Patent costs and impact on innovation : international comparison and analysis of the impact on the exploitation of R&D results by SMEs, universities and public research organisations.
Date: 2015-09-15
Institutions: Directorate-General for Research and Innovation
Subjects: comparative study, cost analysis, innovation, patent, patents licence, research and development, research policy, research report, small and medium-sized enterprises, university

Patent costs and impact on 
innovation 

International comparison and analysis of the 
impact on the exploitation of R&D results by 
SMEs, Universities and Public Research 
Organisations 

 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Directorate-General for Research and Innovation 
Directorate A — Policy Development and Coordination 
Unit A4— Analysis and monitoring of national research policies 

Contact: Richard Deiss 

E-mail:  Richard.Deiss@ec.europa.eu  
Roman.Arjona@ec.europa.eu 
RTD-PUBLICATIONS@ec.europa.eu 

European Commission 
B-1049 Brussels 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
EUROPEAN COMMISSION 

Patent costs and impact  
on innovation 
International comparison and analysis of the impact  
on the exploitation of R&D results by SMEs,  
Universities and Public Research Organisations 

December 2014 

This study was financed under FP7  
(Capacities Work Programme: Support for the Coherent 
Development of Research Policies, tender SI2.624064). 

Carried out by Everis Spain S.L.U. – Madrid 

For the Directorate-General for Research & Innovation 

Directorate-General for Research and Innovation 
Seventh Framework Programme (FP7) 

 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
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LEGAL NOTICE 

This document has been prepared for the European Commission however it reflects the views only of the 
authors, and the Commission cannot be held responsible for any use which may be made of the information 
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More information on the European Union is available on the internet (http://europa.eu). 

Luxembourg: Publications Office of the European Union, 2015. 

ISBN 978-92-79-45520-9 

doi:10.2777/0782 

© European Union, 2015. 
Reproduction is authorised provided the source is acknowledged. 

Cover images: © Lonely, # 46246900, 2011. © ag visuell #16440826, 2011. © Sean Gladwell #6018533, 
2011. © LwRedStorm, #3348265. 2011. © kras99, #43746830, 2012. Source: Fotolia.com. 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Authors and acknowledgements 

The  present  report  includes  the  results  of  the  ‘Patent  costs  and  impact  on  innovation  study:  an 
international  comparison  and  analysis  of  the  impact  on  the  exploitation  of  R&D  results  by  SMEs, 
Universities and Public Research Organisations’. 

This study has been funded by the EC and conducted by everis Spain. 

This  report  was  prepared  by  a  team  of  consultants  and  analysts  from  the  Business  Analytics  and 
Business  Intelligence  units  of  everis  Spain  (www.everis.com),  led  by  Dr.  Ángel  Sánchez  (Project 
Director), Mr. Pablo Hortal (Project Manager) and Mr. David Cuesta (Chief Analyst). 

The project team gratefully acknowledges the  valuable feedback and advice  the Project Officer  of 
the  European  Commission  (Mr.  Richard  Deiss)  and  the  members  of  the  Steering  Committee 
provided to everis throughout the project. 

4 

 
 
CONTENTS 

1 

2 

3 

4 

5 

6 

EXECUTIVE SUMMARY .................................................................................................. 8 

INTRODUCTION ......................................................................................................... 10 

2.1  Context ........................................................................................................... 10 

2.2  Objectives ........................................................................................................ 11 

METHODOLOGY OVERVIEW AND SOURCES OF INFORMATION ......................................... 12 

RESULTS .................................................................................................................. 17 

4.1  PATENT COSTS AND PROCEDURE IN NPOS .......................................................... 17 

4.1.1  Patent costs: a cross-country comparison ................................................... 17 

4.1.2  Country clustering .................................................................................... 30 

4.1.3  Patent costs: policies to promote innovation for SMEs ................................... 31 

4.1.4  Workload in NPOs: cross-country comparison .............................................. 34 

4.2  Profile of patents filed in NPOs and the EPO ......................................................... 40 

4.3  Economic indicators .......................................................................................... 51 

4.3.1  Utilisation rate and economic value of patents ............................................. 51 

4.3.2  Motivation for patenting ............................................................................ 53 

4.3.3  Relationship between patent costs and investment in research ...................... 55 

4.3.4  Impact of patent costs on a number of different aspects ............................... 58 

4.4  Patenting costs investment & internationalisation impacts,  

barriers and burdens ......................................................................................... 71 

DISCUSSION ............................................................................................................ 86 

CONCLUSIONS AND OPEN QUESTIONS ........................................................................ 88 

6.1  Conclusions ...................................................................................................... 88 

6.2  Open questions: the basis for future work ............................................................ 90 

7 

ANNEXES.................................................................................................................. 92 

7.1  Countries and group of countries ........................................................................ 92 

7.2 

7.3 

IPC - Technology field concordance table ............................................................. 93 

IPC - NACE concordance table ............................................................................ 96 

7.4  Economic sectors .............................................................................................. 98 

7.5  N° of patents by technology field and economic sector per type of applicant .......... 101 

7.6 

Literature review ............................................................................................ 105 

5 

 
 
 
 
 
List of figures 

Figure 1 -   Phases of the CRISP-DM methodology process ..................................................... 14 

Figure 2 –   Overall patent costs EUR (2011) ......................................................................... 21 

Figure 3 –   Relative overall patent costs (2011) .................................................................... 24 

Figure 4 –   Cost reductions in overall patent costs for SMEs in EUR (2011) ............................... 32 

Figure 5 -   Number of filings vs Relative administrative fees (2001) ........................................ 40 

Figure 6 -   Weighted average patent life in years by technology field (1991) ............................ 43 

Figure 7 -   Weighted average patent life in years by economic sector (1991) ........................... 44 

Figure 8 -   Weighted average number of validated countries by technology field (2001) ............ 45 

Figure 9 -   Weighted average number of validated countries by economic sector (2001) ........... 46 

Figure 10 -  Arithmetic mean of patent lives per validated country in years  

(for patents filed in 1991) .................................................................................. 49 

Figure 11 -  Arithmetic mean of the number of patents validated in destination countries,  

per origin country of applicants (for patents filed in 2001) ..................................... 50 

Figure 12 -  Patent utilisation (commercialisation or licensing) for the 20 European  

countries considered in PatVal-EU II (2010) vs Relative maintenance costs (2011) ... 51 

Figure 13 –  Economic value of patents for the 20 European countries considered  

in PatVal-EU II (2010) vs Relative maintenance costs (2011) ................................. 52 

Figure 14 –  Motivations for patenting for the 20 European countries considered  

in PatVal-EU II (2010) vs Relative maintenance costs (2011) ................................. 53 

Figure 15 –  GERD vs Relative overall patent costs (2011) ....................................................... 56 

Figure 16 –  BERD vs Relative overall patent costs (2011) ....................................................... 57 

Figure 17 –  HERD vs Relative overall patent costs (2011) ....................................................... 58 

Figure 18 -  Patents filed in 1991 which have a patent life that can be calculated  

(with high certainty), per type of applicant for each technology field ..................... 101 

Figure 19 -  Patents filed in 1991 which have a patent life that can be calculated  

(with high certainty), per type of applicant for each economic sector ..................... 102 

Figure 20 -  Patents filed in 2001 that have been validated in at least one country,  

per type of applicant for each technology field .................................................... 103 

Figure 21 -  Patents filed in 2001 that have been validated in at least one country,  

per type of applicant for each economic sector ................................................... 104 

6 

 
List of tables 

Table 1 -   Project tasks and associated deliverables ............................................................... 13 

Table 2 -   Description of PATSTAT 10-2012 data.................................................................... 16 

Table 3 -   Patent costs structure EUR (2011) ........................................................................ 19 

Table 4 -   Overall patent costs EUR (2011) ........................................................................... 20 

Table 5 –   Relative overall patent costs (2011) ...................................................................... 23 

Table 6 -   3C-index and cost per claim per trillion EUR (2011) ................................................. 25 

Table 7 -   Evolution of absolute overall patent cost in EUR (1991, 1996, 2001, 2006, 2011) ....... 26 

Table 8 –   Litigation timing and costs (EUR) .......................................................................... 28 

Table 9 –   Litigation timing and costs and litigation activity in four EPC contracting stated  

and USA (in €1000)............................................................................................. 28 

Table 10 – Parallel cases in different jurisdictions ................................................................... 29 

Table 11 - Groups of countries with similar patent costs structures (2011) ................................ 30 

Table 12 - Overall patent cost in EUR for SMEs (2011) ............................................................ 32 

Table 13 - Average processing time (2011) ........................................................................... 34 

Table 14 - Workload in the patent offices (2001) .................................................................... 35 

Table 15 - Weighted average patent lives in years (1991) and number of validated countries 

(2001) by technology field ................................................................................... 47 

Table 16 - Weighted average patent lives in years (1991) and number of validated countries 

(2001) by economic sector ................................................................................... 48 

Table 17 - Motivations for patenting in SMEs, universities and PROs ......................................... 55 

Table 18 - R&D investments by SMEs: Research intensity ........................................................ 59 

Table 19 - R&D investments by SMEs: SMEs engaging in in-house R&D and innovation ............... 60 

Table 20 - SMEs with in-house R&D activities vs Relative overall patent costs (2011) ................. 60 

Table 21 - Creation of new initiatives .................................................................................... 61 

Table 22 - PROs' and Universities' ability to create spin-offs .................................................... 61 

Table 23 - Growth of SMEs .................................................................................................. 62 

Table 24 – Employment in fast growing SMEs vs Relative overall patent costs (2011) ................. 63 

Table 25 - Access to venture capital for SMEs to perform R&D ................................................. 64 

Table 26 – Venture capital investment/GDP vs Relative overall patent costs (2011) .................... 64 

Table 27 – Venture capital investment/GDP vs Relative overall patent costs for selected NPOs 

(2011) ............................................................................................................... 65 

Table 28 - Internationalisation behaviour of SMEs .................................................................. 66 

Table 29 – Share of high tech exports in total exports vs Relative overall patent costs (2011) ..... 68 

Table 30 – Share of high tech exports in total exports vs Relative overall patent costs  

for selected countries (2011) ................................................................................ 69 

Table 31 – Licenses and patent revenues from abroad as % of GDP vs Relative overall  

patent costs (2011) ............................................................................................. 70 

Table 32 - Research cooperation between SMEs, UNIs and PROs .............................................. 71 

Table 33 - R&D Investments by SMEs and impact of patent costs ............................................. 73 

Table 34 - International portfolio of SMEs, PROs and Universities ............................................. 74 

Table 35 - Granted patents of SMEs, PROs and Universities (2011, 2012) ................................. 76 

Table 36 - SME, PRO and Universities' perception of the impact of patent costs .......................... 78 

Table 37 - SMEs' perception of the impact of patent costs, low/high tech economic sectors ......... 80 

Table 38 - Main barriers for patenting for SMEs, PROs and Universities ..................................... 82 

Table 39 - Type of costs that are found a real burden by SMEs, PROs and Universities ................ 84 

Table 40 - Analysed countries and group of countries ............................................................. 92 
Table 41 - IPC - Technology field concordance table ............................................................... 93 
Table 42 - IPC - NACE concordance table ......................................................... 96 
Table 43 - Relevant NACE Rev. 1.1 codes ......................................................... 98 
Table 44 - NACE Rev. 2 sections ................................................................. 100 

7 

 
 
 
1.  EXECUTIVE SUMMARY 

Patents are an essential tool for promoting innovation and technological advancement. The patent 
system  creates  a  framework  that  supports  and  incentivises  the  development  of  science  and 
technology  which  fosters  innovation,  technology  transfer  and  economic  growth.  A  strong  patent 
system results in benefits not only at EU level but at a global level and patent costs are one of its 
key elements. The two main objectives of this research are: 

•  To provide a comparison of patent costs levels and structures at country level. 

•  To analyse the impact of patent costs on R&D and innovation activities of SMEs, universities and 

PROs. 

Three main data sources have been used in this research: information gathered from 40 European 
and  international  National  Patent  Offices  (NPOs)  regarding  their  fees  and  operational  aspects, 
PATSTAT (and INPADOC) from which data from direct European and national patents was obtained, 
and  the  everis  survey  which  was  conducted  in  11  countries  covering topics  such  as  patent  costs, 
motivations for patenting, burdens and benefits of patenting. 

The  evidence  collected  shows  wide  differences  in  patent  costs  levels  among  NPOs.  For  example, 
fees paid for a patent maintained for 20 years in Germany can be more than 5 times higher than in 
Malta. However, the situation changes when costs are considered relative to the size of the market 
covered by the patent. For example, the cost of a German patent relative to the size of the German 
market is nearly 75 times lower than for Malta. 

The  costs  for  a  European  patent  filed  at  the  European  Patent  Office1  and  validated  in  6  and  13 
countries  are  high  in  absolute  terms  compared  to  national  patents.  However,  relative  to  market 
size these costs are lower than in most NPOs analysed in EU Member States when translation costs 
and the simplified procedure are considered. Compared with the costs at the JPO (Japan) and the 
USPTO  (USA),  European  patents  relative  to  market  size  are  relatively  expensive;  for  example  a 
patent for 6 European countries is 7.3 times more expensive than a USPTO patent, while a patent 
for  13  European  countries  is  11  times  more  expensive  than  a  USPTO  patent,  which  makes  them 
less affordable for applicants. 

Although there are differences in cost levels, most NPOs in Europe have similar fee structures, with 
relatively low entry fees (administrative fees) and with maintenance fees that increase with patent 
life. The progressive increase of maintenance fees aims at encouraging patentees to drop patents 
which are not valuable enough and hence to unlock lower value aging patents. 

Litigation costs in Europe have also been analysed. Due to the fragmented nature of the European 
system, simultaneous litigation in four European jurisdictions can be twice as high as the fees for 
validating and maintaining a European patent in 13 countries for 20 years. 

Another  topic  addressed  is  an  evaluation  of  workloads  at  NPOs.  Backlogs  have  been  a  cause  of 
concern  for  NPOs  due  to  the  increase  in  patent  filings  in  the  last  years.  Delays  in  the  patent 
granting  process  create  uncertainty  which  affect  business  decisions.  Cross  analysis  of  pendency 
times,  number  of  filings  and  examiners  and  grant  rates  combined  with  facts  gathered  from  the 
literature suggest different levels of thoroughness in the examination process. Less comprehensive 
examination  processes  increase  the  likelihood  of  low  quality  patents  which  may  impede  the 
innovation  process  and/or  increase  the  chances  of  litigation/opposition  procedures,  which  add 
significant and unpredicted costs for applicants and licensees. 

The  study  also  examined  the  arguments  in  favour  of  lower  and  higher  levels  of  patent  fees.  Low 
fees  reduce  the  costs  incurred  by  innovators  and  therefore  increase  the  returns  on  innovative 
investments. However, lower costs are likely to lead to higher numbers of patent applications and 
may  contribute  to  higher  backlogs  or  less  thorough  examination  processes  if  the  number  of 
examiners  does  not  increase  accordingly  or  if  there  are  not  efficiency  gains  in  the  examination 
process. 

Patent life and the number of countries covered by patents have been analysed based on PATSTAT 
and  INPADOC  databases.  Long  living  patents  correspond  to  the  technology  fields  of  micro-
structural  and  nano-technology,  ICT,  bio-science,  medical  technology  and  chemistry.  Likewise, 

1  Although  filed  at  the  EPO,  not  all  costs  are  set  by  the  EPO.  Validation  fees  (in  some  countries)  and 

maintenance costs are charged on behalf of NPOs. 

8 

 
                                                 
European  patents  with  the  highest  number  of  validated  countries  show  similar  results  for  micro, 
nano,  bio,  medical  and  chemistry  related  technologies,  which  leads  to  the  hypothesis  that  these 
require intensive investment on R&D and can be easily copied if they are not adequately protected. 
In  addition,  the  return  on  investment  is  only  achieved  in  the  long  term  due  to  the  high  R&D 
investments  required  in  these  sectors.  ICT-related  patents  have  long  lives  but  are  validated  in  a 
lower number of countries. This fact is likely to be related to the dynamics of this industry rather 
than initial high investments. 

Patents  from  Europe’s  largest  economies  have  on  average  the  longest  lives  which  reflects  the 
increased  economic  importance  of  patents  in  larger  markets.  However,  it  is  also  noticeable  that 
patent life is affected by the fee structure as predicted by the literature. For example, the average 
life of Italian patents (16 years) is well ahead of German patents (13 years) while Italy has a low 
and  flat  renewal  fee  cost structure  in  which  renewal  fees increase  only 22%  from  the 13th  to  the 
20th year while in Germany fees increase by 150%. 

Linear regression analyses have been carried out between patent costs relative to market size and 
other  innovation-related  indicators  such  as  R&D  expenditure,  SMEs  engaged  in  in-house  R&D, 
employment  in  fast-growing  firms,  venture  capital  funding  and  high  tech  exports.  The  results  do 
not  allow  inferring  clear  relations  between  costs  and  these  indicators.  However,  the  analyses  did 
not take into account other relevant factors such as economic structure, other patent related costs 
(e.g.  litigation  and  enforcement),  or  the  patenting  strategies  of  companies  (e.g.  the  extent  to 
which companies patent domestically or internationally). 

The  everis  survey  2013  collected  information  about  entrepreneurial  activity  and  motivations  for 
patenting. Respondents indicated that the cost of patents was a relevant factor although it was not 
possible to establish conclusive relations between patent costs and the responses given. Again this 
indicates that there are many factors, other than patent costs, that impact on innovative behaviour 
and a more sophisticated multi-variate analysis would be needed to examine this issue in greater 
depth. 

9 

 
2.  INTRODUCTION 

2.1  Context 

This study on “Patent costs and impact on innovation: International comparison and analysis of the 
impact of the exploitation of R&D results by SMEs, Universities and Public Research Organisations” 
is  aimed  at  contributing  to  the  development  of  an  evidence-based  monitoring  of  the  evolution  of 
national  research  and  innovation  systems  in  Europe.  The  indicators  developed  shall  allow  for 
assessing the impacts of research policies and programmes on the competitiveness of Europe and 
its contribution to growth and to address societal and global challenges. 

Patents  are  a  basic  tool  for  promoting  innovation  and  technological  advancement.  The  patent 
system  establishes  a  legal  framework  that  supports  and  incentivises  the  development  of  science 
and  technology  that,  in  the  end  stimulates  innovation  and  economic  growth.  Therefore, 
strengthening the patent system will result in several benefits not only at EU level but at a global 
level.  

The  costs  of  filing  and  maintaining  a  patent  influence  the  number  of  filings  and  the  lifespan  of 
patents. Special attention  is paid to  SMEs in  some  countries that take advantage of lower fees in 
order to promote innovation and competitiveness. Therefore they can be considered a part of the 
Intellectual  Property  policy.  The  single  market  for  patents  in  Europe  has  been  affected  by  the 
different  levels  of  patent  costs  across  Member  States.  Several  measures  have  already  been 
undertaken  or  are  under  development  both  by  the  EC  and  Member  States  to  enhance  the  patent 
system. The results of this study shall contribute to a better understanding of the impacts of patent 
costs  and  how  they  can  be  turned  into  a  tool  for  the  development  of  an  effective  European 
knowledge market for patents and the promotion of licensing and technology transfer. 

The  present  study  has  been  carried  out  through  an  evolutionary  approach  with  the  following 
deliverables associated to each phase of the project: 

• 

• 

• 

• 

• 

• 

• 

• 

• 

• 

D1 -   Literature review considering patent costs calculation methodologies and previous 
work carried out on the effects of patent costs on PROs, Universities and SMEs. 

D2 -   Methodology description and roadmap of the tasks. 

D3 -   Interim data for a preliminary set of countries. 

D4 -   Data summary for the 40 countries targeted (see Annex 7.1). 

D5 -   Methodological report containing the conceptual frameworks and definitions for  

the estimation of patent costs and the data from D4. 

D6 -   Report on the survey and case studies with the corresponding methodology  

utilised and the results obtained. 

D7 -  Analytical report presenting the analysis carried out from the different  

information sources and the conclusions obtained. 

D8 -   Final report which presents the study and its context, the objectives and  

the methodology deployed; it presents a summary of the literature review, a synthesis  
of the data provided, the results, main findings and reasoned conclusions. 

D9 -   Brochure and slides presentations for dissemination that shall contain an executive 

summary of the project’s main findings and recommendations. 

D10 - Dissemination workshop which will be an opportunity to present the findings and 

conclusions, to review and discuss the issues of quality and comparability of the data  
collected in the project, and to present the analysis and results with this data. 

The present document is the 8th deliverable (D8) and corresponds to the final report. 

10 

 
  
 
 
 
 
 
  
  
  
 
 
2.2  Objectives 

D8 summarises the results obtained in the previous seven deliverables and provides an integrated 
vision  of  the  findings  and  the  conclusions  stemming  from  them.  The  primary  objectives  of  this 
deliverable are: 

•  To provide a comparison of patent costs levels and structures at country level. 

•  To analyse the impact of patent costs on the R&D and innovation activities of SMEs, Universities 

and PROs. 

The  insight  gathered  during  this  project  aims  to  provide  valuable  information  to  the  EC  and  the 
Member States with regards to policy development in the field of Intellectual Property. As a result 
of the research undertaken in this project, the following questions related to the influence of patent 
costs in the following topics are looked into: 

•  Patent costs levels: Do differences between countries create barriers for the filing of patents? 

•  What is the average patent life and in how many countries is a patent validated? 

•  Utilisation  rate  of  patents:  Does  the  level  of  patent  costs  encourage  the  commercial  use  of 

patents or their licensing? 

•  Economic value of patents: Do patent costs influence the average value of patents? 

•  Motivations for patenting: Do patent costs influence the motivations of patent applicants? 

•  Is  there  a  relationship  between  patent  costs  and  macroeconomic  parameters  such  as  the 

investment on R&D at different levels (GERD, BERD and HERD)? 

•  Do patent costs influence business decisions of SMEs (investments, growth strategies, creation 
of  new  firms,  access  to  VC  funding  or  internationalisation),  Universities  and  PROs  (spin-off 
creation)? 

•  Are patent costs a barrier for patenting for SME, Universities and PROs? 

11 

 
 
 
3.  METHODOLOGY OVERVIEW AND SOURCES OF INFORMATION 

The analysis needed to be carried out in the present study is significantly complex since there is no 
single data source able to provide a complete and simultaneous snapshot of the behaviour of SMEs, 
Universities  and  PROs  in  terms  of  patenting.  Therefore,  different  databases  and  sources  of 
information have been used throughout the project.  

Firstly, 40 National Patent Offices (NPOs) have been consulted to gather data regarding patent fees 
(according  to  the  OECD  patent  costs  can  be  split  into  administrative,  process,  translation  and 
maintenance costs). 

Secondly,  the  EPO  databases  PATSTAT  and  INPADOC  have  been  extensively  used  as  they  are  a 
comprehensive  repository  of  worldwide  patent  statistics,  including  information  on  patent  life  and 
validated  countries  for  European  patents  (this  information  is  provided  by  INPADOC).  In  addition, 
PATSTAT  also  integrates  information  stemming  from  NPOs  which  deliver  this  data  according  to 
individual policies, which makes difficult the “simultaneous” view mentioned before. 

In order to assess previous research in the various topics targeted in this study, a comprehensive 
literature review  has been carried out.  The  main  sources  are  summarised in Annex  7.6  Literature 
review. 

Finally,  these  sources  of  data  have  been  complemented  by  a  survey  (everis  survey  2013) 
conducted in 11 countries, encompassing  6 European countries, 4 from  Asia and the USA. A final 
set  of  414  responses  were  collected  providing  valuable  information  on  the  motivations,  costs, 
impacts  and  perceptions  regarding  patenting  for  two  routes:  “Direct  National”  (standard 
applications  at  the  NPO  level)  and  “Direct  European”  (applications  directly  filed  at  the  EPO). 
Additional  data  sources  like  the  “PatVal  EU-II  survey”  (2010)  and  macroeconomic  data  obtained 
from Eurostat regarding the expenditure on R&D have also been used. 

This  data  collection,  integration  and  analysis  activity  has  been  undertaken  as  part  of  a 
methodology which comprises 5 tasks. Task 1 focused on the literature review of the project; Task 
2  and  Task  3  targeted  the  gathering  of  data  and  information  on,  respectively,  patent  costs  and 
additional patent information, by country; Task 4 included the design and execution of the above-
mentioned  11-country  survey;  Task  5  was  designed  to  identify  and  obtain  other  patent-related 
information  and  economic  indicators,  and  to  analyse  all  information  gathered;  Finally,  Task  6 
focuses on the dissemination of project’s result. 

