 Ladies and gentlemen on the left side of the room I will give the floor to Director General Francis Gehry who will be speaking to you about two subjects today the first one here the international patent statistics for 2011 then we'll take questions on that and then we'll move to the cyber squatting arbitration mediation center activities in 2011 because that is embargoed until Wednesday so it's just to make the taping easier downstairs so Karsten Finke is also with us our Chief Economist and Eric Vilbers the Director of the Arbitration Mediation Center. Thank you very much Sam our ladies and gentlemen very good morning to you thank you very much for coming this morning so let's start with the PCT as you know the international patent system in Safari so it exists and therefore an extremely important indicator of what is happening internationally in the field of innovation in particular it's one of the most important output indicators in the field of innovation and let me say that 2011 was an exceptional year in many ways and I will deal first in terms of volume or if you like demand how much activity is going on in the field of innovation in so far as the patent system provides an insight into that and then who's doing what you know which players are active so first in terms of demand despite the uncertain economic conditions we had a record year with 181,900 nearly 182,000 international applications being found under the PCT that was a growth rate of 10.7 percent over 2010 and the highest growth rate that we have had since the year 2005 it was excuse me it was also the year in which the two millionth PCT international application was filed and in terms of the use of the system and the accelerating pace of innovation it's useful to remember that it took 26 years for us to reach the first one millionth application and then a further seven years only to go to the two millionth application okay so that's the first thing I think to note that it was an extremely strong year despite the relative uncertainty as I said of the economy who's doing what well it's I think a similar story to the one that we have been telling for several years now there is an ongoing geographical shift occurring in the use of the PCT PCT system from generally speaking North America and Europe to Asia or if you like we see the emergence of Asia and as a consequence the relative decline in the share of North America and Europe in relative terms Asian now accounts for 38.8 percent nearly 39 percent of all international applications found under the PCT Europe is 30.9 percent and the North America is 28.3 percent so that is a significant change we saw extraordinary performances last year 2011 by China first of all who's the number of applications increased by 33.4 percent and by Japan where the number of applications international applications increased by 21 percent the explanations for the rise in the two cases are we believe different in the former case it's a reflection of the increased innovative activity that is taking place the second place in the second case Japan while the amount of innovative activity perhaps increases all the time at a relatively modest rate the very large increase in the number of international applications filed represents a shift in the use of or a change in patenting behavior on the part of Japanese enterprises which tend now to file a lesser number of domestic applications and a higher fraction of the domestic applications they tend to internationalize two other comments then in relation to who's doing what and then I'll stop talking on this point it's very interesting to see the middle-income countries increasing the use of the PCT system and their filing of international patent applications presumably reflecting their journey to higher value or to a higher level on the value chain and to increased innovation so we saw Brazil increased by 17 percent 17.2 percent in 2011 and we saw India increased by 11.2 percent in the case of India that 11.2 percent rise followed on a 36 percent rise in the preceding year so we now have two years in a row in which there are significant or double digit growth from India and we will watch with interest to see if that trend is confirmed in the future also from the Russian Federation there was an increase of some 20.8 percent and from Turkey of 12.7 percent so this we feel is very interesting to see at last if you like the reflection in terms of output in innovation area international patent applications of the changing position of the middle-income countries my last comment is perhaps on who's doing what in terms of individual corporations where we see that the biggest father the father of the highest number of applications was a Chinese corporation ZTE active in the telecommunications area and it overtook Panasonic Corporation of Japan as the top father in this regard we see that Japan has 21 separate applicants in the top 50 applicants rank so a very significant performance by Japanese corporations okay I shall stop my remarks at that point and we would be very happy to take any questions yes Daniel Prusin with BNA Francis I'm wondering if you can tell me ZTE is that the first time a Chinese company has topped a list of corporations filing patents and I'm also wondering as well in terms of we have a lot more patent applications being filed from China and other emerging economies but do you have any idea how successful these applications are the quality of these applications are they on a par with the filings in say Europe or North America thank you Dan on the first one if it was if I understand quickly you're just asking for a confirmation yes ZTE was the Chinese corporation that was the top father no first time they were two years ago and two thousand ten was yeah but China was also before 2010 it's not the first time that China 2009 it was also but I think it was Huawei from memory not ZTE and 2010 was Panasonic yes the success of these we don't short answer have a measure of that you would need to track you know the use of the inventions in the corporation's business and within their accounts you know what amounts were attributable to it so it's a very difficult thing to to track the quality of an invention unless it's a really absolutely you know outstanding basic fundamental invention I'm sorry I just follow up I was thinking more in terms of rejection of the applications do we have any idea whether our applications from China and other emerging economies fair in terms of the number that are rejected no chance we don't have any indication and I think it may also be worth pointing out that it is too early to tell because many of the applications most of the applications in fact that have been filed by the Chinese companies let's say over the last two or three years are still you know in in undergoing examination in national patent officers so I think in a few years it would be interesting to look back and see you know how the strong increase in patent filings especially under the PCT system from Chinese companies and I think ZTE technologies and Huawei technologies the two dominant PCT filers stand out here you know how those international patent filings have translated into national phase entries and then how those national phase entries have fared in national patent officers but I think it is too early to to make any assessment in that regard you know the the Russians what what sort of areas with a filing patents in our applications run well short answer is we don't know without examining those all of their applications you know which is possible you know you can do that but we don't have that information available now but what we could do is if you're particularly interested I mean this is all public information I think it wouldn't be difficult for us to provide you the breakdown by field of technology as you see in annex 4 we have the breakdown by field of technology for all applications it wouldn't be difficult for us for you to provide you the breakdown specifically for applications from the Russian Federation have you just got a any general ballpark estimation of idea of what the what the air is the well no okay time at quiet news agency yes on page three there is a decline in the growth in Florida the United Kingdom, Northern and Finland, Australia and Spain and other Western universities also do you think that there is a relation between a relation between this decline and the financial crisis in supporting or financing the development and their research? I'd say first of all that there were very mixed results from Europe some European countries have used as you have pointed out have risen and others fell down for example Switzerland was up 7.3 percent and France was up 5.8 percent and Germany up 5.7 percent but as you have said Netherlands minus 14 percent Finland minus 2.7 percent and Spain minus 2.7 percent also you point out Australia has declined as well my own view and then I'll ask Carsten to correct it or to add to it is that this is a direct reflection of the economic circumstances with the exception of Australia where there has not been an economic recession in the case of Australia I'm not sure what the explanation is but my guess is that it's related to the principal sources of of national income being in the manufacture in the mining sector and less in the research and development area although their percentage of GNP devoted to R&D has been rising so I'm not sure what the explanation is but for Europe I would say these figures are related to different strategies adopted during the economic crisis to innovation and research and development but also secondly and perhaps more importantly different capacities to be able to address research and development during the economic crisis well if I maybe could add one or two thoughts here I think you know in any given country pattern filing trends are influenced by a number of factors and we know for a fact I think there is enough evidence accumulated evidence that suggests that the business cycle does play an important role and certainly if the economy is on a downward trend you know that does affect companies patent filing behavior on the other hand we also know that there are other factors that are relevant you know certain let's say industry trends the industrial structure of the country's research and development activities matters in that regard so it's very difficult for us you know on the basis of these headline numbers to say you know this is directly related to the economic crisis on the other hand I think it is no coincidence you know that we have a rather mixed performance from European countries and you know this as you know has been the region you know most affected by at least the latest wave of the economic crisis that we have observed