In case you missed it, last week the European Patent Office (EPO) released its European Patent Index (EPI) for 2020 which saw the number of European patent applications filed at the EPO drop by 0.7% compared to 2019. If you would like to know more about what the European Patent Index is and why it is significant, please see my earlier blog post here. This is the last in a two part series that will dissect the data released in this year’s EPI and what it may reveal for the state of innovation for certain sectors within Europe.
Who is filing patents at the EPO?
A stark fact shown by this year’s release is that only 45% of patent filings at the EPO actually originate from European entities, with the majority of European applications coming from outside of the EPO member states. The US (25%), Japan (12%), China (7%) and South Korea (5%) make up the bulk (49%) of all foreign applications at the EPO and, interestingly, 4/5 of the top five filers for 2020 are all based outside of Europe, which shows how important Europe is to outside markets. To put this into perspective the top two filers, Samsung and Huawei, in combination have filed more European patent applications last year than all of the UK based entities combined, 12% more in fact, again emphasising the importance of Europe to large non-European organisations. However, the data is perhaps also suggesting a lack of interest from UK based entities to seek protection in Europe. This is backed up by the fact that, on the whole, UK businesses prefer to keep and protect their innovations in the UK. Data published by the UK Intellectual Property Office (UKIPO) in 2019 confirms this by revealing that UK businesses filed nearly double the volume of patent applications at the UKIPO compared to the EPO in the same year.
Software is patentable
It is a common misconception that it is impossible to gain patent protection for a computer-implemented invention (CII), while it is true that software per se is unpatentable at the EPO, there are exemptions to the rule. In response to the recent birth of the 4th industrial revolution, the EPO released its guidance for the examination of CII’s in 2018 which states CII’s may be patentable if they can show a ‘technical effect’. In other words, if the CII is used for a technical application outside of the computer, or if the CII improves the functionality of a computer system in a novel and inventive way, it may be patentable at the EPO. Since the publication of the guidance, there has been a surge in the number of European patent applications filed in the field of Computer Technology, with there being a 13% increase in volume since 2018. This only reiterates the fact that the perception is changing when it comes to software and AI related inventions.
The Covid Effect
Now this wouldn’t be proper 2020 review if COVID-19 wasn’t mentioned somewhere in this blog post. But the recent EPI shows the effect COVID-19 has had, both positively and negatively, on specific industries. For example, MedTech, Pharma and Biotech all saw big increases in filing volume with an uptake of 2.6%, 10.2% and 6.3% respectively, but this was expected given the need for speedy advances in vaccine technologies and diagnostic capabilities. Conversely, there was a sizable drop in transport related filings (-5.5%) on the previous year, more stark is the drop in the UK’s contribution to transport filings which is down 27%. However, it was the aviation industry that took the biggest hit with patent filings down by 25% on last year, which only exacerbates the impact COVID-19 has had on the industry.
Hindsight is 20/20 and perhaps some of these trends may have been predictable before the release of this year’s EPI, however the size and intensity of the trends are harder to predict. Even though the overall picture is one of resilience during the pandemic, it is clear when diving into the detail that COVID has had a seismic impact in industries such as healthcare, manufacturing, and transport. It will be interesting to see what the long term effects of COVID are on filing activity, but that is a question best answered by future releases of the EPI.