New technical inventions have important economic benefits to a nation, as they can often lead to innovations in terms of new or improved products or more efficient manufacturing processes-or even to new industries. To foster inventive activity, nations assign property rights to inventors in the form of patents, which allow the inventor to exclude others from making, using, or selling the invention. Inventors can obtain patents from government-authorized agencies for inventions judged to be new, useful, and non-obvious.
Patent data provide useful indicators of technical change and serve as a means of measuring inventive output over time. Further, U.S. patenting by foreign inventors enables measurement of the levels of invention in those foreign countries (Pavitt 1985) and can serve as a leading indicator of new technological competition (Faust 1984). Patenting trends can therefore serve as an indicator-albeit one with certain limitations-of national inventive activities.
This section describes broad trends in inventive activity in the United States over time by national origin of owner, patent office class, patent activity, and commerce activity. It discusses U.S. inventor patenting in foreign countries and presents data on international patenting in several "critical" technologies.
In 1994, for the first time ever, more than 100,000 patents were issued in the United States. This record number-101,675-of new inventions resulting in new patents caps off what had been several years of steady increases since 1990. In 1995, U.S. patents granted fell short of the previous year's mark, but not by much. Once again, more than 100,000 patents were granted, with the final count reaching 101,419 in 1995.
During the mid-1980s, the number of U.S. patents awarded to U.S. inventors began to decline just as the number awarded to foreign inventors began to rise. This of course raised questions about U.S. inventive activity and whether these numbers were yet another indicator of U.S. competitiveness on the decline. By the end of the decade, however, U.S. inventor patenting picked up and continued to increase and outpace foreign inventor patenting in the United States. In 1989, there was a large jump in the number of new patents awarded to U.S. inventors; that year also marked the first time the number of patents awarded to U.S. inventors exceeded 50,000. Except for the following year (1990), the 50,000 barrier was exceeded each year thereafter. In 1995, U.S. inventors received 55,739 patents. (See figure 6-16 and appendix table 6-12.)
Inventors who work for private companies or the Federal Government commonly assign ownership of their patents to their employers; self-employed inventors typically retain ownership of their patents. Examining patent data by owner's sector of employment can therefore provide a good indication of the sector in which the inventive work was done. In 1995, 79 percent of granted U.S.-origin patents were owned by U.S. corporations. (See "Top Patenting Corporations.") This percentage has increased gradually over the years. [Skip Text Box]
An examination of the top patenting corporations in the United States over the past 23 years underscores the rapid technological transformation achieved by Japan over a relatively short period. In 1973, there were no Japanese companies among the top 10 patenting corporations in the United States. In 1983, there were three Japanese companies among the top 10. By 1993, Japanese companies outnumbered U.S. companies, and the most recent data show eight Japanese companies among the top 10. (See text table 6-4.) Japan's patenting now emphasizes computer technologies, television and communications technologies, and power generation technologies.
After business entities, individuals are the next largest group of U.S.-origin patent owners. Prior to 1982, individuals owned, on average, 24 percent of all patents granted. Their share has fluctuated between 23 and 27 percent since then. In 1995, the 23 percent share accounted for by individuals matched similar period lows in 1994. The federal share of patents averaged 3.4 percent of the total during the period 1963-82; thereafter, U.S. Government-owned patents as a share of total U.S.-origin patents declined. U.S. Government-owned patents were encouraged by legislation enacted during the 1980s, which called for U.S. agencies to establish new programs and increase incentives to their scientists, engineers, and technicians that would facilitate the transfer of technology developed in the course of government activities. (See "Private Use of Public Science.") [Skip Text Box]
Industry makes good use of public science, according to an analysis of more than 100,000 patent-to-science references conducted by CHI Research, Inc. (see Narin, Hamilton, and Olivastro 1997.) This study showed that 73 percent of the references to scientific publications listed as "prior art" on the front pages of U.S. patents were to public science-i.e., authored at academic, governmental, and other public institutions. (See text table 6-5.) The public science cited in these references was at the basic end of the research spectrum and was "...published in influential journals, authored at top-flight research universities and laboratories, was relatively recent, and heavily supported by NIH [the National Institutes of Health], NSF [the National Science Foundation], and other public agencies" (Narin, Hamilton, and Olivastro 1997). The institutions performing publicly funded research typically produce 90 percent of the articles that appear in the main influential scientific and technical journals. Nevertheless, that so much of it so quickly contributes to private sector technological breakthroughs is an important indicator of the potential economic impact of publicly funded research.
