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Technovation 25 (2005) 657671

www.elsevier.com/locate/technovation

Growth of software related patents in different countries


Douglas H. McQueen*
Firma DMQ Business, Master Bengtsgatan 10, S-412 62 Goteborg, Sweden

Abstract
The distribution of software related patent applications in fifteen European countries, the United States and Japan has been determined for
1987, 1990, 1993, 1996 and 1999 using a bibliometric technique. The results were used for extrapolation to 2002 and 2005. The patent
applications were identified using search words extracted from patent claims concerning various aspects of computer software. World-wide,
the annual growth in the number of these patent applications is about 19%. In Europe and the United States there are signs of saturation in the
growth rate while in Japan the growth continues to be exponential. The largest numbers of applications are assigned to IPC patent section G
(Physics), in particular to classes G11, G09, G01, G06, G05 and G08. The next most populous class is H (Electricity) represented most
strongly by classes H01, H03 and H04. Growth in the number of software related patent applications is especially strong in section C
(Chemistry), represented most strongly by class C07 followed by classes C12 and C08, which may overtake section H in the near future. Most
applications assigned to section B (Performing operations; transporting) are in class B60 while in section A (Human necessities) the most
important class is A61.
In Europe, Germany dominates patenting in general and software related patenting in particular. The number of European software related
patent applications slackened considerably in 1999. This slackening is observable over the whole spectrum of patent sections and classes in
which software related patents are significantly present. Since there was no corresponding slump in patenting in general, this slackening is
interpreted as related to conditions in the software sector in particular rather than to general economic conditions or the like.
The importance of the EPO as a receiving office for software related patent applications (priority establishing applications) has increased
relative to national receiving offices during the nineties.
q 2004 Elsevier Ltd. All rights reserved.
Keywords: Software; Patent; Computer

1. Introduction the areas in which embedded software can be found are


many and varied.
The importance of information technology has increased This great variation in fields of application for embedded
significantly over the last decades. Information technology software led to an investigation of patent applications on
inventions related to software (McQueen and Olsson, 2003).
in the form of embedded software is now to be found in
It was based on a bibliometric method of identifying such
products that traditionally only included mechanical and
patent applications that makes use of a number of carefully
electrical components. Examples are cars, medical equip-
chosen search words. They were applied to the titles and
ment such as patient monitoring systems and home
abstracts of WO patent applications in the Derwent World
appliances such as freezers and microwave ovens. These
Patents Index for the patent priority years 1988, 1993 and
examples represent old fields in which the potential of
1998, and thus concern patents world wide as a whole. The
information technology is beginning to be realized. The
main results of that study are that the number of these patent
growth of information technology has also led to the applications increased each year at an annual rate of about
emergence of new fields based on information technology. 17% while the distribution over IPC patent classes narrowed
Examples are the game industry and simulators, industrial only slightly. In terms of patent classification sections,
robots and automated manufacturing processes, telecom- in 1998 over 41% of all software related patent applications
munications and home entertainment equipment. Clearly were in section G (Physics) while section H (Electricity)
contained another 36% of them. In terms of patent
* Tel./fax: 46-31-203-302. classes, the most important patent classes are H04
E-mail address: douglas@minmail.net (Electric communication technique) and G06 (Computing;
0166-4972/$ - see front matter q 2004 Elsevier Ltd. All rights reserved.
doi:10.1016/j.technovation.2003.10.005
658 D.H. McQueen / Technovation 25 (2005) 657671

calculating; counting) accounting for a little more than 40% Thus in our previous work as well as here the patents
of all software patent applications. identified concern software in general, both in computers
Since the assignment of patent applications to patent and in electro-mechanical systems.
classes is mainly according to the character of the problem The patentability of computer programs is a central
to be solved and its solution, rather than the field of the concern in the present context. Whether an invention based
application of the solution found, these statistics relate to the partly or solely on computer programs or software is
technical problems solved by the inventions. This is in patentable or not has been, and still is, the subject of much
contrast to economic statistics on the distribution of debate. The conditions under which patent applications
software over branches of industry that characterizes the including software are patentable vary from country to
application of the problem solutions. There is a study country and with time. The following short discussion is
presenting estimates of the computer software content in six based mainly on the work on this subject by Olsson (Olsson,
industrial sectors in Sweden (McQueen et al., 1998). The 1996) which was completed in 1996.
percentage of sales in each sector that can be ascribed to According to the European Patent Convention Article
software was used to characterize the software content. 52(1) European patents shall be granted for any inventions
According to the estimates in the study, the percentage which are susceptible of industrial application, which are
software in the machinery sector (mainly due to CNC new and which involve an inventive step. An invention is
machines and industrial robots) increased from essentially industrially applicable if it can be used in any kind of
zero in 1981 to 8% in 1995 (real annual growth rate, industry where industry is to be understood in a broad
inflation corrected, 24%). The transportation equipment sense as including any physical activity of technical
sector (including aviation and rail transportation) had a character. This means that in Europe a patentable invention
corresponding increase from 1 to 8% (real annual growth must have technical character. For the EPO an important
rate 18%). Information technology in the electronics sector shift toward more liberal interpretation of the technical
(excluding telecommunications and computers) rose from 3 character requirement occurred in 1986 (the VICOM case).
to 15% (real annual growth rate 18%). In the telecommu- In the United States a patentable invention is new,
nications sector the percentage software increased from 5 to unobvious and useful. The usefulness or utility requirement
60% (real annual growth rate 22%). Even if the methods is less stringent than the European technical character
used to obtain these estimates are not very accurate or requirement since computer programs can be useful without
totally reliable, it is clear that the importance of information necessarily being of technical character. Thus some compu-
technology is increasing steadily (average annual growth ter programs or information technology may be patentable in
rate in these sectors about 21%) on a wide front. This the United States but not in Europe (for example, Internet
average annual growth rate is not much higher than the patents and business method patents). This relatively liberal
rate of growth of software related patent applications, interpretation of usefulness has been developing in the
about 17%. United States at least since 1974 (In re Johnston).
An obvious next step in this investigation is to study how In Germany, a change due to the VICOM case took place
the numbers of software patent applications and their annual in 1987. A further liberalization step took place in 1991 (the
growth are distributed by country, both in Europe and in the Page Buffer case). In Sweden a significant liberalization took
United States and Japan. This is the main emphasis of the place in 1990 (the Philips case) and today the Swedish Patent
work presented in the following. As in the previous study, it Office claims to be in line with the European Patent Office.
is based on applying the search words to the titles and The situation has been a little different in the United
abstracts of patent applications in the Derwent World Kingdom since the Merrill Lynch case (1989) has been
Patents Index (WO applications). Five patent priority years perceived to prevent patenting inventions consisting only of a
were investigated (1987, 1990, 1993, 1996 and 1999) to computer program in combination with a general purpose
better define growth rates. Results were tabulated in computer. The real importance of the Merrill Lynch case in
spreadsheets for the United States and Japan and for fifteen this context may be very limited, but the perception of
different European countries as well as for applications significant restriction may affect propensity to patent in this
submitted directly or indirectly to the European Patent area.
Office (EPO) or to other receiving offices included in the According to a report on a symposium at the European
World Intellectual Property Organisation (WIPO). Patent Office in Munich on 21 22 November 2002
In our previous work (McQueen et al., 1998; McQueen concerning computer programs and patents (Larsson,
and Olsson, 2003) the term embedded software was used 2003), in Japan patent examination criteria concerning
to emphasize that the software is designed to operate in a technical character are intermediate between those applied
technical environment, as required by European patent law. by the USPTO and by the EPO. The patentability criteria
Another use of the term embedded software implies that applied by the French Patent Office appear to be similar to
the software is used in some sort of electro-mechanical those applied by the EPO.
system, as opposed to in computers per se. This is probably In the following, a short literature survey is presented
a more common usage of the term and it is adopted here. before going on to a description of how the statistical results
D.H. McQueen / Technovation 25 (2005) 657671 659

