Trends in Applications for U.S. Patents
Technical Fields Favored by Foreign Inventors
Patent Activity Outside the United States
Inventions are of great economic importance to a nation because
they often result in new or improved products, more efficient manufacturing
processes, or entirely new industries. To foster inventiveness,
nations assign property rights to inventors in the form of patents.
These allow the inventor to exclude others from making, using, or
selling the invention. Inventors obtain patents from government-authorized
agencies for inventions judged to be new, useful, and not obvious.
Although the U.S. Patent and Trademark Office (PTO) grants several
types of patents, this discussion is limited to utility patents,
which are commonly known as patents for inventions. They include
any new and useful (or improved on) method, process, machine, device,
manufactured item, or chemical compound.
Patenting indicators have several well-known drawbacks, including:
- Incompleteness-many inventions are not patented at all,
in part because laws in some countries already provide for the
protection of industrial trade secrets.
- Inconsistency across industries and fields-the propensity
to patent differs by industry and technology area.
- Inconsistency in importance-the importance of patented
inventions can vary considerably.
Despite these limitations, patent data provide useful indicators
of technical change and serve as a way to measure inventive output
In addition, information about foreign inventors seeking U.S. patents
enables the measurement of inventiveness in foreign countries and
can serve as a leading indicator of new technological competition.
(See sidebar, "New Database May Help to Identify
More than 166,000 patents were issued in the United States in 2001,
5 percent more than in 2000. This record number extends a period
of nearly uninterrupted growth that began in the late 1980s. Since
then, growth in U.S. patenting has been steady, but slower
table 6-10 ).
Patents Granted to U.S. Inventors
Some observers have at times expressed concern that any downward
trend in the number of patents issued to U.S. inventors could indicate
a decline in U.S. inventiveness. However, the share of total U.S.
patents granted to U.S. inventors has been fairly stable over the
years, fluctuating within a very narrow range (5256 percent). A
small decline during the mid-1980s rebounded by the end of the decade
as patenting by U.S. inventors increased and outpaced patenting
by foreign inventors. Since peaking at 56 percent in 1996, the share
of U.S. patents granted to and held by U.S. resident inventors has
declined slightly. In 2001, U.S. inventors were awarded nearly 88,000
new patents, or about 53 percent of the total patents granted by
the United States. The increase in U.S. patents granted to foreigners
may simply reflect the attractiveness of the U.S. market for new
products and the growing capacity for global technological innovation.
Inventors who work for private companies or the Federal Government
commonly assign ownership of their patents to their employers; self-employed
or independent inventors typically retain ownership of their patents.
Therefore, examining patent data by the owner's sector of employment
can provide a good picture of a sector's inventive work. Corporations
owned 82 percent of patents granted to U.S. entities (including
other U.S. organizations, the Federal Government, and independent
U.S. resident inventors) in 2001.
This percentage has gradually increased over time. From 1987 to
1997, corporate-owned patents accounted for between 77 and 79 percent
of total U.S.-owned patents. Since 1997, corporations have generally
increased their share of total patents, rising to 80 percent in
1999, 81 percent in 2000, and 82 percent in 2001.
Individuals (independent inventors) are the second-largest group
of U.S. patent owners. Before 1988, individuals owned, on average,
23 percent of all patents granted to U.S. entities.
This figure has trended downward since then, to a low of 17 percent
in 2001. The Federal Government's share of patents averaged 3 percent
from 1963 to 1987, eventually falling to 1.1 percent in 1999.
Its share remained at about 1 percent in 2000 and 2001.
Patents Granted to Foreign Inventors
Patents issued to foreign inventors represented 47 percent of all
patents granted by the United States in 2001, a share that has increased
slightly since 1999.
During much of the 1980s, growth in the number of patents issued
to non-U.S. entities outpaced growth in the number of patents granted
to U.S. inventors. This trend peaked in 1987 and 1988, when patents
granted to foreign inventors accounted for 48 percent of all U.S.
patents. (See sidebar, "Top Patenting Corporations.")
