 Ladies and gentlemen, thank you very much for coming. Director-General Francis Gurry will present the World Intellectual Property Indicator for 2014. And we have also with us today our Chief Economist, Karsten Fink. Thank you, Samar. Ladies and gentlemen, a very good afternoon to you all. Thank you very much for coming this afternoon. Karsten is here, as Samar has already said, and also Mosaid Khan, who works under Karsten and is the head of our statistics area, and they are responsible for this report. So a few messages, if I may, about the report, which, if I may say, I think is a very good survey of what happened in the world in 2013 in intellectual property filing terms. And so the first message, I think, is the continuation of consistent growth of the IP system. Now that's something that's not new that we've been speaking about for many years, but I think it's worth repeating that message because it is one of the indicators of the knowledge economy, if you like. It's one of the indicators that there is an increasingly important component of knowledge in production and distribution of goods and services. And that comes through very sharply with the growth rates that we see in 2013, which very briefly were in the patent area in terms of filings an increase of 9%. You know, add to 2.57 million applications. In the trademark area, an increase of 6.4%. These figures are available to you in the press release. In the design area, an increase by 2.5%. So I suppose that's number one message. Number two message I would say is that a huge amount of this growth is driven by China. So again, not a new message consistent with what we've been saying for a number of years now, but it becomes more and more pronounced, let's say, the position and prominence of China in seeking intellectual property titles. We see, for example, that it has the largest number of patent filings, trademark filings and design filings in the world. In each area, the Chinese office receives more applications than any other office in the world. So this is quite a significant thing. You can also say, because that's all the applications that China receives, whether from Chinese residents, Chinese enterprises or nationals, or from foreigners, it's the largest. But it's also the largest in terms of resident filings. You know, what is being filed by Chinese as opposed to what is being filed by American enterprises or residents or European, various European, different European countries or Japan. So this is extremely important. We also see largely as a consequence of China that Asia is occupying a terribly prominent position now. 58.4% of world patent filings, 48.2% of world trademark filings, and nearly 70%, 69.4% of design filings worldwide. So Asia more generally than China, but China in particular. For the particular country performances, I'm not sure that I need to go into those because the details are given to you in the press release. So it would be pretty boring for you if I were to take you through it individually. Apart from the Chinese phenomenon, which I think is extremely important, but to some extent, as we say in the report, what we see in the intellectual property filing field is a mirror of what we're seeing in the world economy. Okay, so you see that in the patent area, for example, you have growth from China, significant growth, you know, 26%. You have growth from the United States of America, but you have a fall from Japan, 4% less, and a fall 0.4% less from the European countries, members of the European patent organization. What else can I tell you that is more or less high level here? I suppose we can make a comment about the fields of technology, which have been most prominent, and the most prominent is computer technology, 7.6% of all patent applications. For Switzerland, the most filings are pharmaceuticals. For France and Germany, transport-related technology. For Korea, UK and the US, Republic of Korea, UK and the US, computer-related technologies were the principal fields, the main, the most important field, let's say. In the trademark area, moving away from patents and very briefly, again, you know, you have the phenomenon of China with the fastest growth rate of the major offices, 13.8%. An extraordinary number. In the trademark area, we make our counts on the basis of an application per class of goods or services. So one application might contain four classes. So the numbers are slightly inflated, but we can get comparability across countries because there are different systems. So for China, it's 1.88 million. You know, extraordinary numbers. And if you compare that to the US, it's 486,000. Or the European trademark office, 324,000. The main sector, or at least the most important sector, let's say, the main, agriculture for trademarks, 16.5%, interesting, followed by clothing and research and technology. And then just a word on industrial designs. I'd say, of course, again, we do see a slowdown in China, but it's mainly because they have had so many in recent years, I would say, of such high growth rates. But we see a slightly different patent, pattern, whereas in the case of patents, you get this, let me say, domination of filings by industrialised countries and China. In the case of trademarks, it's a bit more mixed. In the case of designs, we see China as the predominant filer, of course, but also important filings from a number of developing countries, such as Turkey or Morocco or Iran. We have also reported on plant varieties, if I may just say one final word, on plant varieties. We may not have