119,970 million won in 2021, while university R&D expenditure expanded from 52,769 million won to 93,306 million won. Enterprises, however, contributed the largest share, with their expenditures growing from 432,229 million won to 808,076 million won.
The distribution of R&D expenditures by research type reflects a balanced approach: basic research spending increased from 101,533 million won in 2012 to 151,002 million won in 2021; applied research grew from 105,727 million won to 214,704 million won; and development expenditures rose from 347,242 million won to 655,647 million won.
Overall, these trends illustrate Korea's strategic focus on enhancing its R&D capabilities through substantial private-sector investment, consistent public support, and a balanced approach to various research types. The growing share of GDP dedicated to R&D highlights its importance in fostering innovation and driving economic growth.
In 2022, the Korean Intellectual Property Office (KIPO) intensified efforts to support a creative economy by refining the intellectual property rights (IPR) administration. Domestically, KIPO focused on improving examination services and promoting economic sustainability through comprehensive IP creation, utilization, and protection. Internationally, it strengthened collaborations with foreign IP offices and global organizations.
Significant advancements were made in examination efficiency, with average pendency times of 14.4 months for patents and utility models, 13.9 months for trademarks, and 4.8 months for industrial designs. KIPO processed 556,436 applications, including 90,207 from non-residents, and saw a 6.8% increase in Korea’s Patent Cooperation Treaty (PCT) applications, reaching 21,916. Innovations such as the AI-based Patent Search System and an expedited examination process for semiconductor patents, reducing processing times to about 2.5 months, were introduced to enhance efficiency.
In November 2022, KIPO hosted a meeting with R&D institutions to explore how patent big data could improve R&D investment efficiency. This discussion aimed to align government and private R&D policies with patent data analysis and identified 173 emerging technologies in key industry areas. Additionally, KIPO supported IP-driven R&D strategies, introduced legislative measures like the National Advanced Strategic Industry Act, and launched "IP Panorama 2.0," an updated e-learning course. The 5th Korea-ASEAN Heads of IP Offices Meeting in November also resulted in new Memorandums of Understanding with the Philippines and Brunei. KIPO has established 26 MoUs with ASEAN countries, enhancing various aspects of IP examination, training, and protection, thereby further strengthening international IP collaborations.
Conclusion
The comparative analysis of R&D expenditures and IP policies reveals both striking contrasts and emerging trends across China, the USA, Japan, South Korea, and Europe, each reflecting differing strategic priorities and economic contexts. China’s rapid increase in R&D spending and patent activity positions it as a formidable force in the global innovation arena, yet it raises concerns about the sustainability of such aggressive growth and its implications for global IP dynamics. While China's efforts reflect a clear intent to dominate technological advancements, they also highlight potential risks related to overreliance on state-driven initiatives and questions about the quality versus quantity of innovation outputs.
In contrast, the USA’s relatively stable investment patterns, coupled with a strong emphasis on private sector involvement, suggest a more balanced approach to fostering innovation. However, the slight decrease in the R&D-to-GDP ratio and the impact of recent policy shifts, such as those addressing climate change, warrant scrutiny. The effectiveness of these policies in maintaining long-term technological leadership amidst fluctuating economic conditions remains a critical concern.
Japan and South Korea present nuanced perspectives on innovation. Japan’s focus on company-led R&D and efficient patent examinations underscores its commitment to maintaining a competitive edge through high-quality research outputs. South Korea's significant private sector contributions and sophisticated IP management highlight its strategic use of R&D for economic growth. Meanwhile, Europe’s varied investment patterns and advancements in patent administration reflect a fragmented yet persistent approach to innovation. Each region's strategy reveals strengths and limitations, indicating that while there is considerable progress in global innovation, there are also inherent challenges and disparities that could shape future dynamics in the technology and intellectual property sectors.
