International IP Applications: Current Status in the World and Japan

May 26, 2020

International Patent System

WIPO statistics on international applications in 2019 show that China was the top user of the Patent Cooperation Treaty (PCT) System that year, with an anticipated total of 58,990 applications filed. It overtook the expected total of applications by the United States of America (57,840 applications filed in 2019), which had maintained the position of top user since the PCT enter into force in 1978.

Japan ranked third after China and the US. The number of patent applications filed from Japan rose by 5.9%, surpassing 50,000 applications for the first time and eclipsing the global growth rate of 5.2%, with a tentative total of 52, 660 applications filed.

Japanese companies also compared favorably to those of other countries: of the top 20 companies in number of applications filed, six were from Japan, five from China, three from the US, and three from the Republic of Korea. The top three corporate filers were all from East Asia, with Huawei in the top position with an estimated 4,411 applications filed, followed by Mitsubishi Electric (2,661 applications filed) and Samsung Electronics (2,334 applications filed).

In contrast, Japanese universities hardly figured among patent applications filed by higher-education institutions. Although the University of Tokyo did rank 12th, US and Chinese universities made a clean sweep of the top positions. There were few Japanese universities among the top 50 users.

One explanation may be that Japanese universities and small-to-medium-sized entities do not yet sufficiently recognize the importance of patents. This situation may help account for the fact there is less licensing revenue and technology transfer in Japan than in Europe and North America. Furthermore, since a registered patent can provide the holder an exclusive monopoly for 20 years, it is expected that such a situation of higher education institutions could make a big impact on the race for leadership over basic technologies that will drive future innovation and markets, as well as on information and communication technologies, which are seeing a remarkable growth in the number of applications.

International Trademark System

As for the International Trademark System (Madrid System) the above-mentioned WIPO statistics indicate that in 2019 its use by Japanese companies was still small compared to Japan's economic scale. In fact, there is only one Japanese company among the top 50 companies using the Madrid System. This suggests that even large Japanese corporations do not sufficiently understand the advantages of this system (a single application and centralized management for all member countries, reduced application and representation fees).

Growth in trademark applications from the US were up about 14% over the previous year. This noticeable increase kept the US in top place. Seven of the top 50 applicants were from the US, some being medium-sized companies that joined the list for the first time.

International Design System

The same WIPO statistics likewise indicate that the use of the International Design System (Hague System) in 2019 by Japanese companies was still small compared to Japan's economic scale. Although the Republic of Korea became party to the Hague Agreement at about the same time as Japan, it makes more active use of the system, as seen by that fact that Samsung ranked 1st and LG 3rd among the top Hague filers.

Against the backdrop of intellectual property litigation with high damage awards, such as the Apple v. Samsung case in California, the Republic of Korea has made headway in developing differentiation strategies in its designs. However, as is the case with the Madrid System, Japanese companies are slow to use the Hague System, although offering similar advantages to all member countries such as a single application, reduced application and representation fees and centralized managment.