spoken too much about that in the past, but it's a very important area which covers innovation in traditional breeding techniques in plant varieties. And it's a very interesting area also, and more attention is being paid to this area. We can see clearly the numbers are entirely different. So worldwide, 15,000 applications, 15,200, but a growth rate of about 6.3%. And the largest user of the system is the Netherlands, which of course is the centre of flower distribution for Europe and also a very important breeding centre for ornamentals, but also vegetables in particular. Karsten, some additional words? I don't think so. I think you've summarised the main trends. As you said, we could say a lot more about the performance of individual countries or officers, but I think this is all well documented in the press release and in the tables in the report. Okay, any questions? As regards China's figures, how credible are they because what one has just really made an honest about the so-called design patterns and liquidity patterns filed by China, and also the Chinese Communist Party's directives to file patent applications without regard to whether they actually amount to any rate to innovation? So where do you place these figures, given what one has just said, in the economist's latest issue? Then the second question is where do you exactly know what is happening in India? Well, let me take China, and then maybe, Karsten, you can respond to the India part. I wouldn't want to contradict an authority like the economist, but I would say that all the signs we see of China's engagement in this area are extremely positive, extremely strong. So strategically, of course, the country since the Third Plenum is on a journey from Made in China to Created in China, away from manufacturing towards the more knowledge-intensive industries, and that is a policy that is spread across the country, of course. So that's very significant, and intellectual property has an important role in that transition. Secondly, I think when you look at other indicators like investment in research and development, China is the second-largest investor in absolute terms in research and development around the world, after the U.S., and before Japan. By 2019, trends, current trends, would indicate that it will catch the U.S. into absolute terms in the R&D expenditure and will pass Europe as a whole in R&D terms. Enormous investment in education as well, and I don't think that these are insignificant indicators. I think they are indicators of, you know, the importance that China is attaching to this area and the strength of their engagement in the area. You could also add other indicators like numbers of science and technology articles published, and that's, again, a very strong performance and an increasingly strong performance. Then we come to our specific area of intellectual property. Well, the numbers, I think, say something, but they're quantitative measures and not qualitative measures. Well, we don't have agreed-upon metrics for judging quality across applications. One indicator that is used is the number of times a patent application is cited by other patent applications, and that's pretty positive for China. China is equal to Europe, European. But I haven't read any co-op on this article, but, you know... Most of the patents filed in China are all basically Chinese sort of given. When it goes to other markets and other countries... Well, have a look at a report done by Thompson Reuters within the last week, and which is available, and which will give you some further information. Okay. It starts with the Thompson Reuters report, like you. Yeah, that's right. And then questions the validity of this document. Yeah. Well, for the reasons that I gave, I would be an optimist about the performance of China. India? India. India. Unless you want to read to China. Yes, please. Well, maybe just one word on China. I think, you know, there's still a relatively young intellectual property system, and I'm sure, you know, that's what many people do. They often point to individual, you know, patents or design patents, invention patents or design patents, and, you know, use that as an example of something that's of relatively low quality, which, by the way, is something you can probably do for most jurisdictions, you know. People regularly do this for patents that have been filed at the USPTO. But I think that doesn't tell you anything systemically. Now, I also have not read the economist's story. I'm sure there is learning going on on the part of the IP users in China, on the part of, you know, the professionals, you know, who are behind the system, you know, on the part of the Chinese Patent Office. But I think there are clearly, you know, sort of encouraging signs, not only in terms of, you know, the underlying R&D investments, but also in terms of, you know, the way that intellectual property is used, you know, for commercial purposes in the Chinese economies. It is correct in our report documents that Chinese patent filings overseas are still far below what you would observe for the United States and Japan. In the case of China, they stand at around 30,000 compared to more than 200,000 filings abroad for the United States and Japan. Now, again, I think, you know, that speaks to the fact that, you know, the Chinese IP system is still relatively young. Certainly filings abroad have been growing very rapidly in the case of China, but one also shouldn't forget that A, China is a very large market, so the necessity, you know, of Chinese