were obtained. After a short description of the curve fitting 1996; Ernst, 1995; Archibugi and Pianta, 1996; Liu and
procedure the results are presented, analyzed and discussed. Shyu, 1997; Ernst, 1998; Grupp and Schmooch, 1999) or of
Finally, some conclusions are drawn. technology in general (Griliches, 1981; Patel and Pavitt,
1987; Narin and Olivastro, 1988; Pavitt, 1988; Pavitt and
Patel, 1988; Griliches, 1990; Chakrabarti, 1991; Archibugi
2. Patent statistics, innovation studies and bibliometric and Pianta, 1996; Kondo, 1999; Grupp and Schmooch,
searches 1999). In their review article Archibugi and Pianta (1996)
discussed the strengths and weaknesses of patent statistics
There is an ongoing debate about patent law, patent as measures of technical development, pointing out several
litigation, patent offices and related subjects, perhaps more of the weak links in the chain from technical ideas to
voluminous concerning conditions in the United States than industrial innovation and production. For instance, not all
conditions in Europe. According to recent publications inventions are patentable and not all patentable inventions
(Hart, 1997; Tamai, 1998; Kortum and Lerner, 1999; are patented. Propensity to patent can vary with firm size,
Beresford, 2001; Maschio and Kowalski, 2001) evaluation industry branch and country. They compared the use of
of the patentability of software related inventions at the patent statistics with innovation surveys as means of
USPTO and at the EPO appears to be converging toward assessing technical change, thus making some of the
similar (but not identical) criteria and methods. Very weaknesses of patent statistics in this connection even
recently, the USPTO has been granting Internet patents more clear. For instance, only about half of all patents are
and business method patents, neither of which is allowed ever used by their owners. In a previous review article Pavitt
under European patent law (Hunt, 2002). Further, for (1988) discussed assumptions behind various uses of patent
several years the USPTO has published patent application statistics and interpretations of the results of their use. He
documents eighteen months after the priority date of the assumed that patent statistics reflect both inventive and
patent, as has the EPO for decades. However, the patent innovative activities, an assumption not necessarily shared
classification system used by the USPTO, based primarily by others. He pointed out that while patent statistics are
on structure and function, is significantly different to the difficult to compare with industrial statistics, it has been
International Patent Classification (IPC) system, which is found that the relation between R&D expenditure and
primarily industry and profession oriented (USPTO, 1973, patenting activity is strongly dependent on industrial sector.
p. 154.3, cited by Kortum and Lerner (1998), appendix Connections between patenting and sales, exports and other
A.2.2). The IPC system was used in this study. economic measures, both at the corporate and industry level,
Patent applications are often taken as indications of have been established and discussed at length for many
inventive activity in spite of the fact that most inventions are years (Pavitt, 1982; Griliches, 1990). In his survey Griliches
not patented, for instance because they may not be technical, (1990) discussed difficulties in assigning patent applications
not new or perhaps not inventive or because of economic to patent classes and in relating patent data to industrial
considerations or constraints. Further, most patented ideas economic data. He also pointed out that patent offices affect
never generate much income. Thus the connection between the numbers of patent applications that are granted in a
patent applications and innovation can be rather tenuous. given time period through various policy decisions and
This has been discussed extensively in the literature. Some through variations in their capacity to examine the
useful review articles are Griliches Patent statistics as applications. There are some arguments that the working
economic indicators: a survey (Griliches, 1990), Archibugi situations of patent examiners at the USPTO are such that
and Piantas Measuring technological change through proper prior art searches are the exception rather than the
patents and innovation surveys (Archibugi and Pianta, rule (Aharonian, 1999; Barton, 2000). The result can be that
1996), Pavitt and Patels The international distribution and patents are granted that should not be granted because they
determinants of technological activities (Pavitt and Patel, in fact do not fulfil the requirement of absolute novelty. It is
1988) and Pavitts Uses and abuses of patent statistics also worth noting that the ratio of granted patents to patent
(Pavitt, 1988). These reviews and some other relevant applications at the USPTO has varied widely during the last
literature have been discussed in the context of software century (Kortum and Lerner, 1999), possibly due to
related patents by McQueen and Olsson (2003). In the variations in the work loads of the examiners, among
present case patent applications concerning software are other things (Griliches, 1990). Thus the number of patents
taken as an indication of a certain type of technical activity, granted need not follow the number of patent applications.
the development of computer programs for integration into a By way of illustration of this point it can be noted that
physical environment as required by patent law. during the 90s the number of EPO patent applications
A large body of published work concerns patents and/or increased at an annual rate of about 10.5% while the number
patent applications as indicators of the development and/or of EPO patents granted decreased at an average annual rate
spread of particular technologies (Pavitt, 1982; Patel and of about 4.9% per year.
Pavitt, 1987; Narin and Olivastro, 1988; Pavitt, 1988; Other work concerns the use of patent or patent
Lennon, 1994; Jacobsson et al., 1996; Joly and de Looze, application statistics, that is, methods of gathering
660 D.H. McQueen / Technovation 25 (2005) 657671