12 

 
 
 
The relationship between the different tasks and project deliverables, as described in section 2.1, is 
shown in the following table. 

Table 1 - Project tasks and associated deliverables 

Task description 

Associated deliverables 

Task 1, “Review of related literature”.  

The  objective  of  this  task  was  to  expose  the  state  of 
the  art  concerning  different  topics.  Basically,  the 
different  methodologies  of  calculating  total  patent 
costs, along the life of a patent, as well as the effects 
of  patent  costs  in  the  behaviour  of  SMEs,  Universities 
and  PROs,  including  possible  relations between  patent 
costs, structural change, and competitiveness of SMEs. 

  D1 - Literature review report. 
  D2 - Study’s methodology.  

Task 2, “Data and information on patent costs”. 

  D3 - Interim data. 

The  objective  of  this  task  was  to  collect  patent  cost 
data  in  the  40  countries  and  3  groups  of  countries 
specified in Annex  7.1.  Together with Task  3,  it  has 3 
different deliverables as outputs (D3, D4 and D5). 

Task 3, “Data and information on patents and average 
patent life”. 

The  present  task  complemented  the 
information 
obtained  on  patent  costs  in  the  previous  task  with 
information on patents and average patent life.  

  D4 - The patent cost data (for the 
project’s target countries) and 
related information. 

  D5 - Methodological report (data 

quality). 

Task  4,  “Survey  and  case  studies  of  patenting  SMEs, 
Universities and PROs”.  

  D6 - Report on survey and case 

studies. 

The  goal  of  this  task  was  to  develop  and  execute  all 
the  surveys  and  case  studies  planned  in  order  to 
obtain a representative, high quality, set of data about 
the  patent  activity,  the  experience  in  patent  filings, 
and the impact of patent costs in the patenting activity 
of SMEs, Universities and PROs. 

Task 5, “Produce analytical work”.  

  D7 - Analysis report: an analytical 

The essential objective of this task was to examine all 
data and information collected up until this point, with 
the  objective  of  obtaining  reliable  conclusions  of  the 
impact  of  patent  costs  (levels  and  structure)  on  the 
patenting  behaviour  of  the  entities  being  targeted,  on 
the  economic  development  of  SMEs,  on  their  R&D 
investments and their internationalisation behaviour. 

report presenting the main 
conclusions.  

Task 6, “Dialogue, meetings and dissemination”.  

  D8 - Final report (the present 

This task, which is geared towards building awareness 
of  the  project,  has  as  its  fundamental  objective  the 
achievement of effective external communication of its 
concept,  its  results  and  the  potential  impact  it  could 
have within the European Union. 

document). 

 

 D9 - Brochure and slides 
presentations for dissemination. 

  D10 - Dissemination workshop. 

The “Analytical report” (D7), which is the resulting deliverable of Task 5, has been developed using 
the CRISP-DM (Cross Industry Standard Process for Data Mining) methodology. This methodology, 
partly funded by the EC during the 1990s, is the most commonly used standard process model in 
both academic and industrial fields, and provides a solid framework for data analysis projects. 

13 

 
 
 
Figure 1  Phases of the CRISP-DM methodology process 

The business understanding phase focuses on the business orientation of the problem, which is 
to  obtain  a  better  understanding  of  the  patent  cost  structure  among  countries  to  develop  and 
promote innovation through an enhanced patent system in Europe.  

The  data  understanding  and  preparation  phases  deal  with  data  gathering  and  quality 
assessment.  The  activities  related  to  these  two  CRISP-DM  phases  have  been  carried  out  several 
times during the project. 

Once  data  is  gathered  and  quality  is  ensured  (to  a  certain  level,  deemed  appropriate  for  the 
analysis to be executed) a  model  is built to optimise  the analytical  work  (modelling phase). In 
this case, most of the project’s related information was integrated in a database where data quality 
and cleansing activities were undertaken. This information came from four main sources: NPO data 
(gathered  manually  from  NPOs  and  integrated  in  the  project’s  data  repository  using  automatized 
processes), the PATSTAT and INPADOC databases (standard automated extraction, transformation 
and  loading  processes  were  applied),  the  everis  survey  2013  (414  responses  from  11  countries, 
automatically  integrated)  and  other  external  sources  (OECD  data  for  GERD,  BERD  and  HERD,  as 
well as PatVal-EU II survey data were manually integrated in the project’s data repository).  

The model itself was mainly, as explained above, a data repository with certain rules and decisions 
to  make  data  analysis  more  reliable  and  efficient.  The  most  representative  features  of  such 
model are the following: 

•  Patent costs gathered from NPOs. The selected reference year was 2011, since it was the 
one for which NPOs, in general, had the most recent and complete data. These costs have been 
divided into the four categories recommended by the OECD: administrative, process, translation 
and maintenance costs. It must be borne in mind that an NPO can only provide administrative 
and maintenance costs. The remaining two categories were estimated following Roland Berger’s 
(RB)  “Study  on  the  cost  of  patenting”  (2004).  Although  some  of  the  data  from  the  RB  study 
may  be  outdated  and  must  be  taken  with  caution,  the  study  is  still  the  most  comprehensive 
research  covering  all  aspects  of  patent  costs  and  therefore  it  has  been  used  in  some  parts  of 
this study. 

•  Process costs in the RB study were estimated as 9,840 € for a set of 14 OECD countries2. In 
order  to  have  more  precise  (i.e.  up-to-date)  process  costs  for  each  country,  several 
assumptions have been made: 

Inflation  adjustment:  in  order  to  carry  these  costs  from  one  year  to  another,  the  average 
inflation rate for the OECD countries published by the World Bank3 has been used. 

   Purchasing power parity adjustment: just updating process costs with inflation rates does not 
take  into  consideration  differences  in  purchasing  power  standards  among  countries. 
Therefore,  the  updated  costs  were  multiplied  by  the  ratio  of  purchasing  power  parities 
between each country and the OECD. However, since a PPP conversion factor for the OECD 
does  not  exist,  Germany’s  conversion  factor  has  been  used  instead.  An  example  of  the 
calculations for the UK is provided below: 

The  starting  point  of  the  calculations  is  the  process  cost  in  Euros  obtained  as  an  average  of  the 
process costs for the countries covered in RB’s study. This average cost (in Euros) is updated using 
the average inflation for the OECD countries and then it is multiplied by the ratio of PPP conversion 
factor for the target country which is given in Local currency divided by international dollars (in the 
example  British  pounds  divided  by  international  dollars)  and  the  PPP  conversion  factor  for  the 

2 The countries covered in the RB study are Austria, Belgium, Switzerland, Germany, Denmark, Spain, Finland, 

France, Italy, The Netherlands, Sweden, the UK, the USA and Japan. 

3 http://data.worldbank.org/indicator/NY.GDP.DEFL.KD.ZG 

14 

 
 
 
  
 
                                                 
country set as a reference, which is Germany (Euros divided by international dollars). The result is 
the  process  costs  in  local  currency  for  the  country  considered  (in  the  example  British  pounds  for 
the UK) 

•  Regarding translation costs, the data from the RB study has also been used. Translation costs 
from  English  to  the  languages  considered  in  the  report  have  been  updated  using  World  Bank 
inflation rates for the OECD countries, and allocated to each country according to the languages 
accepted  in  its  NPO.  If  several  languages  are  accepted  in  one  NPO,  the  lowest  cost  was 
selected.  For  those  countries  whose  languages  are  not  covered  in  RB’s  research,  an  average 
translation cost has been chosen except for China, South Korea and Japan where the difference 
between language families did not allow for an accurate comparison using RB’s data. It must be 
taken  into  account  when  dealing  with  NPO  data  that  only  national  filings  are  analysed. 
Therefore, the London Agreement4 does not apply. 

•  Another  decision  included  in  the  analysis  model  is  related  to  the  patent  application 
mechanisms.  In  the  last  decade,  several  NPOs  have  established  different  fees  depending  on 
whether  the  filing  is  paper  based  or  electronic  based.  In  order  to  follow  a  consistent  criterion 
among countries and throughout the temporal scope considered,  only costs for paper based 
applications have been taken into account. No extra charges for late payment are assumed in 
any case.  

•  Regarding the length of the text considered, the RB study has also been taken into account. 
According to this study, the “model patent”  has 28 pages (including 4 pages of claims) and 
13 claims. 

•  European patent costs: the costs of filing, validating and maintaining a European patent have 
been calculated for the model patent previously described. Costs depend on the countries where 
the  patent  is  validated.  In  this  study  costs  are  considered  for  2011  in  the  6  and  13  most 
frequently validated countries: 

   The  6  European  countries  group  includes  those  countries  where  at  least  40%  of  European 
patents  are  validated.  These  countries  are  Germany,  France,  Italy,  The  Netherlands, 
Switzerland and the UK. 

   The 13 European countries model patent corresponds to the countries in which at least 12% 
of  European  patents  are  validated.  In  addition  to  Germany,  France,  Italy,  The  Netherlands, 
Switzerland and the UK, Austria, Belgium, Denmark, Finland, Ireland, Spain and Sweden are 
also included. 

Administrative  fees  for  the  European  patent  are  comprised  by  the  administrative  and 
designation  fees  charged  by  the  EPO  plus  any  other  validation  fees  charged  by  the  receiving 
NPOs. Maintenance costs are the most important costs component for European patents since it 
is  a  bundle  of  the  maintenance  fees  charged  by  each  NPO.  Translation  costs  have  been 
calculated according to the London Agreement5 and the process costs have been estimated as 
the average of the process costs for each country included in the aggregate. 

•  Other  features  of  the  model  deal  with  patent  costs  expressed  in  Purchasing  Power  Parity 
(PPP). PPP conversion factors published by the World Bank6 have been used and, consequently, 
data  in  local  currencies  has  then  been  transformed  into  international  dollars,  allowing  for 
homogenous comparisons between countries. 

•  Patent costs expressed in Euros are calculated using exchange rates published by the World 
Bank7  which  provide  the  cost  based  in  dollars  that  are  then  transformed  into  Euros  using  the 
dollar-Euro  exchange  rate  for  2001,  2006  and  2011.  For  1991  and  1996  the  conversion  from 
dollars to Euros has been made using the fluctuation of the German Mark as a reference for the 
Euro area. 

4 http://www.epo.org/law-practice/legal-texts/london-agreement.html 

5 The London Agreement has only been applicable for Finnish EP validations from the 1st of November 2011. For 

simplicity purposes, Finland translation costs are calculated as if only claims need to be translated. 

6 http://data.worldbank.org/indicator/PA.NUS.PPP 

7 http://data.worldbank.org/indicator/PA.NUS.FCRF 

15 

 
                                                 
•  Average patent life and number of validated countries. This information has been gathered from 
EPO’s PATSTAT (release 10/2012), including INPADOC (release 10/2012). The different dataset 
utilised are summarised in the following table. 

Table 2 - Description of PATSTAT 10-2012 data 

[1]   Field APPLN_FILING_DATE = 1991, 1996, 2001, 2006 or 2011 in table TLS201_APPLN 
[2]   Technology field is known and valid (i.e. different to NULL, Unknown and N/A) 
[3]   Type of applicant is known and valid (i.e. different to NULL, Unknown and N/A) 
[4]   Economic sector is known and valid (i.e. different to NULL, Unknown and N/A) 
[5]   Field PUBLN_FIRST_GRANT = 1 in table TLS211_PAT_PUBLN 
[6]   Legal status code PG25 (at INPADOC table) in all validated countries (see explanation in Section 0) 
[7]   Legal status codes including PG25 or PGFP (at INPADOC table) 

•  Correlation analysis, applied to obtain the linear regression coefficient of determination 
(R^2),  is  used  to  explore  the  possible  relationship  between  several  economic  indicators  and 
patent costs. This method provides a clear indication of how close the variation of a pair of two 
variables  is  to  a  certain  regression  line  (R^2  measures  the  share  of  the  variation  in  “y” 
explained by the variation in “x”; a coefficient of determination of 1 implies that the regression 
models the correlation perfectly well). 

Evaluation and deployment are the final phases of the CRISP-DM methodology. The former pays 
attention  to  the  evaluation  of  the  model  (i.e.  the  results  obtained  and  shown  in  “D7  -  Analysis 
Report”) to be carried out by the Commission and project stakeholders. The latter focuses on the 
needed  activities  for  the deployment  (dissemination  and  future  application)  of  the  model  (and  its 
corresponding results and conclusions). This document and the dissemination workshop are a key 
part of the means for the evaluation and deployment of the project’s results. 

Several challenges have been encountered during the execution of the project.  

The most relevant are: 

•  The lack of available data of patent costs at NPO level has limited the analysis of the evolution 

in time of patent costs. 

•  The limited data provided by NPOs, such as the average number of claims or  pendency times, 
have restricted the number of countries for which the analysis of patent costs through the 3C-
index is done or the analysis of workloads at their POs respectively. 

•  The lagging of data integration in PATSTAT and INPADOC (specifically the information delivered 
by  NPOs)  required  taking  the  year  2001  as  a  reference  year  for  several  analyses.  Data  was 
incomplete  for  the  years  2011  and  even  2006  due  to  two  facts:  data  is  not  registered  in 
PATSTAT until patents are published at their corresponding POs, and the sending of patent data 
by the NPOs to the EPO varies between countries. 

•  The intrinsic complexity of measuring the average patent life and the limited detail of the survey 
(everis survey 2013) for some required elements of analysis have indeed been challenges that 
have been tackled during the execution of the project.  

Despite these limitations, a set of relevant conclusions have been reached which can be used as a 
base or guide for future analysis and decision-making by the Commission. 

16 

 
 
 
4.  RESULTS 

The results obtained in the different analyses are divided into 4  sections that cover the questions 
previously raised: 

•  Section 1: Patent costs and procedure in NPOs. 

•  Section 2: Profile of patents filed in NPOs and the EPO. 

•  Section 3: Economic indicators. 

•  Section 4: Investment & internationalisation impacts, barriers and burdens regarding patenting 

costs. 

In order to provide a good understanding of the work carried out and the results obtained, a similar 
structure has been followed in each section: 

•  Introduction: a brief outline of the issue in question and its relevance. 

•  Data  sources  and  data  preparation:  the  main  data  sources  are  identified  and  the  different 

processes of data treatment are described. 

•  Analysis:  based  on  the  processed  data  and  the  objectives  for  each  section,  analysis  and 

presentation of the results are performed.  

•  Conclusions and recommendations: according to the results of the analytical phase, conclusions 

are drawn. 

4.1  Patent costs and procedure in NPOs 

In  this  section  a  cost  analysis  of  the  patenting  process  is  carried  out  at  an  NPO  level.  Costs  are 
considered  using  different  perspectives  in  order  to  identify  costs  structures  that  could  have  an 
impact  on  the  patent  applicant  behaviour.  Finally,  a  description  of  the  NPOs’  workload  is 
undertaken and put into perspective with how costs can impact on it. 

4.1.1  Patent costs: a cross-country comparison 

The  goal  of  this  subsection  is  to  provide  a  cross-country  comparison  of  the  costs  of  obtaining 
and  maintaining  a  patent.  As  indicated  above,  according  to  the  "Patent  Statistics  Manual"  of  the 
OECD, four main components of patent costs can be identified8: 

•  Administrative  costs:  filing  fees, search,  examination, country  designation, grant/publication 

fees and validation fees that are due to the corresponding patent office. 

•  Process costs: costs associated with the drafting of the application and with the monitoring of 
the procedure (interaction with examiners and the patent office) on the applicant’s side. These 
costs can be incurred in-house or externalised. 

•  Translation costs: in the case of applications abroad, such costs arise once a European patent 
is granted at the EPO, and depend on the length of the patent and whether the country where 
the patent is validated is part of the London Agreement or not. The more countries covered, the 
higher  the  translation  costs.  In  the  case  of  national  patents,  only  those  entities  that  originally 
write their patents in a language different than the official one(s) of the destination NPO incur in 
translation costs. 

•  Maintenance costs: are renewal fees to keep the patent valid during a maximum period of 20 

years (extensible for certain types of patents). 

8 OECD Patent Statistics Manual, Paris, 2009. 

17 

 
 
 
                                                 
Administrative and maintenance costs for direct national applications were obtained from the NPOs 
while  translation  and  process  costs  were  taken  from  the  RB  study  on  the  topic.  RB’s  data  was 
obtained  in  2004  for  a  set  of  14  OECD  countries  hence  it  has  been  conveniently  updated  using 
OECD  inflation  rates.  However,  taking  an  average  value  for  all  NPOs  might  create  distortions, 
especially  for  less  developed  countries.  In  order  to  have  more  precise  data  for  each  country, 
process costs have been adjusted according to the relative purchasing power parity between each 
country analysed and a reference country. As indicated earlier, since there is not a PPP indicator for 
the OECD, Germany has been chosen instead. Translation services can be considered a more global 
market, therefore only OECD inflation rates are used. 

It  must  be  noted  that  from  the  point  of  view  of  an  NPO,  translation  and  process  costs  are 
transparent;  when  patents  are  filed  they  are  already  translated  and  processed.  Besides  this, 
considering  translation  costs  for  the  analysis  will  bias  towards  estimating  costs  for  foreign 
applicants,  since  national  applicants  do  not  incur  in  translation  costs.  Besides  this,  updated  RB’s 
data for process and translation costs may not factor in changes in law firms procedures, strategies 
or  advances  in  translation  tools.  Therefore,  only  costs  set  by  the  NPOs  (administrative  and 
maintenance costs for 10/20 years) comprise the overall costs that are used for most of 
the analysis. 

In  order  to  provide  a  consistent  cost  analysis  throughout  the  NPOs  selected,  the  same  model 
patent defined in the RB study has been used. As mentioned, this model patent has 13 claims, 28 
pages (including 4 pages of claims), and is written in English. 

Costs are expressed in four ways to provide different angles of analysis: 

•  Patent costs expressed in  absolute terms (Euros)9  provide  a global  perspective of  the  selected 
NPOs  and  allow  for  an  objective  comparison  of  costs  for  a  foreign  applicant  willing  to  protect 
his/her inventions in different country. 

•  Patent costs expressed  in relative terms. Patent costs expressed just  in absolute  terms do not 
take  into  account  the  attractiveness  of  each  market.  Several  parameters  can  be  used  to 
measure the attractiveness of a market. In the literature the population of a country and GDP 
are frequently used, the latter being the option chosen. Therefore, relative costs are calculated 
dividing costs expressed in Euros by the GDP of each country in billions of Euros (1,000,000,000 
€). 

•  Patent costs adjusted in terms of PPP10 are a very useful indicator to provide an insight on the 
impact of patent costs for a local inventor willing to protect its invention in his/her own country. 

•  The  3C-index11  is  a  synthetic  indicator  that  allows  for  a  cost  comparison  between  countries 
considering market size (measured in terms of population) and technological capacity measured 
in terms of average number of claims (instead of the number of patents). 

•  Cost per claim per GDP, which is a variation from the 3C-index that measures the attractiveness 

of a country in terms of its economic output. 

Following the OECD’s definition of patent costs, the total patent costs for the 40 NPOs selected plus 
an European patent (6 and 13 countries) are shown below. 

9 Exchange rates used are obtained from the World Bank (http://data.worldbank.org/indicator/PA.NUS.FCRF). 

Currency exchange for Euro countries prior to 2001 is calculated using the German Mark as a reference. 

10 Local Currency to PPP expressed in international dollars is calculated using conversion factors published in the 

World Bank Data repository (http://data.worldbank.org/indicator/PA.NUS.PPP). 

11 “The cost factor in patent systems” (2006) by B. van Pottelsberghe and D. François. 

18 

 
 
                                                 
Table 3 - Patent costs structure EUR (2011) 

[1]   Administrative costs in Euros.  
[2]   Maintenance costs for 20 years in Euros.  
[3]   Process costs in Euros.  
[4]   Translation costs in Euros. 
[5]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK).  
[6]   Costs for a European patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and SE). 
[7]   Arithmetic mean of the costs for EFTA countries.  
[8]   Arithmetic mean of the costs for other countries NPOs.  
[9]   Arithmetic mean of the costs for all NPOs.  
[10]  2011 refers to the filing year 

Note:   administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  Process  costs  are  calculated  as  the  average  of  process  costs  in  the 
validated  countries.  Translation  costs  are  the  sum  of  translation  costs  taking  into  account  the  London 
Agreement (when applicable) 

Source:  NPOs 

Overall patent costs for the NPOs considered are shown in Table 4. Patent life has a big impact on 
patent  costs  the  patentee  pays  since  in  most  countries  maintenance  costs’  annual  payments 
increase sharply at the end of the patent’s lifespan. In order to assess the impact of patent life on 
the overall costs, the analysis is carried out for a 10 and 20 years patent life. 

19 

 
 
Table 4 - Overall patent costs EUR (2011) 

[1]   Overall patent costs (administrative + maintenance 10 years) in Euros.  
[2]   Overall patent costs (administrative + maintenance 20 years) in Euros.  
[3]   Ratio Overall patent costs 10 years - Overall costs 20 years.  
[4]   Overall patent costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK).  
[5]   Overall patent costs for a European patent validated in 13 countries (DE, FR, IT, NL, CH and UK, AT, BE, 

DK, FI, IE, ES and SE).  

[6]   Arithmetic mean of the overall patent cost for EFTA countries.  
[7]   Arithmetic mean of the overall patent cost for other countries NPOs.  
[8]   Arithmetic mean of the overall patent cost for all NPOs.  
[9]   2011 refers to the filing year 

Note:  administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance fees charged by each NPO.  

Source: NPOs 

20 

 
 
 
Figure 2 - Overall patent costs EUR (2011) 

The  fees  for  filing  and  maintaining  for  20  years  a  granted  model  European  patent  validated  in  6 
countries  can  be  3.3  times  more  expensive  than  a  Japanese  patent,  and  5.9  times  more  than  a 
patent granted by the USPTO. The main cause for the higher overall costs of European patents is 
the maintenance fees charged by the NPOs. 

Overall costs for the 6 European countries patent are slightly higher than filing 6 national patents, 
however,  when  the  reduction  in  translation  costs  due  to  the  London  Agreement  and  the  more 
simple  procedure  are  considered,  the  European  patent  becomes  more  competitive.  Fees  paid  for 
the 13 European countries patent during 20 years of patent life are already lower than the sum of 
the  fees  charged  if  13  national  patents  were  filed.  If  translation  costs  are  considered,  the  13 
European countries patent is even more competitive. 

Individual  countries  such  as  Germany,  Austria  and  The  Netherlands  exhibit  significantly  higher 
maintenance  costs  than  others  NPOs  considered  in  the  study,  although  their  filing  costs  are  very 
similar to the average cost of EU-28 countries. On the other hand, Japan exhibits the highest costs 
mainly due to the impact of per claim fees which are charged during the examination and in each 
annual payment for the renewal of the patent. 

Despite its high overall patent  costs,  Germany is the leading European market in terms of patent 
filings.  This  may  be  explained  by  the  importance  in  terms  of  market  size  and  dynamism  and  the 
medium-high technology intensity of the companies that operate in the German market, which may 

21 

 
 
force companies to prioritise protecting their inventions in Germany even though costs are higher. 
However, it cannot be ruled out the possibility that costs can become a barrier for small enterprises 
with  low  IP  protection  budgets.  The  case  of  Japan  is  somehow  different  with  most  of  the  filings 
coming from Japanese inventors; the high number of filings may be explained by the medium-high 
technology intensity of the companies and from incentives to patent inventions. 

Another  important  element  to  be  considered  when  comparing  overall  patent  costs  is  how  they 
progress over time. Annual payments for maintenance increase at the end of the patent lifespan; 
the ratio between accumulated cost for a 10 year patent lifespan and the accumulated overall cost 
for a 20 year patent is a good indicator of the progression over time of maintenance  fees. Lower 
ratios  indicate  sharp  increases  at  the  end  of  patent  life  which  can  be  considered  an  incentive  to 
maintain only highly valuable patents (for the patent holder perspective) and, up to a certain point, 
a way to promote innovation by unlocking the use of IP that may not be valuable for the inventor 
but can be put in to use for a third party. 

When  considering  only  maintenance  costs  for  10  years,  the  country  order  changes  considerably. 
Countries with highly progressive  maintenance  fees  such as Germany, Austria or the Netherlands 
have  no  longer  the  highest  costs.  In  this  case,  Finland,  the  USA,  Japan,  Brazil,  Norway,  Italy, 
Hungary or Denmark have the highest overall costs. Patent holders in these countries do not have 
such a high economic disincentive to drop less valuable patents. 