companies to file abroad is certainly smaller than it is, you know, let's say in the case of a, you know, an applicant. I think that's important to keep in mind. So, you know, I would share the Director General's optimistic outlook on China, but I think it'll be interesting to how we look at this 20 years from now when, you know, I think, you know, history will be written. On India, I can give you the 2013 number India saw a filing decline in the area of patents of 2.1%, relatively minor decline. You know, this comes after many years of growth in India. Just to give you some numbers, in 2004 there were more than, slightly more than 17,000 patent filings in India. In 2012, that figure rose to 44,000, which is, you know, the highest on record. So you've seen a small decline in 2013, which maybe I'm speculating here related to the economic slowdown. You know, we know there's, you know, always some correlation between, you know, economic performance and, you know, patent filing performance. That may be one factor, but we ultimately don't know. But most of the patents have come from the non-resident Indians. Yes, I could look up the number, but it's still the case that the majority of patents in India... So I don't quite speak about any sustained activity on growth, or something to talk about. Well, it depends on what you would like to measure, I would say. But certainly, I mean, we can give you the numbers on resident filings if that is what you're interested in. Yeah. And the growth on 2012? Yeah. But it's not inconsequential that foreign filings are going up. I mean, there is a reason for that, and that is related to investment, and what is happening in the Indian economy also. You don't file there unless you also have an interest in the economy. Thank you. I think there was a question here. Yes, it is. Sorry, I'm just from AFP. I just wanted to speak a bit more about the relationship between patent filings and the health of an economy. Is there a chicken and egg thing? We need to talk about as the economy goes down, or a cure. But is there a reverse relationship there? And in terms of following on from what the gentleman was saying about does that change when we're talking about a high percentage of resident or non-resident? I noticed that Australia has a large proportion of non-resident allocations. Does that speak to a certain change in the health of the economy as well? Well, as I mentioned, we know that there is a correlation between the business cycle and patent filings. We saw this quite clearly in the course of the great financial crisis in 2009, after which in most jurisdictions there was a significant drop in patent filings. And indeed you would find the numbers in this report as well as the previous reports that we published in 2006. We also know that correlation isn't one for one. There are many factors that influence patent filings from one year to the next. You would also often find that research and development spending, even though it may be affected by the business cycle, is less affected than consumptions and other elements of, let's say, economic output. And often what you would observe is that patent filings wrecked more slowly and in a more muted way than the business cycle. But a lot depends really on the country and there are lots of confounding influences. Then we, for example, the declining share of European patent filings. Is that a reflection of Europe's decline, the economic situation? Or is that the sign of basically declining behind in terms of innovation in terms of other countries regions of Asia? I would answer that with a qualified yes. In a sense that Europe's declining share has partly to do with the fact that China is growing a lot. So if China is growing much faster than the rest of the world it's only natural that the global shares of the other regions decline. But it's also the case and you would find that in our numbers that in Europe patent filings have been more or less stagnant. And while you probably can't make a direct causal statement that this is entirely due to the financial crisis and the ensuing weak economic performance, I think you can say that there is a mirror in what you see. The reason I would say qualified yes is that if you look at individual European countries the performance is quite mixed. So you look at Spain for example, in Spain you saw healthy growth of both research and development investments as well as patent filings really up to 2009 and you look at the data and you see that since 2009 there has been stagnation if not declines in both variables. And I think there the relationship to the crisis is entirely obvious. I think in some of the larger European economies such as France and Germany the picture is more nuanced in the sense that in France and also in Germany there has been reasonably healthy growth in research and development but the patent filing performance has been more mixed and again there are other factors at play there are public investments in research and development that were undertaken in the aftermath of the crisis so there isn't any one-to-one correspondence but I would say that economic conditions leave their imprint on how the economy performs in the area of innovation. Let me just add one comment if I may because you raised the resident, non-resident question also to say that to some extent this can be a misleading sort of figure because what you are measuring to a certain extent is one individual country's performance against the rest of the world so most countries have a larger share of non-resident