patent/patent application statistics and methods of evaluat- patent class 364. The accuracy of such estimates has
ing them (Pavitt, 1988; Pavitt and Patel, 1988; Griliches, been called into question partly because it is difficult to
1990; Joly and de Looze, 1996; Ernst, 1995; Archibugi and determine how many patents without mention of
Pianta, 1996; Liu and Shyu, 1997; Grupp and Schmooch, computer software are included in these patent classes.
1999). In this context it is clear that patent applications are a Another serious difficulty with this data is that there can
different measure of innovative activity than are granted be many patents including computer software not
patents (Griliches, 1990). In recent years the European assigned to class 364 or 395 but to other patent classes.
Patent Office databases have become quite valuable for Other methods have also been used (see Gregory
studies of patenting in Europe since patent application Aharonian, International Patent News Service, www.
examination is nearly the same for applications from all patent-software.com).
countries instead of country dependent, as previously With the possible exception of the US patent class 395,
(Griliches, 1990; Grupp and Schmooch, 1999). Advantages neither the patent classification systems nor the industry
of using patent application statistics rather than patent branch codes contain categories that properly and inclu-
statistics are that the patent application comes in first, that is, sively identify software related inventions or products/firms
as near as possible to the moment of invention, and that the /industries. Computer software, and especially software
statistics are not directly affected by patent office examin- embedded in industrial products, is presently in the widest
ation policies (Griliches, 1990). variety of patent applications and patents as well as in the
Another group of publications concerning patent and widest variety of industries and commercial entities in
patent application statistics focuses on the results of the general (McQueen et al., 1998). It is probably a hopeless
statistical analysis, for instance tracing the development of a task to find a way of identifying computer software by class
technology or an industry or even of a country (Pavitt, 1982; or code within the framework of the classification systems
Patel and Pavitt, 1987; Pavitt, 1988; Pavitt and Patel, as they are configured at present. However, bibliometric
1988; Chakrabarti, 1991; Lennon, 1994; Jacobsson et al., search techniques can be successfully used to find most
1996; Ernst, 1995; Archibugi and Pianta, 1996; Patel and
computer program related patents in patent databases, as
Pavitt, 1997; Malerba and Orsenigo, 1999). Relationships
was shown in previous work (McQueen and Olsson, 2003).
between patent data and R&D data, firm sales and/or
It has long been possible to apply bibliometric search
number of employees have been investigated (Griliches,
techniques (key word searches, author searches and the like)
1981; Pavitt, 1982; Pavitt, 1988; Pavitt and Patel, 1988;
to patent data (Liu and Shyu, 1997). It might be surprising
Griliches, 1990; Jacobsson et al., 1996; Ernst, 1995;
that this has not been done more often but perhaps searches
Archibugi and Pianta, 1996; Ernst, 1998; Kondo, 1999),
based on patent classifications have generally been
often with inconclusive results. Archibugi and Pianta (1996)
satisfactory. One area in which it is not possible to use the
pointed out that neither R&D data nor patent data give
patent classification scheme effectively is software.
comparable results for small and large firms, partly because
standard methods of collecting R&D data underestimate the A similar situation arises in the field of biotechnology.
amount of R&D carried out in small firms. In some fields This new generic technology interpenetrates many fields of
small firms make relatively large contributions to technical science and engineering and is therefore difficult to capture
innovation while in other fields they appear to be in a single patent class. Instead, biotechnology patents can
disadvantaged. Especially in Europe, small firms in general be mainly found in several specific IPC classes as well as
may be disadvantaged by the high cost of European patents. spread thinly over a wide range of other patent classes (Joly
One way to attempt to follow the development of and de Looze, 1996). In order to obtain a good sample of
software-related patenting is to identify patent classes in patents in plant biotechnology Joly and de Looze (1996)
which software is particularly important. Several such intersected the results of bibliometric searches using
USPTO patent classes have been listed by Mykytyn et al. carefully chosen keywords together with experts in plant
(2002), for instance. Kortum and Lerner (1998) tried to biotechnology with IPC classes concerning biotechnology.
identify software patents by first identifying firms They then used a scientometric method, co-word analysis, to
specialising in software and then by identifying the identify 26 more or less coherent research programs within
patent classes to which their patent applications were the larger field of plant biotechnology. The research
most often assigned, among them H04J and H04K programs revealed useful information concerning the
(Kortum and Lerner, 1998; Kortum and Lerner, 1999). structure of commercial activities in plant biotechnology.
Total patenting in these classes was then used to estimate There appear to be few studies similar to that of Joly and de
the number of software patents. Lennon (1994) made use Looze reported in the literature. This should not be taken to
of US patent class 364 (Electrical computers and data mean that these methods are not used by various
processing systems) and US patent class 395 (Infor- commercial organizations. Possibly based on experience
mation processing system organization) to estimate of such commercial use of keyword searches, Liu and Shyu
numbers of software related patents. US patent class (1997) discussed some of the problems associated with the
395 was created in 1991 and absorbed some parts of use of keywords for patent searches.
D.H. McQueen / Technovation 25 (2005) 657671 661

3. Patent application data acquisition equally, often to two or three patent classes or patent
subclasses. If an application is classified in two subclasses
The search profile was assembled explicitly to character- belonging to the same class (often the case) it is counted
ize the distribution of software patent applications in the twice in that class and if it is classified in two different
International Patent Classification system (IPC 6) at different classes (less common) it is counted in each of them. The
points in time. A previous report (McQueen and Olsson, resulting numbers of patent applications, classified
2003) contains more information on how the search profile according to year, country/organization and patent class,
was developed and tested. It was applied to the Derwent were listed in spreadsheets for further analysis. On average,
World Patents Index based on international (WO) patent the numbers of patent application assignments in the
application abstracts collected from forty patent-issuing spreadsheets are about 75% greater than the numbers of
authorities, that is, the title and abstract texts of patent patent applications counted once per patent family.
applications with the designation WO. In the Derwent World A patent application can be filed at EPO by any natural or
Patents Index the titles and abstracts of the patent legal person regardless of nationality or place of residence
applications have been re-written in order to make them or business. When an application is first made to a national
more informative than the original documents might have receiving office, priority can be claimed for a European
been as well as to make it possible to search the documents in patent application based on that national application.
a single language (English). Their purpose is to briefly inform However, it is also possible to file the priority establishing
readers of the contents of the respective patent documents. document directly at the EPO, in which case the patent
Five different priority years (the oldest reference date) application priority is designated EPO. This is effectively
were investigated: 1987, 1990, 1993, 1996 and 1999. what happens in the now common procedure when Euro-
Originally the study was to be based on the priority years PCT (international) applications are filed requesting a
1988, 1991, 1994, 1997 and 2000 but initial trials suggested European patent. Thus to evaluate the number of patent
that the data for 2000 was not complete. Therefore the series applications from European sources the data from each of
was shifted back a year. The identified applications were the countries must be summed and then increased by the
classified according to the country or organization in which portion of EPO priority applications that come from
they were first filed (not necessarily the country where the European sources. For software related patent applications
inventors were domiciled). Table 1 shows the countries and this latter portion is not known.
organizations to which patent applications were assigned in It is interesting to characterize the distribution of the
this study. patent application assignments over the 118 patent classes.
The first fifteen countries in Table 1 will be referred to One useful measure is the number of patent application
here as the Europe 15, which is not the same as EU 15 as assignments in the twenty most populous patent classes
the term is used for instance by the European Commission. compared to the total number of such patent application
Each identified patent application was counted once for assignments for the 118 classes. This measure seems to be
each of the IPC patent classes (or patent subclasses) to useful. A measure of the distribution of patent application
which it was assigned. About 50% of the applications are assignments over the twenty most populous patent classes
assigned to one class only while the rest are assigned about could be provided by the entropy measure (the negative of
the sum of the logarithms of the fractions of assignments in
Table 1 each of the twenty classes). This measure was applied and
Countries and organizations in this study studied and finally rejected because it appears to be
misleading in the present case. When applied on a country
AT Austria
BE Belgium by country basis the entropy turned out to be higher for the
DK Denmark countries with low numbers of applications. Rather than
FI Finland indicating something about the industrial structures giving
FR France rise to patent applications in these countries, this is more
DE Germany
likely a simple size effect aggravated by the double and
IE Ireland
IT Italy treble counting mentioned above playing a more and more
NL Netherlands important role as the numbers of independent patent
NO Norway applications is reduced.
PT Portugal
ES Spain
SE Sweden
CH Switzerland 4. Estimating the parameters of the logistic curve fit
GB United Kingdom
EP European Patent Office EPO A fairly good description of the temporal development of
WO World Intellectual Property Organization WIPO the numbers of patent applications can be developed by
JP Japan
fitting a logistic function of the form p Aexpx=
US USA
1 expx to the data where A is the adjustable amplitude
662 D.H. McQueen / Technovation 25 (2005) 657671

