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Companies step up patent filings to prepare for global recovery


By Sabine Vollmer

Ingersoll-Rand’s decision a few years ago to focus on innovation to drive future growth is beginning to pay off.

Despite slow revenue growth, the Ireland-based industrial and commercial equipment maker, which owns air-conditioning brand Trane, more than doubled earnings from continuous operations to $1.02 billion between 2009 and 2012, according to company filings. Innovations contributed 24% of revenue in 2012, up from 14% in 2009. In 2012 alone, the number of patents the company filed rose 75%.

International patent filing trends released by the World Intellectual Property Organization in Switzerland suggest companies worldwide are increasingly betting on innovation the way Ingersoll-Rand has.

Following a 4.8% drop at the height of the global debt crisis in 2009, international patent filings reached a record 194,400 in 2012, and Francis Gurry, WIPO director general, expects them to exceed 200,000 this year.

Filings increased 5.7% in 2010, 10.9% in 2011 and 6.6% in 2012, driven by double-digit growth in China, South Korea and Japan.

The numbers are “telling a story about robust growth despite the weak international economic climate,” Gurry said in a video press conference announcing the results.

Gurry said the robust increase in patent filings signals that companies are building strong intangible asset portfolios to prepare for a global economic recovery.

Other international filings to protect intellectual property rights support the view that economic activity is picking up. Applications for trademarks, which cover products and services, were up 4.1% in 2012, according to WIPO. Japan, the UK and the US represented the biggest portion of the increase in trademark applications.

The country where companies sought the most trademark protections was China, followed by the EU, Russia and the US, Gurry said. “That’s quite interesting – the magnitude of the Chinese market.”

Additional WIPO details about last year’s international patent filings included:

  • The US was the country with the most patent filings, with 51,207 or 26.3% of the annual total.
  • China is projected to overtake Germany this year and move into third place behind Japan.
  • Of the 20 companies with the most filings, a dozen were from Asia; six were from Europe; and two were from the US. The top four corporate filers were from either China or Japan.
  • Eight of the top 10 filers among educational institutions were from the US. The University of California topped the list of educational filers.
  • Electrical engineering was the industry that generated the most patents worldwide, driven by double-digit growth in computer technology, IT solutions for management and electrical machinery.

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Sabine Vollmer (svollmer@aicpa.org) is a CGMA Magazine senior editor.

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