From 1990 until 1996, however, the trend reversed: U.S. inventor
patenting activity increased at a faster pace than did foreign inventors',
which dropped the foreign share of all patents to 44 percent. Over
that time, Japan and Germany accounted for about 56 percent of all
U.S. patents granted to foreign inventors. The top four countries
(Japan, Germany, France, and the United Kingdom) accounted for about
72 percent of U.S. patents awarded to foreign residents since 1963
(figure 6-20 ).
Although patenting by inventors from leading industrialized countries
has leveled off or declined in recent years, some Asian economies,
particularly Taiwan and South Korea, have stepped up their patenting
activity in the United States and are proving to be strong inventors
of new technologies.
Between 1963 (the year data first became available) and 1987, Taiwan
received just 1,293 U.S. patents. During the 14-year period since
then, Taiwan was awarded nearly 29,000 U.S. patents. U.S. patenting
activity among inventors from South Korea shows a similar growth
pattern. Before 1987, South Korea received just 343 U.S. patents;
since that time, South Korea has been awarded more than 21,000 new
patents. The latest data indicate that Taiwan has moved ahead of
France and the United Kingdom to become the third most active residence
of foreign inventors who obtain patents in the United States. In
2000 and 2001, the top five countries receiving patents from the
United States were Japan, Germany, Taiwan, France, and the United
Trends in Applications for U.S. Patents
The review process leading up to the official grant of a new patent
takes approximately 2 years, on average. Consequently, examining
year-to-year trends in the number of patents granted does not always
show the most recent changes in patenting activity. The number of
patent applications filed with the U.S. PTO are examined to obtain
an earlier, albeit less certain, indication of changes to patterns
Patent Applications From U.S. and Foreign Inventors
Applications for U.S. patents reached 326,500 in 2001, about 10
percent more than in 2000. Applications rose by a similar percentage
in 2000. These latest data add to what has been nearly a decade
of annual increases (figure
table 6-11 ).
Patent applications from U.S. residents made up 56 percent of all
applications in 2000, a share maintained since 1997. In 2001, this
share declined slightly, to 54 percent. Because patents granted
to foreign inventors generally accounted for about 4547 percent
of total U.S. patents granted, the success rate for foreign applications
appears to be about the same or slightly higher than that of U.S.
Over time, residents of Japan have received more patents than residents
of any other country. They accounted for 4048 percent of U.S. patent
applications made by foreign residents, more than twice that of
Germany, which had the next most active group of applicants. Japan's
share slipped only in the late 1990s, falling to a decade low of
40 percent in 1999. Since then, its share has increased. The German
share has generally exhibited a downward trend, falling from a high
of 16 percent in 1989 to about 13 percent in 2000 and 2001.
Although patent filings by inventors from the leading industrialized
countries leveled off or began to decline, other countries, particularly
Asian countries, stepped up their patenting activity in the United
States. This is especially true for Taiwan and South Korea, and
data on recent patent applications indicate that the rising trend
in U.S. patents granted to residents of these two Asian economies
is likely to continue. Since 1997, residents of Taiwan and South
Korea distinguished themselves in the number of applications submitted,
applying for enough patents to replace France and Canada in the
top five foreign sources seeking U.S. patents. Residents of Taiwan
moved further up the list, to third, in 1998, and in 1999 applied
for more than 9,000 new patents. This was an increase of 27 percent
from the previous year and 2,400 more applications than were made
by residents from the fourth-ranked United Kingdom. U.S. patent
applications by Taiwanese inventors dropped by about 4 percent in
2000 but resumed double-digit growth in 2001. If recent patents
granted to residents of Taiwan are indicative of the technologies
awaiting review, many of these applications will be for new computer
and electronic inventions. After slowing somewhat in 1999, U.S.
patent applications from South Korean inventors picked up, increasing
by 13 percent in 2000 and 18 percent in 2001 (figure
Equally impressive was growth in patent applications by inventors
from Israel, India, Finland, Belgium, and China. Data show dramatic
increases over the past several years and provide yet another indication
of the ever-widening community of nations active in global technology
development and diffusion.