The USPTO has a high ratio between 10 year and 20 year overall costs, however its cost structure 
for renewal fees is quite different. Maintenance costs are divided into 3 renewal payments at 3½, 
7½ and 11½ years after the  grant.  Considering that  on average time to grant is 33 months, this 
costs  structure  promotes  that  those  patent  holders  who  consider  their  IP  valuable  enough  at  the 
14th  year  of  the  patent  life  will  pay  the  renewal  fee  and  lock  it  until  the  end  of  the  patent  life. 
Otherwise the patent will be dropped and the IP will be available for third party users, which is the 
effect that a highly progressive maintenance fee structure would have. 

Average patent lives of European patents are studied in section 4.2. One of the key results is that 
patents  live  longer  in  larger  economies  as  a  consequence  of  the  higher  income  potential  of  the 
patent which would compensate for the increasing maintenance fees at the end of the patent life. 
Interestingly,  average  patent  life  in  Italy  is  nearly  16  years,  which  is  longer  than  the  following 
European country  with the longest  average patent  life, Germany, where patents live just over 13 
years.  When  renewal  fees  are  considered,  Italy  has  a  low  and  flat  renewal  fee  cost  structure  in 
which renewal fees increase only 22% from the 13th year to the 20th and remain flat from the 15th 
year. By contrasts, maintenance fees from the 13th year to the 20th in France, the UK and Germany 
increase  2.3,  2.4  and  2.55  times  respectively.  This  fact  is  aligned  with  our  previous  assumptions 
regarding renewal fee progressiveness. 

When  considering  costs  in  terms  of  PPP,  countries  from  Eastern  Europe  such  as  Hungary  or 
Bulgaria, Romania or the Czech Republic have overall costs which are not only above the average 
of the EU-28 area, but also among the 40 countries covered. Despite the high administrative costs, 
the number of filings has  been  very high  in  Hungary in the past, though the  number of  grants is 
quite low thus only administrative costs are partially incurred but no maintenance fees in most of 
the cases. 

Other important countries in terms of economic size such as the USA, China or Japan have different 
cost structures. While in the USA, filing costs are higher than the average when expressed both in 
Euros  and  PPP,  their  maintenance  costs  are  lower.  Japan’s  patent  costs  are  the  highest  when 
expressed  in  Euros  but  when  considered  in  PPP  their  overall  costs  are  lower  than  other  Asian 
countries thus not constituting a barrier for patent protection for local inventors. China and South 
Korea  have  overall  costs  in  absolute  terms  very  similar  to  other  large  economies.  However,  in 
terms  of  PPP,  overall  costs  are  higher,  especially  their  maintenance  costs.  This  might  become  a 
barrier for protecting the inventions of smaller local entities. 

Regarding  other  emerging  economies,  they  display  a  diverse  behaviour.  While  India  has  lower 
costs  both  in  terms  of  filing  and  maintenance  than  the  averages,  Brazil  has  significantly  higher 
costs  not  only  when  compared  with  other  emerging  economies  but  among  the  40  countries 
analysed. In order to reduce the impact of high fees on SMEs, these countries have implemented 
costs reductions which are described in section 4.1.3. 

However,  patent  costs  measured  in  absolute  terms  do  not  explain  the  patenting  behaviour  of 
patentees.  Since  a  patent  grants  an  exclusive  right  to  exploit  an  invention  in  a  certain  market, 
patent costs need to be measured in relative terms to the size of the market where the protection 
is sought. GDP has been chosen to measure  the market attractiveness for patenting an invention 
and patent costs is expressed in relative terms to GDP as shown in Table 5. 

22 

 
 
 
Table 5 - Relative overall patent costs (2011) 

[1]   Relative overall patent costs (administrative + maintenance 10 years) to GDP (billion €) in 2011.  
[2]   Relative overall patent costs (administrative + maintenance 20 years) to GDP (billion €) in 2011.  
[3]   Ratio overall patent costs 10 years - Overall costs 20 years 
[4]   Relative overall patent costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK).  
[5]   Relative overall patent costs for a European patent validated in 13 countries (DE, FR, IT, NL, CH and UK, 

AT, BE, DK, FI, IE, ES and SE).  

[6]   Arithmetic mean of the relative overall patent cost for EFTA countries.  
[7]   Arithmetic mean of the relative overall patent cost for other countries.  
[8]   Arithmetic mean of the relative overall patent cost for all NPOs.  
[9]   2011 refers to the filing year. 

Note:  administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated. 

Source:   NPOs 

23 

 
 
 
 
 
Figure 3 - Relative overall patent costs (2011) 

Note:  in  order  to  improve  the  clarity  of  the  data  presented,  costs  for  Malta,  Estonia,  Iceland,  Latvia,  Cyprus, 
Bulgaria,  Slovenia,  Lithuania,  Croatia,  Hungary,  Slovakia  and  Luxembourg  have  been  removed  from  the 
previous chart. Data can still be consulted in Table 5. 

Relative costs show a completely different perspective. For example, Malta (costs data are provided 
in  Table  5  but  are  not  shown  in  Figure  3  for  clarity  purposes)  which  was  the  country  with  the 
lowest absolute overall costs is now the country with the highest relative costs. 

Relative overall costs for the model patent filed at the EPO and validated in 6 and 13 countries are 
now  lower  than  most  of  the  NPOs  considered.  6  European  countries  and  13  European  countries 
patents provide exclusive rights on countries that represent 67% and 87% of the economic output 
of the EU-28 and EFTA countries respectively. Despite this, relative overall costs for the 6 European 
countries patent is 7.3 times higher than the same patent filed at the USPTO and 1.5 times higher 
than in the JPO. Maintenance costs account for most of the difference in relative costs between the 
6  European  countries  patent  and  the  same  patent  filed  at  the  USPTO  and  the  JPO.  Relative 
maintenance costs of the 6 European countries patent are 10.6 and 1.5 times higher than the costs 
in the USA and Japan respectively. 

24 

 
 
 
 
The 3C-index shows a new perspective by measuring the cost relative to two parameters:  

•  Market size of the country where the patent is filed. Bigger countries may be able to produce a 
higher  number  of  endogenous  patents  while,  at  the  same  time,  creating  a  relevant  market 
opportunity capable of attracting foreign patent filings. 

•  Number  of  claims:  Choosing  the  number  of  claims  instead  of  patent  count  as  a  measure  of 

technological capacity reduces the impact of patenting behaviours between markets. 

It is calculated as the sum of administrative costs and translation costs for each NPO divided by the 
average number of claims and the population of the country expressed in million inhabitants. 

Only  a  few  of  the  NPOs  included  in  the  study  have  data  on  the  average  number  of  claims.  The 
results for these NPOs where all data was available are the following: 

Table 6 - 3C-index and cost per claim per trillion EUR (2011) 

[1]   European Patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[2]   European Patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and SE) 
[3]   3C-index - (Administrative + translation costs) in Euros. Population in million inhabitants 
[4]   Costs - (Administrative + translation costs) per claim per trillion € GDP  

Note 1:  administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Translation  costs  are  the  sum  of 
translation costs taking into account the London Agreement (when applicable) 
Note 2:  Data shown only for NPOs with available data 

When  compared  in  terms  of  the  3C-index,  NPOs  show  wide  differences  between  them.  Bigger 
markets  such  as  the  USA,  Japan  and  South  Korea  or  the  6  European  countries/13  European 
countries markets have low costs measured in terms of the 3C-index which is translated in terms 
of  high  number  of  patent  filings.  Malta  also  has  a  low  3C-index  mainly  because  of  the  very  low 
administrative and the lack of translation costs, however since it is such a small market it does not 
have the critical mass to attract patent filers. 

Spain’s 3C-index is also low because of its high population and moderate costs but the number of 
filings  is  comparative  low  compared  not  only  with  other  large  economies  in  the  EU  but  also  with 
less  populated  countries  such  as  the  Nordic  countries  (which  also  have  higher  costs).  Several 
hypotheses may be raised, although the importance in the Spanish economy of low and medium-
low technology intensive sectors such as the primary sector or the tourism sector may impact the 
number of filed patents. 

Measuring  market  attractiveness  in  terms  of  GDP  allows  differentiating  between  countries  with 
similar population but different levels of wealth. Using this approach implies several changes such 
as  Japan  and  South  Korea.  Japan  has  lower  relative  costs  than  South  Korea  and  also  a  higher 
number  of  patent  applications.  The  same  can  be  said  for  Norway  which  now  has  lower  relative 
costs  than  Malta  and  a  higher  number  of  patent  filings.  The  Czech  Republic  and  Hungary  also 
change their relative order although their relative costs and 3C-index are very similar. 

Throughout  this  study,  patent  costs  data  for  different  years  have  been  gathered  allowing  to 
compare  them  with  the evolution  of  inflation.  Table  7  shows  the  data  available  (most  NPOs  were 
not able to provide a complete set of data for all the years considered): 

25 

 
 
 
Table  7  -  Evolution  of  absolute  overall  patent  cost  in  EUR  (1991,  1996,  2001,  2006, 
2011) 

1991 refers to the filing year;  
1996 refers to the filing year 
2001 refers to the filing year;  
2006 refers to the filing year;  
2011 refers to the filing year.  

[1]   Overall patent costs (administrative + maintenance) in Euros;  
[2]  
[3]  
[4]  
[5]  
[6]  
[7]   Cost increase from the first year with available data to 2011;  
[8]   Accumulated inflation from the first year with available data to 2011. 

Note: Data shown only for NPOs with available data 

Based on the data provided  by  the  NPOs,  Table  7  shows the evolution of patent  costs over  time. 
The  Compound  Annual  Growth  Rate  (CAGR)  of  overall  patent  cost  from  2011  to  the  first  year 
where  data  was  available  has  been  calculated  and  it  is  compared  with  the  average  inflation  rate 
between  these  years.  Despite  the  fact  that  the  set  of  data  is  not  complete  for  most  of  the 
countries, in general terms it can be concluded that patent costs have increased below the inflation 
rate in most of the countries analysed. South Korea is the most notable exception because of the 
introduction  in  2009  of  additional  fees  per  claim.  The  increase  of  costs  for  Portugal  is  due  to  the 
low costs it had in 1991. However if we consider their data from 2001 onwards, patent costs have 
grown  below  inflation.  The  other  two  exceptions  are  Japan  and  Greece.  Japan  has  suffered  a 
prolonged  deflationary  period  with  negative  inflation  rates  whereas  its  fees  have  been  adjusted. 
This is particularly important in the case of per claim fees which were applied both in the pre-grant 
stage (examination and granting) and during the 20 years maintenance period. In years covered in 
the research, per claim fees suffered a steep increase in 1996 but reduced gradually the following 

26 

 
 
 
years.  It  must  be  noted  that  the  average  number  of  claims  of  patents  filed  at  the  JPO  increased 
from 7.2 in 200012 to 9.7 in 201113. In the case of Greece, patent costs have suffered a huge price 
increase in 2011, probably caused by the need to increase the NPO income in a scenario of severe 
economic downturn. 

Litigation costs are not always considered as an integral part of the IP policy. The aim of this part 
of  the  report  is  to  review  some  of  the  existing  literature  in  order  to  provide  some  detail  on  this 
topic, especially in Europe where, unlike in the USA, little information is available.  

Patent  protection  at  a  reasonable  cost  is  an  essential  part  of  an  IP  system  in  order  to  promote 
innovation, but affordable IP rights enforcement can be just as important. Not being able to pursue 
the  rights  that  a  patent  provides  to  its  owner  or  licensee  makes  it  nearly  useless  and  litigation 
costs can be a barrier especially for SMEs and individuals. 

One of the main changes in the European patent system is the creation of the unitary patent which 
has a unitary effect in all jurisdictions that have acceded to the measure without having to validate 
it  in  each  NPO  and  paying  the  corresponding  validation  and  maintenance  fees.  Along  with  the 
unitary  patent,  the  Unified  Patent  Court  (UPC)  will  have  exclusive  jurisdiction  with  respect  to 
unitary  patents  and  European  patents  granted  by  the  EPO  which  have  designated  one  or  more 
Member States.  

The creation of the UPC has brought up the interest in the topic of litigation costs in Europe. In the 
current situation,  both  national patents and  European  patents validated in a Member State of the 
EPC are subject to national laws which lead to a fragmented system. This implies that enforcing a 
European in different Member States will require initiating legal actions in each state that, in some 
cases may lead to contradictory decisions. In order to better measure the impact in terms of costs 
on  the  patentee  or  the  licensee  of  a  patent,  a  review  of  litigation  costs  across  Europe  has  been 
carried out. 

As  previously  mentioned,  research  on  litigation  in  Europe  had  been  limited  until  recently.  Recent 
research on the topic includes Cremers et al14 or Graham et al15. These research studies focus on 
the  differences  in  procedures,  litigation  cases  outcomes,  cross-border  litigation  and  technology 
implications  in  litigation  cases  for  the  most  important  jurisdictions  in  Europe.  Though  costs  are 
commented in these papers, they are not the central part of them. In this regard, a recent report 
issued by law firm CMS16 offers a broad set of data provided by practitioners about costs and other 
practical topics related to litigation in 19 states. Data about time to first hearing, patent litigation 
costs  for  a  first  instance  decision,  costs  for  patent  litigation  proceedings  for  an  appeal  and  the 
availability of cross-border injunctions: 

12 http://www.trilateral.net/statistics/tsr/2001/TSR.pdf 
13 http://www.fiveipoffices.org/statistics/statisticsreports/statisticsreport2011edition/Patentactivity.pdf 
14  Patent Litigation in Europe. Katrin Cremers, Max Ernicke, Fabian Gaessler, Dietmar Harhoff, Christian 

Helmers, Luke McDonagh, Paula Schliessler, and Nicolas van Zeebroeck. ZEW research 2013 

15 Comparing Patent Litigation Across Europe: A First Look. Stuart J.H. Graham, Nicolas Van Zeebroeck. 

Stanford Technology Law Review. (2014) 
16 International Patent Litigation. CMS (2013).  

27 

 
 
 
                                                 
Table 8 – Litigation timing and costs (EUR) 

Source: CMS 2013 

All data gathered must be taken as a reference for standard cases. All practitioners contributing to 
the report indicate that for highly complex cases timing until first action and time to decision can 
be substantially longer and costs may increase significantly. 

Although  patent  courts  have  jurisdiction  on  national  patents  and  European  patents  validated  in 
their  territory,  international  injunctions  are  available  in  some  states  as  indicated  in  Table  9.  This 
was the case in The Netherlands where cross- border injunction was available to prevent infringing 
activities.  However  the  availability  of  cross-border  injunctions  has  been  limited  since  2007  (as 
decided  by  the  European  court  of  justice).  Cross-border  actions  are  limited  and  rare  in  every 
jurisdiction. 

Mejer and Van Pottelsberghe17 also provide litigation costs estimations for patents with an amount 
in dispute equivalent to about 1 million €. These costs are shown below. 

Table 9 – Litigation timing and costs and litigation activity in four EPC contracting stated 
and USA (in €1000) 

Source:  Economic Incongruities in the European Patent System. Malwina Mejer and Bruno van Pottelsberghe de 
la Potterie. (2009) 

17   Economic Incongruities in the European Patent System. Malwina Mejer and Bruno  van Pottelsberghe de la 

Potterie. (2009) 

28 

 
 
 
 
 
                                                 
Both sources  provide similar results with the UK  being the most expensive jurisdiction. Patentees 
or  licensees  must  initiate  separate  proceedings  in  each  jurisdiction  where  infringement  occurs  or 
invalidity is claimed. Cumulated costs for multiple litigations can be very high, especially for SMEs 
and individuals which may consider patent enforcement unaffordable. 

Patent  litigation  is  not  common  however  as  can  be  seen  in  Table  9.  Litigation  activity  ranges 
between  1.7  per  1,000  patents  in  force  in  Germany,  0.77  per  1,000  patents  in  France,  0.5  per 
1,000  patents  in  The  Netherlands  or  0.26  per  1,000  in  the  UK.  This  ratio  for  the  USA  is  1.86 
patents  litigated  per  1,000  patents  in  force.  Graham  and  Zeebroeck18  calculated  the  number  of 
decisions in each country and  year relative to  the  number of patents of the same average age in 
the same country. Results range from 34.7 litigations per 1,000 granted patents in Belgium to 2.1 
in  the  UK  (this  ratio  for  the  USA  is  25,  7.7  for  Germany,  23.2  for  France  and  28.7  for  The 
Netherlands). 

Cremers et al19 investigated parallel cases of cross border litigation. They identified matched patent 
families  across  jurisdictions  and  differentiated  two  cases:  (1)  The  same  patent  with  either  same 
claimant or defendant (less restrictive case) and (2) The same patent with the same claimant and 
defendant (more restrictive case). The results are shown below: 

Table 10 – Parallel cases in different jurisdictions 

Source: Patent Litigation in Europe. Cremers et al. 2013. 

The share of patents duplicated in Germany is low in relative terms compared with The Netherlands 
and the UK, but in absolute terms the number of cases in The Netherlands and the UK is still lower. 
The  authors  explain  the  bigger  share  in  the  UK  and  The  Netherlands  by  the  larger  share  of  EPO 
patents among litigated patents that have entered into force in the other jurisdictions. 

The authors also analyse the value of ligated patents taking in considerations characteristics which 
are  commonly  interpreted  as  proxies  for  the  value  of  patents  (backward  citations,  forward 
citations,  non-patent  citations,  number  of  inventors  and  number  Of  IPC  classes).  The  results 
suggest that litigated patents in the UK are the most valuable. This may reflect the large share of 
pharmaceutical patents litigated in the UK. 

One  phenomenon  that  has  drawn  the  attention  of  innovative  industries  is  the  non-practicing 
entities or patent trolls which have, so far, operated mainly in the USA. Harhoff20 describes a non-
practising  entity  (or  patent  troll)  as  “a  company  that  acquires  patents  of  failed  companies  or 
independent  innovators  and  uses  these  to  threaten  suit  against  infringing  companies  without 

18  Comparing  Patent  Litigation  Across  Europe:  A  First  Look.  Stuart  J.H.  Graham,  Nicolas  Van  Zeebroeck. 

Stanford Technology Law Review. (2014) 

19  Patent  Litigation  in  Europe.  Katrin  Cremers,  Max  Ernicke,  Fabian  Gaessler,  Dietmar  Harhoff,  Christian 

Helmers, Luke McDonagh, Paula Schliessler, and Nicolas van Zeebroeck. ZEW research 2013 

20  The  strategic  use  of  patents  and  its  implications  for  enterprise  and  competition  policies.  Dietmar  Harhoff 

(2007) 

29 

 
 
                                                 
having the intention of using the patent they assert”. Patent trolls may take advantage of dubious 
quality patents which are usually very broad and cover extremely lucrative processes. The author 
identifies  low  quality  examination  processes  that  lead  to  weak  patents  as  a  cause  of  the 
proliferation  of  patent  trolls.  Since  patent  trolls’  victims  are  those  who  are  not  willing  or  able  to 
fight a patent infringement case through  an  invalidity  trial (normally SMEs or individuals), a fast, 
low  cost  patent  litigation  system  with  a  broad  geographical  coverage  and  with  cost  recovery 
mechanisms may deter trolls from acting. 

4.1.2  Country clustering 

The  goal  of  this  clustering  is  to  identify  groups  of  countries  with  similar  patent  costs  structures 
and/or  levels.  A  Ward  hierarchical  clustering21  method  with  Euclidean  distance  in  the  R 
programming  language  and  software  environment22  for  statistical  computing  and  graphics  to 
identify  groups  of  countries  with  similar  administrative,  maintenance  costs  for  the  first  10  years 
and maintenance costs from the 10th to the 20th year (in Euros) were used. After running several 
iterations of the algorithm, 5 clusters were chosen: 

Table 11 - Groups of countries with similar patent costs structures (2011) 

[1]   Relative administrative costs to GDP (billion €).  
[2]   Relative maintenance costs for years 0 to 10 to GDP (billion €).  
[3]  
[4]   Relative overall patent costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK).  
[5]   Relative overall patent costs for a European patent validated in 13 countries (DE, FR, IT, NL, CH and UK, 

Relative maintenance costs for years 10 to 20 to GDP (billion €) in 2011.  

AT, BE, DK, FI, IE, ES and SE) 

Note:  administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

21 http://www.stat.cmu.edu/~cshalizi/350/lectures/08/lecture-08.pdf 

22 http://stat.ethz.ch/R-manual/R-patched/library/stats/html/hclust.html 

30 

 
 
                                                 
•  Cluster A: cluster A is comprised of the low relative overall costs countries. Countries in cluster 
A range from big economies (in terms of population, GDP per capita or both) such as Japan, the 
USA, China or India to medium sized economies like Switzerland and Poland, which have lower 
absolute  patent  costs.  Despite  having  the  highest  absolute  overall  costs,  both  6  European 
countries and 13 European countries aggregates are part of cluster A thanks to the importance 
of  the  market  opportunity  they  provide.  6  European  countries  aggregate  provides  patent 
protection  in  a  market  twice  as  big  as  the  Japanese  market  while  in  the  case  of  13  European 
countries aggregate, the market potential is slightly bigger than the USA. 

•  Cluster  B:  this  cluster  is  composed  of  medium/small  economies  with  medium/high  overall 
costs. On the one hand, medium sized economies with high absolute costs like the Netherlands 
or Sweden cannot reach cluster A. On the other hand, smaller economies from Eastern Europe 
with moderate absolute overall costs which have high relative costs. 

•  Cluster  C:  cluster  C  is  comprised  only  of  four  small  economies  from  Eastern  Europe  and  the 
Baltic countries. Their absolute costs are similar to the average of the EU countries but the small 
size of their economies leads to high relative costs. 

•  Clusters D and  E: all the  countries  in these  clusters correspond to very small countries,  with 
the biggest of them in terms of population (Latvia) having just 2 million inhabitants. These low 
populated have small economies measured in terms of GDP and as a consequence their relative 
costs are very high. 

4.1.3  Patent costs: policies to promote innovation for SMEs 

Several  NPOs  offer  discounts  on  administrative  and/or  maintenance  costs  of patents  for  SMEs,  in 
order to increase their competitiveness by boosting innovation and provide opportunities to thrive 
and grow. The objective of this analysis is to identify those countries where discounts are applied 
as  of  2011  and  the  importance  of  these  discounts  on  the  overall  cost  of  the  patenting  process. 
Eligibility  criteria  change  between  countries  and  in  some  cases  they  are  very  restrictive  with  the 
types  of  SMEs  that  can  benefit  from  cost  reductions.  In  most  cases,  the  criterion  of  what  is 
considered an SME differs from the one set by the EC23. The specific requirements are specified in 
each case. 

Some  NPOs  offer  fee  reductions  for  natural  persons,  universities  and  non-for  profit  organisations 
but only those directed specifically to SMEs have been selected.  

According to the information gathered, the NPOs shown in the following table have been identified 
to offer price reductions. 

23 For the EC an SME is defined as an enterprise having less than 250 persons employed and less than EUR 50 
million turnover or a balance sheet of no more than EUR 43 million. SMEs can be divided into several classes: 
micro  enterprises  with  less  than  10  persons  employed,  small  enterprises  with  10-49  persons  employed  and 
medium-sized enterprises with 50-249 persons employed 

31 

 
 
                                                 
Table 12 - Overall patent cost in EUR for SMEs (2011) 

[1]   Administrative costs in Euros 
[2]   Maintenance cost for 20 years in Euros 
[3]   Overall patent costs (administrative + maintenance cost 20 years) in Euros 
[4]   Relative overall cost (administrative + maintenance cost 20 years) to GDP (billion €) in 2011 
[5]   Overall cost reduction for SME compared with the general case (%) 
[6]  

2011 refers to the filing year 

Note: Data shown only for NPOs with available data 

Figure 4 - Cost reductions in overall patent costs for SMEs in EUR (2011) 

When  analysing  fee  reductions  for  SMEs  it  must  be  noted  that  each  NPO  sets  different  eligibility 
criteria which must be stated in order to make accurate comparisons: 

•  France:  fee  reductions  are  applicable  to  SMEs  with  less  than  1,000  employees  and  with  no 
more  than  25%  of  its  shares  owned  by  a  company  with  more  than  1,000  employees.  Costs 
reductions are limited to a 50% cost of the pre-grant fees, a 50% reduction of the renewal fees 
from the 2nd to the 5th year and a 25% reduction of the renewal fees for the 6th and 7th year. 

