SCIENCE & ENGINEERING INDICATORS

An invention brings something new into being and has a practical bent. Examples include a design, hybrid flower, mechanical device, software program, or commercial product. When these inventions are registered as intellectual property, the resulting records provide useful indicators of invention. For U.S. firms, trade secrets, trademarks, and design patents are all important for intellectual property protection (Indicators 2018, section “Invention: United States and Comparative Global Trends.”)

Although there is more to invention than patenting, patents are primary indicators of invention, providing valuable technological and geographic detail. For patenting purposes, invention is defined as the production of something potentially useful, previously unknown, and nonobvious. The U.S. patenting system provides inventors with the exclusive right to make, use, or sell their invention, or in the words of the Patent Act of 1790, “any improvement therein not before known or used,” so long as the invention is deemed “sufficiently useful and important” (USPTO 2002). USPTO data provide patenting measures by technology area for all patents registered in the United States, including those patents that are granted outside of businesses and to foreign entities. (See sidebar There Is More to Invention Than Patenting.)

Utility patents provide protection for the way something works. A design patent protects the way something looks and the way it is shaped, specifically the visual ornamental characteristics of articles of manufacture (USPTO 2018). For U.S. inventors, plant patents protect hybridized plants, such as roses. Trademarks protect the symbols used in commercial activity and often appear in conjunction with new products and processes. For U.S. R&D-performing firms, trademarks are as important as patents in protecting intellectual property (NCSES 2018).

The Technical Appendix provides more information on the intellectual property data used in this report.

The USPTO awarded 309,000 utility patents in 2018, nearly equally divided between foreign and domestic inventors (Table S8-1). Among U.S. assignees (those assigned the rights of ownership), businesses received by far the most patents (131,121 or 85%); individuals (9%), the academic sector (4%), and the government sector (1%) each received a relatively small share of patents (Figure 8-1).

Among U.S. assignees, businesses have seen a rapid increase since 2009 in the number of patents granted, followed by more moderate growth after 2014. Patents issued to U.S. firms almost doubled (94%) between 2002 and 2017 (Figure 8-1). This increase in patenting reflects in part an overall trend toward the increased importance of intellectual property protection, especially for information that can be digitized (Organisation for Economic Co-operation and Development [OECD] 2017b). To put this in context with the growth in business R&D expenditures in the United States, patenting activity grew faster. Over the same period, businesses’ domestic R&D expenditures rose 59%, after adjusting for inflation (NCSES 2020).

The NCSES Business R&D Survey (BRDS) provides information on industry affiliation of U.S. inventors who receive USPTO patents. Data from BRDS show that the USPTO granted 102,000 utility patents to R&D-performing firms in the United States in 2017 (Figure 8-2). Firms in the computer and electronics manufacturing industry received the greatest number of patents, almost 30,000 in 2017 (Figure 8-2). These firms also report the highest level of domestic R&D performance in 2017, about $79 billion (Figure 8-3). In general, high R&D industries have high rates of patenting; the relative ranking differs, however. For example, the computer systems design and related services industry showed relatively high levels of U.S. patenting, while several other industries outspent it domestically in R&D. Conversely, the scientific R&D services industry performed more than $17 billion in R&D in 2017 while receiving only a little over 1,100 patents (Figure 8-2 and Figure 8-3).

The motivations to patent an invention may differ substantially from the motivations to create other types of knowledge. Business researchers more frequently engage in experimental development activity, which is directed toward creating or improving products or processes, than their academic and government counterparts. This increases opportunities for direct commercial applications of their work.

Relative to the amount of R&D performed, universities and federal labs receive fewer patents. In 2017, businesses accounted for more than 70% of the R&D performed in the United States; universities performed about 13% and government labs about 10% (NCSES 2020). Of the USPTO patents assigned to U.S. assignees in that year, academic institutions accounted for about 4%, and government labs even fewer at 0.8% (these shares were unchanged in the latest patent data for 2018) (Figure 8-1).