and xayyo with a being the adjustable growth rate, y the 5. Results
year and yo the adjustable inflection year (the middle of the
curve). It is not practically possible to use straight-forward To begin with, the numbers of software related patent
least squares fitting techniques here because the resulting application assignments per country/organization summed
system of three equations to be solved is both complicated over all patent classes is tabulated in Table 2. Columns 2 6
and non-linear. However, if a good estimate of the contain the data extracted using the bibliometric search.
amplitude A of the curve is available, then the quotient Columns 7 and 8 show the results of fitting the data to logistic
p=Ap can be formed. Its logarithm is equal to xay yo functions as described above and then evaluating the results
and simple least squares fitting gives a and yo. for the years 2002 and 2005. Columns 9 and 10 show the
A first estimate of the amplitude A is twice the average of logistic function growth rate in percent and the inflection
the numbers of patent applications for each of the five years. year.
This can be used as a starting point in a search for the value The estimates given for 2002 and 2005 are based on all
of A that minimizes the least squares deviation of the data five of the priority years from 1987 to 1999. As extrapol-
points from the fitted logistic function. The search is easily ations they are only fairly accurate, for statistical reasons
implemented using the Excel Goal Seek tool. The result is (limited numbers of data points, noise in the data, etc). As
best least squares estimates of the amplitude, growth rate predictions they cannot be highly accurate because changes
and inflection year. Inflection years from around 1985 to in external circumstances such as the state of the economy or
around 2000 can be assumed to be fairly accurate, but later the state of the telecommunications industry or patent
inflection years are less so as the data on which they are application and granting practices are not taken into account.
based extend only to 1999. Thus an inflection year of about Further, there are significant numbers of applications that
2010 or later really only indicates that the growth in patent were given EPO priority and thus in this study cannot be
application numbers is essentially exponential with no sign assigned to a specific country. According to statistical data in
of saturation. Inflection years in the eighties and early EPO annual reports, about 49% of all EPO patent
nineties indicate significant saturation effects. applications originate from European countries, about 18%
A useful way of evaluating the result is to extrapolate to from Japan and about 29% from the United States. The
the years 2002 and 2005. These extrapolations together with remaining almost 4% come from other countries. Thus over
the annual growth rates in percent and the inflection points 90% of EPO patent applications not originating from the
of the logistic curves provide the best available description United States or Japan come from European countries. In
of the data. terms of numbers of applications the most important other

Table 2
Country by country results for the sums of software related patent application assignments over all patent classes. The European countries are arranged in
descending order according to the extrapolations

Country/organisation Data 1987 Data 1990 Data 1993 Data 1996 Data 1999 Extrapolations Growth rate % Inflection year

2002 2005

Germany 1386 2027 2745 2981 2087 2888 2964 14 1984


Spain 183 560 889 875 171 635 668 4 1993
Norway 171 276 312 458 530 620 689 16 1996
France 151 240 260 323 435 547 695 8 2058
United Kingdom 172 221 274 339 416 493 574 10 2004
Finland 123 273 391 437 143 352 374 7 1991
Sweden 79 113 161 163 201 205 209 26 1989
Netherlands 47 23 37 72 84 94 117 8 2029
Italy 22 33 47 59 73 83 91 18 1994
Austria 8 20 17 22 32 40 51 11 2011
Belgium 1 1 7 12 21 26 28 38 1997
Switzerland 39 40 22 17 12 6 3 222 1993
Ireland 4 49 10 2 8 4 2 216 1986
Denmark 163 148 27 9 14 2 0 243 1991
Portugal 33 59 48 1 1 0 0 281 1994
Europe 15 2585 4083 5251 5783 4236 5650 5759 18 1985
EPO 1936 2731 3537 5223 7535 10,023 13,568 12 2018
Europe 15 EPO 4521 6814 8788 11,006 11,771 12,507 12,854 24 1990
Japan 1804 2092 2899 4376 5623 7465 9922 10 2026
United States 1714 2665 3858 5758 5615 6194 6355 27 1991
WIPO 2185 3739 5069 7480 10,567 14,274 18,334 15 2005
Sum World 14,745 22,124 29,402 39,626 45,347 50,875 54,374 19 1993
D.H. McQueen / Technovation 25 (2005) 657671 663

countries are Australia, Canada, Israel, the Republic of curve characteristics for WIPO are more similar to those of
Korea; Israel and Taiwan. In the case of WIPO the Japan than those of Europe and the United States. Globally,
applications need not come from Europe, the United States software related patent applications show a definite tendency
or Japan, but can come from Canada, the Republic of Korea, to saturation.
Russia, Australia, Israel or India or any other country such as Table 3 shows the numbers of patent application
China. Since the data arranged under the headings EPO and assignments in each of the eight patent sections summed
WIPO in Table 2 cannot be definitely characterized with over the Europe 15 countries, the United States and Japan.
respect to countries or even regions of origin, it will be used The overall annual growth rate is about 26% with a
sparingly in the following. saturation limit at about 17,500. As a rule, the average
During the nineties the total number of PCT (inter- annual growth rates are 25 30% with inflection years
national) patent applications grew at a very high rate, around 1990, that is, with significant saturation. Exceptions
increasing by almost a factor of three between 1995 and are sections B and C where the growth is exponential.
1999. Table 2 shows that the numbers of software related Section C appears to be the real growth star. The clearly
patent application assignments designated EPO and WIPO dominant patent section is G (annual growth rate 25%).
show similar trends. Sections B, C and H are about half as large. In general the
Table 2 shows that among European countries Germany trend is toward a more even distribution of these patent
is the major player with about half of the application application assignments over the eight patent sections.
assignments for which the priority establishing documents Table 4 shows the same sort of data but grouped for the
were submitted to European national receiving offices. The Europe 15 countries, the United States and Japan. For the
actual share of software related patent applications from Europe 15 countries and for the United States the saturation
Germany may be somewhat lower as patent applicants limits (about 6000 and about 6500) have almost been
resident in other countries, especially the smaller ones, may reached while for Japan this limit is still far in the future.
more often choose to apply directly or indirectly (via Euro- The differences in the distributions of application assign-
PCT applications) to the European Patent Office rather than ments over patent sections between the three regions are
through national receiving offices. small. An exception is section C where the Europe 15
For the Europe 15 group of countries there is a clear number is only half of the corresponding values for the
tendency toward saturation which began to make itself felt in United States and Japan. For the Europe 15 countries the
the early nineties (inflection year 1985). This may be partly data for 1999 show a significant drop compared to 1996,
due to an increased tendency to apply to the European Patent while for the United States there is an insignificant decrease
Office (often via Euro-PCT applications) rather than to and for Japan the 1999 numbers are higher than the 1996
national receiving offices. The data for EPO show exponen- numbers. The important sections G and H show low growth
tial growth with no hint of saturation. The data for the sum of rates for Europe (14% and 11%, respectively) and Japan
the Europe 15 group plus EPO (a clear overestimate of (14% and 7%, respectively) compared to the United States
European patenting) shows a diminished but still significant (27% and 28%, respectively).
tendency to saturation (inflection year 1990). Table 5 is similar to Table 4 except that it is based on the
With respect to growth rate and inflection year the logistic twenty most populous (in terms of software patent
curve fit for the United States data is quite similar to that for applications) of the altogether 118 patent classes. For each
the Europe 15 group plus EPO. This is in contrast to the data of the Europe 15, the United States and Japan the patent
for Japan which shows no sign of saturation. The logistic classes are arranged in decreasing size according to the 2002

