 Ladies and gentlemen, very good morning to you. Thank you very much for coming on this beautiful morning So a couple of things if I may say to at the outset first of all What are we talking about here? Because as you recall back in December, I think last year we also spoke about numbers and Intellectual property applications. So this the distinction is this once a year in December November we release a survey of Worldwide activity in intellectual property in the preceding year. So the last one was about that, you know What's happening in every single country of the world for which we have data, which is a lot? What's this one about this one is about the systems that the international systems of WIPO runs and in particular the patent cooperation treaty for international patent applications the Madrid system for international trademark applications and the Hague system for international design applications and two things perhaps comments on those You one might expect it's a something of an assumption that the best intellectual property applications pass through the international systems You know one might expect that those who have something that they consider to be eminently commercializable We'll seek protection internationally and so Here we have a very good picture of of activity internationally and the second thing is perhaps Point to make is that the systems are of different levels of maturity So in the case of the patent cooperation treaty we have 152 countries that belong to it and so that gives us a very good picture because it's 95% of the GDP worldwide, you know, it's a it's a huge It's a very good picture. The Madrid system is is slightly less mature It has 97 Contracting parties covering about 113 countries. So it's a good picture, but it's not exactly It's not at the same level as the PCT and the Hague system is the least mature of the three that has some 49 Contracting parties to the latest act and it's very much in growth, but we nevertheless can make some insights about it so comments on what the results were and There is a certain monotony to the comments from the last five or six or seven years, but nevertheless, let's put the Observations out there and the first is that you know in a world in which we are getting messages from the principle, let's say economic bodies that The world economy's performance is rather sluggish and rather disappointing what we see here is in marked contrast to that because the growth rate in the international patent applications is some Seven point three percent the growth rating international trademark applications is seven point two percent and designs It's thirty five percent. So this is I think says something in itself and what it says is of course that the nature of economic activity is more and more You know contains a knowledge component more and more and that these sectors of the economy are tending to outperform Other sectors of the economy. It's a joint generalization, but nevertheless Let's make it I'd say the second Comment which is again a repetition of it of a trend or it is is a trend is that the performance of China is something quite extraordinary so in the in terms of international patent applications the number of applications from China rose by What is it forty four percent? Forty four percent, you know, that's one year forty four point seven percent You know, this is we're used to you know double digit growth from China We used to it climbing very very rapidly, but forty four percent is something Really quite exceptional. So it takes it China in terms of volume of international patent applications emanating from China to a position which is very close to the first two in terms of volume Sources of international patent applications. So if you look at those sources, you have the United States in the first position with Give you round figures 56,000 international patent applications Japan in the second position 45,000 international patent applications China in the third position with 43,000 international patent applications so if double digit of growth Continues from China and there's no reason why we would expect on recent trends for that not to be the case We would expect China to move into second position next year and within two or three years To catch the United States America. So I think that is while it's a story that we have been hearing now for or Relating now for several years It really is quite exceptional So what are the comments can I make to you? Well The third one I suppose is that Asia in general Now accounts for forty seven point four percent of all international patent applications forty seven for most half of international patent applications And if you went back merely ten years 2006 it was 27% now obviously the biggest driver and that is China, you know the Nevertheless 47% and you can compare that with Europe twenty five point six percent and North America twenty five point three percent So here is something that of course we've been discussing for years, but it's very apparent I'm not sure how much I you would like me to bore you about the details because you have the details But so perhaps I won't go into more details But we're happy to talk about Any any of these the features of this Please Sure sure Will you do the latter through the former So by using our systems you have an easier method of filing in United States or Japan or wherever it might be So typically what an applicant in the pattern area or in any other area would do is file a home application their first application and Then within 12 months they would follow it with that so-called international application Which would cover all of the other contracting parties or so many of them as they may wish so instead of filing if you're a German company instead of filing first in Germany and then after within 12 months that's the There's a rule about that called priority and then Filing after 12 within 12 months in United States a separate application in Japan separate application in China separate application India and so on you file one with us and It covers all of those other countries a hundred fifty two other countries So it's much more efficient. There are certain other advantages like postponing the costs until you have more information about the Likely patentability the technical Nature of the application how you're getting your money together for