IP Round-up
Ilayaraja Settles for Rs 60 Lakh in Copyright Dispute:
The copyright dispute between legendary composer Ilayaraja and the producers of the hit film ‘Manjummel Boys’ over the song ‘Kanmani Anbodu’ has been resolved. Following mediation, the producers agreed to compensate Ilayaraja with Rs 60 lakh. Ilayaraja initially demanded Rs 2 crore, asserting that the song played a crucial role in the film's success and alleging that his permission had not been obtained for its use. Legal notices were sent in May, accusing the filmmakers of copyright infringement, while the producers claimed they had acquired the necessary musical rights, which Ilayaraja disputed. ‘Kanmani Anbodu,’ originally composed by Ilayaraja for the 1991 film ‘Guna’ starring Kamal Haasan, was featured in ‘Manjummel Boys,’ directed by Chidambaram. The song's inclusion significantly contributed to the film’s popularity in Kerala and Tamil Nadu, as well as its dubbed versions in Tamil and Telugu. (Source: OnManorama)
Astroyogi Sues Astrotalk:
Astrotech platform Astroyogi has filed a lawsuit against its competitor Astrotalk, alleging unauthorized use of the ‘Astroyogi’ trademark within various horoscope categories, leading to overlaps with its services. Astroyogi accuses Astrotalk of illegally using its trademark name and branding elements, raising concerns about potential infringement of its trademark rights. Astroyogi, founded by Meena Bahl Kapoor in 2001 and known for partnerships with Microsoft, Yahoo, and AOL, emphasizes its commitment to high standards of integrity and ethics. Meanwhile, Astrotalk, founded by Puneet Gupta and Anmol Jain in 2017, recently secured INR 110 Cr in funding to enhance its product offerings and regional language services. (Source: Inc24)
Samsung's Rollable Display Tablet?:
Samsung is exploring an innovative rollable display technology that could revolutionize device interaction, as indicated by a recent patent filing with the US Patent and Trademark Office. This patent describes a tablet with a horizontally expandable display, which adjusts its size dynamically using built-in rolling actuators. The display can stretch outward in both directions, adapting based on peripheral usage, such as a keyboard, one-handed operation, or a stylus. A dedicated processor enables the tablet to detect connected devices like smartphones and expand the screen to mirror the display via NFC. Additionally, the tablet could control Samsung's SmartThings smart home devices or a TV by expanding part of the screen and can adjust for right-handed or left-handed users. While there is no certainty that this concept will become a consumer product, Samsung's continued innovation in flexible displays promises a futuristic shift in device functionality. (Source: Techspot)
Enact Federal Laws Against AI Deepfakes:
The U.S. Copyright Office has urged Congress to swiftly enact new federal legislation to combat the threats posed by AI-generated deepfakes. After gathering over 10,000 public responses and conducting extensive research on AI's impact on intellectual property, the Office released a report highlighting the dangers of AI-generated content like deepfake music, images, and impersonations. Current state laws are deemed insufficient, prompting the need for comprehensive federal regulations to protect public figures, private citizens, and businesses. The proposed law should address unauthorised digital replicas, hold digital platforms accountable, and balance free speech concerns with stringent penalties for deepfake distribution. This call to action comes as nearly a dozen AI-related laws are already under consideration, including the NO FAKES Act, spurred by incidents like the AI impersonation of actress Scarlett Johansson. For AI to function effectively and lawfully, it must integrate enterprise blockchain systems to ensure data integrity and security, as covered by CoinGeek. (CoinGeek)
Unlock Devices with Unique Heartbeats:
California-based Apple is reportedly developing a new method for device unlocking using users' unique heartbeats. According to AppleInsider, Apple has been granted a patent for technology that leverages cardiovascular signatures to unlock iPhones and other devices. Filed in August 2022, the patent describes how the Apple Watch's ECG feature could identify users, allowing heart patterns to serve as a biometric authentication method, enhancing or replacing Face ID and passcodes. This continuous authentication would remain active as long as the watch is worn, simplifying access across multiple devices. Additionally, Apple may integrate heart-measuring sensors into future iPhones, potentially enabling mood assessment. While still in the patent stage and untested, this innovation could significantly advance biometric authentication. Concurrently, Apple's new AI features, branded 'Apple Intelligence,' will be delayed to iOS 18.1, expected in October, giving developers early access through a beta release this week, as reported by Bloomberg's Mark Gurman. (Mint)
References:
Ahmed, Z. (2024, July 28). Samsung patent dreams up wild tablet display that morphs into different shapes. TechSpot. https://www.techspot.com/news/103998-samsung-patent-dreams-up-wild-tablet-display-morphs.html
Copyright dispute: Ilayaraja and Manjummel Boys producers reach compensation agreement. Onmanorama. https://www.onmanorama.com/entertainment/entertainment-news/2024/08/05/copyright-dispute-ilayaraja-manjummel-boys-producers-compensation.html
European Patent Office. (n.d.). Statistical data resources. IP5 Offices, from https://www.fiveipoffices.org/statistics/statisticaldata
IP5 Offices. (2022). IP5 Statistics Report 2022. IP5 Offices. https://link.epo.org/ip5/statistics2022
Kaaru, S. (2024, August 5). US Copyright Office calls for 'prompt federal action' to combat AI deepfakes. CoinGeek. https://coingeek.com/us-copyright-office-calls-for-prompt-federal-action-to-combat-ai-deepfakes/
Sharma, P. (2024, August 5). Astroyogi sues Astrotalk over trademark breach claims. Inc42. https://inc42.com/buzz/astroyogi-sues-astrotalk-over-trademark-breach-claims/
Unlock with a heartbeat! Apple's new patent eyes cardiovascular-based security logins.(2024, August 6) Mint. https://www.livemint.com/technology/tech-news/unlock-with-a-heartbeat-apples-new-patent-eyes-cardiovascular-based-security-logins-11722418879910.html