Table 3
Section by section results for the sums of software related patent application assignments over European countries, the United States and Japan

Section Data 1987 Data 1990 Data 1993 Data 1996 Data 1999 Extrapolations Growth rate % Inflection year

2002 2005

A 401 578 1004 1303 1064 1297 1317 28 1989


B 1412 1213 1757 2165 2462 2883 3398 6 2050
C 294 473 846 1172 2010 3154 4922 16 2019
D 26 95 230 123 268 279 288 33 1993
E 46 150 220 261 209 265 271 28 1990
F 263 385 557 799 840 928 966 24 1992
G 2497 3783 4694 6487 5731 6520 6642 25 1989
H 1164 2163 2700 3607 2890 3567 3618 27 1988
Sum 6103 8840 12,008 15,917 15,474 16,733 17,066 26 1989

Section A: Human necessities; Section B: Performing operations; transporting; Section C: Chemistry; metallurgy; Section D: Textiles; paper; Section E:
Fixed constructions; Section F: Mechanical engineering; lighting; heating; weapons; blasting; Section G: Physics; Section H: Electricity.
664 D.H. McQueen / Technovation 25 (2005) 657671

Table 4
Section by section results for the sums of software related patent application assignments separately for the Europe 15 countries, the United States and Japan

Country Section Data 1987 Data 1990 Data 1993 Data 1996 Data 1999 Extrapolations Growth rate % Inflection year

2002 2005

Europe 15
A 228 286 451 435 252 397 414 5 1985
B 632 581 815 864 771 875 903 10 1982
C 144 250 383 439 435 449 451 38 1989
D 15 40 114 51 94 109 113 23 1991
E 18 85 131 129 100 132 134 28 1989
F 129 190 256 360 288 356 365 23 1989
G 1067 1662 1944 2343 1579 2232 2299 14 1985
H 352 989 1157 1162 717 1135 1179 11 1985
Sum 2585 4083 5251 5783 4236 5650 5759 18 1985
United States
A 95 171 312 496 431 503 511 34 1991
B 428 348 524 743 899 1070 1311 8 2023
C 67 112 236 378 684 1158 1857 20 2010
D 5 25 59 42 87 98 105 32 1995
E 17 41 59 83 68 83 84 34 1990
F 66 111 178 256 307 344 365 25 1993
G 774 1210 1601 2322 2015 2331 2375 27 1989
H 262 647 889 1438 1124 1443 1481 28 1991
Sum 1714 2665 3858 5758 5615 6193 6354 27 1991
Japan
A 78 121 241 372 381 411 418 34 1992
B 352 284 418 558 792 895 1124 8 2054
C 83 111 227 355 891 1349 2392 20 2020
D 6 30 57 30 87 123 163 20 2003
E 11 24 30 49 41 49 50 29 1991
F 68 84 123 183 245 339 467 11 2027
G 656 911 1149 1822 2137 2642 3082 14 1999
H 550 527 654 1007 1049 1293 1564 7 2050
Sum 1804 2092 2899 4376 5623 7465 9922 10 2026

predictions. For each of the three regions the numbers are followed by classes C12 and C08. In section A class A 61
summed (sum) and that number compared to all software dominates and in section B class B60 dominates.
patent applications for that region (all software), At the country level, comments based on statistical
expressed as a percentage (percentage). These twenty results have to be restricted to the first few countries in
patent classes account for about 70% of all patent class Table 2 because the numbers for about half of the
assignments in the Europe 15 countries, the United States countries are too small to give statistically significant
and Japan. In terms of the order in which the patent classes results. In terms of the distribution of software related
are listed in Table 5, the United States and Japan are fairly patent application assignments over the relevant patent
similar while the order for Europe is quite different to the classes, the data for the three Scandinavian countries
order for the United States and even more different to that Norway, Finland and Sweden stand out as being unusually
for Japan. For instance, patent class C07 (Organic strongly concentrated in class H04 (Electric communi-
chemistry) is at the top of the lists for both the United cation technique), probably due to the presence of both
States and Japan but is in position 12 for Europe. Patent Nokia and Ericsson. Among the other countries, only in
class H04 (Electric communication technique) is at the top the United Kingdom does H04 also appear among the
of the list for Europe but in position 5 for the United States most populous patent classes. In Finland and Spain the
and position 10 for Japan. number of assignments to the twenty most populous
In this context the most populous classes can be classes decreased precipitously in 1999 compared to 1996.
determined by summing the results in Table 5 for the In both cases there were saturation tendencies even
Europe 15, the United States and Japan and ranking the earlier. Corresponding dips are much less pronounced in
results according to the extrapolations for 2002. For section the Norwegian and Swedish data.
G the most important classes are then G11, G09, G01, G06, The data for Germany is especially interesting because of
G05 and G08, in descending order. For section H the Germanys dominant position in European software based
corresponding classes are H01, H03 and H04, all about patenting. As Table 6 shows, patent section G (Physics) is
equally large. In section C class C07 is by far the largest, especially well represented at the top of the table while H04
D.H. McQueen / Technovation 25 (2005) 657671 665

Table 5
Sums of software related patent application assignments in the twenty most populous of the 118 patent classes separately for the Europe 15 countries, the
United States and Japan

Data 1987 Data 1990 Data 1993 Data 1996 Data 1999 Extrapolations Growth rate % Inflection year

2002 2005

Europe 15
H04 109 615 575 363 197 363 359 21 2002
G01 227 495 523 401 218 338 326 22 1998
H03 126 188 246 344 169 301 319 10 1990
G05 131 139 251 276 215 273 280 19 1987
G11 106 157 208 308 143 264 283 10 1991
H01 57 96 169 270 164 261 271 24 1991
G08 47 108 137 234 236 257 263 32 1992
A61 135 193 330 299 123 242 250 3 1993
G07 55 74 102 218 203 240 253 25 1993
G09 48 64 131 224 158 221 227 28 1992
G06 311 394 364 342 142 174 98 229 2001
C07 31 44 89 135 150 164 170 30 1993
B60 30 79 125 117 154 156 157 38 1991
G02 52 76 92 138 98 133 138 19 1989
H02 37 60 111 115 102 116 117 30 1988
G10 39 34 57 106 80 105 110 20 1992
C08 25 59 56 80 57 78 80 20 1988
G03 35 76 57 62 58 67 70 4 1986
A63 11 23 28 60 49 61 63 29 1992
C12 25 44 38 31 55 54 61 4 2112
Sum 1637 3018 3689 4123 2771 3990 4081 16 1985
All software 2585 4083 5251 5783 4236 5650 5759 18 1985
Percentage 63.3 73.9 70.3 71.3 65.4 70.6 70.9
USA
C07 11 16 46 96 249 481 969 27 2010
H03 81 122 218 426 321 424 437 30 1992
G11 82 125 200 414 291 407 422 28 1992
H01 45 76 165 392 312 395 403 37 1993
H04 97 378 399 405 218 387 404 9 1986
G01 189 303 393 390 246 369 383 7 1982
A61 62 126 239 364 267 361 367 32 1991
G06 229 358 368 383 274 358 368 3 1975
G09 28 61 104 251 272 306 317 36 1994
C12 7 11 32 50 134 251 502 25 2014
A63 7 15 30 80 95 231 442 23 2015
G05 91 124 175 202 197 215 220 22 1988
G02 34 51 95 193 192 213 219 34 1993
G08 31 52 105 173 159 181 184 34 1992
G10 18 22 39 94 130 175 217 23 2000
H02 24 43 62 114 142 155 162 29 1994
G03 36 64 54 83 113 139 179 9 2043
C08 11 27 38 68 100 137 166 22 2000
G07 26 25 49 104 106 123 131 26 1994
B60 19 50 76 107 115 121 123 36 1991
Sum 1128 2049 2887 4389 3933 4460 4535 30 1990
All software 1714 2665 3858 5758 5615 6161 6309 28 1991
Percentage 65.8 76.9 74.8 76.2 70.0 72.4 71.9
Japan
C07 15 20 51 106 333 561 1099 27 2010
G11 79 105 160 373 322 390 406 28 1993
G09 25 53 78 227 303 375 417 30 1997
H01 45 56 122 283 310 350 365 33 1994
H03 73 100 155 304 291 336 350 27 1993
G02 35 48 76 166 225 307 386 20 2001
A61 48 98 191 297 264 297 299 43 1991
G06 192 254 259 269 251 272 276 10 1975
G01 160 230 270 267 224 269 276 9 1979
(continued on next page)
666 D.H. McQueen / Technovation 25 (2005) 657671