Technical Fields Favored by Foreign Inventors
A country's inventors and the distribution of its patents by technical
area is a reliable indicator of both the country's technological
strengths and its focus on product development. Patent activity
in the United States by inventors from foreign countries can be
used to identify a country's technological strengths as well as
U.S. product markets likely to see increased competition. This section
discusses the key technical fields favored by U.S. resident inventors
and inventors from the top five foreign countries obtaining patents
in the United States.
Fields Favored by U.S. and Leading Foreign Resident Inventors
Although U.S. patent activity encompasses a wide spectrum of technology
and new product areas, corporate patenting patterns reflect activity
in several technology areas that have already contributed much to
the nation's economic growth. In 2001, for example, corporate patent
activity indicated U.S. technological strengths in business methods,
medical and surgical devices, electronics, telecommunication, and
biotechnology (table 6-4
The 2001 data also show Japan's continued emphasis on photocopying,
photography, and office electronics technology, as well as its broad
range of U.S. patents in communication technology. From improved
information storage technology for computers to wave transmission
systems, Japanese inventors have earned U.S. patents in areas that
aid in the processing, storage, and transmission of information.
German inventors continue to develop new products and processes
in areas associated with heavy manufacturing, a field in which they
have traditionally maintained a strong presence. The 2001 U.S. patent
activity index shows that Germany emphasizes inventions for motor
vehicles, printing, switches, and material-handling equipment.
In addition to inventions for traditional manufacturing applications,
British patent activity is high in aeronautics, biotechnology, and
table 6-12 ).
Like the British, the French are quite active in patent classes
associated with manufacturing applications and aeronautics (appendix
table 6-13 ).
They share the emphasis of U.S. and British inventors in biotechnology.
As recently as 1980, Taiwan's U.S. patent activity was concentrated
in the area of toys and other amusement devices. By the 1990s, Taiwan
was active in communication technology, semiconductor manufacturing
processes, and internal combustion engines. Data from 2001 show
that Taiwan's inventors also became active in other areas, adding
electrical systems, semiconductors, and computer hardware technologies
to their technology portfolio.
U.S. patenting by South Korean inventors also reflects that country's
rapid technological development. The 2001 data show that South Korean
inventors are currently patenting heavily in television technologies
and a broad array of computer technologies that include devices
for dynamic and static information storage, data generation and
conversion, error detection, and display systems (table
Patent Activity Outside the United States
In most countries, nonresident (foreign) inventors account for
a much larger share of total patent activity than is true in the
When foreign patent activity in the United States is compared with
that in nine other countries, only Japan and Russia consistently
showed lower activity levels (figure
table 6-14 ).
Data from the patent offices in Brazil, Italy, and the United Kingdom
all show that about 80 percent of patents granted in those countries
go to nonresident inventors.
Even higher levels of nonresident patenting occur in Canada and
Mexico (more than 90 percent in 1999 and 2000). Although much attention
is given to the level of nonresident patent activity in the United
States, it has remained fairly stable over the past 10 years, accounting
for about 4447 percent of all U.S. patents issued.
Data from the World Intellectual Property Organization (WIPO),
which includes patent data from most patent-granting countries,
show the global reach of U.S., Japanese, and German inventors who
patent their inventions in other countries. In 1999 and 2000, U.S.
inventors made up the largest group of foreign inventors seeking
patents in the countries neighboring the United States and in major
markets in Asia, Europe, and Latin America. U.S. inventors also
received more patents than other nonresident inventors in Japan,
India, Brazil, Mexico, France, Germany, Italy, and the United Kingdom
(figure 6-24 ).
Japanese-resident inventors, who consistently account for the largest
percentage of U.S. patents granted to nonresident inventors, also
patent successfully in other parts of the world. In addition to
their success patenting in the United States, Japanese-resident
inventors lead all foreign inventors patenting in China and South
Korea, and they follow only U.S. inventors in the United Kingdom
and Canada. Germany, whose inventors also have a long tradition
of patenting new inventions in the United States, actively patent
in India, Japan, Brazil, Mexico, and other large European markets.
These data underscore the importance that corporations and other
owners of new technologiesthrough seeking to protect their intellectual
propertyplace on national patent systems. They also show the extent
to which both advanced and developing nations depend on the diffusion
of new technologies from around the world.