applications naturally than resident applications of course there's a scale and it varies. I think the US hovers around about the 50-50 mark for example China is definitely more resident than non-resident for a whole host of reasons Japan is probably more resident than non-resident also but most other countries you'll find Sweden I think might be the same even though they have more non-resident so that's a measure to be treated with some care I'd say Jamil then Boris first still in China some are multinationals and other companies claimed for the last 10 years that they went to China the products are copied and now they're patented these products as Ravi said is this a lesson also for Western companies because many of them say that they went to joint ventures with Chinese companies and other business deals and now they're seeing their own products being patented with some kind of is this a lesson as well and secondly on Brazil despite the increase over on the world to see the numbers of Brazil they are very very small and even if you see the patent office in Brazil with 30,000 files 26,000 from abroad basically the innovation aspect of this seems to be not even very good health well on the first what we're measuring here is filings rather than the extent of imitation that might exist in any particular economy so we have very little in the report that can address your question I think if I may say that your question has a certain amount of anecdotal value this is what people are saying I think what I could say is that China takes intellectual property very seriously and if you look at both strategically and in terms of providing an administrative and legislative infrastructure so one of the things that has just been introduced in China for example is specialized IP courts and that will come online in on January 1 next year and there are relatively few countries in the world that devote governmental infrastructure to the specialization of enforcement of intellectual property or intellectual property disputes I think we see many signs that they're taking this extremely seriously in China Do you know how many people work in the Chinese pattern office? Look so they have a separate office for patents and designs on the one hand and trademarks on the other hand in the patent area my guests do you know Karsten where around about 15,000 you know it's a lot it's the biggest in the world yeah it's huge now on Brazil well that's a difficult question I think Karsten do you want to make a comment on this? Yeah well I can't say too much about it I think again I think the 2013 performance you have to see in light of how the Brazilian economy fared in 2013 which I think was the beginning of the downturn in Brazil and you're right in saying that most of the filings are by non-residents in Brazil but that does affect resident as well as non-resident filings so I think that's important to keep in mind now the fact that the minority share of filings in Brazil are from from residents is that a big problem per se I don't think it is I think there are pockets of excellence in Brazil if you think of the aircraft industry if you think of Embraer if you also think about oil exploration technology there's quite a bit happening but maybe I'm the one who's now too much anecdotal evidence certainly agriculture, Brazil is doing quite well in plant varieties so it's not that there is no innovation occurring in Brazil I think it's the question of whether the glass is half empty or half full Boris and then John Yes, first I don't know what the local classes are but more broadly without taking you too much time patenting and technical creativity is one of the topics least easy to put in numbers and still today in the publication of the indicator reports so you have to focus on numbers but still there are very few tables which can help those who are not interested in the country country wise breakdown but the let's say technical category breakdown what are these patents about is it a new painting for tomatoes or is it new underpaint or is it solar cell I don't know and there are some details but I have bad hearing I don't think you have addressed that so a couple of comments one we have available on our website a data center where you can go and profile your country very easily I am not interested in my country at all I am interested in technological innovation well first you can do that I thought you were interested in your country and secondly and patent scope here well in the case of patents I think the breakdown you would be interested in is the breakdown by fields of technology and that is available that isn't the reports yes I am happy to point you to them the director general in his opening remarks referred to computer technology having seen the fastest growth in 2013 also if you for example in this leaflet here actually not here it's sorry on pages on page 6 you would find the fields of technology that have a content for the fastest growth in patenting and surprisingly medical technology are much more sluggish and more ancient fields of computer technology so all this would be interesting to examine to analyze more in that you are right and there is but there is a we have this difficulty that in the patent system for the way in which they classify patent applications because they have to do it to examine against pre-existing technology is by fields of technology and in economics more generally people often use for example standard industry classification so we have a difference of classification techniques now you know