•  Norway: fee reductions in Table 12 are only available for SMEs with no more than 20 full-time 

equivalent employees. Fee reductions are limited to the filing fees. 

•  Romania: Romanian legal framework does not require a certain number of employees to obtain 
fee  reductions.  Instead,  costs  reductions  are  depended  on  the  turnover  of  the  company. 
Companies with a turnover of less than 2 million Euros (as shown in Table 12 will pay only 50% 
of the pre-grant fees and the maintenance fees for the first 5 years. In case that the company 
has  a  turnover  of  less  than  1  million,  pre-grant  fees  and  maintenance  fees  payable  are  only 
20% of those in the general case.  

32 

 
 
 
•  Brazil: fee reductions comprise all pre-grant and maintenance fees in Brazil (-60%). Reductions 

are applicable to SMEs with a turnover of less than R $3,600,000. 

•  Canada: fee reductions  comprise  all  pre-grant  and maintenance  fees (-50%). Companies with 
less  than  50  employees  which  are  not  controlled  by  other  companies  with  more  than  50 
employees may apply for fee reductions.  

•  Japan: Japan provides a 50% examination fee reduction for SMEs that lack funding as well as 
for  SMEs  dedicated to  R&D  (at  least  3%  of  their  budget).  SMEs  that  lack  funding  may  benefit 
from  a 50% maintenance fees reduction for the first  three years or a three year grace period. 
SMEs dedicated to R&D have a three year 50% reduction of annual fees. 

•  Russia:  the  Russian  Patent  Office  (Rospatent)  offers  a  50%  fee  reduction  for  pre-grant  fees 
(filing, examination and grant) as well as 50% reduction of the maintenance fees from the 3rd to 
the 5th year. 

•  USA:  SMEs  (companies  with  less  than  500  employees  which  have  not  assigned,  granted, 
conveyed a license to an entity, person or non-profit organisation which does not fulfil the SMEs 
requirements) will only pay 50% of the pre-grant fees and maintenance fees to the USPTO. 

On  average,  price  reductions  of  the  overall  costs  are  significant  for  the  USA,  Brazil  and  Canada 
where  costs  reductions  are  available  for  both  in  pre-grant  (administrative  costs)  and  for  every 
annuity of the maintenance fees. The rest of the  NPOs offer  reductions that only  affect pre-grant 
fees and, in some cases, the first years of the renewal fees. However, this may still be an incentive 
for SMEs that will reduce the upfront cost of patenting. Maintenance costs may not be fully incurred 
if  the  economic  value  of  the  patent  does  not  compensate  for  them.  This  is  reasonable  for  SMEs 
where  patenting  for  defensive  purposes  is  not  common  and  the  real  value  of  a  patent  cannot  be 
determined accurately at the time of the application. 

Other  support  schemes  for  SMEs  in  force  from  2012  (therefore  not  included  in  Table  12)  and 
covering national and/or international applications are the following: 

•  The  USPTO  offers  from  2012  (thus  not  included  in  Table  12)  a  75%  reduction  of  the  fees  for 
micro entities (company with less than 500 employees, which has not been named inventor in 
more than 4 patents applications for which the national fee was not paid, had gross income that 
does  not  exceed  3  times  the  median  household  income  and  has  not  assigned,  granted, 
conveyed a license to an entity which does not fulfil the aforementioned requisites). 

•  China:  the  SIPO  office  does  not  offer  fee  reductions  but  supports  legal  entities  with  financial 
difficulties  regardless  their  nationality.  These  entities  may  request,  prior  justification  of  their 
situation,  deferred  payment  of  70%  of  the  application  fee,  the  examination  fee  and  the 
maintenance fees for first 3 years from granting the patent of national patents and PCT national 
phase entries. Entities repay the full amount when the invention has created income. 

•  Israel:  Israel’s  patent  office  established  in  2012  (thus  not  included  in  Table  12)  reduced  filing 

fees (40%) for companies with a turnover of less than ILS 10 million. 

•  Spain:  The  Spanish  patent  office  subsidises  90%  of  the  fees  and  translation  costs  of  Spanish 

SMEs patenting abroad. 

•  India:  India  offers  reduced  fees  for  small  entities  engaged  in  the  manufacture  of  production 
goods or in the rendering of services where the investment in machinery or equipment does not 
exceed the limits specified for a medium enterprise. 

33 

 
 
 
4.1.4  Workload in NPOs: cross-country comparison 

The goal of this section is to identify different indicators that allow the comparison of POs in terms 
of workload and provide some reasons for the observed data. All data regarding patent offices was 
gathered contacting NPOs and the EPO. The total number of patents filed and granted at each NPO 
and the EPO was extracted from PATSTAT. 

The processing time shows the duration of the different processes in the patent procedure and its 
timing (which also determines the timing of the fees paid). The processes taken into account in the 
analysis are: 

•  First action pending time: Time between filing and the first action undertaken by the patent 

office. This parameter is particularly significant because it shows the PO’s backlog. 

•  Searching time: Time between filing and completing the searching process. 

•  Examination time: Time between filing and the issuing of the results of the examination. 

•  Pending time: Time between granted, lapsed or denied and filing date. 

Other relevant processes related to patents are: 

•  Trial time: Time taken for the patent trials to resolve at the national courts. 

•  Opposition time: Time for the resolution of an opposition (when there is a resolution regarding 

a patent, appeals can be launched; not to be confused with trials). 

Table 13 - Average processing time (2011) 

[1]   2011 refers to the average processing time in months for patents processed during 2011 

Note1:  Data shown only for patent offices with available data 
Note 2: All processing times start from the date of filing 

34 

 
 
 
 
 
Table 14 - Workload in the patent offices (2001) 

[1]   Number of patent examiners in each patent office 
[2]   Average number of claims for patents processed 
[3]   Number of distinct patents filed in the patent office 
[4]   (Filings / Examiners) for countries with available data on both items 
[5]   ((Filings * Average Claims) / Examiners) for countries with available data on all 3 items 
[6]   Number of distinct patents granted in the patent office 
[7]   Number of grants / number of filings 
[8]   (Grants / Examiners) for countries with available data on both items 
[9]   (Grants * Average Claims / Examiners) for countries with available data on all 3 items 
[10]  Sum for the EU-28 patent offices as of 2014 
[11]  Arithmetic mean for the EU-28 patent offices as of 2014 
[12]  Sum for non-EU-28 patent offices 
[13]  Arithmetic mean for non-EU-28 patent offices 

Note 1:  Data shown only for patent offices with available data 
Note 2:  Belgium  and  Cyprus  do  not  have  patent  examiners  since  the  examination  is  carried  out  by  the  EPO. 
Malta does not have examiners since it does not carry out examination of patents 
Note 3:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’. 

Sources: [1, 2] NPOs; [3] PATSTAT 10-2012, Dataset Alpha; [6] PATSTAT 10-2012, Dataset Beta 

Despite  the limitations  in  terms  of  gathering  a  complete  set of  data  for  every  country  (especially 
for trials and oppositions), certain conclusions can be drawn. On average, countries outside Europe 
have a much higher workload in terms of filings per examiner. This also means a long first action 
pending  time  (e.g.  25.9  months  for  Japan  or  16.8  months  for  South  Korea).  However,  once  the 
process  begins,  the  time  until  grant  (estimated  from  the  pending  time)  can  be  considered  short 
(8.1  months  for  Japan  or  8  months  for  South  Korea)  thus  these  NPOs  can  be  considered  very 
efficient.  Across  Europe,  the  French  and  German  patent  offices  have  the  highest  workloads 
measured in terms of filings per examiner, while Spain or Austria have much lower ratios. 

35 

 
 
 
 
 
However some considerations have to be made on the previous analysis: 

•  Analysing  the  workload  as  the  number  of  claims  per  examiner  shows  smaller  differences 
between  NPOs.  The  average  number  of  claims  for  the  JPO  and  KPO  are  lower  (9.8  and  9.7 
respectively) than for most European NPOs, the EPO and the USPTO. 

•  The  JPO  outsources  the  searching  and  documentation  process  to  an  Industrial  Property 
Coordination Centre which eases the workload for the examiners. The KIPO also outsources part 
of the prior art searching. Outsourcing these tasks reduces the examination pendency. 

•  The  stricter  the  granting  process,  the  lower  the  grant  rate.  A  measure  of  how  thorough  the 
granting  is  can  be  looked  at  in  terms  of  the  granted  claims  per  examiner.  In  general  terms, 
European  NPOs  have  lower  granted  claims  per  examiner  ratios  which  could  suggest  that  the 
comprehensiveness  and,  as  a  consequence,  the  time  required  for  the  examination  process  is 
higher  than  in  other  NPOs.  Though  a  more  severe  process  can  slow  the  granting  process  and 
add  some  process  costs  (therefore  deterring  patentees  from  filing  more  patents),  it  is  also 
important  since  it  can  reduce  litigation  procedures  in  the  long  term  that  can  have  an  even 
bigger impact on the operations of an entity. 

•  Table  10  shows  that  the  USPTO  has  a  very  high  number  of  claims  per  examiner,  only 
comparable  to  those  from  the  KIPO  and  JPO  despite  the  fact  that  part  of  their  searching  and 
documentation  is  outsourced.  This  fact  combined  with  the  high  rate  of  grants  and  the 
comparatively  low  pendency  time,  may  induce  to  think  a  less  rigorous  examination  process  is 
carried out. This fact has been highlighted in the literature van Pottelsberghe de la Potterie and 
François24 and van Pottelsberghe de la Potterie and Mejer25. In this last paper the authors sum 
up  the  main  reasons  for  backlogs  at  the  USPTO  which  are  1)  The  greater  scope  of  patentable 
subject matters at the USPTO which increase the number of patent applications, 2) The relative 
novelty  of  inventions  approach  of  the  USPTO  which  allows  filing  applications  after  the 
dissemination  of  the  patentable  matter,  3)  The  reduced  transparency  during  prior  art 
identification,  4)  The delays  caused  by  the  amendment  of  claims  provided  by  the  continuation 
procedure  and  5)  The  high  turnover  of  USPTO  examiners  (33%)  which  leads  to  that  the 
examiners have, on average 3 years of experience in processing patent applications. 

Based on the previous comments, it is not straightforward to make an accurate comparison on the 
workloads  for  the  different  NPOs.  Granting  time  (although  dependant  on  the  differences  between 
patent  office  procedures)  is  probably  the  best  indicator  to  measure  the  combination  of  workload 
and  operational  efficiency.  Long  granting  periods  do  have  an  impact  on  business  decisions. 
Streamlining  some  processes  by  increasing  the  use  of  electronic  means  and/or  increasing  the 
number  of  examiners  would  remove  some  of  the  barriers  for  the  use  of  patents  as  the  choice  to 
protect IP. 

Though patent costs have not been taken into consideration in the analysis of the workload of POs, 
according to evidence collected by de Rassenfosse and van Pottelsberghe26 from different authors, 
pre-grant fees have a direct impact. Some relevant examples are listed below: 

•  Archontopoulos et al (2007)27 identified a decrease in the number of patent claims at the USPTO 
due  to  a  fee  per  claim  increase  (price  elasticity  of  about  -0.20),  which  translated  into  a 
reduction of the POs’ workload. 

•  MacLeod  et  al  (2003)28  and  Nicholas  (2010)29  analysed  the  increase  in  the  number  of 
applications  caused  by  the  reductions  in  patent  costs  after  the  1883  Patent  Act  in  Britain.  A 
150% increase in patent applications caused by an 84% reduction of the fees (elasticity  -66%) 
was  reported.  But  one  interesting  fact  is  the  decrease  in  the  patent  quality  highlighted  by 
Nicholas (2010) with the increase of the number of patent applications “concentrated in the low 
value  distribution  of  patents”  as  measured  by  renewal  data.  Even  though  the  event  quoted 
happened  more  than  130  years  ago,  it  exemplifies  the  side  effects  of  lowering  (significantly) 

24 The cost factor in patent systems. B. van Pottelsberghe de la Potterie, D. François, (2006). 
25 Patent backlogs at USPTPO and EPO: Systemic Failure vs deliberate delays. Malwina Mejer, B. van 

Pottelsberghe de la Potterie. 

26 The role of fees in patent systems: theory and evidence. Gaétan de Rassenfose, Bruno van Pottelsberghe, 

(2010). 

27 When small is beautiful measuring the evolution and consequences of the voluminosity of patent applications 

at the EPO, E. Archontopoulos et al, (2007). 

28 Patents and Industrialisation: An Historical Overview of the British Case, 1624-1907. C. MacLeod and A. 

Nuvolari, (2003). 

29   Cheaper patents, T. Nicholas, (2010). 

36 

 
                                                 
patent fees in order to spur patent activity: an increase of POs’ workload, a decrease of patent 
quality and, in this particular case, a reduction of the income of the POs. 

•  Lazaridis  and  van  Pottelsberghe  (2007)30  identified  an  indirect  effect  of  the  reduction  of  the 
number  of  claims  triggered  by  the  increase  of  per  claim  fees,  which  is  the  reduction  in  the 
number of interactions between the PO and the applicant. This fact not only implies a reduction 
of process  costs but also a delay  in the granting  process  that the authors estimated in 1 year 
per two additional claims. 

•  de  Rassenfosse  and  van  Pottelsberghe  (2008)31  estimated  the  price  elasticity  at  the  trilateral 
offices  (EPO,  USPTO  and  JPO)  over  26  years,  obtaining  a  long  term  elasticity  of  around  -0.30 
and a short term elasticity between -0.06 and -0.12. 

de Rassenfosse and van Pottelsberghe32 developed a model to study the price elasticity of patents 
for  the  members  of  the  European  Patent  Convention.  According  to  this  model,  they  propose  a 
patent  production  function  which  depends  on  several  variables  such  as  the  number  of  full  time 
scientists  and  researchers,  the  stock  of  knowledge  and  the  incentives  to  patent.  Patent  costs 
(calculated as the administrative fees) are  part  of  the ‘incentives to patent’ variable among other 
factors  such  as  GDP  and  the  strength  of  patent  protection.  Different  estimations  of  these 
parameters were carried out and all of them led to negative values of the price elasticity of priority 
filings. 

The  previous  examples  describe  the  trade-offs  between  making  patents  more  affordable  and  the 
operation of POs: 

•  Economic  sustainability:  administrative  fee  reductions  may  lead  to  a  decrease  in  the  PO 
income  if  the  number  of  applications  do  not  increase  sufficiently  (a  preliminary  estimation  of 
price-elasticity is needed). In addition, an increase in the number of examiners shall be required 
and, consequently, the operational costs will increase too. Therefore, a comprehensive economic 
study is needed if the POs have to be self-sustainable. 

•  Service requirements: an increase in the workload for POs caused by patent costs reductions 

may have two hidden costs for patent applicants that can exceed initial savings: 

Increase of the granting time: delays caused by the higher workloads at the PO may affect 
business decisions on issues such as investment, access to venture capital funding or market 
internationalisation. 

   Quality  of  the  services:  reducing  the  comprehensiveness  of  the  examination  process  may 
lead  to  an  increase  in  the  litigation  costs  in  the  future,  as  well  as  the  associated  business 
impacts for patent holders in the case of a negative ruling of patent courts. 

In  all  the  references  mentioned,  price  elasticities  are  negative  and  lower  than  1.  Despite  this, 
patent costs are certainly a key part of the IP policy since a good balance between affordability and 
POs  workload  is  required  if  the  impact  of  patenting  at  the  PO  level  is  to  be  maximised.  This 
conclusion  is  also  supported  by  de  Rassenfosse  and  van  Pottelsberghe33  who,  based  on  the 
negative  elasticity  of  patent  filings,  suggest  that  fees  “should  be  considered  a  tool  of  intellectual 
property policy, especially in the current context of backlogs”. 

The financial sustainability of an NPO is also affected by the timing of payments. Van Pottlesberghe 
and Danguy34 simulated cash flows generated by Euro-direct patent filing validated in 6 countries. 
According to the authors, a European Patent begins to generate income in the 13th year and, taking 
into account average survival rates, 30% of the total patent applications filed at the EPO contribute 
to compensate for the  net cumulated losses generated by the remaining 70%. An increase in the 
pre-grant  fees  should  reduce  the  cross-subsidisation  of  short  life  patents  by  the  ones  maintained 
for a longer period. The authors also admit that, in order to minimise the effect of higher pre-grant 
fees on SMEs, specific fees for SMEs should be set. 

30   The rigour of EPO's patentability criteria: An insight into the "induced withdrawals", G. Lazaridis and B. van 

Pottelsberghe, (2007). 

31   A Policy Insight into the R&D-Patent Relationship, G. de Rassenfosse and B. van Pottelsberghe, (2008). 
32   Per  un  pugno  di  dollari:  A  first  look  at  the  price  elasticity  of  patents,  de  Rassenfosse  and  B.  van 

Pottelsberghe, (2007). 

33  Per  un  pugno  di  dollari:  A  first  look  at  the  price  elasticity  of  patents,  de  Rassenfosse  and  B.  van 

Pottelsberghe, (2007) 

34   Patent fees for a sustainable EU (community) patent system. B. van Pottelsberghe de la Potterie, J.Danguy 

(2010) 

37 

 
  
                                                 
The  combination  of  fee  levels  and  the  thoroughness  of  the  examination  procedures  defines  the 
level of “patent friendliness” of a patent system. On the one hand, a more patent friendly system 
facilitates  the  access  to  patent  protection  by  setting  affordable  fees  and/or  a  streamlined 
examination procedure while, on the other  hand, a  more strict  patent system  may  set higher  fee 
levels  and/or  a  more  comprehensive  examination  levels  aimed  at  deterring  low  quality/low  value 
patent  filings.  However,  both  systems  have  several  trade-offs.  Patent  friendly  systems  foster 
patent filings which can be an advantage for SMEs, PROs and universities which normally have low 
IP protection budgets and, sometimes, do not have a clear idea of the value of their inventions at 
the time of filing. Patent friendly systems also have several drawbacks, not only for the NPOs but 
for the whole system: Low fees increase patent propensity which in the end contributes to higher 

workloads and backlogs for NPOs. 

•  Proliferation  of  low  quality  and/or  defensive  patents  becomes  a  barrier  for  innovators  as  they 

become part of the prior art and prevent high quality patents from being granted. 

•  Low  quality  patents  create  difficulties  for  examiners  in  the  identification  of  prior  art  and  the 

novelty of the invention, lengthening the examination and increasing backlogs. 

•  If  the  quality  of  the  examination  decreases  due  to  higher  workloads,  the  chances  of 
litigation/opposition  procedures  increase.  This  adds  significant  and  unpredicted  costs  during 
patent lifetime for the applicants and licensees. 

•  Low quality patents pave the way for non-practicing entities which act mainly against SMEs or 
individuals who are not willing or able to enter into litigation processes. Patent trolls deter from 
patent filing and lead to less robust IP protection alternatives such as secrecy. 

More strict patent granting procedures try to reduce low quality filings which negatively affect the 
patent  system  and  NPO  operation.  High  fees  and  increased  thoroughness  of  the  examination  are 
used to act on patent filings, but this approach also has some drawbacks: 

•  It is a long term strategy since behavioural changes take a long time to settle and, in the mid-

term, increase workloads and backlogs due to longer examination processes. 

•  Higher  pre-grant  fees  may  act  as  a  deterrent  not  only  for  low  quality  filings  but  for  SMEs, 

universities and PROs with limited budgets. 

•  Stricter grant procedures increase process costs for the applicant since a more thorough patent 
examination  requires  further  work  on  patent  drafting  and  processing  which  adds  to  the 
external/in-house  process  costs.  These  are  the  single  most  important  cost  item  for  national 
patent filings which can turn unaffordable for SMEs. 

38 

 
 
 
Despite the low degree of elasticity of patents, acting on patent fees may provide a tool to reduce 
backlogs,  contribute  to  the  sustainability  of  POs  and  deter  from  patenting  behaviours  that  block 
innovation.  Building  from  the  findings  gathered  in  the  literature  and  the  data  obtained,  the 
following fee structure is proposed: 

•  Administrative  fees:  cash  flow  analysis  of  Euro  PCT  patents  showed  that  long  living  patents 
subsidises  short  lived  ones.  Increasing  pre-grant  fees  reduces  temporal  differences  between 
fees income and PO’s costs at the beginning of the process while reducing speculative filings. 

•  Maintenance  fees:  the  progressive  increase  of  renewal  fees  encourages  patentees  to  drop 
patents  which  are  not  valuable  enough  while  POs  obtain  a  reasonable  income  from  the  most 
valuable ones. Relatively flat  renewal fee structures contribute to a higher share  of long living 
patents that generate additional income too but do not incentivise patentees to unlock low value 
aging patents. However, a sharply progressive increase of the renewal fees during the life of the 
patent may have the  perverse  effect of encouraging  enterprises to drop prematurely a patent, 
while the economic value of the patent is yet to be revealed by the market. This can notably be 
the  case  for  the  most  radical  innovations  that  face  difficulty  in  finding  a  large  market  at  their 
early  development  stages.  This  is  also  the  case  for  niche  markets  before  they  become 
mainstream.  For  this  reason,  the  coexistence  of  different  patent  systems  in  the  world,  on  the 
one hand systems with sharply progressive cost structure of renewal fees (as in Europe) and on 
the  other  hand  systems  with  a  flat  or  a  degressive  rate  (as  in  the  USA),  may  constitute  an 
economic  advantage  for  the  most  innovative  enterprises  benefitting  of  this  flat  or  declining 
structure of maintenance fees. This is notably the case for small enterprises that because of the 
lack  of  resources  are  less  likely  to  be  able  to  allocate  sufficient  resources  for  an  early 
development in large markets. 

•  Creation of incentives for SMEs, PROs and universities: the increase of the pre-grant fees 
proposed may become a barrier for the access to the patent system of innovators which often 
lack the required funds. In addition, innovators do not always have a clear idea of the value of 
their  IP  at  the  time  of  application.  Hence,  high  fees  may  prevent  them  from  filing  patents  or 
force them to delay the process as much as possible in order to postpone the payment of grant 
and maintenance fees. Two possible incentive schemes are proposed: 

   Fee reductions: specific pre-grant and renewal fees for the first years for SMEs, PROs and 
universities  should  be  implemented.  A  50%  reduction  is  proposed.  A  fee  reimbursement 
mechanism  should  be  in  place  in  case  of  the  patents  are  sold  or  licensed  to  other  entity 
different from the ones for which the fee reduction was intended. 

   Grace period: payment of some of the fees should be postponed at least until the fifth year. 

However, grace periods may be used for defensive patenting at no or low cost. 

39 

 
 
 
4.2  Profile of patents filed in NPOs and the EPO 

The aim of this section is to analyse the consequences of patent costs on the patenting  behaviour 
of  applicants,  indicated  by  the  number  of  patents  and  average  patent  life  in  the  countries  within 
the scope of the study, as well as the number of validated countries in European applications. The 
comparison is carried out by type of applicant (i.e. assignee sector), technology field and economic 
sector. 

The  base  sample  comprises  direct  national  and  European  applications.  International 
applications  (PCT)  have  been  discarded  due  to  the  fact  that  their  filing  fees  are  fixed  but  their 
inclusion  nonetheless  introduces  unnecessary  complexity  into  the  analysis.  Additionally,  their 
absence  enhances  the  level  of  comparability  with  all  other  analyses  carried  out  in  the  report,  as 
these  do  not  encompass  PCT  applications  either  (aside  from  a  marginal  element  of  the  study’s 
survey). 

The  first  analysis  is  how  costs  may  influence  the  number  of  filings.  As  previously  mentioned  in 
section  4.1.4,  de  Rassenfosse  and  van  Pottelsberghe35  developed  a  model  to  study  the  price 
elasticity of  patents  for  the  members  of the  EPC.  According to this  model, they  propose  a patent 
production function which depends on several variables such as the number of full time scientists 
and researchers, the stock of knowledge and the incentives to patent. Patent costs (calculated as 
the  administrative  fees  per  million  capita)  are  part  of  the  ‘incentives  to  patent’  variable  among 
other factors such as GDP and the strength of patent protection.  

Similarly,  we  have  used  relative  administrative  costs  (pre-grant  fees) to  GDP  (billion  €)  for  NPOs 
with  available  data  for  2001  to  explore  their  relation  with  patent  filings  extracted  from  PATSTAT. 
Natural logarithms of the number of filings and relative administrative costs and the corresponding 
results are presented below: 

Figure 5 - Number of filings vs Relative administrative fees (2001) 

Patents filed in 2001 

[1]  
[2]   Relative administrative costs to GDP (billion €) 

Note 1:   Data shown only for NPOs with available data 
Note 2:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’ 

Source:   PATSTAT 10-2012, Dataset Alpha, NPOs 

35   Per un pugno di dollari: A first look at the price elasticity of patents, de Rassenfosse and B. van 

Pottelsberghe, (2007). 