investment and so on so It's it they have a lot of advantages, which explains why They are the preferred filing route Yes, you do have to pay a fee for us, which is extremely modest One off it depends on the system actually, but let's talk about patents. It's one fee And after it's about 1400 Swiss francs One application 152 or so countries and That's if you are going to file only in three countries Then financially it's cheaper to do it directly in those three then pay the 1400 So it becomes economical to do it through our system after four applications basically Not Counting the non-financial benefits that go with it too. So if you're certain fields of technology for example you might have The capacity to make semi-conductors existing only in a limited number of countries and so you may not seek worldwide Protection you need to seek protection only in those likely competitor markets, but other fields of technology such as pharmaceuticals They would typically try to file almost everywhere It doesn't it doesn't it doesn't yeah Always Well, they do and but the if you define an international patent application a certain as an application That is filed in more than one country So to it could be but could be a hundred Then we are we are through our systems come 60 60% of all of those 60% of all applications that filed in more than one country come through our system Yeah, please Yeah, and second question Do you think that protectionist trade policy from the US and the Trump might accelerate So on the first question and we derive 96.5% of our revenue through these systems Through these systems And about 3.5% of the revenue comes from member state contributions So Yeah, at least Swiss francs anyway And what does that translate into in round figures 400 million Swiss francs a year for the total for the total budget and Come down so for the member state contributions are about 380 million Swiss francs a year I Swiss francs per year is our budget Sorry from the application and 380 million from applications so 20 million if you like from Member states, so I'm giving you round figures. We can give you exact if you'd like but those are those are accurate Going where? Keeps going up here Oh second one, sorry. Well, look, I don't see its impact on these systems and Obviously, you know, there is a lot one could say if one knew more about the nature of the policies But on the general tendency that you describe of of perhaps You know protectionist Forces being at work in the world I don't see an immediate I don't see an immediate impact on these systems Because these systems actually are passports into other Territories out there economically. It's it's protecting your intellectual assets in other markets in which you would like to operate Now protectionism might have some impact on your capacity to be able to act in other Markets, but these would be the instruments that you would continue to use because they give you an advantage Frank sorry Basically this whole patent PCT scenario is one of there are four or five or seven tigers Completely monopolize the whole thing then there are this tortoise is very laggard In fact, they're not been growing at all. Does this imbalance asymmetry Sort of Well to comments on that first of all it is if you like a measure a measure of technological capacity so Therefore it's it's You know, it's it's not the only measure it's a measure of technological capacity and it's very interesting Therefore to have a measure of that and to see what is happening, but my second comment would be I just gave you a figure saying that you know in Asia 10 years ago They accounted for 27 percent of international applications Last year it was 47 percent. I mean, that's not exactly stability. Is it? So now admittedly the great driver in that has been China but Also Japan and Korea Republic of Korea those of those have had good performances, too so Yes, in any given year you look and you see that there is a large domination of the of the applications But there first of all there have been changes and secondly, you know When you're dealing with technological capacity You're dealing with something which takes time. It's a long-term game to acquire You know, it's a long-term game and you're you do have Increasing performances so one could cite India One could cite India 1529 applications last year Sorry Previous year was 14 14 hundred and 12 8% growth yeah, and Okay, it's not the same country, but I would expect that and there I'm sticking my head out because you know We don't know but I would expect that you will see India's performance continue to rise Not in the same way as China It's not the same country, but it's we are seeing these signs that it is Using the international patent system more and more Thank you Joan in fact, I think there were years they were much more than 1500 It presents some kind of stagnation Despite all the initiatives So would you really give your actual, you know serious assessment In the sense that Will my serious assessment would be that when you take all of the policy measures that Being implemented in India at the moment. I Would be extremely surprised if we do not see a steadily increasing performance in the use of the international patent system And I think that is coming through so you know take the number that we just said 1500 okay, so There was a time when we you said India files roughly the same amount as Belgium Belgian file 1200 Belgian file 1200 last year If you compared it to Canada 1500 Canada's 2300 okay, so and I would say that You know Canada's not a technologically backward country So I would say the figures are there. We have to wait. Of course you can we can't declare a trend Yet, but I would be highly surprised if we don't see a steadily increasing performance And that would be medium term In the medium term, I would say Certainly in the long term too, you know One country that it listed here is called under Some countries we don't have that information about who that country of that list of the afternoons So we this class and I know once we have more information that will be Yeah Pattern cooperation treaty is invention, so it's basically technology PCT inventions It's basically technology Madrid is trademark, so it is branding and The Hague is designs, so that's the external appearance of products furniture as the as the principal applicant was Falcon from the