Research at universities and federal labs more frequently yields peer-reviewed articles than commercially oriented inventions. This disparity between R&D activity and patenting makes sense given the difference among the activities and goals of universities, federal labs, and businesses. Academic patenting also differs in terms of focus areas. Compared with other sectors, academic patenting is relatively more focused on pharmaceuticals, biotechnology, and medical technologies. In 2018, these three technology areas accounted for 41% of USPTO patents awarded to U.S. academic institutions, compared with 10% of USPTO patents to all sectors (Table S8-2, Table S8-4, Table S8-17, Table S8-19, and Table S8-20).

The USPTO classifies patent data filings based on technology areas, and the detailed technology areas can be aggregated to analyze trends in patenting focus over time. For example, the electrical engineering technology area includes five subclasses, which are further subdivided into dozens of detailed categories or fields. This report provides annual data for USPTO and international patents based on the 35 technical fields described by the World Intellectual Property Organization (WIPO) for international comparisons.^{​For this report, Table S8-2 lists the 35 WIPO technical fields, Table S8-3 provides the regions, countries, and economies covered by USPTO patent and international patent family patent data, and Table S8-4 through Table S8-42 present utility patent data. The tables cover USPTO patents and international patent family patents from 1998 to 2018. Table S8-2 contains USPTO academic patenting data by the 35 technical fields mentioned above.} Figure 8-4 aggregates data on these 35 fields into five broad technology areas.

The USPTO patents granted to U.S. inventors can be grouped into engineering-related patents; both electrical and mechanical engineering patents made up about 60% of USPTO patents in 2018 (Figure 8-4). Patents related to instruments, chemistry, and other fields made up the remainder of USPTO patents to U.S. inventors in 2018. The number of electrical engineering patents more than doubled between 2000 and 2018 (Figure 8-4). The role of information and communication technologies (ICT) is evident here as well; 2 of the 35 technology fields, computer technology and digital communication, account for a large part of the increase in electrical engineering patents (Figure 8-5).

Health and medical inventions contribute to growth across these five broad technology areas; for example, patents in the analysis of biological materials and in medical technology contribute to the growth in patenting in instruments, and inventions in biotechnology and pharmaceuticals contribute to the growth in chemistry patenting. Similarly, advances in autonomous vehicles incorporate inventions in multiple areas, including optics, transport, electrical machinery, and chemicals.

The data in this section present global patenting trends in three complementary ways; all three demonstrate rapid worldwide growth. First, the WIPO data provide a high-level view of patenting by the most active patent offices globally, indicating markets where this form of intellectual property protection is increasing over time. Second, international patent family data provide a more detailed view of emerging patented inventions across geography, based on inventor’s address. International patent family data count each invention once as a family of related filings based on granting year of the first underlying invention. Patent families count inventions granted in at least one jurisdiction and count the invention only once, even if it is later protected elsewhere. Based on inventor addresses, inventors from China patent most frequently at the global level. Third, this report rounds out the global patent analysis focusing on the technology-level activity of U.S. and foreign inventors granted USPTO patents. These data show the increasing role of foreign inventors in USPTO patenting.

Historically, patenting grew exponentially in the second half of the 20th century. Figure 8-6 shows patent applications for the top five offices worldwide: USPTO, National Intellectual Property Administration of the People’s Republic of China, European Patent Office, Japan Patent Office, and Korean Intellectual Property Office. WIPO compiled these data; it collects patenting data from national offices and compiles patent statistics internationally. While the USPTO and the Japan Patent Office previously had the largest number of filings, China now receives the largest number of patent applications worldwide (WIPO 2019).

Patents as a ratio to gross domestic product (GDP) provides a normalization for the size of each economy. On this basis, South Korea has the largest number of patents, followed by China and Japan, according to the WIPO data (Figure 8-7). South Korea also has the highest ratio of R&D expenditures to GDP of the top 15 R&D-performing countries and economies (Indicators 2020 report “Research and Development: U.S. Trends and International Comparisons”).

