EPO Annual Report Highlights New Trends in European Patent Filings and Registrations

Each year, the European Patent Office (EPO) releases an Annual Report that highlights key statistics and indicators from the prior year’s patent activity. As the executive arm of the European Patent Organization, the EPO is tasked with providing a uniform procedure for inventors to obtain patent protection in the Organization’s member states throughout Europe.

While Israel is not a member state of the European Patent Organization, activity at the EPO is still worth Israeli companies’ and inventors’ attention for a number of key reasons. Most significantly:

• European patent activity may be an indicator of overall trends in the region, impacting Israeli firm’s patent strategies.
• Israeli firms with an international presence need to be cognizant of potentially-competing patent activity in their target markets abroad.
• International companies’ patent filings with the EPO may signal their intent for pursuing patent protection in Israel and the Middle East.

With these considerations in mind, we will examine some of the most notable data from the EPO’s most recent Annual Report. You can also read our recent discussion of the IP5’s 2014 Annual Report on worldwide patent activity here.

European Patent Filings are on the Rise

From 2010 to 2014, total European patent filings increased from almost 236,000 annually to more than 274,000 per year. This includes direct European applications as well as applications filed under the Patent Cooperation Treaty (PCT), which allows companies and inventors to seek simultaneous protection in 148 countries – including Israel – worldwide.

Of the applications filed, 115,959 received examination, and 64,613 applicants received European patent certificates in 2014. Just over 3,000 patent applications, roughly 1.1 percent, were opposed.

Medical Technology and I.T. Continue to See the Highest Volume

Based on the EPO’s classifications, medical technology continues to see the largest number of patent filings in Europe, with 11,124 applications representing a 3.2 percent increase year-over-year. However, grouping digital communication and computer technology together, these categories saw a combined 19,887 applications, with filings in each category rising 6.6 percent and 7.8 percent, respectively.

Biotechnology saw the sharpest increase in filings, at 12.1 percent. The only categories to see decreases in application numbers were:

• Organic fine chemistry (down 1.3 percent);
• Engines, pumps and turbines (down 3.2 percent); and
• Pharmaceuticals (down 5.4 percent).

Perhaps unsurprisingly, the nine of the 10 companies with the largest number of patent filings in 2014 were in the digital communications and computer technology industries. However, these nine firms still combined to file just over 15,000 applications – less than six percent of the total filings in 2014.

Israel Ranks Sixths Among Non-EPO Member States in European Patent Filings

Among non-EPO member states, Israel ranked sixth globally in terms of European patent filings in 2014. Israeli firms made a strong showing that allowed the country to come in behind only the U.S., Japan, China, Korea and Canada, narrowly edging out Australia and India.

The top six non-EPO countries remained unchanged between 2013 and 2014, though the number of patent applications originating from Israel actually dropped by a modest 1.1 percent.

What Can Israeli Investors Learn from the EPO’s Annual Report?

Combined with the Ministry of Finance’s recently-proposed tax break for companies that transfer foreign patents into Israel, the 2014 EPO Annual Report represents favorable news for Israel-based companies and Israel as a whole. While the major players in major industries continue to dominate patent filings, there clearly is room for regional and entrepreneurial companies to stake their claim to patent rights abroad. If the proposed tax break brings more patent filers to Israel, we may see the country further climb the ranks of non-EPO member states claiming patent rights on the European continent.

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As the largest intellectual property law firm in Israel, Reinhold Cohn Group represents companies and entrepreneurs in patent matters worldwide. If you would like to speak with one of our attorneys, please contact us today.