40 

 
 
 
                                                 
The  relatively  low  determination  coefficient  shows  the  necessity  of  carrying  out  a  multivariate 
analysis, although the negative low elasticity is in concordance with results from the literature. 

The fact that patents may have multiple applicants has been taken into account with the objective 
of  avoiding  double  counting.  To  determine  the  country  of  origin,  only  applicants  (and  not 
inventors) have been considered. 

The  analyses  in  which  technology  fields  and  economic  sectors  have  been  determined  from  the 
patent’s  IPC  codes  have  made  use  of  the  following  tables:  ’IPC  -  Technology  field  concordance 
table’ and ’IPC - NACE concordance table’ (both found in the Annex below). 

When  comparing  by  country  of  origin,  technology  field  or  economic  sector,  no  fractional 
technique36  has  been  applied  (in  case  of  patents  with  applicants  from  different  countries,  or 
multiple  technology  fields  or  economic  sectors)  as  this  way  of  proceeding  (i.e.  not  using  this 
technique) is deemed as providing closer-to-reality numbers when making patent listings based on 
these  properties  (country  of  origin,  technology  field  or  economic  sector).  In  other  words,  when 
making patent listings based on country of origin, technology field or economic sector, fractionised 
patents would count as less than 1, which would be incorrect. 

Assignee sector allocation has been determined through the usage of the assignment taxonomy 
which  has  been  developed  by  ECOOM  (KU  Leuven)  and  Sogeti  as  part  of  the  framework  of  the 
Eurostat  work  on  harmonized  patent  statistics  based  on  PATSTAT.  The  quality  levels  obtained  in 
terms of completeness and accuracy reach 99% (‘Data Production Methods for Harmonized Patent 
Indicators: Assignee sector allocation’, 2009, Du Plessis, M., Van Looy, B., Song, X & Magerman, T.).  
The  assignee  sector  classification  used  (the  ECOOM-EUROSTAT-EPO  PATSTAT  Person  Augmented 
Table  EEE-PPAT),  which  discriminates  by  individual,  company,  government,  university,  hospital, 
non-profit  and/or  unknown,  has  been  the  one  equivalent  to  the  PATSTAT  release  deployed in  the 
project  (i.e.  10/2012).  With  the  objective  of  minimising  unnecessary  complexity,  patents  with 
multiple  assignee  sector  codes  assigned  to  them  (which  account  for  less  than  0.3%  of  the  total 
sample volume) have been assigned the first code available in the above mentioned classification. 

The number of validated countries, which only applies to European patents, has been calculated 
as the distinct number of countries which include either of the following two codes within the legal 
status database INPADOC (10/2012 version): 

•  PG25: Patent lapsed or withdrawn at the NPO. 

•  PGFP: Annual fee paid to the NPO. 

With  regards  to  average  patent  life,  only  European  patents  have  been  considered.  It  has  also 
been taken into  account  that,  as far as a European patent is concerned, its maximum  term is 20 
years  from  its  filing  date.  The  patent  may  lapse  earlier  if  the  annual  renewal  (maintenance)  fees 
are not paid or if the patent is revoked by the patentee or after opposition proceedings. In certain 
cases (medical or plant protection product patents) it is possible to extend the period of protection. 
Therefore, taking into account  that the PATSTAT release  used in  the project  is 10/2012,  the  year 
1991 (i.e. patents filed in 1991) has been used as the sole reference from the set of years under 
study, as this is the only year in which standard (non-extensible) patents have had the chance to 
reach their maximum term. 

For  the  calculation  of the life of  patents  of the  selected  sample  (European  patents  filed  in 1991), 
the  same  two  legal  status  codes  listed  above  have  been  used  (PG25  and  PGFP).  Within  the 
deployed methodology the Single Renewal Approach (SRA) was used, which consists of measuring 
the  longest  renewal  reached  in  any  EPC  contracting  state,  based  on  the  idea  that  as  long  as  the 
patent is maintained in at least one market, it suggest that the patent still carries sufficient value 
to its holder and is probably still being exploited. Therefore, in theory, a patent is considered to be 
alive whilst it remains in force in at least one of the countries in which it was validated. However, 
due  to  the  inconsistent  timing  of  some  of  the  legal  status  data  delivered  from  NPOs  to  the  EPO, 
identifying whether a patent remains alive is not always straightforward. The methodology used to 
calculate  the  life  of  a  patent  included  finding  out  the  last  date  of  all  the  patent’s  PG25  codes 
available  (patent  lapsed  or  withdrawn  at  the  NPO),  and  the  last  date  (plus  one  year  as  yearly 
renewal  fees  are  paid  in  advance)  of  all  its  PGFP  codes  available  (annual  fee  paid  to  NPO).  From 
these two dates: 

36   Fractional technique: when counting patents by applicant countries for example, one counts a distinct 

patent with applicants from x different countries as 1/x of a patent. 

41 

 
                                                 
•  If the one corresponding to the PG25 code was the latest of both of them, it was used (together 

with the filing date) to calculate the life of the patent directly. 

•  Otherwise,  if  the  date  (plus  one  year)  corresponding  to  the  PGFP  code  was  the  latest,  a 
decision  had  to  be  made,  depending  on  its  closeness  to  the  present  date  (in  the  case  the 
present date is represented by the date of the release version of PATSTAT used: 10/2012), on 
whether a patent is still alive (and a life can therefore not be determined), or whether it can be 
considered as dead (allowing a life to be determined). 

This decision included the allowance of the following tolerance periods:  

   6 months due to the fact that if the payment of a renewal fee is not made in due time, the 

renewal fee may still be validly paid within 6 months of the due date. 

   A further 6 months due to the erratic nature of delivered data mentioned above37.  

Therefore, if the gap between the present date (10/2012) and the PGFP code date (plus one year 
due to fee prepayment) is more than 1 year (the sum of the two tolerance periods listed above), 
the patent was deemed dead, and a life could be determined (together with the filing date). 

Examining  the  number  of  patents  by  type  of  applicant  (see  Annex  7.5)  the  weight  of  patents 
assigned  to  ‘Company’  is  so  overwhelmingly  high  compared  to  all  other  types  of  applicants 
('Government', 'Hospitals', 'Individual' and 'University') that displaying graphically ‘average patent 
life’ or ‘average number of validated  countries’  per type of applicant is not practical. Instead, the 
following  figures  show  the  total  weighted  average  patent  life  by  technology  field  and  economic 
sector (for patents filed in 1991), and the total weighted average number of validated countries by 
technology  field  and  economic  sector  (for  patents  filed  in  2001).  Thereafter,  these  weighted 
average patent  lives and number  of  validated  countries are  displayed side by side, by technology 
field and economic sector. 

An  interesting  behaviour  is  displayed  in  Figure  6  and  Figure  8  below.  The  former  shows  that  the 
patents  with  the  longest  life  correspond  to  the  technology  fields  of  micro-structural  and  nano-
technology,  ICT  (information  and  communication  technology),  bio-science  (biotechnology  and 
pharma),  medical  technology  and  chemistry  (particularly  food  and  organic  fine  chemistry).  The 
latter  shows  similar  results  with  respect  to  micro,  nano,  bio,  medical  and  chemistry  related 
technologies,  which  leads  to  the  hypothesis  that  these  require  intensive  investment  on  R&D  and 
can be easily copied if they do not have adequate IP protection mechanisms. In addition, the return 
on investment is only achieved after a long period due to the high investments carried out during 
the development phase. In this context patents become assets and therefore their lives tend to be 
longer. In the case of ICT related patents however, their life period is long but the average number 
of  countries  in  which  they  are  validated  in  is  average.  This  fact  is  likely  to  be  related  to  the 
dynamics of this industry rather than initial high investments. 

37   This tolerance period is obviously very subjective, but has been considered reasonable by everis. 

42 

 
 
                                                 
Figure 6 - Weighted average patent life in years by technology field (1991) 

Weighted average patent life (in years) of patents filed in 1991 

Note 1: Data available only for European patents;  
Note 2: Patents can belong to more than one technology field 
Note 3: 1991 has been used as the sole reference year as this is the only year in which standard 
(non-extensible) patents have had the chance to reach their maximum term 

Source: PATSTAT 10-2012, Dataset Gamma 

43 

 
 
 
 
Figure 7 - Weighted average patent life in years by economic sector (1991) 

Weighted average patent life (in years) of patents filed in 1991 

Note 1:  Data available only for European patents 
Note 2:  Patents can belong to more than one economic sector 
Note 3:  1991 has been used as the sole reference year as this is the only year in which standard 

(non-extensible) patents have had the chance to reach their maximum term 

Source: PATSTAT 10-2012, Dataset Gamma 

44 

 
 
 
 
Figure 8 - Weighted average number of validated countries by technology field (2001) 

Weighted average number of validated countries (for patents filed in 2001) 

Note 1:  Data applicable only for European patents 
Note 2:  Patents can belong to more than one technology field 
Note 3:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’ 

Source:  PATSTAT 10-2012, Dataset Delta 

45 

 
 
 
 
Figure 9 - Weighted average number of validated countries by economic sector (2001) 

Weighted average number of validated countries (for patents filed in 2001) 

Note 1:  Data applicable only for European patents 
Note 2:  Patents can belong to more than one economic sector 
Note 3:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’ 

Source:  PATSTAT 10-2012, Dataset Delta 

Comparing  economic  sectors  in  terms  of  length  of  patent  life  and  number  of  countries  validated 
(Figure 7 and Figure 9 above) there is a clear lack of similarity. This makes sense if one takes into 
account  that  becoming international implies  having a  global  IP  strategy,  considering  in each  case 
the local (national) singularities of any specific economic sector. 

As indicated earlier, the following tables show the above weighted average patent lives and number 
of validated countries displayed side by side, by technology field and economic sector. 

46 

 
 
 
 
Table  15  -  Weighted  average  patent  lives  in  years  (1991)  and  number  of  validated 
countries (2001) by technology field 

[1]   Weighted average patent life (in years) of patents filed in 1991; Source: PATSTAT 10-2012, Dataset 

Gamma 

[2]   Weighted average number of validated countries for patents filed in 2001; Source: PATSTAT 10-2012, 

Dataset Delta 

Note 1:  Data available/applicable only for European patents 
Note 2:  Patents can belong to more than one technology field 
Note 3:  2001  has  been  chosen  as  the  reference  year  for  the  weighted  validated  countries  calculation  since 
filing data for 2006 and 2011 was not complete. For further  details see ‘Methodology overview and sources of 
information’ 
Note 4:  1991  has  been  used  as  the  sole  reference  year  for  patent  life  calculation  as  this  is  the  only  year  in 

which standard (non-extensible) patents have had the chance to reach their maximum term 

47 

 
 
 
 
 
Table 16 -  Weighted  average  patent  lives  in  years  (1991)  and  number  of  validated 

countries (2001) by economic sector 

[1]   Weighted average patent life (in years) of patents filed in 1991; Source: PATSTAT 10-2012, Dataset 

Gamma 

[2]   Weighted average number of validated countries (for patents filed in 2001); Source: PATSTAT 10-2012, 

Dataset Delta 

Note 1:  Data available/applicable only for European patents 
Note 2:  Patents can belong to more than one economic sector 
Note 3:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’ 
Note 4:  1991  has  been  used  as  the  sole  reference  year  for  patent  life  calculation  as  this  is  the  only  year  in 

which standard (non-extensible) patents have had the chance to reach their maximum term 

48 

 
 
 
 
The  last  analysis  in  the  current  section  is  focused  on  the  average  patent  life  per  country  and 
number of validated countries per country. Based upon the above premises and the most adequate 
available data as explained earlier, this analysis is based on the following data extracts: 

• 
• 

Arithmetic mean of patent lives per validated country (for patents filed in 1991). 

Arithmetic  mean  of  the  number  of  patents  validated  in  destination  countries,  per  origin 
country of applicants (for patents filed in 2001). 

The outcome of these data extracts is depicted below: 

Figure  10  -  Arithmetic  mean  of  patent  lives  per  validated  country  in  years  (for  patents 

filed in 1991) 

Arithmetic mean of patent lives per validated country (for patents filed in 1991) 

Note 1:  Data applicable only to European patents 
Note 2:  1991  has  been  used  as  the  sole  reference  year  for  patent  life  calculation  as  this  is  the  only  year  in 
which standard (non-extensible) patents have had the chance to reach their maximum term 

Source: PATSTAT 10-2012, Dataset Gamma 

The  patent  lives  per  validated  country  indicator  is  lead  as  anticipated  by  Europe’s  largest 
economies, even though there  is the notable  exception of Italy in which patents reach a mean of 
almost 16 years, well ahead of the second country in line, Germany, with just over 13 years. 

49 

 
 
 
 
Figure 11 -  Arithmetic mean of the number of patents validated in destination countries, 

per origin country of applicants (for patents filed in 2001) 

Arithmetic  mean  of  the  number  of  patents  validated  in  destination  countries,  per  origin  country  of  applicants 
(for patents filed in 2001) 

Note 1:  Data applicable only to European patents 
Note 2:  Only  origin  countries with  more  than  an  average of 20  patents  validated  in  destination  countries  are 
displayed 
Note 3:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’ 

Source:  PATSTAT 10-2012, Dataset Delta 

As expected, large economies with a strong patenting culture lead the way in the average number 
of  patents  validated  in  destination  countries.  Specifically  though,  it  is  Europe's  largest  economy, 
Germany,  which  is  positioned  way  ahead  of  the  rest  (including  the  USA  and  Japan).  This  fact 
makes sense as the scope under consideration only includes European patents, and the local factor 
(geographical  proximity  and  the  effect  this  has  on  economic  ties)  has  a  big  influence  in  this 
indicator. 

50 

 
 
 
 
4.3  Economic indicators 

The aim of the present section is to investigate the possible relationship between the patent costs 
in a country and several economic indicators from data stemming from different sources. 

This section is divided into four different subsections, dealing each of them with a specific analysis. 
These  analyses  focus  on  the  economic  value  of  patents,  the  motivations  behind  patenting,  the 
relationship between patenting and R&D investment and, finally, some results stemming from the 
everis  survey  2013  addressing  different  perceptions  of  patenting  cost  from  SMEs,  PROs  and 
Universities. 

4.3.1  Utilisation rate and economic value of patents 

The main data sources used in this topic are “PatVal-EU II” (more than 13,000 surveyed inventors 
in 2010) and the NPOs maintenance costs for patents (2011) obtained during the project. The next 
figure shows the considered countries and the corresponding linear regression. 

Figure 12 -  Patent  utilisation  (commercialisation  or  licensing)  for  the  20  European 
countries considered in PatVal-EU II (2010) vs Relative maintenance costs 
(2011) 

[1] Relative maintenance costs 20 years to GDP (billion €) in 2011 
[2] Linear regression: coefficient of determination 

Sources: NPOs, PatVal-EU II 

Maintenance  costs  are  used  instead  of  “overall  patent  costs”  (administrative  plus  maintenance 
costs) since the PatVal-EU II survey refers to European patents and, therefore, NPOs only account 
for maintenance costs of such patents. 

As can be seen in the figure there is no linear or established relationship between the patent costs 
and  the  exploitation  in  the  shape  of  new,  commercial  products  or  just  by  the  mechanism  of 
licensing to any third-party. 

This could lead us to conclude that, based on the available data, the utilisation of the patents in the 
internal  product  development  activity  or  licensing  is  not  related  with  the  patent  costs.  It  is  also 
remarkable the small amount of licensed patents, on average below 10% of the total. This leads to 
the following working hypothesis: patents are mostly filed by strategic or internal motivations (new 
product development in the case of enterprises) rather than for licensing purposes. 

The  second  analysis  carried  out  deals  with  the  economic  value  of  patents.  This  is  a  complicated 
topic since the best indications of the economic value of such assets are the accomplishment of a 
deal for a certain price or the exploitation of a new product (or the improvement of current ones), 
being sure of the contribution of the corresponding patents to these products. Since there is not a 
well-accepted  model  regarding  this  topic  (i.e.  widely  used  by  patenting  organisations)  the  best 
information source must be, again, a survey. In this case the previously-mentioned PatVal-EU II. 

51 

 
 
 
 
Figure 13 -   Economic  value  of  patents  for  the  20  European  countries  considered  in 

PatVal-EU II (2010) vs Relative maintenance costs (2011) 

[1]   Relative maintenance costs 20 years to GDP (billion €) in 2011 
[2]   1 = Less than 30.000 € / 2 = > 30.000 € to € 100.000 € / 3 = > 100.000 € to € 300.000 € / 4 = > € 

300.000 € to € 1 million € / 5 = > 1 million € to 3 million € / 6 = > 3 million € to € 10 million € / 7 = > 
10 million € to 30 million € / 8 = > 30 million € to € 100 million € / 9 = > 100 million € to 300 million € / 
10 = More than 300 million € 

[3]   Linear regression: coefficient of determination 

As  in  the  first  analysis,  there  is  no  relationship  between  the  relative overall patent  costs  and  the 
economic value of patents, measured using a numerical value from 1 to 9 (as can be seen in Note 
3  of  the  figure  displayed  above)  corresponding  to  a  certain  interval  for  the  economic  value  of  a 
patent.  It  must  be  borne  in  mind  that  such  economic  value  is  just  an  estimate  of  the  inventors. 
However, it is pretty clear according to PatVal-EU II data that being part of a patent family is more 
relevant than being granted. This could be a reinforcement of the above mentioned hypothesis that 

52 

 
 
 
claims  that  a  patent  is  a  strategic  asset.  In  this  sense,  to  be  part  of  a  set  of  patents  allows  the 
patent to add value to its “relatives” and, at the same time, its perceived value is also increased. 

4.3.2  Motivation for patenting 

The  third  and  final  analysis  of  this  item  deals  with  the  motivations  behind  patenting  and  their 
relationship  with  patent  costs.  In  this  case,  two  different  data  sources  for  motivations  have  been 
used:  PatVal-EU  II  and  everis  survey  (only  for  “universities”,  since  this  is  the  only  case  where 
surveyed information on costs is available for all the countries). 

Figure  14  –  Motivations  for  patenting  for  the  20  European  countries  considered  in 

PatVal-EU II (2010) vs Relative maintenance costs (2011) 

[1]   Relative maintenance costs 20 years to GDP (billion €) in 2011 
[2]   Answers  were  given  on  a  5  point  Lickert  Scale  (1  -  not  important,  5  -  very  important);  we  assume 

equidistance and, therefore, provide means 
Linear regression: coefficient of determination 

[3]  

Sources: NPOs costs in 2011, PatVal-EU II 

53 

 
 
 
The results displayed in the figure do not indicate any pattern or correlation with the overall patent 
costs  for  the  20  analysed  countries.  The  two  “motivations”  with  the  highest  mean  values 
correspond  to  “satisfaction  from  showing  that  something  is  technically  possible”  and  “intellectual 
challenge”. It is worth remarking that this survey (PatVal-EU II) was addressed to inventors, that 
is, those who are involved in innovative activities as the ones corresponding to R&D. 

In order to have a complementary view of the motivations, the everis survey (2013) has also been 
used. The surveyed motivations are 5 and different to the ones corresponding to PatVal-EU II. 

54 

 
 
 
 
Table 17 - Motivations for patenting in SMEs, universities and PROs  

[1]   Main  reasons  for  patenting  (arithmetic  mean  of  the  respondent's  level  of  agreement  (1  -  Completely 

disagree; 2 - Disagree; 3 - Partially agree; 4 - Agree; 5 - Completely agree)) 

Source: everis survey 2013 

4.3.3  Relationship between patent costs and investment in research 

The  first  analysis  of  this  topic  focuses  on  the  relationship  between  overall  patent  costs 
(administrative  and  maintenance  costs)  and  the  GERD  (Gross  Expenditure  on  R&D),  BERD 
(Business Enterprise Expenditure on R&D) and HERD (Higher Education Expenditure on R&D) using 
standard correlation analysis. 

55 

 
 
 
 
 
Figure 15 - GERD vs Relative overall patent costs (2011) 

[1]   Relative overall costs include administrative and maintenance costs (2011) to GDP (billion €) in 2011 
[2]   Gross domestic expenditure on R&D (GERD) (% of GDP) (2011) 
[3]  
[4]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES 

Linear regression: coefficient of determination 

and SE) 

Only patent offices with available data (costs and GERD) are shown 

Note 1:  
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Sources: NPOs  (costs)  and  Eurostat  2011  except  for  Brazil  and  India  (World  Bank  2011),  Switzerland  (OECD 
2008) and Canada, Israel, Japan and South Korea (OECD 2011) 

As  can  be  seen  in  the  depicted  figure  there  is  no  relationship  between  the  GERD  and  the  overall 
patent costs gathered at NPO level. Since the patenting activity is highly related to the innovative 
activities  of  enterprises,  a  stronger  relationship  with  BERD  (Expenditure  on  R&D  in  the  business 
enterprise sector) could be expected. This hypothesis is not true according to our second analysis, 
that is, the correlation analysis of patent costs vs BERD. 

However, it is difficult to raise a conclusion since in some countries a significant share of total local 
patents  comes  from  foreign  countries  and,  therefore,  they  are  not  influenced  by  BERD,  GERD  or 
HERD at the local (NPO) level. 

56 

 
 
 
Figure 16 – BERD vs Relative overall patent costs (2011) 

[1]   Relative overall costs include administrative and maintenance costs (2011) to GDP (billion €) in 2011 
[2]   Expenditure on R&D in the business enterprise sector (BERD) (% of GDP) (2011) 
[3]   Linear regression: coefficient of determination 
[4]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and SE) 

Note 1:   Only patent offices with available data (costs and BERD) are shown 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Sources: NPOs  costs,  Eurostat  2011  except  for  Canada,  Israel,  Japan  and  South  Korea  (OECD  2011)  and 
Switzerland (OECD 2012) 

According to the available data, the enterprise investment on R&D is not constrained or influenced 
by  patent  costs  to  a  significant  extent.  That  is,  the  linear  regression  curve  does  not  accurately 
represent how the variation on overall patent costs affects the variation on BERD. 

The  final  analysis  of  this  item  deals  with  the  relationship  between  patent  costs  and  the  HERD 
(Expenditure on R&D performed in the higher education sector). 

57 

 
 
 
 
 
Figure 17 - HERD vs Relative overall patent costs (2011) 

Expenditure on R&D performed in the higher education sector (HERD) (% of GDP) (2011) 
Linear regression: coefficient of determination 

[1]   Relative overall costs include administrative and maintenance costs (2011) to GDP (billion €) in 2011 
[2]  
[3]  
[4]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European patent validated in 13 countries (DE, FR, IT, NL, CH, UK,  AT, BE, DK, FI, IE, ES 

and SE) 

Only patent offices with available data (costs and HERD) are shown 

Note 1:  
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Sources: NPOs, Eurostat 2011 except for Luxembourg, Canada, Israel, Japan, South Korea (OECD 2011) and 
Switzerland (OECD 2010)  

Like  in  the  previous  cases,  the  determination  coefficient  is  very  low.  Again,  the  linear  regression 
does  not  represent  accurately  the  relationship  between  HERD  and  patent  costs.  In  our  opinion, 
HERD  is  conditioned  by  the  R&D  policy  of  higher  education  institutions  and  does  not  seem  to  be 
constrained  by  the  costs  of  patenting.  Moreover,  patenting  is  more  likely  the  consequence  of 
research activities rather than the driver of such activities. 

4.3.4 

Impact of patent costs on a number of different aspects 

The final results of the everis survey 2013 consisted of the  414 respondents which completed the 
survey comprehensively (the design of the sample is detailed in Section 4.4). Out of these, all non-
cost-related  answers  were  considered  valid  as  is.  Cost-related  answers  (related  to  questions 
around  the  concept  of  a  ‘representative  European  patent’)  underwent  a  filtering  process  with 
the  objective  of  discarding  those  which  were  considered  unreasonable.  This  process  consisted  of 
the following steps: 

58 

 
 
First, if the administrative cost was deemed unreasonable, it was assumed that, because of the 
fact  that  administrative  costs  cannot  vary  wildly,  the  respondent’s  cost-related  answers  were  not 
sufficiently reliable. Therefore, all his/her cost figures were disregarded. 