The analysis also found that the number of references to public science had nearly tripled over a recent six-year period (from 1987-88 to 1993-94), suggesting that the linkage between patented technologies and contemporary public science is growing. The availability of better electronic search tools to inventors and patent examiners in the more recent period might help to explain this trend, but researchers do not credit it alone with the tripling of science citations on U.S. patents.
The study concludes that there are strong linkages between contemporary public science and technological breakthroughs patented in the United States, and that these linkages are becoming stronger. These findings are consistent with other indicators of increased linkages and collaborations of industry with academia and national labs. (See chapters 4 and 5.)
Foreign-origin patents represent nearly half (45 percent in 1995) of all patents granted in the United States. Their share rose throughout most of the 1980s before edging downward in 1989. At their peak in 1988, foreign-origin patents accounted for 48 percent of total U.S. patents. Since then, with U.S. inventor patenting increasing faster than foreign inventor patenting, the foreign inventor share has declined several percentage points. (See appendix table 6-12.)
Foreign patenting in the United States is highly concentrated by country of origin. In 1995, two countries-Japan and Germany-accounted for over 60 percent of U.S. patents granted to foreign inventors. The top five countries-Japan, Germany, France, the United Kingdom, and Canada-accounted for 80 percent. (See figure 6-17.) These data show a slowdown in U.S. patenting activity by inventors from these five countries. From 1982 to 1992, U.S. patenting activity by inventors from these five countries nearly doubled, peaking in 1992 at nearly 37,000 U.S. patents. Patenting by Japanese and French inventors was especially strong during this period.
Since then, patenting by inventors from the leading industrialized countries has leveled off and has even begun to decline in some instances. France, Germany, and Japan were each awarded fewer U.S. patents in 1995 than in 1992. The United Kingdom and Canada increased their patenting, but only slightly. Other countries, particularly Asian countries outside Japan, have stepped up their patenting activity in the United States and are showing themselves to be strong inventors of new technologies. This is especially true for Taiwan and South Korea. Before 1982 (data are available starting in 1963), Taiwan was awarded just 316 U.S. patents. Between 1982 and 1995, Taiwan was awarded nearly 9,000 U.S. patents. U.S. patenting activity by inventors from South Korea shows a similar growth pattern. Before 1982, South Korea was awarded just 102 U.S. patents; since then, more than 4,500 new patents have been awarded. Inventors from China and Hong Kong also rapidly increased their patenting in the United States since 1982. Even so, when the number of U.S. patents awarded to China and Hong Kong in 1995 are combined, they represent less than one-tenth the number awarded to Taiwan in that year.
A country's distribution of patents by technical area has proved to be a reliable indicator of a nation's technological strengths, as well as an indicator of direction in product development. This section compares and discusses the various key technical fields favored by inventors in the world's three leading economies-the United States, Japan, and Germany-and in two newly industrialized economies-Taiwan and South Korea.
While U.S. patent activity spans a wide spectrum of technology and new product areas, U.S. corporations' patenting shows a particular emphasis on several of the technology areas that are expected to play an important role in future economic growth (U.S. OSTP 1997). In 1995, corporate patent activity reflected U.S. technological strengths in developing new medical and surgical devices, electronics, telecommunications, advanced materials, and biotechnology. (See text table 6-6 and appendix table 6-13.)
The 1995 patent data continue to show Japanese inventors emphasizing technology classes associated with photography, photocopying, and consumer electronics industries. (See appendix table 6-14.) What is also evident in 1995 is the broader range of U.S. patents awarded to Japanese inventors in information technology. From improved information storage technology for computers to visual display systems, Japanese inventions are earning U.S. patents in areas that aid the processing, storage, and transmission of information.
German inventors continue to develop new products and processes in technology areas associated with heavy manufacturing industries in which that country has traditionally maintained a strong presence. The 1995 U.S. patent activity index shows a German emphasis on motor vehicles, printing, new chemistry and advanced materials, and material handling equipment patent classes. (See appendix table 6-15.) German inventors have also stepped up their patent activity in some newer technology areas, such as biotechnology and opto-electronics.
Patent activity in the United States by inventors from newly industrialized economies can be seen as an indicator of these economies' technological development and as a leading indicator of U.S. product markets likely to see increased competition.