this computer technology is it used where is it used in computer goods or is it used in supporting innovations in different industrial applications and fields and the same for biotechnology it can be used in agriculture it can be used in pharmaceuticals it can be used in chemicals it can be used across the whole range so there is a slight difficulty if you like in trying to classify the whole field of patent applications I know it's not very helpful but just to explain one of the methodological difficulties in this area you did mention the Locano system of classifying different industrial designs I have John and then Gunilla Yes Mr. Curry in your research do you have an assessment how many of the patent applications come from dual use areas in other words where there is a military and civilian input for instance we've seen recently in the Ebola vaccines a lot have come from the Department of Defense Research for the National Institute how much of this research whether it's in engineering in electronics and can you capture this in a statistic at least while it's patented into the US Patent Office or the Chinese Patent Office We can't Why? Well for a start because a number of countries such as the United States the Kingdom have a system of secret inventions For example for security reasons the United States law requires an United States resident or enterprise to file first in the United States of America and not overseas and incoming applications are screened and with potentially significant military applications do not necessarily find themselves in their way into the open patent system and that United States is not the only country to practice that system I believe that the United Kingdom and France also practice it but I would need to put my research up to date so that's one reason why we can't have an accurate measure of this What we do know is of course that there are many commercial applications of what started as military technology such as GPS Canela I wanted to ask you about the Nordic countries and as you can see there have been climbing applications in the EU but it hasn't touched as much as I understand right in Nordic countries and how do you explain that the economic recession Well I'll start and Carson can finish or compliment or correct but well the Nordic countries are all knowledge intensive economies and they're all knowledge intensive economies they're with the exception of Norway of course not resource primary resource economies so what they have is human resources and technology so this has been a consistent train for many years so we see extremely strong performances for Sweden, Denmark Finland in these areas and also in research and development if I'm not mistaken Sweden has the highest GDP percentage of GDP committed to research and development in the world if it's not the highest it's one of the top it's one of the highest and what else could I say about the Nordic countries Carson Well I'm just looking at the number numbers and I'm obviously not prepared I would say though that if I look at Finland you have a decline of about 5% in filings in the case of Sweden it's an increase of about 2.4% which is similar to what you see in other European or I would say is within the range of other European countries you see a notable increase in Norway and I can't tell you immediately what is behind there but certainly on the face of the number I would characterize that as a more mixed performance but I think that's quite a lot Is that Nokia? I'm asking you because I know Nokia has been going through difficulties and that may be reflected in patent filing but I'm speculating here so and remember also our global innovation index we have very strong performances from the Nordic countries I think Sweden is number 3 taken and on the global GA2 but also strong performances from Denmark Sweden number 3 used to be 2 number 3 this year Finland number 4 Denmark number 8 so strong performances there There's more time I was kind of late with the report so I didn't want to be there I can follow up earlier With reference to the patent filing you've also got a statistic in the report of trademarks in force What's the difference between the two I mean which other countries where people just file and forget about and make sure it's relevant and the countries where they're active doing better Well on the first one there's a fundamental difference between the patent system and the trademark system Patents in most jurisdictions are limited to 20 years whereas trademarks in principle can last forever provided applicants renew them when they come due and you see that I mean what is interesting if you look at the age profile of trademarks in force you would see the majority of them of relatively recent vintage but there's a significant number of trademarks that have been enforced literally for decades that speaks to the fact that certain brand names have long lasting values If you look at the aggregate values of patents and trademarks in force they're increasing simply because applications have been increasing and you would expect that to result in an increase in the stock of existing trademarks For which other countries where you've got them in force and which other countries where people just file they say I've invented something or I've invented something and just pay the fee and don't activate it I don't think that there are many people that file unless they have a corresponding economic interest or activity so I don't think they file and just leave it there because it costs money and there are