Administrative costs were deemed unreasonable if they were 100% below or 300% above a figure 
representing  a  relatively  low-cost  administrative  fee  of  a  European  patent  at  current  prices: 
4,520 €  (i.e.  costs  outside  the  range  2,260  €  to  18,080  €  were  considered  unreasonable).  The 
amount 4,520 € was derived from the sum of the following elements: 

•  Filing fee - EP direct - online: 120 €. 
•  Fee for a European search - Applications filed on/after 01.07.2005: 1,285 €. 
•  Designation  fee  -  For  all  contracting  States  designated  for  applications  filed  on/after 

01.04.2009: 580 €. 

•  Examination fee - For applications filed on/after 01.07.2005: 1,620 €. 
•  Fee  for  grant  and  printing  (not  more  than  35  pages)  or  fee  for  grant  including  fee  for 

publication: 915 €. 

Second,  if  the  process  cost  was  deemed  unreasonable,  it  was  assumed  that  the  respondent’s 
cost-related  answers  were  not  sufficiently  reliable.  Therefore,  all  his/her  cost  figures  were 
disregarded. 

Process  costs  were  deemed  unreasonable  if  they  were  300%  above  the  reference  process  cost 
extracted from the Roland Berger study: 11,443 € (i.e. the figure calculated in 2004, 9,840 €, and 
updated  using  the  average  inflation  rate  of  the  OECD  countries  published  by  the  World  Bank). 
Process costs below this figure were not judged as these can be considered by patentees as low as 
zero if this activity is undertaken in-house. 

Third, if the maintenance cost was deemed unreasonable, it was assumed that the respondent’s 
cost-related  answers  were  not  sufficiently  reliable.  Therefore,  all  his/her  cost  figures  were 
disregarded. 

Maintenance costs were deemed unreasonable if they were below the minimum fee of a European 
patent at current prices: 465 € (amount corresponding to the 3rd year renewal fee). 

And  fourth,  translation  costs,  if  the  answer  to  the  question  “Has  your  entity  used  patent 
translation  services  during  2012?”  was  “No”  and  the  value  of  the  next  question  (“Approximately, 
what costs in Euros has your entity incurred in these services?”) was anything bigger than 0 €, this 
cost was deemed unreliable and was discarded. 

After applying this filtering process, the following fields were eliminated: 44% administrative costs; 
36% process costs, 49% maintenance costs and 40% translation costs. Due to the high uncertainty 
related  to  the  cost-related  data  stemming  from  the  survey  (including  the  data  which  passed  the 
above-mentioned  filtering process),  the  usage  of  all  cost-related  information  (linked  to the  everis 
survey)  in  the  different  analysis  included  in  the  current  report  has  been  discarded,  as  this  data 
does not provide sufficient reliability. 

R&D investments by SMEs: Research intensity 

Table 18 - R&D investments by SMEs: Research intensity 

[1]   Arithmetic mean of last year's expenditure on R&D (“Approximately, what has been your last year's 

expenditure on R&D?”) 

Source:  everis survey 2013 

59 

 
 
 
 
R&D investments by SMEs: SMEs engaging in R&D and innovation 

Table 19 - R&D investments by SMEs: SMEs engaging in in-house R&D and innovation 

[1]   Share of SMEs that spent more than 0 € on R&D last year ("Approximately, what has been your last year's 

expenditure on R&D?") 

Source: everis survey 2013 

According to the survey, the USA, the UK, Germany, Japan and Sweden are among the countries 
with the highest R&D Investment and R&D share of innovative SMEs. At the European level this is 
not surprising, since, according to the European Innovation Scoreboard 201438, these countries are 
leading  innovators.  Again,  as  mentioned  in  ‘Item  A’  above,  patent  costs  are  not  a  constraint  to 
innovation in countries with a long track record in innovation, in this case at SME level. 

Using data from the Eurostat Community Innovation Survey 2010, a relation between patent costs 
and the percentage of SMEs engaged in in-house R&D activities can be explored. 

Table 20 - SMEs with in-house R&D activities vs Relative overall patent costs (2011) 

[1]   Relative  overall  patent  costs  for  SMEs  (administrative  +  maintenance  20  years)  to  GDP  (billion  €)  in 

2011 

[2]   % of SMEs (10-49 employees) engaged in-house R&D activities 
[3]   % of SMEs (50-249 employees) engaged in-house R&D activities 
[4]  

Linear regression: coefficient of determination 

Note1:   only countries with available data 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Sources: NPOs, Eurostat 

38   http://ec.europa.eu/enterprise/policies/innovation/policy/innovation-scoreboard/index_en.htm 

60 

 
 
 
                                                 
The linear regression of the results do not allow to infer a potential relation between overall patent 
costs and the percentage of SMEs engaged in R&D activities independently of their size in terms of 
employees. 

Entrepreneurial activity (new initiatives) 

Table 21 - Creation of new initiatives 

SMEs 

[1]  "In what measure have patent costs influenced your entity in the following matters? Ability to create new 
initiatives" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

Entrepreneurial activity (new spin-offs) 

Table 22 - PROs' and Universities' ability to create spin-offs 

PROs 

Universities 

[1] "In what measure have patent costs influenced your entity in the following matters? Ability to create spin-
offs" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

Regarding the relation between entrepreneurial activity (creation of initiatives/spin-offs) and patent 
costs, the survey does not display clear evidence. With the exception of Indian SMEs, less than 9% 
of the respondents on average report that the creation of new firms may be influenced by patent 
costs.  At  the  PRO/University  level,  interviewees  that  report  that  patent  costs  may  influence  the 
creation  of  spin-offs  are  nearly  three  times  higher  than  in  the  case  of  SMEs  (24%  and  25%  for 
PROS  and  SMEs  respectively).  This  may  be  explained  by the  fact that  spin-off  creation is  a  usual 
Technology  Transfer  alternative  promoted by  TTOs.  Overall,  and  considering the  reduced  number 
of answers in some cases, it seems that entrepreneurial projects are, up to some extent, affected 
by  the  overall patent  costs,  but  the  impact  for  SMEs  does  not  seem  important.  It  must  be  noted 
that, at the time the survey was conducted, India,  France, Japan and the USA have reduced fees 
for SMEs, PROS and Universities. 

61 

 
 
 
 
Entrepreneurship  seen  at  the  SME  level  (creation  of  new  initiatives)  and  PRO  &  University  level 
(spin-off  creation)  is  thought  as  being  a  phenomenon  based  on  the  strategic  value  of  concrete 
technologies  /  envisaged  projects,  and  is  therefore  very  dependent  on  the  specific  sample  of 
entities surveyed in this case. 

Growth of SMEs 

Table 23 - Growth of SMEs 

[1]  "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Economic 
development" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

In  order  to  identify  links  between  patent  costs  and  the  growth  of  SMEs,  a  potential  relation 
between  fast  growing  SMEs  and  overall  patent  costs  has  been  explored.  The  Innovation  Output 
Scoreboard  and the Innovation Output Indicator both provide an indicator for fast growing SMEs. 
The  indicator  shows  the  degree  of  innovativeness  of  successful  entrepreneurial  activities.  It 
captures the capacity of a country to transform its economy rapidly to take advantage of emerging 
demand. 

Fast-growing  enterprises  are  defined  as  firms  with  average  annual  growth  in  employees  of  more 
than 10% a year, over a three-year period, and with 10 or more employees at the beginning of the 
observation period. The sum of sectorial results for the employment in fast-growing enterprises by 
economic  sector  is  then  multiplied  by  the  innovation  coefficients  of  these  sectors  and  finally,  the 
result  is  divided  by  the  total  employment  in  fast-growing  enterprises  in  the  business  economy 
(without financial sector). 

62 

 
 
 
 
Table 24 – Employment in fast growing SMEs vs Relative overall patent costs (2011) 

[1]   Relative overall patent costs for SMEs (administrative + maintenance 20 years) to GDP (billion €) in 2011 
[2]   Employment  in  fast-growing  firms  (2011)  of  innovative  sectors  as  calculated  for  the  Innovation  Union 

Scoreboard  

[3]   Linear regression: coefficient of determination 

Note 1:  only countries with available data 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

The  low  value  of  the  determination  coefficient  does  not  allow  establishing  a  linear  relationship 
between the employment rate of fast growing firms and patent costs. 

Access to venture capital for SMEs to perform R&D 

Venture  capital  has  increased  its  importance  in  the  development  of  early  stage  innovative  firms. 
Many reasons may explain the growth of venture capital as a way of obtaining funding. The most 
important ones are the creation of legal frameworks that support VC investors, the implementation 
of financial markets like NASDAQ in the USA or the “Neuer Markt” in Germany which are especially 
suited  for  the  floatation  of  young  companies  or  the  development  of  myriad  of  ICT  start-ups  with 
attractive growth rates for investors. 

63 

 
 
 
 
Table 25 - Access to venture capital for SMEs to perform R&D 

[1]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Access  to  venture 

capital to perform R&D" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

In order to explore any potential relationship between patent costs for SMEs (the ones more likely 
to receive VC funding at an early stage) and VC investment, data of VC investment as of GDP for 
the countries covered in the research has been collected and they are shown below: 

Table 26 – Venture capital investment/GDP vs Relative overall patent costs (2011) 

[1]   Relative overall patent costs for SMEs (administrative + maintenance 20 years) to GDP (billion €) in 2011 
[2]   VC investment in early stage (seed and start-up) and later stage as of GDP (%) for 2011 except Israel, 

South Korea and USA (2012) 

[3]   Linear regression: coefficient of determination 
[4]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and SE) 

Note 1:  only countries with available data 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Source:  NPOs, World Bank, Eurostat and OECD (EE, SI, IL, CA, JP, KR and USA) 

64 

 
 
 
 
 
Table 27 –   Venture  capital  investment/GDP  vs  Relative  overall  patent  costs  for 
selected NPOs (2011) 

[1]   Relative overall patent costs (administrative + maintenance 20 years) to GDP (billion €) in 2011 
[2]   VC investment in early stage (seed and start-up) and later stage as of GDP (%) for 2011 except Israel, 

South Korea and USA (2012) 

[3]   Linear regression: coefficient of determination 
[4]   Costs for a European Patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European Patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and 

SE) 

Note 1:  data for China not available 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Source:  NPOs, World Bank, Eurostat and OECD (IL, JP, KR and USA) 

The  low  determination  coefficient  for  the  first  case  does  not  allow  inferring  any  potential  relation 
between  the  two  variables.  Regarding  the  case  where  only  data  for  selected  countries/group  of 
countries  is  shown  (6  European  countries  patent,  13  European  countries  patent,  Israel,  Japan, 
South  Korea  and  the  USA),  the  potential  positive  correlation  of  VC  investment  and  patent  costs 
needs to be interpreted cautiously due to the low determination coefficient and the small sample. 
Several hypotheses may explain the lack of conclusive findings: 

•  Different degrees of development of VC industry in each country: Countries such as the USA or 
Israel have a well establish network of investors with VCs that can manage funds of hundreds or 
even thousands million dollars that are able to provide seed stage funding as well as later stage 
rounds.  In  other  countries  VCs  and  angel  investors are  mostly  focused  on  seed  or early  stage 
rounds which amount for a fraction of the volume of investment of developed markets for VC. 

•  Cross-border flows of start-ups: start-ups that seek later stage rounds of funding migrate to VC 
attraction  poles  such  as  the  Silicon  Valley,  Massachusetts  or  London  in  Europe,  where  it  is 
possible to obtain advanced funding rounds. 

•  Importance  of  IP  protection  in  innovative  start-ups:  some  ICT  start-ups  which  account  for  an 
important  number  of  VC  deals  do  not  always  rely  on  patents  since  they  innovate  in  their 
business  model.  This  does  not  preclude  that  when  young  start-ups  reach  later  stages  of 
development they may protect any IP they generate. 

The relation between patents, innovation and VC funding has been studied in the literature. Engel 
and Keilbach39 analysed the impact of venture capital on growth and innovation of young German 
firms. The authors compared a sample of VC backed firms with a control group and they concluded 
that VC backed firms have a larger start-up size, a larger and better educated management team 
and have a larger number of patents at their foundation date. Their research also shows that 
having  one  or  more  patents  before  their  foundation  date  increases  the  probability  of 
getting VC funding in the start-up’s first year of activity. 

Based on a matching procedure aimed at minimizing the statistical bias due to systematic selection 
of firms, the authors find evidence that venture funded firms display higher growth rates compared 

39   Firm Level Implications of Early Stage Venture Capital Investment – An empirical investigation. Dirk Engel, 

Max Keilbach (2007). 

65 

 
 
                                                 
to non VC backed firms. The number of patent applications of VC funded firms is also higher than 
non  VC  funded  firms  (weakly  significant  when  considered  overall  but  not  significant  for  industry 
aggregates) but this was also the case before the engagement of VCs. The probability of applying 
for  at  least  one  additional  is  higher  for  VC  funded  firms  but  the  difference  is  insignificant. 
Therefore, the authors conclude that there is weak evidence supporting the idea that firms funded 
by VCs have a different patenting behaviour. 

Hirukawa and Ueda40 continued the work carried by Kortum and Lerner (KL) (2000) regarding the 
impact  of  VC  contributing positively  to  patent  counts  at  industry  level  in  the  period  ranging  from 
1988 to 1992. The authors extend the period of time considered to 2001 and find that the impact 
of  VC  in  patent  counts  increases  in  the  period  1968-2001  compared  with  the  period  1968-1992. 
Therefore VC effect on patent counts increased in the 1990s. 

Additionally,  the  authors  also  consider  other  innovation  metrics  different  than  patent  counts  like 
the  Total  Factor  Productivity  and  labour  productivity.  In  the  case  of  Total  Factor  Productivity  no 
conclusive  results  support  a  positive  impact  of  VC  investment.  Labour  productivity  is  affected 
positively  by  VC  investment  however  this  effect  may  be  explained  by  the  technology  substitution 
input factors away from labour. 

Other  interesting  findings  and  discussions  in  this  paper  are  related  with  the  reasons  why  VC 
increases the patent propensity of the industry: 

•  Established  firms  are  found  to  increase  the  originality  of  their  patents  to  compete  with  non-
public  firms  when  VC  investment  increases.  This  finding  contradicts  previous  research  that 
suggested that established firms should file blocking patents leading to a deterioration of patent 
quality. 

•  Start-ups tend to use patents as a way to appropriate returns on innovation. This is due to the 
fact that start-ups cannot use other appropriation methods, such as secrecy, since most of them 
do not own their manufacturing and marketing capacities. 

•  Start-ups increase their patent propensity because patents are considered as a mean to obtain 
funding. Engel and Keilbach also consider patents as a way to increase the probability to obtain 
funding since patents are supposed to prove the innovative performance. 

•  Start-ups are considered to use patents as a way to reduce the risk of VCs expropriating their 

inventions. 

Summing  up  these  findings  and  comments,  patents  can  be  considered  a  prerequisite  to  obtain 
funding. Most early stage start-ups have no income and funding constraints, therefore patent cost 
may  become  a  burden  for  patenting.  Incentives  for  start-ups,  in  the  form  of  price  reductions  for 
SMEs, may increase the chances of survival for these firms in their early stages. 

Internationalisation behaviour of SMEs 

Patents can be used as an indicator of the internationalisation of companies. Companies willing to 
enter  a  certain  market  may  decide  to  protect  their  inventions  in  that  specific  market  and  patent 
costs may represent an obstacle for this. 

Table 28 - Internationalisation behaviour of SMEs 

[1]   "In what  measure  have  patent  costs  influenced your  entity  in  the  following matters? Internationalisation 

behaviour" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

40   Venture capital and industrial “Innovation” Masayuki Hirukawa, Masako Ueda 2013 

66 

 
 
                                                 
Despite the relative small sample for each of the countries surveyed, the influence of patent cost as 
a barrier for internationalisation among the SMEs can be considered to be low. 

SMEs from China and India are the two countries surveyed that most frequently report patent costs 
as  a  barrier  to  internationalise  their  IP.  Chinese  SMEs  must  incur  into  translation  costs  to  file  a 
patent  at  the  EPO  and,  like  Indian  companies,  face  the  ratio  of  fees/GDP  per  capita  of  the  11 
countries surveyed. 

27%  of  German  SMEs  surveyed  also  report  that  patent  costs  are  a  burden  for  the 
internationalisation  of  their  IP.  This  can  be  explained  by  the  comparatively  high  relative  costs  of 
patenting outside Germany in other countries except for the UK and France (and indeed the same 
can be said for these two countries). 

USA’s SMEs may consider costs relevant since the relative overall costs in their home market are 
the  lowest  of  all  the  countries  covered  in  this  study.  Besides  the  higher  relative  validation  and 
maintenance costs required to file a European patent in the most relevant countries, the potential 
higher  process  costs  arising  from  a  more  thorough  examination  process  may  act  as  deterrent  for 
American applicants. 

Only 1 out the 19  Japanese  SMEs (approx. 5%) surveyed report patent costs as a barrier for the 
internationalisation  of  IP.  However,  fees  can  be  considered  more  accessible  for  Japanese  SMEs 
compared  with  other  Asian  countries  since  Japan’s  GDP  per  capita  is  nearly  8  times  bigger  than 
China’s  or  30  times  higher  than  India’s.  The  same  can  be  said  about  Swedish  SMEs  taking  into 
account that its GDP per capita is the highest of all the countries surveyed. 

In order to further explore the impact of patent costs on the internationalisation of companies, the 
share  of  high  tech  exports41,  which  are  the  ones  that  most  frequently  rely  on  patents,  over  total 
exports42  has  been  calculated  (data  breakdown  according  to  the  size  of  the  company  is  not 
available). The ratio has been represented against the overall cost in the following figures: 

41 http://data.worldbank.org/indicator/TX.VAL.TECH.CD 

42 http://data.worldbank.org/indicator/NE.EXP.GNFS.CD 

67 

 
 
 
                                                 
Table 29 –   Share  of  high  tech  exports  in  total  exports  vs  Relative  overall  patent  costs 

(2011) 

[1]   Relative overall patent costs (administrative + maintenance 20 years) to GDP (billion €) in 2011 
[2]   High tech exports over total exports of manufactured goods in 2011 except for Norway (2010) 
[3]   Linear regression: coefficient of determination 
[4]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and SE) 

Note 1:  only countries with available data 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Sources:   NPOs, World Bank 

68 

 
 
 
 
Table 30 –   Share  of  high  tech  exports  in  total  exports  vs  Relative  overall  patent  costs 

for selected countries (2011) 

[1]   Relative overall patent costs (administrative + maintenance 20 years) to GDP (billion €) in 2011 
[2]   High tech exports over total exports of manufactured goods in 2011 
[3]   Linear regression: coefficient of determination 
[4]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and SE) 

Note 1:  only countries with available data 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Sources:   NPOs, World Bank 

Low determination coefficients for both sets of countries are too low to infer any  potential relation 
between the share of high tech exports and the overall patent costs. 

Internationalisation  of  technology  can  be  seen  from  the  perspective  of  revenues  and  patent 
revenues coming from abroad too. This indicator is calculated in the Innovation Union Scoreboard 
with  the  reported  data  shown  below  and  potential  relations  with  relative  patent  costs  have  been 
explored. 

69 

 
 
 
 
Table 31 –   Licenses  and  patent  revenues  from  abroad  as %  of  GDP  vs  Relative  overall 

patent costs (2011) 

[1]   Relative overall patent costs (administrative + maintenance 20 years) to GDP (billion €) in 2011 
[2]   License and patent revenues from abroad as % of GDP for 2011 
[3]   Linear regression: coefficient of determination 
[4]   Costs for a European patent validated in 6 countries (DE, FR, IT, NL, CH and UK) 
[5]   Costs for an European patent validated in 13 countries (DE, FR, IT, NL, CH, UK, AT, BE, DK, FI, IE, ES and SE) 

Note 1:  only countries with available data 
Note 2:  Administrative  costs  for  6  European  countries  and  13  European  countries  patents  are  pre-grant  and 
designation  fees  charged  by  the  EPO  plus  validation  fees  charged  by  NPOs.  Maintenance  fees  are  the  sum  of 
maintenance  fees  charged  by  each  NPO.  GDP  value  used  to  calculate  relative  costs  for  European  6  and  13 
countries aggregates is the sum of the GDPs of the countries where the patent is validated 

Sources:   NPOs, World Bank and EC (Innovation Union Scoreboard database 2014) 

Like  in  the  previous  case,  the  determination  coefficient  is  too  low  to  infer  any  potential  relation 
between licenses and patent revenues and overall patent costs. 

Internationalisation  of  technology  measured  by  patent  validation  flows  has  been  studied  in  the 
literature. Harhoff, Hoisl, Reichl and van Pottelsberghe43 used a gravity model to identify the major 
factors affecting the validation behaviour of European Patents. The factors identified by the authors 
were: 

•  Wealth (GDP per capita) and size (number of inhabitants) the applicant country.  
•  Wealth and size of the targeted validation country. 
•  Distance between capital cities. 
•  EPC member duration. 
•  Patent  costs  which  are  divided  into  validation  fees,  maintenance  fees  (from  years  4-6)  and 

translation costs. 

From  the  above  mentioned  factors,  wealth  and  size  of  the  applicant  country  are  more  important 
than  the  same  parameters  of  the  destination  country.  An  increase  of  1%  of  the  GDP  in  the 
applicant  country  increases  the  validation  flows  1.5%  while  1%  increase  of  the  GDP  of  the 

43   Patent validation at the country level - The role of fees and translation costs. Dietmar Harhoff, Karin Hoisl, 

Bettina Reichl and Bruno van Pottelsberghe de la Potterie. (2009). 

70 

 
 
                                                 
validation  country  accounts  for  an  increase  of  0.7%.  An  increase  of  1%  of  the  population  of  the 
applicant country increases patent validation flows 0.9% (0.35% for the validation country). 

Distance between capital cities is found to affect negatively validation flows. An increase of 1% of 
the distance reduces patent flows 0.5%. 

EPC membership duration is found to be correlated to the wealth of the validation country and can 
be considered as proxy for the attractiveness of the validation country. 

Validation and maintenance fees are significant with elasticities of -0.1 and -0.4 respectively. When 
factored together the elasticity is -0.5. 

Research cooperation between SMEs, UNIs and PROs 

Table 32 - Research cooperation between SMEs, UNIs and PROs 

PROs 

Universities 

[1]   "In what measure have patent costs influenced your entity in the following matters? Cooperation with the 

industry" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

These tables show an interesting behaviour. In countries with a significant industrialisation degree 
the amount of “technology centres” (a special type of PRO) is high. These organisations usually act 
as a kind of liaison between more basic research (stemming from universities) and the needs of the 
industry. As can  be  seen,  the cooperation with universities in South Korea and Germany is much 
lower than the cooperation with PROs. 

4.4  Patenting costs investment & internationalisation impacts, barriers and 

burdens  

The everis survey 2013 has been used to analyse the perception of the surveyed organisations on 
investment & internationalisation impacts, barriers and burdens regarding patenting process’ costs. 
As  mentioned  in  the  previous  section,  this  analysis  has  been  carried  out  upon  the  information 
provided by the 414 respondents which completed the survey comprehensively. 

The  design  of  the  sample  (detailed  below),  which  amounted  originally  to  413  participants  (even 
though  at  the  end  of  the  survey  414  responses  were  obtained),  was  undertaken  using  stratified 
sampling based on an equilibrium influenced by the level of IP-growth and the R&D intensity of the 
countries and adjusted based on everis’ knowledge of the marketplace. 