As recently as 1980, Taiwan's U.S. patent activity was primarily in the area of toys and other amusement devices. By the 1990s, Taiwan was active in such areas as communications technology, semiconductor manufacturing processes, and internal combustion engines (see NSB 1991). The latest available data (1995) show that inventors from Taiwan have continued to patent heavily in communications technologies and processes used in the manufacture of semiconductor devices; data also show heavy activity in computer storage and display devices, advanced materials, and transistors. (See text table 6-7 and appendix table 6-16.) Ten years earlier, inventors from Taiwan received no patents in any of these technology classes.
U.S. patenting by South Korean inventors has also shown rapid technological development. The 1995 data show that Korean inventors are patenting heavily in television technologies, electrical products, and advanced materials. (See text table 6-7 and appendix table 6-17.) South Korea's patenting has also expanded into a broader array of computer technologies that include devices for dynamic and static information storage, data generation and conversion, error detection, and display systems.
Both South Korea and Taiwan are already major suppliers of computers and peripherals to the United States. The recent patenting data show that their scientists and engineers are continuing to develop new technologies and improve existing technologies. It is likely that these new inventions will enhance these economies' competitiveness in the United States and in global markets.
In most parts of the world, foreign inventors account for a much larger share of total patent activity than in the United States. When foreign patent activity in the United States is compared with that in 15 other important countries in 1985, 1990, and 1995, only Russia and Japan had less foreign patent activity. (See figure 6-18 and appendix table 6-18.)
What is often obscured by the rising trends in foreign-origin patents in the United States is the success and widespread activity of U.S. inventors in patenting their inventions around the world. U.S. inventors lead all other foreign inventors not just in countries neighboring the United States (Canada and Mexico), but also in distant markets such as Japan, Brazil, Hong Kong, India, Malaysia, and Thailand. (See figure 6-19.) Japanese inventors edge out Americans in Germany and the United Kingdom, and dominate foreign patenting in South Korea. German inventors lead all foreign inventors in France, Italy, and Russia; they are also quite active in many of the other countries examined.
This section explores the relative strength of America's technological position by examining international patenting patterns in three important technology areas: advanced manufacturing, biotechnology, and advanced materials. To facilitate the patent search and analysis, these broad technology areas were each represented by a narrower subfield: robot technology as a proxy for advanced manufacturing, genetic engineering for biotechnology, and advanced ceramics for advanced materials. To ensure maximum comparability of data, this analysis is built around the concept of a "patent family"-i.e., all the patent documents published in different countries associated with a single invention. (See "International Patent Families as a Basis for Comparison.") [Skip Text Box]
A patent family consists of all the patent documents associated with a single invention that are published in different countries. The first application filed anywhere in the world is the priority application: it is assumed that the country in which the priority application was filed is the country in which the invention was developed. Similarly, the priority year is the year the priority application was filed. The basic patent is the first patent or patent application published in any of the roughly 40 countries covered in the database used in this section. This database, the Derwent World Patents Index Latest, covers basic patents published from 1981 to the present.
National patent systems, such as Japan's, that encourage large numbers of domestic patent applications skew counts of patent families over time as an indicator of technological activity. To eliminate this bias, international patent families are used as a basis of comparison. An international patent family is created when patent protection is sought in at least one other country besides that in which the earliest priority application was filed.
Three indicators are used here to compare national positions in each critical technology:
In each technology area, U.S. inventive activity is examined for the 1990-94 period, alongside that of five other countries: Japan, Germany, France, the United Kingdom, and South Korea.
As used here, robot technology covers program- controlled manipulators-e.g., the manipulator, program control, gripping heads, joints, arm sensors, safety devices, and accessories-and excludes non-program-controlled manipulators, prosthetic devices, and toy robots.
International Patenting Activity. During the first half of the 1990s, 1,719 international patent families were formed in robotics, with priority applications in the six countries examined. (See figure 6-20.) Patenting activity in the six-country group accounts for about three-quarters of all families in this technology area.
The conventional perception of Japan as an innovator in the area of advanced manufacturing techniques is reinforced by the large number of robot inventions originating in Japan. Japan led all other countries studied in the total number of international patent families in robot technology created during the 1990-94 period. Japanese inventors held 43 percent of the total number of international patent families formed by the six countries included in the study, followed by the United States (24 percent), Germany (16 percent), France (9 percent), the United Kingdom (4 percent), and South Korea (3 percent).
Japan ranks number one in patent activity when the entire five-year period is considered; however, this activity declined rapidly after 1992. At about the same time, U.S. activity picked up; in 1994, the United States led Japan in the number of international robot technology patent families formed.