Table 5 (continued)
Data 1987 Data 1990 Data 1993 Data 1996 Data 1999 Extrapolations Growth rate % Inflection year

2002 2005

H04 401 321 290 285 247 219 196 24 1917


C12 11 15 31 45 201 210 253 31 1999
G08 23 37 60 125 166 210 242 24 1998
G07 25 21 34 88 152 209 329 17 2014
G10 23 17 33 74 157 207 333 18 2014
G05 51 69 123 139 178 198 211 21 1993
C08 13 24 34 58 117 179 298 18 2021
B60 15 37 72 86 125 138 145 30 1994
G03 35 60 44 64 128 132 172 9 2042
H02 20 34 55 74 98 107 113 26 1994
A63 6 14 23 57 65 74 77 35 1994
Sum 1295 1613 2161 3387 4157 5380 6722 12 2007
All software 1804 2092 2899 4376 5623 7465 9922 10 2026
Percentage 71.8 77.1 74.5 77.4 73.9 72.1 67.8

(Electric communication technique), at the top of the about three of every four such assignments in all the 118
Europe 15 countries list, is in position 8. In 1999 the patent patent classes. The most software intensive classes are H04
application frequency dropped significantly and in 16 of the (Electric communication technique) and G06 (Computing;
20 patent classes compared to 1996. A tendency to calculating; counting). The proportion of software related
saturation is clearly discernable already in the middle patent applications here is about 50%. Next in importance
nineties. come G11 (Information storage), G07 (Checking devices)
The proportion of all patent applications in a given patent and H03 (Basic electronic circuitry). These are followed by
class that corresponds to software related patents is of G05 (Controlling; regulating) with about half the intensity
interest. This was evaluated previously for the twenty of H04 and G06. The rest of these twenty patent classes are
classes with the most software related patent application relatively sparcely populated by software related patent
assignments (McQueen and Olsson, 2003), corresponding to applications.
Table 6
Numbers of software related patent application assignments in the twenty most populous of the 118 patent classes for Germany

Data 1987 Data 1990 Data 1993 Data 1996 Data 1999 Extrapolations Growth rate % Inflection year

2002 2005

Germany
G11 57 89 131 220 78 183 198 13 1993
G05 84 88 154 164 140 165 169 19 1986
G08 20 47 67 117 143 160 168 29 1994
G01 152 246 277 188 103 150 133 27 2000
H03 58 80 124 181 69 147 159 9 1993
H01 36 52 101 160 75 147 157 18 1993
G09 22 34 67 135 70 129 134 28 1992
H04 68 282 247 147 73 122 107 27 1995
B60 16 50 77 71 108 114 118 29 1992
A61 50 94 158 117 43 94 94 0 2028
G07 25 23 43 88 79 93 98 26 1993
G06 170 223 219 175 59 90 58 222 2000
G02 27 38 59 78 60 77 78 24 1989
H02 23 33 56 70 55 69 70 26 1989
G10 18 16 27 42 36 43 45 19 1991
C07 9 17 32 42 39 43 43 37 1990
C08 10 21 32 42 31 42 43 23 1990
G03 24 53 37 35 33 36 36 21 2036
C12 8 13 19 12 21 21 23 16 1990
A63 2 2 3 1 1 1 1 212 1995
Sum 879 1501 1930 2085 1316 1927 1933 12 1984
All software 1386 2027 2745 2981 2087 2984 3226 15 1984
Percentage 63.4 74.1 70.3 69.9 63.1 64.6 59.9
D.H. McQueen / Technovation 25 (2005) 657671 667

Table 7 6. Analysis
Numbers of direct patent applications from residents per country for the
Europe 15 countries, Japan and the United States as well as China and India
The overall tendency for the number of software related
(source: WIPO patent statistics)
patent applications to saturate is significant (Table 2) and
Country Direct applications of residents invites investigation. This tendency to saturation is evident
in the Europe 15 (and in the Europe 15 plus EPO sum) and
1986 1990 1994 1998
in the United States but not in Japan. Applications with
Germany 43,629 35,282 36,715 46,523
other priority countries (here designated WIPO in the tables)
United Kingdom 20,040 19,310 18,384 19,530 are an intermediate case.
France 12,155 12,378 12,519 13,251 A possible explanation for this saturation tendency is
Italy 7872 the changing state of the economy in general. Such a
Sweden 3685 3108 3953 3972 general change in economic conditions would affect total
Finland 1754 2059 2306 2471
Netherlands 1866 2147 1748 2451 patent applications in essentially the same was as it would
Spain 1649 2218 2136 2270 affect software based applications. Study of Table 7 shows
Switzerland 3199 2987 3033 2025 that this explanation is unlikely. While the numbers of
Austria 2210 2025 1989 1882 direct patent applications from residents in each country
Denmark 958 1218 1274 1543 has remained essentially constant for the Europe 15, they
Norway 903 899 1031 1292
Ireland 743 734 811 985 have increased slightly for Japan and strongly for the
Belgium 794 643 744 690 United States. Thus there is no obvious correlation
Portugal 77 101 103 96 between the temporal developments of patenting in
Europe 15 93,662 85,109 94,618 98,981 general and software related patenting. An explanation
Japan 290,132 332,952 319,261 357,379
for the saturation tendency in software related patenting
USA 65,195 90,643 107,233 132,767
China 3494 11,191 13,726 has to be more specific.
India 999 1147 1588 2111 As Tables C and D show, patent sections G (Physics) and
H (Electricity) dominate software related patent appli-
To put the above data into perspective it is useful to cations in Europe, the United States and Japan, with section
tabulate data for patent applications of all types for different G almost twice as populous as section H. This domination
countries and different years. Table 7 shows data on direct weakened significantly in 1999 compared to 1996. In the
patent applications by residents of the respective country Europe 15 and the United States this is because the numbers
extracted from WIPOs web site. In general, the numbers of of applications in sections G and H decreased and in Japan it
is because they grew less quickly than the numbers of
applications per country are steady or increase with time,
applications in the other six sections.
with Switzerland and Austria the exceptions. For the Europe
Sections G and H include patents from the telecommu-
15 countries as a whole, the numbers of patent applications
nications industry, the computer technology industry and
have remained at a generally constant level. Patent
sensors and actuators, including controlling, that is, the
applications in Japan show a slowly increasing trend and in
electronics/microprocessor based part of high tech industry.
the United States they increase rapidly. Finally, China and
Here, in terms of absolute numbers, the most important
India are examples of countries whose applications are
patent classes in section G are G11 (Information storage),
included in the WIPO category in Table 2. Other such
G09 (Educating; Cryptography; Display; Advertising;
countries with relatively large numbers of patent applications Seals), G01 (Measuring; Testing), G06 (Computing;
are Russia, Australia, Canada and the Republic of Korea. Calculating; Regulating), G05 (Controlling; Regulating)
Comparison of the numbers of software related patent and G08 (Signalling). In section H the most important
applications (Table 2) with the numbers of all patent classes are H01 (Basic Electrical Elements), H03 (Basic
applications (Table 7) shows that for the Europe 15 Electronic Circuitry) and H04 (Electronic Communication
countries and the United States the proportions of software Technique). The patent application assignments are fairly
related patent applications have been similar and have evenly distributed over these patent classes. They corre-
increased by about 60% during the 12 year period. If the spond fairly well to electrical engineering/electronics with
applications designated EPO in this study were added to computers and telecommunications.
those of the Europe 15 (about half), the United States (about Much attention is paid to the telecommunications sector
a third) and Japan (about a fifth) the software related patent in this context. According to a recent report (Koski, 2002)
intensities would increase significantly, a little more in electric communication technology patenting in OECD
Europe than in the United States than in Japan. In Japan the countries grew dramatically in the beginning of the nineties
proportion of software related patent applications has been (publication years) and then leveled off, that is, saturated
relatively low but has increased more quickly than (Koskis Figure 7). The data in Table 5 for class H04 for the
in Europe and the United States (by about 150% during Europe 15 and the United States (priority years) confirm
the 12 years). this. Corresponding data for Japan show a steady decrease in
668 D.H. McQueen / Technovation 25 (2005) 657671