71 

 
  
 
 
 
EU country 

Sample size 

Spain 

France 

UK 

Germany 

Sweden 

Poland 

TOTAL 

40 

45 

45 

30 

45 

18 

223 

Non-EU country 

Sample size 

USA 

Japan 

China 

South Korea 

India 

TOTAL 

45 

45 

40 

30 

30 

190 

72 

 
 
 
 
 
R&D Investments by SMEs and impact of patent costs 

Table 33 - R&D Investments by SMEs and impact of patent costs 

R&D Investments by SMEs 

Impact of patent costs: improvement of performance due to patents (SMEs) 

[1]   "Approximately,  what  has  been  your  company's  last  year  revenue  in  Euros?"  (Arithmetic  mean  of  last 

year's revenue on R&D in euros) 

[2]   "Approximately,  what  has  been  your  last  year's  expenditure  on  R&D?"  (Arithmetic  mean  of  last  year's 

expenditure on R&D in euros) 

[3]   "What is the number of employees in your company?" (Arithmetic mean of the number of employees) 
[4]   "Does holding patents improve your performance in the following contexts? Revenue" (Arithmetic mean of 
the  improvement  of  the  companies'  performance  (1  -  Completely  disagree;  2  -  Disagree;  3  -  Partially 
agree; 4 - Agree; 5 - Completely agree)) 

[5] "Does holding patents improve your performance in the following contexts? Investments" (Arithmetic mean 
of the improvement of the companies' performance (1  - Completely disagree; 2  - Disagree; 3  - Partially 
agree; 4 - Agree; 5 - Completely agree)) 

[6]   "Does  holding  patents  improve  your  performance  in  the  following  contexts?  Number  of  employees" 
(Arithmetic  mean  of  the  improvement  of  the  companies'  performance  (1  -  Completely  disagree;  2  - 
Disagree; 3 - Partially agree; 4 - Agree; 5 - Completely agree))  

Source: everis survey 2013 

73 

 
 
 
 
Regarding investment policy, revenues and employees growth of SMEs, it is important to point out 
that patents are  seen  as assets by SMEs and  are  developed and filed following strategic reasons, 
with  a  long-term  return  on  investment  and,  therefore  are  not  affected  by  short/mid-term  actions 
undertaken by SMEs following business considerations. 

International portfolio of SMEs, PROs and Universities 

Table 34 - International portfolio of SMEs, PROs and Universities 

SMEs 

PROs 

74 

 
 
 
 
Universities 

[1]   "What  regions  does  your  entity  usually  seek  protection  in?  Regions  in  which  the  entities  usually  seek 

protection in" (percentage of respondents that seek protection in each region) 

Source: everis survey 2013 

There  is  a  clear  homogeneity  between  the  destination  regions  of  the  surveyed  SMEs,  PROs  and 
Universities:  all  of  them  look  for  international  protection  in  the  EPC  region,  the  USA  and  Japan, 
having  the  two  first  regions  a  mean  value  close  to  70%  of  the  surveyed  entities.  However, 
regarding  SMEs  there  is  a  remarkable  difference:  SMEs  would  rather  protect  their  technology  in 
China (close  to 50%  of  the cases) than  Japan  (40%) which is a clear indication of the increasing 
importance of China as a global economic player. 

75 

 
 
 
 
 
 
Granted patents of SMEs, PROs and Universities (2011, 2012) 

Table 35 - Granted patents of SMEs, PROs and Universities (2011, 2012) 

SMEs 

PROs 

76 

 
 
 
 
Universities 

[1]   Number of patents granted through Euro-PCT route in 2011 
[2]   Number of patents granted through Euro-Direct route in 2011 
[3]   Number of patents granted through Euro-PCT route in 2012 
[4]   Number of patents granted through Euro-Direct route in 2012 

Source: everis survey 2013 

The data available from the survey makes it difficult to obtain a set of global conclusions. However, 
looking  at  the  three  large  economies  of  Germany,  the  USA  and  Japan  and  focusing  at  the  SME 
level,  some  comments  can  be  made:  (1)  these  countries  display  a  clear  leadership  position  in 
terms of patents granted; (2) Japan and the USA clearly rely more on the Euro-PCT route than the 
Euro-Direct,  and  (3)  a  large  European  economy  like  Germany  displays  a  very  close  amount  of 
patents  granted  following  the  two  considered  routes,  which  is  a  clear  sign  of  the  German  bet  on 
innovation and, therefore, patenting as the basis of the competitiveness of its world-class SMEs. 

77 

 
 
 
 
 
SME, PRO and Universities' perception of the impact of patent costs 

Table 36 - SME, PRO and Universities' perception of the impact of patent costs 

SMEs 

PROs 

78 

 
 
 
 
Universities 

[1]   "In what measure have patent costs influenced your entity in the following matters? Frequency of patent 

filings" (percentage of respondents that consider patent costs have a high impact) 

[2]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Geographical 

coverage of patents" (percentage of respondents that consider patent costs have a high impact) 

[3]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  R&D  budget" 

(percentage of respondents that consider patent costs have a high impact) 

[4]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Access  to  venture 

capital to perform R&D" (percentage of respondents that consider patent costs have a high impact) 

[5]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Economic 

development" (percentage of respondents that consider patent costs have a high impact) 

[6]   "In what measure have patent costs influenced your entity in the following matters? Ability to create spin-

offs" (percentage of respondents that consider patent costs have a high impact) 

[7]   "In what measure have patent costs influenced your entity in the following matters? Cooperation with the 

industry" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

79 

 
 
 
 
 
SMEs' perception of the impact of patent costs, low/high tech economic sectors 

Table 37 -  SMEs'  perception  of  the  impact  of  patent  costs,  low/high  tech  economic 

sectors. Medium-low-tech and low-tech economic sectors 

High-tech and medium-high-tech economic sectors 

80 

 
 
 
 
[1]   "In what measure have patent costs influenced your entity in the following matters? Frequency of patent 

filings" (percentage of respondents that consider patent costs have a high impact) 

[2]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Geographical 

coverage of patents" (percentage of respondents that consider patent costs have a high impact) 

[3]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  R&D  budget" 

(percentage of respondents that consider patent costs have a high impact) 

[4]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Access  to  venture 

capital to perform R&D" (percentage of respondents that consider patent costs have a high impact) 

[5]   "In  what  measure  have  patent  costs  influenced  your  entity  in  the  following  matters?  Economic 

development" (percentage of respondents that consider patent costs have a high impact) 

[6]   "In what measure have patent costs influenced your entity in the following matters? Ability to create spin-

offs" (percentage of respondents that consider patent costs have a high impact) 

Source: everis survey 2013 

81 

 
 
 
 
Regarding  this  point,  the  limited  amount  of  responses  makes  it  difficult  to  carry  out  an  accurate 
analysis.  The  only  remarkable  fact  is  the  impact  on  frequency  of  patenting  that  South  Korea 
displays  for  high-tech  and  medium-high-tech  economic  sectors.  Apart  from  this,  no  relevant 
conclusions can be drawn as far as the impact of patent costs is concerned. 

Main barriers for patenting for SMEs, PROs and Universities 

Table 38 - Main barriers for patenting for SMEs, PROs and Universities 

SMEs 

PROs 

82 

 
 
 
 
Universities 

[1]   "What were the main barriers found by your entity during the process of patent filing? Lack of information" 

(percentage of respondents that agree) 

[2]   "What were the main barriers found by your entity during the process of patent filing? Costs" (percentage 

of respondents that agree) 

[3]   "What were the main barriers found by your entity during the process of patent filing? Language barriers" 

(percentage of respondents that agree) 

[4]   "What were the main barriers found by your entity during the process of patent filing? Complexity of the 

patent system" (percentage of respondents that agree) 

Source: everis survey 2013 

Regarding  barriers  for  patenting  there  is  a  consensus  among  SMEs,  PROs  and  Universities:  all  of 
them consider patent cost as the main barrier for patenting, with a clear difference with the second 
ranked  barriers.  The  only  remarkable  exception  to  this  pattern  is  China.  In  this  country, 
“information”  is  the  leading  factor  for  SMEs  and  significantly  high  for  PROs  and  Universities.  This 
fact could be associated with the increasing interest in IP rights in China and the need to create a 
business culture around this topic. 

83 

 
 
 
 
 
 
Type of costs that are found a real burden by SMEs, PROs and Universities 

Table 39 - Type of costs that are found a real burden by SMEs, PROs and Universities 

SMEs 

PROs 

84 

 
 
 
 
Universities 

[1]   "What  type  of  costs  do  you  find  a  real  burden?  Administrative  fees"  (percentage  of  respondents  that 

agree) 

[2]   "What type of costs do you find a real burden? Maintenance cost" (percentage of respondents that agree) 
[3]   "What type of costs do you find a real burden? Process costs" (percentage of respondents that agree) 
[4]   "What type of costs do you find a real burden? Translation costs" (percentage of respondents that agree) 

Source: everis survey 2013 

In this case, there is a clear consensus between the different types of organisations (SMEs, PROs 
and Universities) about considering process costs as a real burden for patenting. This cost is indeed 
variable, and depends heavily on the complexity of technology itself and the (geographical) target 
level  of  protection.  In  this  case,  it  makes  sense  that  entities  willing  to  patent  their  innovations 
might consider this erratic component of the total costs of patenting as a real barrier. 

85 

 
 
 
 
5.  DISCUSSION 

The  project  pursues  the  goal  to  analyse  to  what  extent  the  costs  of  patenting  impacts  the  R&D 
activity and, subsequently, the innovation carried out by SMEs, Universities and PROs and how it is 
being influenced by such costs.  

This analysis is indeed complex since there is no single data source able to provide a complete and 
simultaneous snapshot of the behaviour of the mentioned entities in terms of patenting. Therefore, 
different  databases  and  sources  of  information  have  been  used  throughout  the  project.  As 
described in section 3, the main sources of information used have been the following:  

•  40  NPOs  have  been  consulted  to  gather  data  regarding  overall  patent  costs  (according  to  the 

OECD they can be split into administrative, process, translation and maintenance costs).  

•  EPO databases PATSTAT and INPADOC have been extensively used as they are a comprehensive 
repository  of  worldwide  patent  statistics,  including  information  on  patent  life  and  validated 
countries for European patents (this information is provided by INPADOC). In addition, PATSTAT 
also integrates information stemming from NPOs which deliver this data according to individual 
policies, which makes difficult the “simultaneous” view mentioned before. 

•  These sources of data have been complemented by a survey (everis survey 2013) conducted in 
11 countries, encompassing 6 European countries, 4 from Asia and the USA. A final set of 414 
responses were collected providing valuable information on the motivations, costs, impacts and 
perceptions  regarding patenting  for two  routes:  “Direct  National”  (standard  applications  at  the 
NPO level) and “Direct European” (applications directly filed at the EPO). Additional data sources 
like  the  “PatVal  EU-II  survey”  and  macroeconomic  data  obtained  from  Eurostat  regarding  the 
expenditure on R&D have also been used. 

As  a  general  remark,  the  lack  of  available  data  in  some  cases  at  NPO  level,  the  lagging  of  data 
integration in PATSTAT and INPADOC (specifically the information delivered by NPOs), the intrinsic 
complexity  of  measuring  the  average  patent  life  and  the  limited  detail  of  the  survey  for  some 
required  elements  of  analysis  have  indeed  been  challenges  that  have  been  tackled  during  the 
execution of the project. 

Regarding  NPO  level  costs  as  a  source  for  a  comprehensive  analysis  of  the  patent  costs 
behaviour, an important remark must  be raised.  The  information is  far from being homogeneous. 
I.e. each NPO has its own definitions and criteria on what constitutes its different fees. This implies 
that one has to spend a great deal of effort finding out what these definitions and criteria are, as 
they  are  not  normally  defined  in  detail  in  the  documents  which  are  made  available  to  the  public. 
This  fact  makes  it  close  to  impossible  to  obtain  precise  information  if  the  sample  is  as  big  as  40 
NPOs.  We  can  conclude  therefore  that  a  future  study  should  focus  on  a  reduce  sample  of 
NPOs and for a shorter period of time (reduced amount of years to be taken into account). 

On  the  other  hand,  PATSTAT  provides  a  complete  and  fairly  accurate  source  of  information 
regarding  direct  national  and  European  applications,  as  well  as  international  applications  (PCT). 
Although  the  lagging  of  data  integration  in  PATSTAT  and  INPADOC  (specifically  the  information 
delivered by NPOs) is  still a problem, both  databases can be considered a reliable data source. It 
makes us consider that an extensive and deeper analysis of PATSTAT, from a “big-data” approach, 
could  have  provided  additional  insights  regarding  patenting  behaviour.  Therefore,  we  recommend 
exploiting  PATSTAT’s  datasets  from  a  wider  perspective  within  the  framework  of  a  new 
project. 

Another possible discussion could treat the economic indicators analysis and the effort to find out 
relationships  between  certain  macroeconomic  parameters  (GERD,  BERD  and  HERD)  and  NPOs 
patent  costs,  or  between  such  costs  and  motivations  for  patenting  or  the  economic  value  of 
patents. This “quasi-empirical” way of working may lead to working hypotheses supported by, for 
example, a linear regression model. However, if such positive relationship is not seen, what should 
be done to overcome such a situation? In most cases, the answer is clear: the expected behaviour 
is not present in the data but this does not necessarily mean that the opposite behaviour is true. 

The  deadlock  described  above  is  a  consequence  of  the  data  and  the  analysis  method  used.  A 
different approach could have been to build a simple model prior to analysing the data trying 
to describe some expected behaviour in certain cases and then, using the data gathered (if 
possible, with a higher degree of accuracy), validate such model. This approach, that can be called 
build-measure-learn  (build  a  model,  measure  -validate-  vs  data  and  learn  -extract  validated 
knowledge),  is  very  close  to  standard  scientific  methods  and  should  be  explored  as  a  reasonable 
strategy in future developments on this topic. 

The final issue to be addressed refers to the survey design and results. As mentioned above, the 
survey targeted 11 different countries, 3 different entity types (SMEs, PROs and Universities) and 
an extremely wide scope of topics and questions. Although a significant effort was given to simplify 

86 

 
the survey, the resulting questionnaire was still complex and difficult to apply in such a big sample 
(the USA, four Asian countries and six EU  Member  States). There was no time to try with a beta 
version of the survey, make changes, try again and so on, until a final best-of-breed version was 
produced. Now, when all the information has been gathered and only a limited part of the survey is 
providing  real  value  to  the  project,  it  is  when  some  improvements  are  obvious,  both  from  the 
usability  (less  questions  and  topics)  and  execution  (greater  schedule  and  sample).  This 
experience should be a relevant input in any future attempt to carry out similar surveys. 

87 

 
6.  CONCLUSIONS AND OPEN QUESTIONS 

6.1  Conclusions 

The present study on patent costs and impact on innovation has been carried out considering three 
main  data  sources:  40  NPOs  from  which  patent-related  information  was  gathered,  PATSTAT  (and 
INPADOC) from which data from direct European and national patents was obtained, and the everis 
survey  which  was  conducted  in  11  countries  which  covered  topics  such  as  patent  costs, 
motivations,  burdens  and  benefits  of  patenting.  Additional  data  sources  such  as  the  PatVal-EU  II 
survey  and  Eurostat  GERD,  BERD  and  HERD  data  was  also  used  to  provide,  respectively,  a 
complementary  view  on  motivation,  economic  value  and  utilisation  rate  of  patents,  as  well  as 
macroeconomic data regarding expenditure on R&D. 

All  the  above  mentioned  data  sources  have  been  analysed  and  a  selection  of  the  most  relevant 
results has been displayed in section 3, addressing four different topics: patent costs at NPO level, 
profile  of  patents  filed  in  NPOs  and  the  EPO  (including  an  EPO  patent  validated  in  6  and  13 
countries), economic indicators and their relationship with  patent costs and, finally,  investment & 
internationalisation  impacts,  barriers  and  burdens  regarding  patenting  costs.  For  each  of  these 
topics,  the  corresponding  interpretation  of  the  data  has  been  included,  as  well  as  some  “working 
hypotheses” (not tested) when it has been appropriate. Following this approach, a selection of the 
most relevant insights are summarised as a set of preliminary conclusions. This pursues two goals: 
on  one  hand,  provide  the  reader  with  an  easy-to-read  briefing  and,  on  the  other  hand,  set  the 
basis for a future debate and discussion on the impacts of patent costs. 

Firstly,  we  can  draw  our  attention  to  the  costs  structure  at  the  NPO  level.  Basically,  different 
countries  display  different  cost  behaviours.  Germany  is  the  leading  European  market  in  terms  of 
patents filed but also has the highest absolute costs. This may be explained by the importance in 
terms of market size and dynamism, and the medium-high technology intensity of the companies 
that  operate  in  the  German  market,  which  may  force  companies  to  prioritise  protecting  their 
inventions  in  Germany.  Despite  this,  high  costs  may  still  be  a  barrier  for  some  SMEs  with  low  IP 
protection budgets. 

However, patent costs expressed just in absolute terms do not take into account the attractiveness 
of each market. Considering relative costs (i.e. those obtained dividing costs expressed in Euros by 
the  GDP  of  each  country  in  billion  Euros)  an  interesting  behaviour  appears:  relative  overall  costs 
for  the  model  patent  (28  pages  and  13  claims)  filed  at  the  EPO44  and  validated  in  6  and  13 
countries are now lower than most of the NPOs considered and, in absolute terms, these European 
patents  are  more  competitive  than  a  bundle  of  national  patents  when  translation  costs  and  the 
simplified procedure are considered. 

Other important countries in terms of economic size such as the USA, China or Japan have different 
cost structures. Despite this, relative overall costs for filing a 6 European countries model patent is 
7.3  times  higher  than  the  same  patent  filed  at the  USPTO  and  1.5  times  higher  than  in  the  JPO. 
Maintenance  costs  charged  on  behalf  of  NPOs  account  for  most  of  the difference  in  relative  costs 
between  the  model  Europe  (6  and  13  countries)  patent  and  the  USPTO  and  JPO.  Relative 
maintenance costs of the 6 European countries patent are 10.6 and 1.5 times higher than the costs 
in the USA and Japan respectively. 

In addition, our investigation has analysed the cost reductions applied by different NPOs to SMEs in 
order  to  boost  the  innovation  developed  by  these  entities.  They  are  indeed  significant  in  many 
countries;  however  we  have  not  found  any  quantitative  evidence  on  the  positive  impact  of  such 
special  pricing  on  patenting  activity.  This  could  be  based  on  the  fact  that  most  NPOs  (with  the 
exception  of  the  USA,  Brazil  and  Canada)  offer  reductions  that  only  affect  pre-grant  fees  and,  in 
some cases, the first years of the renewal fees. Although this special pricing may be an incentive, it 
must be stressed that maintenance costs are the most relevant ones for SMEs and may not be fully 
incurred if the economic value of the patent does not compensate for them. This is reasonable for 
organisations where patenting for defensive purposes is not common and the real value of a patent 
cannot be determined accurately at the time of the application. 

44   Although  filed  at  the  EPO,  not  all  costs  are  set  by  the  EPO.  Validation  fees  (in  some  countries)  and 

maintenance costs are charged on behalf of the NPOs. 

88 

 
 
 
                                                 
We have also described five different clusters of countries in item 4.1.2 with similar relative overall 
patent  costs  components  (administrative  and  maintenance  costs).  Since  relative  costs  are  used, 
the  final  displayed  behaviours  for  the  different  clusters  make  sense.  For  example,  cluster  A  is 
comprised  of  the  low  relative  overall  costs  countries.  Countries  in  cluster  A  range  from  big 
economies (in terms of population, GDP per capita or both) such as Japan, the USA, China or India, 
to medium-sized economies like  Switzerland  and  Poland, which  have lower absolute patent costs. 
On  the  other  hand,  clusters  B  and  C  account  respectively  for  medium/small  economies  with 
medium/high overall costs and four small economies from Eastern Europe and the Baltic countries. 
Finally, clusters D and E correspond to very small countries, with the biggest of them in terms of 
population  (Latvia),  having  slightly  more  than  2  million  inhabitants.  Their  economies  are  small 
measured by their GDP and, as a consequence, their relative costs are very high. In other words, it 
can be remarked that large economies or medium sized economies with low overall costs within the 
scope of this study can be placed  in the same  group  of countries when relative patents costs are 
considered. 

Secondly, special attention has been paid to litigation costs. According to the data gathered, patent 
litigation in various jurisdictions can be unaffordable for SMEs or individuals due to the fragmented 
nature of the patent  litigation  system  in Europe. Costs for  litigation  in  four European jurisdictions 
may  be  twice  as  high  as  the  total  fees  for  validating  and  maintaining  a  European  patent  in  13 
countries. In addition, patent trolls45 have drawn the attention of innovators due to their increasing 
activity.  Since  patent  trolls’  victims  are  those  who  are  not  willing  or  able  to  fight  a  patent 
infringement case through an invalidity trial (SMEs or individuals are the most vulnerable), a fast, 
low  cost  patent  litigation  system  with  a  broad  geographical  coverage  and  with  cost  recovery 
mechanisms may deter trolls from acting. 

Thirdly, the SME’s share in the patents granted mix has been investigated. Unfortunately, the lack 
of  available  data  at  the  NPO  level  and  the  intrinsic  complexity  of  identifying  SMEs  make  it 
impossible  to  reach  a  conclusion  regarding  the  SME’s  participation  in  the  granted  patents  mix. 
Additional  effort  should  be  carried  out  to  foster  efficient  registration  of  the  applicant  type 
(company, university, individual, etc.) at the NPO level to obtain in the future a better view of the 
patenting  behaviour  in  Europe.  However,  using  data  from  the  Eurostat  Community  Innovation 
Survey 2010, the relation between patent costs and the percentage of SMEs engaged in in-house 
R&D activities has been explored. In this particular case, the linear regression of the results do not 
allow to infer a potential relation between overall patent costs and the percentage of SMEs engaged 
in R&D activities independently of their size in terms of employees. 

Fourthly,  average  patent  life  has  been  analysed  thanks  to  PATSTAT  and  INPADOC.  Some 
interesting pattern has been found: the patents with the longest life correspond to the technology 
fields  of  micro-structural  and  nano-technology,  ICT  (information  and  communication  technology), 
bio-science  (biotechnology and pharma), medical  technology and chemistry (particularly food and 
organic  fine  chemistry).  Likewise,  the  analysis  of  patents  with  the  highest  number  of  validated 
countries  shows  similar  results  with  respect  to  micro,  nano,  bio,  medical  and  chemistry  related 
technologies,  which  leads  to  the  hypothesis  that  these  require  intensive  investment  on  R&D  and 
can be easily copied if they do not have adequate IP protection mechanisms. In addition, the return 
on investment is only achieved after a long period due to the high investments carried out during 
the development phase. In this context patents become assets and therefore their lives tend to be 
longer. In the case of ICT related patents however, their life period is long but the average number 
of  countries  in  which  they  are  validated  in  is  average.  This  fact  is  likely  to  be  related  to  the 
dynamics of this industry rather than initial high investments. 

Another  insight  can  be  obtained  if  the  average  patent  lives  per  validated  country  indicator  is 
considered.  As  expected,  Europe’s  largest  economies  display  the  longest  lives,  with  the  notable 
exception  of  Italy  in  which  patents  reach  a  mean  of  almost  16  years,  well  ahead  of  the  second 
country  in  line,  Germany,  with  just  over  13  years. This  corresponds  with  the  hypothesis  that low 
and  flat  maintenance  fee  structure  such  as  Italy’s  is  an  incentive  for  longer  living  patents. 
Germany’s maintenance fees sharply increase towards the end of the 20 year patent lifespan thus 
incentivising  patent  holders  to  drop  lower  values  and  unlocking  the  IP  which  is  beneficial  for  the 
system.  

45Harhoff defines patent trolls as companies that acquire patents of failed companies or independent innovators 
and use these to threaten suit against infringing companies without having the intention of using the patent 
they assert 

89 

 
 
                                                 
Fifthly, the present study also deals with additional economic indicators. Correlation analyses were 
carried  out  to  investigate the  relationship  between  maintenance  costs  (at  the  NPO  level)  and  the 
utilisation  of  patents,  their  economic  value  and  the  motivations  for  patenting  (PatVal-EU  II).  No 
significant correlation was found associated with the above mentioned indicators. 

Correlation analysis has also been applied to find out possible relationships between patent costs at 
the  NPO  level  and  the  GERD,  BERD  and  HERD.  We  have  not  found  any  significant  relationship 
between  patent  costs  and  these  economic  indicators,  with  determination  coefficients  lower 
than 0.2. 

Other indicators have been taken into account regarding patenting behaviour of SMEs, such as the 
percentage  of  in-house  R&D,  employment  in  fast-growing  firms  (those  supposed  to  be  linked  to 
innovative  activities)  and  venture  capital  funding.  In  all  cases,  there  is  no  observed  relationship 
between relative patent costs and these indicators. If all type of companies are considered and we 
focus  on  the  internationalisation  behaviour,  measured  as  the  share  of  high  tech  exports  in  total 
exports, there is no relationship between relative patent costs and this type of exports. 

Finally, regarding entrepreneurial activity and patent costs, the everis survey 2013 has been taken 
into  account,  although  it  does  not  display  significantly  conclusive  data.  Entrepreneurship,  both  at 
the  SME  level  (creation  of  new  firms)  or  PRO/University  level  (spin-off  creation)  seems  to  be  a 
phenomenon  based  on  the  strategic  value  of  the  technology  or  envisaged  project,  rather  than  a 
process led by the overall patent costs. Moreover, the survey shows no relationship between patent 
costs and growth, access to VCs and internationalisation of SMEs. 