Although South Korea's share of international patent families was the lowest overall, its share was comparable in size to that of the larger and more advanced economy of the United Kingdom (3.4 percent for Korea versus 4.2 percent for the United Kingdom). Given its newly industrialized economy status, South Korea's overall international inventive activity in this technology area is impressive-especially when the data show that South Korea's patenting activity in this technology area equaled that of the United Kingdom in 1994.
Highly Cited Robot Inventions. On this indicator, the United States led all countries-and by a wide margin-with 55.6 percent of all highly cited robot technology international families generated during the 1990-94 period (10 of 18). Japan (with 33.3 percent of the highly cited patents) and Germany (with 11.1 percent) trailed distantly. (See text table 6-8.) The United Kingdom, France, and South Korea did not have any international robot families in the highly cited group.
Only the United States had more highly cited international patent families than would be expected-2.3 times-based on its level of activity (i.e., based on the total number of U.S. international robot technology families). None of the other countries studied produced the expected number of highly cited inventions. Specifically, Japan produced only about 80 percent of what might be expected based on the number of inventions it produced during this period, and Germany produced only about 70 percent of what was expected. Again, France, the United Kingdom, and South Korea-with nearly 300 international robot patent families among them-had no highly cited robot inventions during this period.
The United States thus appears to have contributed a disproportionate number of important robot inventions relative to its level of inventive activity. This circumstance also may suggest that even though Japan had a higher number of international robot inventions, U.S. inventions were more technologically important.
Mean International Patent Family Size. This indicator attempts to measure the perceived economic potential of a robot invention by calculating, for each international patent family, the number of countries in which patent protection is being sought, adjusted for market size. When mean international patent family size is calculated for each country's robot technologies, there is not as much separation in the scores as might be expected. (See text table 6-9.) U.S. inventions received the highest score and therefore have the highest level of perceived commercial value based on this measure. South Korean inventions received the lowest score. Since most inventions are first patented in the country in which the inventor resides, U.S. inventions have an advantage in this indicator due to the large size of the U.S. economy. But European inventions also have the advantage of many commercial, locational, and historical ties that facilitate multiple-country patenting. Furthermore, the move toward European unification has encouraged wider patenting within Europe. Still, U.S. inventions scored slightly higher on average than did European robot inventions. Japan's robot inventions also scored well on this indicator, bolstered by the tendency of Japanese inventors to seek patent protection in large economies such as the United States and Germany (79 and 60 percent, respectively). South Korea scored remarkably well, but it too sought patent protection for most of its robot inventions in large markets like the United States (64 percent) and Japan (41 percent).
For this study, genetic engineering is defined as recombinant DNA (rDNA) technology. It includes processes for isolation, preparation, or purification of DNA or RNA; DNA or RNA fragments and modified forms thereof; the introduction of foreign genetic material using vectors; vectors; use of hosts; and expression. As used here, genetic engineering does not include monoclonal antibody technology.
International Patenting Activity. If the decade of the 1980s generally introduced genetically engineered products to the global marketplace, then the 1990s may become the decade when genetically engineered products come of age. Although slow compared to patenting in the previous decade, the number of international patent families grew steadily from 1991 to 1994, with the largest jump recorded in 1993. (See figure 6-21.) The United States is widely considered the global leader in the biotechnology field, and these data support that perception. The United States is the priority country (location of first patent application) for 63 percent of the internationally patented inventions created during the 1990-94 period; Japan follows with 13 percent, the United Kingdom with 10 percent, and Germany with 7 percent.
When the total number of foreign applications associated with each country's genetic engineering technology is considered, the United States continues to lead all other countries by a wide margin. The United States had more foreign patents than the other five countries combined, accounting for almost 64 percent of the nearly 42,000 foreign patents. The rankings and shares for the other five countries remain the same.
Highly Cited Genetic Engineering Inventions. Out of the 3,411 international patent families in genetic engineering formed by the six countries during the 1990-94 period, only 39 were considered highly cited inventions. The United States, with about 63 percent of the total international patent families recorded during the period, also had the largest proportion of highly cited international patent families-59 percent. (See text table 6-10.) Japan, with 13 percent of the total families, had just 10 percent that were highly cited. The United States, Japan, Germany, and South Korea all produced fewer highly cited patents than expected based on their shares of patent families associated with this technology. The United Kingdom produced the expected number of highly cited inventions based on its share of the total genetic engineering inventions patented internationally (citation ratio equal to 1.0). The only country that exceeded expectations on this indicator was France. France, with far fewer patent families overall than the other countries examined, produced more than three times the number of important or highly cited patents as expected based on its level of activity.