patenting in class H04. In Europe the patenting behavior


may be connected with opening up the telecommunications
market, thus changing the nature of commercial competition
and the perceived need of patent protection or patent
portfolios (Koski, 2002). A recent trend is for companies
such as Ericsson to abandon their former policy of applying
for large numbers of patents for the purpose of trading
intellectual property and blocking competitors and to adopt
a more selective, quality oriented patenting policy. This is
an example of industry branch specific and country or
region specific behavior affecting the numbers of patents
applied for in a particular field.
Sections B (Performing operations; transporting) and C
(Chemistry; metallurgy) are the strongest amongst the
remaining six sectors. They appear to be catching up section
H (Electricity). In section B patent class B60 (Vehicles in
general) is the most important. Not only transportation
equipment manufacturers (automobile makers, for instance)
but also their tier 1 and tier 2 suppliers, among others, Fig. 1. Numbers of software related patent application assignments for the
constitute the corresponding industrial sector. It shows clear Europe 15, the United States and Japan. The points for 19871999 are data
signs of saturation in Europe, the United States and Japan. In while for 2002 and 2005 they are extrapolations.
section C patent classes C07 (Organic chemistry), C08 the period under study the ratio of the number of software
(Organic macromolecular compounds; their preparation or patent application to the total number of patent applications
chemical working-up; compositions based thereon) and C12 has been much lower in Japan than in Europe or the United
(Biochemistry; beer; spirits; wine; vinegar; microbiology;
States. Fig. 2 shows the time development of the numbers of
enzymology; mutation or genetic engineering) are the most
software related patent assignments for sections A, B, C and
important. This is the realm of biotechnology. Here signs of
G and H. The numbers of patent assignments for the four
saturation are more evident in Europe than in the United
different patent class groups show somewhat different trends
States or Japan, but even in Europe there is no drop in
over time. A fair but not exact representation of the
patenting activity in the late nineties in sections B or C.
development of a given group of software related patent
In section A the dominant patent class for software
related patent assignments is A61 (Medical or veterinary application assignments in the Europe 15, the United States
science; hygiene). It shows especially strong signs of or Japan can be obtained by multiplying the two relevant
saturation in Europe. curves. Thus for the Europe 15 the saturation of the numbers
Thus, according to these statistics growth in the number of application assignments for sections G and H is
of software related patent applications is branch or sector
specific as well as country or region dependent.
A more general reason for apparent saturation in the
growth of the numbers of software related patent
applications is that in Europe there was a general
relaxation of restrictions on patenting software related
inventions in the eighties and early nineties. It has taken
time for awareness of this relaxation of restrictions to
reach practitioners. In Europe this would result in an
exaggerated growth rate of software related patent
applications in the early nineties followed by a slacken-
ing as awareness reached the practitioners and pent up
demand was satisfied.
In the United States the recent surge in Internet patents
and business method patents (Hunt, 2002) can cover up a
reduction in other types of software patents.
Much of the above is summarized in Figs. 1 and 2. Fig. 1
shows the time development of the numbers of software
Fig. 2. Numbers of software related patent application assignments
related patent assignments for the Europe 15, the United (Europe, the United States and Japan combined) for four different groups
States and Japan. There are definite saturation trends in of patent classes. The points for 19871999 are data while for 2002 and
Europe and the United States but not in Japan. Throughout 2005 they are extrapolations.
D.H. McQueen / Technovation 25 (2005) 657671 669

especially pronounced while for Japan it is only slight. faster than the numbers of applications with priority from
Patent application assignments in section C show some individual European countries, the United States or Japan.
saturation in the Europe 15 but no such tendency in Japan. In This is discussed in the next section.
general the United States shows intermediate behavior.
A measure of the proportion of software related patent
application assignments amongst all patent applications on a
country by country basis can be obtained by comparing the 7. Discussion
two indicators in a diagram. Fig. 3 shows such a comparison
for 1996 where data on direct applications from residents is A weak point in the above analysis is the fact that there
used. The data in the lower left part of the diagram is are as many software related patent application assignments
unreliable because of the low numbers of software related with priority stemming from an EPO application as there are
patent application assignments involved. The figure indicates assignments with priorities from individual European
that in 1996 software related patent applications were countries. A European patent application can be filed with
especially common in Germany, Spain, Norway and Finland EPO from anywhere in the world. The bibliometric search
while they were relatively rare in the United Kingdom, Italy methods used in this study do not differentiate between
and Switzerland. Three years later the very high numbers of countries of origin when it comes to applications with
software application assignments for Germany, Spain and priority from EPO submissions. Neither is the country of
Finland dropped significantly toward more normal levels origin given for the data designated WIPO here.
while that for Norway remained high. With the exception of A good (but unproven) assumption is that most EPO
Ireland, for which the numbers are too small to be reliable, application assignments in this study originate from the
changes in the positions of the other countries between 1996 Europe 15 (around half), the United States (about a third)
and 1999 were small. and Japan (about a fifth). It is becoming more and more
The number of WIPO applications, that is, applications common to submit applications to EPO either directly or
with priority claims in countries outside of Europe, the indirectly, for instance via a Euro-PCT application, rather
United States and Japan, has grown more strongly and will than first submitting an application to a national patent
continue to grow more strongly than the corresponding office. This results in both an economic savings and less
numbers of patent applications from Europe, the United time and effort spent on patent administration. More and
States or Japan (Table 2). Large numbers of such WIPO more often the original patent documents are written in
English, French or German rather than some other European
applications originate from the former Soviet Union,
language and can thus be submitted to EPO without
Australia, Canada and the Republic of Korea, among
translation. Examples of countries in which this transition
other countries. This is an indication of geographic spread
can be expected are Denmark, Sweden, Norway Finland and
of software related patenting.
the Netherlands. The situations in Spain, Portugal and Italy
Also, the number of applications claiming priority from
are less clear.
EPO rather than a specific country continues to increase
Other reasons for submitting applications directly to the
EPO may be connected with conditions in the country of
residence of the applicant. In Sweden, until 1990, it was
nearly impossible to obtain a patent on an invention that
included computer programming, for which reason compa-
nies like Ericsson sent their applications directly or
indirectly to the EPO. After 1990 there was a considerable
upswing in Ericssons patenting in Sweden. Similar
conditions may exist in other countries.
In German speaking Switzerland, it is probably almost as
natural to send a patent application to Munich as to Bern.
Since Switzerland is a relatively small country surrounded
by much larger ones, patent protection in Switzerland alone
is often not meaningful. Thus a tendency for Swiss inventors
to submit their applications to the EPO is logical. Similar
conditions may affect inventors in French speaking Belgium
who would submit their applications to the Hague.
The above indicates that although it is likely that most
EPO priority patent assignments in the present study
Fig. 3. The number of software related patent assignments (1996) against concern applications from European countries, the United
the number of direct patent applications of all sorts from residents (1996) by States or Japan, their distribution amongst the countries is
country (source: WIPO patent statistics). very difficult to predict. On the other hand, this increased
670 D.H. McQueen / Technovation 25 (2005) 657671