Netherlands to furniture maker, so it's furniture fashion watches clothing extra and cars shape the external appearance Yeah, so we can't give you an exact figure on that because that no longer concerns us What happens with these systems and they're each slightly different? It's a little bit difficult to generalize is that Certain phases of the processing procedure are internationalized since one application one international search one international preliminary examination, you know so there at the end of the day the title is granted by the The country that's designated Okay, so it's what but that country that is office Receives Information from the system which assists them to take the decision So we don't have that's in their ball court, but a rough figure a rough, you know figure would be and it's you know We're generalizing here because they're different countries different slightly different standards Rough figure would be two-thirds approval rate for patents rough But the one-third doesn't necessarily get rejected in many cases. We're also the applicant voluntarily withdraws withdrawals because the applicant feels No, there's a combination of reasons and another reason to the one that cast and mentioned is the applicant might withdraw Because what it actually wants to do is to publish the technology So that happens we publish it and then they withdraw they didn't go any further Why would they do that because they don't want someone else to pattern it? Publications you know fans anyone else from patent against cool defensive publication No No more first and it was first to file or first to invent not published Tom, what about how many of the trademarks are approved and how many of the I Can't give you that figure but It's much yeah, it's much higher because I mean typically Typically company wouldn't just shoot off an application. I mean branding is a very important investment decision and before you would choose a brand you would search its availability and Make sure that you are well advised about its distinctiveness that nobody else has it Because you're going to be investing a lot of money not Just in the application but in the advertising in the image and how you're going to project this Obviously some mega piece of Registration that's right in place like China and Japan in the US, but it's not a smooth correlation with innovation in China's numbers of ten times out of Switzerland, which are ten times out of Island there's no way that China is a hundred times more innovative Island and you were talking about in years were gradually progressing But presumably in you would have to have a like a step change It's not gonna go up by three percent a year or you know in line with GP. It's just there are some countries Which are totally different from from most countries So I just wonder if you can explain why some countries show these mega numbers And most countries don't and the second question is about China's patterns Is it anyway? I'm sort of looking at the I mean the quantity is obviously big. Is there any way looking at the quality? And is it a difference? You know, do you see a different kind of quality of Well on the first I think and maybe custom can supplement what I say It is as I said a measure of technological capacity. It's not the only one So we also publish a global innovation index, which is a much broader look at you know some 68 or so different elements that we think are important inputs to an innovation ecosystem and Outputs of innovation ecosystem and that would be a better measure We would suggest for overall in innovation capacity and performance of a country than just pattern figures Which are one element. So there's that now why would different countries have You know different Extents of usage of the system Well, I think they're probably of the patent system. They're probably Various explanations for that, but we we can't discount, you know Demography for a start. So Switzerland is 8 million people China is 1.4 billion So one would expect that if there was any similarity in technological capacity that you would get more applications coming out of China So demography is obviously important and we do publish in our Reports and Messiah next to you can refer you to these a measure of applications per GDP and Per population so we can we do have figures on that and they would be sounder ways of looking at the matter But it is obviously complex now The second question was Quality yeah, look, it's a difficult one. It's a very difficult one And there's a lot of urban legend around this and a lot of anecdotes The reality is that we do not have a metric for quality Now you might say well, you know, you're really hopeless. Why don't you? And the I think the answer to that is if we did, you know, you wouldn't need a venture capital industry If you could tell what the commercial capacity and potential of a of an invention at the very first stage then You know, you don't need to be going to No, no, I look it's you know, we are vitally interested in this question as you are And Yeah, well on the first let's deal with the first We can give you areas of technology Where they are most active and that tends to be digital computer technology telecommunications We you can couple it also with looking at the Amount of investment that's going into R&D and the sectors of Investment in R&D in China and we know they have that It's in round figures four hundred billion US dollars in R&D this year as opposed to five hundred and twenty billion US dollars for the United States of America It's more invested in R&D in China than in the European Union. So on that alone And given the general policy of emphasis of the Chinese authorities on innovation Emphasis also on the educational system. I would be very wary of making, you know, comments about quality But You know, if the quality is not there at the moment it will be there and I think that we Will see that translated into commercial applications But you know, there are it is also numbers here that we're dealing with numbers I'd have to look it up, but it is less than I'm going on the Batel Institute figures In there R&D report for this year. We have a question here on the right Yes, a question on the Participation of Japan in the A system if I understand it made the first application in 2014 and We are still increased thousand percent increase between the