The patent family data described in this section account for patenting in international jurisdictions without double-counting. Patent offices register patents from resident inventors as well as foreign inventors; thus, a unique invention may be registered in more than one jurisdiction. Further, a patent may be modified or extended, adding to the total number of patents. The patent family statistics presented here count a unique underlying invention as the unit of measurement. Each patent family covers a group of related patents that have an original invention in common. All subsequent patents in a family refer to the first patent filed, called a priority patent; the original filing may be domestic or from another jurisdiction. For example, an invention patented in Japan may refer to an earlier patent in the United States. In this case, both the Japanese and the U.S. patent would be part of the same patent family. The composition of these patenting data differs from that of the USPTO data and shows both the breadth and growth of inventive activity around the world. Table S8-4 through Table S8-40 show the patent family data alongside the USPTO data.

In 2018, U.S. inventors received patents on approximately 46,000 international patent families compared with 144,000 separate patents issued by the USPTO (Table S8-4). Figure 8-8 shows the scale of USPTO patents compared with international patent families for China, the European Union (EU), Japan, South Korea, the United States, and the world. Overall, China had the largest number (334,000) of international patent families granted in 2018; in 10 years this represents an increase of almost eightfold (43,500 in 2008) (Table S8-4).

By technology area, electrical engineering patents make up almost a third (31%) of international patent families; mechanical engineering patents make up another quarter (Figure 8-9). For inventors from China, electrical engineering patents comprise almost a third of international patent families granted in 2018 (Figure 8-9). In comparison, electrical engineering comprised 45% of USPTO patents granted to U.S. inventors in 2018 (Figure 8-4).

USPTO patents provide insight into the activities of inventors who choose to bear the cost of protecting their inventions in the U.S. market. The USPTO grants slightly more than half (53%) of all U.S. patents to foreign inventors, up from 46% in 2000 (Table S8-4). Rising rates of foreign patenting reflect the expansion of commercial activities across international borders as foreign firms seek patent protection in multiple international jurisdictions (Fink, Khan, and Zhou 2015). Large multinational companies, including those based outside of the United States, have increasingly sought patent protection beyond their domestic borders. The EU and Japan continue to account for the largest numbers of foreign USPTO patent grantees, followed by South Korea (Figure 8-10). Although inventors from China account for a relatively small number of USPTO patents, over a decade, they have seen almost a 10-fold rise in the number of USPTO patents granted (from 1,600 in 2008 to 15,500 in 2018) (Figure 8-10). Patents related to electrical engineering accounted for the majority (63%) of USPTO patents granted to inventors from China (Figure 8-11).

Patenting of designs is a very important intellectual property protection strategy for about one in six U.S. R&D-funding or -performing firms (NCSES 2018). In 2018, the USPTO awarded over 16,000 design patents to U.S. inventors or designers (Figure 8-12). The USPTO granted an additional 14,000 design patents in 2018 to inventors from outside of the United States (Table S8-43).^{​The design classes that make up design patents registered to U.S. designers are also shown (Table S8-44).} The EU accounts for about 4,600 of these (Figure 8-12). Since 2014, China has rapidly increased its design patenting in the United States and now patents on a scale comparable to Japan and South Korea (Figure 8-12).^{​Table S8-43 and Table S8-44 show the number of U.S. design patents granted since 2000 and 1998, respectively, by region, country, or economy and by design class.}

By product area, 10 years ago, the largest number of design patents were granted for furnishings (Table S8-44). The focus has shifted over the last decade to recording, communication, or information retrieval equipment—the category that includes items like smart phones, keyboards, and computer icons has grown rapidly to become the largest category of design patenting. Figure 8-13 shows the trend growth for U.S. design patents in this category and in furnishings.