maintenance fees so if you file in a country it's because you're interested in having an economic activity there Please A question about China's IP plate Among the huge numbers in patents and trademarks and designs respectively which kind of technology is the most at the end of the year to break down the numbers? Computers and telecommunications from memory was the predominant field but we will just consult it I think we would need to get back to you on this I think the numbers are easy to dig out you have them here so the three top fields in the case of China is computer technology digital communication and electrical machinery apparatus energy fields that you would associate with information and communication related technologies having said this these are the top three fields if you look at the spectrum of patent filings you would see China filing patents in pretty much all of the technology fields so certainly the fields of specialization differ from country to country but I would say China's patent patent filings are reasonably well diversified page 32 and chart A23 yes sorry I stick to my type of question not to embarrass you but because after all we are all here to try to understand what technical progress is about beyond the figures helpful thing for instance page 33 I very well understand the part about medical technology but if we look at the ones on basic material chemistry we feel very embarrassed because we see that Brazil is the most innovative in terms of basic material chemistry and that Korea is the last but one so we could conclude ok Brazil is basic and not Korea but if we look closer at the least we are surprised that Brazil tops Netherlands, Germany, Switzerland etc and Korea is on the other side so it poses all the question what really is basic and what is sophisticated another question is page 122 so I know that Trocter and Gamble is not no longer addressing the washing powder and Pampas business but still lot of patents in Pampas Pampas is their most heavily patented product but here in page 122 we are in the design so it's still surprising for me that Trocter and Gamble find more application for design by far than Hermes for instance just behind Swatch and Philip so all this for me poses very interesting question of interpretation I hope you will stay long enough we'll be here soon suddenly it's very fine to us all this fascinating well on the second one you know I think I'm guessing an answer on the second one I think that you would find that Trocter and Gamble have vastly numerically more products than Hermes I mean they are all over the consumer durables but what does this kind mean for this kind of product should you be here understand what you think so I would say that's the second one and on the basic chemicals well what is important to keep in mind for the figure 824 these are relative specialization indices with the emphasis on relative so you compare the strength of countries across the spectrum and figure out where is it that they have strength and weaknesses but that does not necessarily allow direct comparison between countries so it may very well be that overall Germany files far more many patents in basic materials chemicals than Brazil but as far as their relative performance is concerned so that's important to keep in mind it shows that Brazil it was page 33 that Brazil together with Netherlands, Germany and Switzerland is rather prone to innovation in basic material chemistry it's a strange group if you compare with all the figures on this page so that was just a question I know that you cannot supply but I think the answer could be interesting in a sense that most likely it's interesting in a sense that this is all based on sort of data on patent filings in fields of technologies okay I think we'll take one last question France is coming back to this issue that we mentioned that the Chinese are getting serious about IPN enforcement but I think some recent studies have shown that the threshold where an infringement is a violation is much lower in terms of value the higher more products need to you know it's a high level before a citizen you might counterfeit an X amount of products before it's a criminal offence is that changing the new law? Will there is an annual study done by the British law firm RAF R-O-U-S-E on IP litigation and it comes to some interesting conclusions one of which is that foreigners win more frequently in Chinese litigation than residents in the field and they substantiate that and you can look at their study online but well there's many possible explanations for that one may be that there are more foreigners that have interesting strong titles in force there because you tend to file overseas with your strong titles but nevertheless it's on its face a very interesting statistic so I'm not sure about I think we have to be very careful about the story My question is are they lowering the threshold for instance a few years ago someone could infringe 300-400 products before it was considered a criminal offence the exacting of the law is the law making an infringement so easy and out then in the past? Well I can't give you a direct answer because I'm not qualified to without looking at the data I would say that they take it very seriously and indications of this study by a very credible annual study done by the British law firm are that foreigners are not necessarily suffering in the Chinese litigation system at all Thank you very much and happy holidays to everybody and hope to see you in the new year The red carpet will always be