Based on this indicator, the United States leads the other countries in terms of the volume of important (highly cited) genetic engineering inventions it produced during the period examined. While it fell slightly short (citation ratio of 0.9) of what might be expected given its share of overall patenting in this technology, the total number of highly cited patents produced by the United States in this important technology area is nevertheless noteworthy.
Mean International Patent Family Size. Patented genetic engineering inventions developed in Japan and Germany appear to be the most commercially valuable, on average, based on this measure, although the scores for each of the countries are similar. (See text table 6-11.) Japan has sought patent protection in 11 countries whose combined economies are equivalent to 1.6 times that of the United States (based on GDP); German-origin inventions average 14.7 countries with a combined GDP equal to 1.5 times that of the United States. Patented genetic engineering inventions originating in the United States rank third in perceived commercial exploitation potential. Inventions originating in France, South Korea, and the United Kingdom all trailed the United States based on this measure.
National technological positions in the broad field of advanced materials have been assessed through an examination of international patenting activity in advanced ceramics. For this study, advanced ceramics are defined as ceramics (i.e., inorganic, nonmetallic solids) with compositions not usually found in traditional ceramics. These compositions include oxides, carbides, nitrides, and borides, as well as aluminate, titanate, zirconia, and modified silicates. The six countries analyzed represent approximately 90 percent of total international patent family activity by all countries in this technology.
International Patenting Activity. During the 1990-94 period, these six countries generated a total of 968 international patent families in the field of advanced ceramics. Annual formation of international patent families varied from a high of 264 in 1990 to 134 in 1994, which is the last priority year for which complete data are available.
Japan and the United States lead all other nations in the formation of international patent families involving advanced ceramics technology. Together they accounted for over 70 percent of the total formed in the five-year period examined. (See figure 6-22.) Japan held 39 percent of the total families formed (with 381 international families) over the period studied; the United States held 32 percent (with 310 international families). Germany, France, and the United Kingdom trailed with 16, 7, and 5 percent of the total, respectively. South Korea held 1 percent of the international patent families in this technology.
When the total number of foreign applications associated with each country's advanced ceramics technology is considered, the United States and Japan switch places, with the United States taking the lead in terms of total number of foreign patents sought for advanced ceramics technology. Out of a total of 7,025 advanced ceramics foreign patents generated from priority applications filed by the six countries during the 1990-94 period, the United States generated 40 percent (2,811 patents); Japan generated 24 percent (1,669 patents).
Highly Cited Advanced Ceramics Inventions. Out of the 968 international patent families formed during the 1990-94 period, only 23 were highly cited. Japan generated the greatest number of international patent families in this technology area during the same period, but the United States had the greatest number of highly cited inventions with 15 (or 65 percent of all highly cited international patent families). (See text table 6-12.) Japan was second with four. When each country's number of highly cited international patent families is adjusted to account for its overall volume of international patenting in this technology (citation ratio), the United States again leads all six nations. The United States had a citation ratio of 2.0-that is, twice as many highly cited international patent families as would be expected given its share of total families during the period. Japan's citation ratio, 0.4, suggests that the four highly cited international families it produced during this period were below expectations, given the total number of international patent families the country generated. The United Kingdom had only two highly cited international families, but exceeded expectations in this indicator with a citation ratio of 1.8. France and Germany each had one highly cited international patent family, falling below expectations given their share of total families in this technology.
Mean International Patent Family Size. The advanced ceramics inventions with the highest perceived foreign market potential, on average, were produced in France; these were closely followed by those produced in the United States. (See text table 6-13.) The United States also had the second largest number of international patent families for the period examined. Japan, the most prolific inventor of world-class advanced ceramics technologies during the 1990-94 period, trailed the United States and the large European nations in terms of average commercial potential for each invention. South Korea also trailed the leaders, but still made an impressive showing in this technology area, providing yet another indication of its progress in developing science-based technologies (see NSB 1993, p. 185).
Taken together, these indicators suggest strong U.S. inventive activity in advanced ceramics technology. While producing the second largest number of international patent families in this category during the period studied, U.S. inventions were the most highly cited and had nearly the highest average commercial potential when compared with inventive activity in the other five nations.
Based on this examination of international patenting, the U.S. S&T enterprise is producing inventions in important technologies that are able to be patented around the world. The U.S. lead in genetic engineering was most evident from this collection of international patenting indicators, but U.S. inventors also made a strong showing in robot technologies, especially in 1994.