first and second year and now Between thousand six and fifteen one hundred percent increase. Can you give me details on why this increases? Sure. So this goes back to the comment I made at the outset that the three systems have different levels of maturity and The least mature if you like is the Hague system And Japan only recently joined the Hague system as did the United States America and as did the Republic of Korea Before that it was traditionally had a membership, which was largely European now as a result of those three obviously extremely innovative countries Joining the Hague system. We're seeing these very high growth rates in the design area of 35% this year 40% last year But it's on a small volume You know and it doesn't have the same geography or geographical coverage that the patent System the PCT does So we will see other countries coming into the system and it will give us an increasingly better view of Design activity worldwide. So Japan's I think figures are explained by its recent Joining of the system and they're starting to use it Well, yes, it's a complex question. I mean what is a defense related invention Yeah, for example, yeah for GGSP DPS wasn't a military invention well came out of military Invention so yeah, so You know it's hard to say what is There are civilian uses I Look, I would suspect so because when you look at the If you decompose the research and development figures, you see that a large component is defense research and development and So they're obviously producing something, you know and Most of the time we prefer not to see it. I think you know Deployed but the other thing to note is that a number of countries have what they call Secrecy provisions so This is at least the United States United Kingdom, France, I believe Germany and others where they look at home domestic applications, okay, so applications filed by their own constituents And they have the capacity to pull those from the publication system It's called secret inventions or defense inventions and obviously we don't have figures on that If it's okay with everybody I mean Your comments on quality Patent applications Well, there are one or two studies on this I think We're still in good one and So maybe it were there are some studies on this My colleagues can comment perhaps on them and You want to say something castle or the side I mean, I don't think there's an obvious conclusion coming out of these studies Because you have both you have, you know Kate so what these studies have done they have looked at these No studies that have been done by academics. They have looked at pattern filings that have been submitted to various offices in the world the same pattern filings and see what happened and You would find both you would find in a cases where a patent was submitted United States and it was not accepted in the United States, but it was accepted in Japan, but you would also find Finding the other way around It's also very difficult to come to firm conclusion there because the timeline is not the same It could be that one office looks at a company that one particular Point of time and another office at another point in time and you know Offices also use the information that is generated by one pattern prosecution and another jurisdiction to inform their own process So it's it's very happy to point you to these studies But they don't necessarily would tell you that office is more permissive than than than another office You know why I'm asking this question is that this comparative assessment has become an essential exercise because you have publications like slamming the Chinese patents as You know quality wise very poor that just in front of you So while the same comment you don't hear about say the patents that are coming for fight by US or Japan So is there any sort of bias towards these kind of systems? I mean does the WIPO come to this conclusion that there is something perhaps to be looked at Look, I think that we can't obviously make a comment on that but to cut to observations first You know where it's not for us to say whether there's bias in the comments You know that are made about the system. We're giving you the figures and we're seeing trends and it's You know you can draw some conclusions from those figures and trends and I would say that one thing that We need to do need to pay attention to however in in the longer term in the future is that In a world in which competition is increasingly based on technological capacity and innovation and in which that the advantages that Derived commercial advantages that are derived from technological capacity and innovation Protected by intellectual property Obviously, I think we would all be interested in ensuring that there's enough transparency About patent granting processes around the world to for us to be able to See if there is any cribbing on or cheating on the on the on the standard on the application of the standards and so I Don't suggest that there is and I don't we don't have any evidence to suggest that there is but I think that This is something that we should Look for in the future You have any statistics on the game he opposes countries the average time Process and because the argument has been made by stalling you hope your domestic industry will reverse engineer and fire application some Sure, no, we do have those some aside has a lot to do with that What's the average I say they think for an application to be Examining a US and what's the average stage in Japan or Brussels or Beijing? Difficult because comparing the offices were difficult the reason for that is sometimes the applicant can delay the process You're looking rough, I'm going to give you a rough figure, right? You're looking at about You're looking it differs. So in Korea. They are processing them in under 20 months, you know under 20 months years in European patent Organization you're looking at more than 36 months And but they would also tell you that their quality of their process is the highest, you know, so we're into You know a different assessments self assessments here And the other thing is that it depends on the field of technology So you'll find that it's much longer in the biotech area than it is in the IT Area It also depends on the average length of pendency depends on the on the Field of technology so it's longer in the area of biotechnology generally