Patents are an indicator of inventive activity. By issuing patents that allow the patent owner to demand payment for their use, governments protect inventions that are new, not obvious, and useful. The U.S. Patent and Trademark Office (USPTO) grants patents to inventors from all over the world, and because of the sheer volume of U.S. patents and the importance of the U.S. market, they are a useful indicator of trends in the geographic location of inventive activity.
About half (49%) of the patents granted by the USPTO went to U.S.-based inventors in 2008, down from 55% in 1995 and somewhat below the U.S. share of applications. Japan's share has been a steady 20%–22% over the period, above its share of applications; the EU members received 14%–16%. The Asia-9's share increased from 3% to 10% over the period, mostly on the strength of South Korea and Taiwan. China's share remained in the 1% range in all major technology areas. Indigenous inventive activity, a focus of government policy, appears elusive, at least as indicated by patents filed in a major Western market (figure
Patents on inventions for which protection is sought in the United States, the EU, and Japan require substantial resources for obtaining and maintaining them. This suggests that their owners consider them to be valuable. These patents are herein treated as an indicator of the distribution of high-value patenting around the world.
Just over 30% of high-value patents had U.S. inventors in 2006, down somewhat from 34% in 1997. The EU's share declined somewhat more, to 29% in 2006, followed closely by Japan. The Asia-9's increasing share largely reflects patents with Korean inventors. As with U.S. patents, Chinese inventors appeared on only 1% of these high-value patents (figure