predilection for submitting applications directly or 8. Conclusion


indirectly to the EPO should be of considerable interest to
European patent offices and other authorities and organiza- In Europe and the United States the days of unlimited
tions concerned with inventors and patenting. exponential growth in the numbers of software related
The reasons for tendencies toward saturation of the patent applications are at an end. Their numbers will
numbers of software related patent applications, especially continue to grow, but more gradually. Most applications
in Europe, can be many and varied. There are some will continue to be assigned to patent section G (Physics).
indications that corporations such as Ericsson are becoming Within section G the most important classes (in terms of
more restrictive about the number of patents they invest in absolute numbers) are G11, G09, G01, G06, G05 and G08.
to protect their inventions or to provide bargaining means in In the Europe 15 and the United States the next most
their negotiations with competitors or for licensing their populous section is H (Electricity) in which classes H01,
technology. European patents valid in a half dozen or more H03 and H04 are the most important. In the United States
European countries are quite expensive compared to United section C (Chemistry; metallurgy) may soon overtake
States patents and savings are necessary. section H while in Europe growth in software related patent
In Europe, the relaxation of patentability restrictions on applications in section C is near a saturation level. In section
software related inventions in the eighties and early nineties C the most important classes are C07, C08 and C12. In
may have led to exaggerated growth in the numbers of Europe growth in assignments to section B (Performing
software related patents in the early and middle nineties. As operations; transporting), where B60 dominates, is near a
the transition died out an apparent tendency toward saturation level while in the United States assignments
saturation resulted. continue to grow almost exponentially. In section A
There is a widespread opinion that the number of (Human necessities) class A61 dominates.
patent applications is closely connected with R&D In Japan there is little sign of saturation in the growth of
expenditure. In many corporations R&D budgets are no software related patent applications, possibly in part
because their number is still relatively small compared to
longer growing and in some cases they are being cut.
the total number of patent applications made per year in
Currently, R&D expenditure in Europe is only almost
Japan. In Japan assignments are most frequent to section
60% of that in the United States. Weak points in the
G. Next most popular is section H, closely followed by
R&D patenting relationship are that it is highly
section C which will probably overtake section H in the near
dependent on the particular branch of industry involved,
future. Thus, world-wide, section C is gaining on section H
statistics are based mainly on data from large corpor-
while section G maintains its dominant position.
ations and the best correlations between patenting
In Europe, Germany dominates software based patenting
frequency and R&D expenditure have correlation coeffi-
with about 50% of all such patent applications from the
cients r 2 of only around 0.67 (Pavitt, 1982). Still, due to
fifteen European countries investigated here. Software
restricted R&D budgets a saturation in the growth of the
related patent applications represent relatively high frac-
number of software related patent applications is to be tions of all patent applications from Germany, Spain,
expected in Europe. Norway and Finland while they are relatively rare in the
Another enabler of patent applications is university United Kingdom, Italy and Switzerland. The low intensities
educated scientists and engineers (Schmookler, 1957; for the United Kingdom, Italy and Switzerland may be due
Pavitt, 1982). For United States data for 1950 Schmook- to specific conditions in those countries and do not
ler found a correlation coefficient r 2 of 0.69 between necessarily reflect low invention rates in the software field.
patents and technologists. For United States data for The role of the EPO as a receiving office for direct or
1973 Pavitt found a corresponding correlation coefficient indirect patent applications has become more important
of 0.71. More recent data is not available, but there is during the nineties. The number of software related patent
widespread awareness that higher technical education is a applications with priority based on EPO applications
significant enabler of invention and patenting, at least increased almost fourfold from 1987 to 1999 while the
high tech invention and patenting. Currently there is corresponding number for the fifteen European countries
concern about a possibly insufficient supply of well- patent receiving offices increased by only about two. In
educated engineers and scientists to maintain technical contrast, the total number of direct patent applications from
innovation in Europe and the United States. In the case European countries remained nearly constant during that
of software related patent applications especially, rela- period. There can be several reasons for this shift from
tively young scientists and engineers are in focus. It application to national patent receiving offices to application
would be instructive to compare the numbers of such to the EPO, often via Euro-PCT applications.
engineers and scientists with patent application statistics The numbers of applications with the priority designation
on a country by country basis, taking into account the WIPO (that is, applications from countries outside Europe
scientists and engineers subjects of specialization and and excluding the United States and Japan) increased by a
the academic levels they achieved. factor of three between 1987 and 1999. This is indicative of
D.H. McQueen / Technovation 25 (2005) 657671 671

geographical spreading of software related patenting, but Kondo, M., 1999. R&D dynamics of creating patents in the Japanese
not necessarily of software related invention. There is a Industry. Research Policy 28, 587 600.
Kortum, S., Lerner, J., 1998. Stronger protection or technological
general trend toward internationalization of patent appli- revolution: what is behind the recent surge in patenting. Carnegie
cation as exemplified by the steadily and rapidly increasing Rochester Conference Series on Public Policy 48, 247304.
numbers of PCT applications during the late nineties. Kortum, S., Lerner, J., 1999. What is behind the recent surge in patenting.
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This work was generously supported by the Research
patents. Technovation 23, 533 544.
Fund of the European Patent Organisation. The bibliometric McQueen, D.H., Wilhelmsson, L., Emanuelsson, G., 1998. Microproces-
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Swedish Patent and Registration Office. The views European Journal of Engineering Education 23, 365381.
expressed herein are solely the responsibility of the author. Mykytyn, K., Mykytyn Jr, P.P., Bordoloi, B., McKinney, V., Bandyopad-
hyay, K., 2002. The role of software patents in sustaining IT-enabled
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