UK slumps to Ninth Place in European Patent Applications

According to the European Patent Office the UK has slumped from fifth place in the number of applications for European patents in 2004 to ninth in 2013. There were 6,469 European patent filings from the UK in 2013 which was an increase of just 7 from the 6,462 in 2004. By contrast, there 32,022 from Germany compared to 28,221 in 2004 and 12,417 from France in 2013 compared to 9,656 in 2004. But the real growth in applications has come from China (22,292 in 2013 compared to 1,880 in 2004) and South Korea (16,857 in 2013 compared to 5,721 in 2004).

For a more complete picture I have compiled the following table of the top 10 applicant countries based on European Patent Office data:

Country	2012	2013
USA	63,198	64,967
Japan	51,791	52,437
Germany	33,850	32,022
China	19,182	22,292
South Korea	14,791	16,857
France	12,285	12,417
Switzerland	8,129	7,966
Netherlands	6,489	7,606
UK	6,666	6,469
Sweden	4.654	5.094

The UK's performance is even more depressing when the number of applications per million inhabitants are taken into consideration (see the table on page 15 of Facts and Figures for 2014 that can be downloaded from the "Publications" page of the EPO website). The UK comes 16th in that league with 72 European patent applications per million inhabitants.  Top of the list is Switzerland with 832 European patent applications per million inhabitants followed by Sweden (402), Finland (360), Denmark (347), Netherlands (347) and Germany (328). Japan comes 9th with 177 European patent applications per million inhabitants, France 10th with 148, South Korea 12th with 129, the Republic of Ireland 13th with 115 and the USA 15th with 107.

Why does the UK do so badly in the number of applications to its home patent office in comparison with its global competitors? I used to think that it was because of the high cost of enforcement in the UK compared to France, Germany and the Netherlands. The rule changes limiting the costs and duration of proceedings in the Patents County Court (now IPEC) in October 2010 addressed that problem but  the number of European patent filings from the UK has actually fallen from 7,146 in 2010 to 6,469 in 2013.

Paradoxically a report by Silicon Valley Bank on Innovation Economy Outlook 2014 published this week paints a rather rosy picture for the UK. This report may well contain the answer. Much of the UK's growth has been in the service sector, especially financial and professional services and information technology for which patents are not available. Manufacturing in the UK is less important than it is in our continental and East Asian competitors.

If that is the explanation it suggests a failure of Coalition policy since 2010 to rebalance the British economy from one that is heavily dependent on services and the public sector to an economy based on manufacturing and exports.