6.2  Open questions: the basis for future work 

The  results  shown  in  this  report  and  the  conclusions  in  the  previous  section  do  not  provide  a 
definite  answer  to the  main  question  which  was  the  foundation  for  this  study:  are  patent  costs  a 
barrier for innovation? 

As  mentioned,  there  is  no  strong  evidence  suggesting  that  patent  costs  can  be  a  constraint  for 
patenting. The everis survey 2013 indicates that respondents consider patent costs a burden, but it 
does  not  mean  that  lower  fees  will  increase  the  issuing  of  high  quality  patents.  Following  this 
comment,  one  question  that  could  be  answered  in  future  studies  could  be:  what  is  the  right 
balance between patent costs and patent application quality? 

Another open area could deal with the pendency times and grants per examiner. This comparison, 
carried out in section 4.1.4, highlights the differences between the processes of the different patent 
offices.  In  general  terms,  the  EPO  has  lower  granted  claims  per  examiner  ratios,  which  could 
suggest that the time required for the examination process is higher than in its Japanese and USA 
counterparts.  In  this  regard,  literature  gives  several  arguments  showing  that  the  EPO 
process  is  very  strict.  The  answer  to  this  question  is  relevant:  patent  offices  should  be 
sustainable; increasing  the number of examiners to reduce  backlogs would  automatically yield an 
increase  in  the  operational  expenditure.  Therefore,  new  ways  to  act  on  backlogs  are  required  in 
order  to  cope  with  the  increase  of  patent  filings  while  maintaining  the  quality  of  the  examination 
process. 

Throughout  the  study  a  hypothesis  has  been  taken  for  granted:  patents  are  a  relevant  factor  for 
innovation.  Indeed  patents  and,  more  precisely,  patent  offices  are  devoted  to  support  innovation 
providing a framework in which inventors’ discoveries can be made available for the public while, at 
the  same  time,  providing  exclusive  rights  for  the  exploitation  of  the  inventions.  However,  some 
highly  dynamic  sectors  are  moving  beyond  patents  as  they  rely  on  the  innovation  in  business 
models or accelerated innovation in which technology is a mean and the stiffness and timing of the 
patent system are not aligned with the objectives of these innovators. 

Regarding  economic  indicators  and,  more  specifically,  GERD,  BERD  &  HERD  and  patents  costs  at 
the NPO level, some additional analysis should be carried out to cope with the fact that a 
fraction  of  national  applications  come  from  foreign  countries:  these  countries  are  not 
affected  by  the  local  (national)  R&D  expenditure.  In  the  case  of  R&D  intensity  in  the  business 
sector, an issue to be explored is the possibility that business growth and profitability are spurring 
innovation in a highly competitive and globalised market, while patents are always valuable despite 
their costs when the returns on investments are clear. Fast growth-technology intensive SMEs are 
probably  the  most  sensitive  users  and  the  priority  targets  for  further  research.  In  the  case  of 
higher education R&D expenditure, ownership of inventions, rewards for inventors and technology 
transfer practices should be analysed in depth to identify specific behaviours across countries. 

90 

 
Another related topic is the “economic value of patents”. PatVal-EU II made an attempt to measure 
this parameter by asking inventors. Actually, the inventors were asked for their perceptions of the 
economic value of their patents. Could it be possible to move forward from these results and 
provide a complementary view of the economic value of patents? Indeed it is a complicated 
topic but the final return-on-investment for a patent is, for sure, a fundamental reason for issuing a 
patent application.  

Finally,  the  everis  survey  carried  out  pursued  very  ambitious  goals,  targeting  SMEs,  PROs  and 
Universities in 11 different countries with strong differences between some of them. The questions 
conducted in the survey covered a wide scope of topics. All these factors have led to the outcome 
that only a limited fraction can be exploited. A new survey focused on a reduced set of topics and 
with a greater sample could be undertaken to clarify some of the open issues raised after this work 
and  improve  the  knowledge  regarding  patenting  motivations.  This  will  allow  a  better 
understanding of the reasons behind patenting for different organisations and countries. 

91 

 
7.  ANNEXES 

7.1  Countries and group of countries 

Wherever  applicable  throughout  the  document,  data  and  indicators  are  provided  for  the  following 
countries and groups of countries: 

Table 40 - Analysed countries and group of countries 

EU-28 

EFTA countries 

Other countries 

Austria 

Belgium 

Bulgaria 

Cyprus 

Czech Republic 

Germany 

Denmark 

Estonia 

Spain 

Finland 

France 

UK 

Greece 

Croatia 

Hungary 

Ireland 

Italy 

Lithuania 

Luxembourg 

Latvia 

Malta 

Netherlands 

Poland 

Portugal 

Romania 

Sweden 

Slovenia 

Slovakia 

Switzerland 

Iceland 

Norway 

 

Brazil 

Canada 

China 

Israel 

India 

Japan 

South Korea 

Russia 

USA 

 

92 

 
 
 
 
 
 
 
 
7.2  IPC - Technology field concordance table 

Table 41 - IPC - Technology field concordance table 

Field of Technology 

International patent classification (IPC) 
symbols 

I: Electrical 
engineering 

Electrical machinery, 
apparatus, energy 

F21#,  H01B,  H01C,  H01F,  H01G,  H01H,  H01J, 
H01K,  H01M,  H01R,  H01T,  H02#,  H05B,  H05C, 
H05F, H99Z 

Audio-visual technology 

G09F,  G09G,  G11B,  H04N-003,  H04N-005,  H04N-
009,  H04N-013,  H04N-015,  H04N-017,  H04R, 
H04S, H05K 

Telecommunications 

G08C,  H01P,  H01Q,  H04B,  H04H,  H04J,  H04K, 
H04M, H04N-001, H04N-007, H04N-011, H04Q 

Digital communication 

H04L 

Basic communication 
processes 

H03# 

Computer technology 

(G06# not G06Q), G11C, G10L 

IT methods for 
management 

G06Q 

Semiconductors 

H01L 

1 

2 

3 

4 

5 

6 

7 

8 

II: 
Instruments 

9 

10 

11 

12 

13 

Optics 

G02#,  G03B,  G03C,  G03D,  G03F,  G03G,  G03H, 
H01S 

Measurement 

G01B,  G01C,  G01D,  G01F,  G01G,  G01H,  G01J, 
G01K,  G01L,  G01M,  (G01N  not  G01N-033),  G01P, 
G01R, G01S, G01V, G01W, G04#, G12B, G99Z 

Analysis of biological 
materials 

G01N-033 

Control 

G05B,  G05D,  G05F,  G07#,  G08B,  G08G,  G09B, 
G09C, G09D 

Medical technology 

A61B, A61C, A61D, A61F, A61G, A61H, A61J, A61L, 
A61M, A61N, H05G 

Source: WIPO (2012). 

93 

 
 
 
 
 
 
 
Field of Technology 

International patent classification (IPC) symbols 

III: Chemistry 

14 

Organic fine chemistry 

(C07B, C07C, C07D, C07F, C07H, C07J, C40B) not A61K, 
A61K-008, A61Q 

15 

16 

17 

18 

19 

20 

21 

22 

Biotechnology 

(C07G, C07K, C12M, C12N, C12P, C12Q, C12R, C12S) not 
A61K 

Pharmaceuticals 

A61KnotA61K-008 

Macromolecular 
chemistry, polymers 

C08B, C08C, C08F, C08G, C08H, C08K, C08L 

Food chemistry 

Basic materials 
chemistry 

A01H,  A21D,  A23B,  A23C,  A23D,  A23F,  A23G,  A23J, 
A23K, A23L, C12C, C12F, C12G,C12H, C12J, C13D, C13F, 
C13J, C13K 

A01N,  A01P,  C05#,  C06#,  C09B,  C09C,  C09F,  C09G, 
C09H,  C09K,  C09D,  C09J,  C10B,  C10C,C10F,  C10G, 
C10H,  C10J,  C10K,  C10L,  C10M,  C10N,C11B,  C11C, 
C11D, C99Z 

Materials, metallurgy 

C01#, C03C, C04#, C21#, C22#, B22# 

Surface technology, 
coating 

B05C, B05D, B32#, C23#, C25#, C30# 

Micro-structural and 
nano-technology 

B81#, B82# 

23 

Chemical engineering 

B01B,  B01D-000#,  B01D-01##,  B01D-02##,  B01D-
03##,  B01D-041,  B01D-043,  B01D-057,  B01D-059, 
B01D-06##, B01D-07##, B01F, BOU, B01L, B02C, B03#, 
B04#,  B05B,B06B,  B07#,  B08#,  D06B,  D06C,  D06L, 
F25J, F26#, C14C, H05H 

24 

Environmental 
technology 

A62D,  B01D-045,  B01D-046,  B01D-047,  B01D-049, 
B01D-050, B01D-051, B01D-052,B01D-053, B09#, B65F, 
C02#, F01N, F23G, F23J, G01T, E01F-008, A62C 

IV: 
Mechanical 
engineering 

25 

26 

27 

28 

Handling 

B25J, B65B, B65C, B65D, B65G, B65H, B66#, B67# 

Machine tools 

B21#,  B23#,  B24#,  B26D,  B26F,  B27#,  B30#,  B25B, 
B25C, B25D, B25F, B25G, B25H, B26B 

Engines, pumps, 
turbines 

F01B, F01C, F01D, F01K, F01L, F01M, F01P, F02#, F03#, 
F04#, F23R, G21#, F99Z 

Textile and paper 
machines 

A41H,  A43D,  A46D,  C14B,  D01#,  D02#,  D03#,  D04B, 
D04C,  D04G,  D04H,  D05#,  D06G,  D06H,  D06J,  D06M, 
D06P, D06Q, D99Z, B31#, D21#, B41# 

29 

Other special machines 

A01B,  A01C,  A01D,  A01F,  A01G,  A01J,  A01K,  A01L, 
A01M,  A21B,  A21C,  A22#,  A23N,  A23P,  B02B,  C12L, 
C13C,  C13G,  C13H,  B28#,  B29#,  C03B,  C08J,  B99Z, 
F41#, F42# 

30 

Thermal processes and  F22#, F23B, F23C, F23D, F23H, F23K, F23L, F23M, F23N, 

94 

 
 
 
 
 
Field of Technology 

International patent classification (IPC) symbols 

apparatus 

F23Q, F24#, F25B, F25C, 

F27#, F28# 

Mechanical elements 

F15#, F16#, F17#, G05G 

Transport 

B60#,  B61#,  B62#,  B63B,  B63C,  B63G,  B63H,  B63J, 
B64# 

31 

32 

V: Other fields 

33 

Furniture, games 

A47#, A63# 

34 

Other consumer goods 

A24#,  A41B,  A41C,  A41D,  A41F,  A41G,  A42#,  A43B, 
A43C,  A44#,  A45#,  A46B,  A62B,  B42#,  B43#,  D04D, 
D07#,  G10B,  G10C,  G10D,  G10F,  G10G,  G10H,  G10K, 
B44#, B68#, D06F, D06N, F25D, A99Z 

35 

Civil engineering 

E02#,  E01B,  E01C,  E01D,  E01F-001,  E01F-003,  E01F-
005, E01F-007, E01F-009, E01F-01#, E01H, E03#, E04#, 
E05#, E06#, E21#, E99Z 

95 

 
 
 
 
 
 
7.3  IPC - NACE concordance table 

In  December  2006,  NACE  Rev.  2  was  introduced  as  a  revision  of  the  existing  NACE  classification 
(1.1).  Shifts  and  conversions  in  the  NACE  classification  system  imply  the  need  for  updating 
concordance  tables  between  NACE  sectors  and  technology  domains,  which  are  used  to  arrive  at 
patent statistics by industry. 

Over  the  last  decade,  patent  indicators  reporting  activity  by  industry  relied  on  the  well-known 
concordance  table  between  industries  and  technologies  developed  by  Schmoch  et  al  (2003).  This 
concordance  scheme  was  developed  and  validated  by  matching  IPC  classes  to  industries  via  an 
assessment  of  a  representative  sample  of  firm-owned  patents,  resulting  in  an  allocation  of  IPC 
codes to NACE categories. 

In  2013-2014,  Eurostat  produced  an  updated  IPC-NACE  concordance46.  The  update  relies  on  two 
sources:  (1)  the  existing  concordance  between  44  technology  sectors  of  the  Fraunhofer 
classification  with  corresponding  IPC  classes  and  NACE  1.1  industries,  and  (2)  the  official 
conversion table NACE 1.1 to NACE Rev. 2, edited and published by Eurostat. IPC codes have been 
re-allocated to NACE Rev.2 industries based on content analysis, co-occurrence/co-citation analysis 
and  industry  membership of  main  applicants.  The  resulting  concordance  table has  been  validated 
by a team of independently operating experts (Eurostat, EPO and Fraunhofer-Gesellschaft). 

This study was carried out before the release of the updated IPC-NACE concordance. Therefore, the 
concordance IPC-NACE used is shown in Table 42. 

Table 42 - IPC - NACE concordance table 

NACE Rev. 
1.1 code47 

Corresponding IPC codes 

15 

16 

17 

18 

19 

20 

21 

23 

24.1 

24.2 

24.3 

24.4 

24.5 

24.6 

A01H, A21D, A23B, A23C, A23D, A23F, A23G, A23J, A23K, A23L, A23P, C12C, 
C12F, C12G, C12H, C12J, C13F, C13J, C13K  

A24B, A24D, A24F  

D04D, D04G, D04H, D06C, D06J, D06M, D06N, D06P, D06Q  

A41B, A41C, A41D, A41F  

A43B, A43C, B68B, B68C  

B27D, B27H, B27M, B27N, E04G  

B41M, B42D, B42F, B44F, D21C, D21H, D21J  

C10G, C10L, G01V  

B01J, B09B, B09C, B29B, C01B, C01C, C01D, C01F, C01G, C02F, C05B, C05C, 
C05D, C05F, C05G, C07B, C07C, C07F, C07G, C08B, C08C, C08F, C08G, C08J, 
C08K, C08L, C09B, C09C, C09D, C09K, C10B, C10C, C10H, C10J, C10K, C12S, 
C25B, F17C, F17D, F25J, G21F  

A01N  

B27K  

A61K, A61P, C07D, C07H, C07J, C07K, C12N, C12P, C12Q  

C09F, C11D, D06L  

A62D, C06B, C06C, C06D, C08H, C09G, C09H, C09J, C10M, C11B, C11C, C14C, 
C23F, C23G, D01C, F42B, F42D, G03C  

24.7 

D01F  

25 

26 

27 

A45C, B29C, B29D, B60C, B65D, B67D, E02B, F16L, H02G  

B24D, B28B, B28C, B32B, C03B, C03C, C04B, E04B, E04C, E04D, E04F, G21B  

B21C, B21G, B22D, C21B, C21C, C21D, C22B, C22C, C22F, C25C, C25F, C30B, 
D07B, E03F, E04H, F27D, H01B  

46   https://circabc.europa.eu/d/d/workspace/SpacesStore/d1475596-1568-408a-9191-426629047e31/2014-

10-16-Final%20IPC_NACE2_2014.pdf. 

47   See the Annex ‘Economic sectors’. 

96 

 
                                                 
NACE Rev. 
1.1 code47 

Corresponding IPC codes 

28 

29.1 

29.2 

29.3 

29.4 

29.5 

29.6 

29.7 

30 

31.1 

31.2 

31.4 

31.5 

31.6 

32.1 

32.2 

32.3 

33.1 

33.2 

33.3 

33.4 

33.5 

34 

35 

36 

A01L, A44B, A47H, A47K, B21K, B21L, B22F, B25B, B25C, B25F, B25G, B25H, 
B26B, B27G, B44C, B65F, B82B, C23D, C25D, E01D, E01F, E02C, E03B, E03C, 
E03D, E05B, E05C, E05D, E05F, E05G, E06B, F01K, F15D, F16B, F16P, F16S, 
F16T, F17B, F22B, F22G, F24J, G21H  
B23F, F01B, F01C, F01D, F03B, F03C, F03D, F03G, F04B, F04C, F04D, F15B, 
F16C, F16D, F16F, F16H, F16K, F16M, F23R  
A62C, B01D, B04C, B05B, B61B, B65G, B66B, B66C, B66D, B66F, C10F, C12L, 
F16G, F22D, F23B, F23C, F23D, F23G, F23H, F23J, F23K, F23L, F23M, F24F, 
F24H, F25B, F27B, F28B, F28C, F28D, F28F, F28G, G01G, H05F  

A01B, A01C, A01D, A01F, A01G, A01J, A01K, A01M, B27L  

B21D, B21F, B21H, B21J, B23B, B23C, B23D, B23G, B23H, B23K, B23P, B23Q, 
B24B, B24C, B25D, B25J, B26F, B27B, B27C, B27F, B27J, B28D, B30B, E21C  
A21C, A22B, A22C, A23N, A24C, A41H, A42C, A43D, B01F, B02B, B02C, B03B, 
B03C, B03D, B05C, B05D, B06B, B07B, B07C, B08B, B21B, B22C, B26D, B31B, 
B31C, B31D, B31F, B41B, B41C, B41D, B41F, B41G, B41L, B41N, B42B, B42C, 
B44B, B65B, B65C, B65H, B67B, B67C, B68F, C13C, C13D, C13G, C13H, C14B, 
C23C, D01B, D01D, D01G, D01H, D02G, D02H, D02J, D03C, D03D, D03J, 
D04B,D04C, D05B, D05C, D06B, D06G, D06H, D21B, D21D, D21F, D21G, E01C, 
E02D, E02F, E21B, E21D, E21F, F04F, F16N, F26B, H05H  

B63G, F41A, F41B, F41C, F41F, F41G, F41H, F41J, F42C, G21J  

A21B, A45D, A47G, A47J, A47L, B01B, D06F, E06C, F23N, F24B, F24C, F24D, 
F25C, F25D, H05B  
B41J, B41K, B43M, G02F, G03G, G05F, G06C, G06D, G06E, G06F, G06G, G06J, 
G06K, G06M, G06N, G06T, G07B, G07C, G07D, G07F, G07G, G09D, G09G, G10L, 
G11B, H03K, H03L  

H02K, H02N, H02P 

H01H, H01R, H02B  

H01M  

F21H, F21K, F21L, F21M, F21S, F21V, H01K  

B60M, B61L, F21P, F21Q, G08B, G08G, G10K, G21C, G21D, H01T, H02H, H02M, 
H05C  

B81B, B81C, G11C, H01C, H01F, H01G, H01J, H01L  

G09B, G09C, H01P, H01Q, H01S, H02J, H03B, H03C, H03D, H03F, H03G, H03H, 
H03M, H04B, H04J, H04K, H04L, H04M, H04Q, H05K  

G03H, H03J, H04H, H04N, H04R, H04S  

A61B, A61C, A61D, A61F, A61G, A61H, A61J, A61L, A61M, A61N, A62B, B01L, 
B04B, C12M, G01T, G21G, G21K, H05G  
F15C, G01B, G01C, G01D, G01F, G01H, G01J, G01M, G01N, G01R, G01S, G01W, 
G12B  

G01K, G01L, G05B, G08C  

G02B, G02C, G03B, G03D, G03F, G09F  

G04B, G04C, G04D, G04F, G04G  

B60B, B60D, B60G, B60H, B60J, B60K, B60L, B60N, B60P, B60Q, B60R, B60S, 
B60T, B62D, E01H, F01L, F01M, F01N, F01P, F02B, F02D, F02F, F02G, F02M, 
F02N, F02P, F16J, G01P, G05D, G05G  
B60F, B60V, B61C, B61D, B61F, B61G, B61H, B61J, B61K, B62C, B62H, B62J, 
B62K, B62L, B62M, B63B, B63C, B63H, B63J, B64B, B64C, B64D, B64F, B64G, 
E01B, F02C, F02K, F03H  
A41G, A42B, A44C, A45B, A45F, A46B, A46D, A47B, A47C, A47D, A47F, A63B, 
A63C, A63D, A63F, A63G, A63H, A63J, A63K, B43K, B43L, B44D, B62B, B68G, 
C06F, F23Q, G10B, G10C, G10D, G10F, G10G, G10H  

Source: "Linking Technology Areas to Industrial Sectors - Report for the European Commission, DG Research", 
Fraunhofer  Institute  for  Systems  and  Innovation  Research,  Observatoire  des  Sciences  et  des  Techniques, 
University of Sussex, Science and Policy Research Unit (11/2003). 

97 

 
 
 
7.4  Economic sectors 

The  IPC  -  NACE  concordance  table  shown  above  (which  can  be  considered  as  the  most  reliable 
source at present in terms of IPC - NACE concordance studies) references the following NACE Rev. 
1.1 codes (Eurostat, 2002): 

Table 43 - Relevant NACE Rev. 1.1 codes 

NACE Rev. 1.1 
code 

Description 

15 

16 

17 

18 

19 

20 

21 

23 

24.1 

24.2 

24.3 

24.4 

24.5 

24.6 

24.7 

25 

26 

27 

28 

29.1 

29.2 

29.3 

29.4 

29.5 

29.6 

29.7 

Food, beverages 

Tobacco products 

Textiles 

Wearing apparel 

Leather articles 

Wood products 

Paper 

Petroleum products, nuclear fuel 

Basic chemical 

Pesticides, agro-chemical products 

Paints, varnishes 

Pharmaceuticals 

Soaps, detergents, toilet preparations 

Other chemicals 

Man-made fibres 

Rubber and plastics products 

Non-metallic mineral products 

Basic metals 

Fabricated metal products 

Energy machinery 

Non-specific purpose machinery 

Agricultural and forestry machinery 

Machine-tools 

Special purpose machinery 

Weapons and ammunition 

Domestic appliances 

98 

 
NACE Rev. 1.1 
code 

Description 

30 

Office machinery and computers 

31.1 

Electric motors, generators, transformers 

31.2 

Electric distribution, control, wire, cable 

31.4 

Accumulators, battery 

31.5 

Lightening equipment 

31.6 

Other electrical components 

32.1 

Electronic components 

32.2 

Signal transmission, telecommunications 

32.3 

Television and radio receivers, audio-visual electronics 

33.1 

Medical equipment 

33.2 

Measuring equipment 

33.3 

Industrial process control equipment 

33.4 

Optical instruments 

33.5 

Watches, clocks 

34 

35 

36 

Motor vehicles 

Other transport equipment 

Furniture, consumer goods 

The project’s survey however takes advantage of referencing the newer version of this standard: NACE Rev. 2 
(Eurostat, 2008): 

99 

 
 
 
Table 44 - NACE Rev. 2 sections 

Section 

Description 

A 

B 

C 

D 

E 

F 

G 

H 

I 

J 

K 

L 

M 

N 

O 

P 

Q 

R 

S 

T 

U 

Agriculture, forestry and fishing 

Mining and quarrying 

Manufacturing 

Electricity, gas, steam and air conditioning supply 

Water supply; sewerage, waste management and remediation activities 

Construction 

Wholesale and retail trade; repair of motor vehicles and motorcycles 

Transportation and storage 

Accommodation and food service activities 

Information and communication 

Financial and insurance activities 

Real estate activities 

Professional, scientific and technical activities 

Administrative and support service activities 

Public administration and defence; compulsory social security 

Education 

Human health and social work activities 

Arts, entertainment and recreation 

Other service activities 

Activities  of  households  as  employers;  undifferentiated  goods-  and  services-
producing activities of households for own use 

Activities of extraterritorial organisations and bodies 

100 

 
 
 
 
7.5  N° of patents by technology field and economic sector per type of applicant 

The present annex shows the number of distinct patents filed in 1991 and 2001 by technology field 
and economic sector per type of applicant, taking into account patents: 

•  which have a patent life that can be calculated (with high certainty). 

•  that have been validated in at least one country. 

Figure 18 -   Patents filed in 1991 which have a patent life that can be calculated (with 
high certainty), per type of applicant for each technology field 

[1]   Number of distinct patents (filed in 1991) for which patent life can be calculated (with high certainty) 

Note 1:  Data available only for European patents 
Note 2:  Patents can belong to more than one technology field 
Note 3:  1991  has  been  used  as  the  sole  reference  year  for  patent  life  calculation  as  this  is  the  only  year  in 

which standard (non-extensible) patents have had the chance to reach their maximum term 

Source:  PATSTAT 10-2012, Dataset Gamma 

101 

 
 
 
 
Figure 19 -   Patents filed in 1991 which have a patent life that can be calculated (with 
high certainty), per type of applicant for each economic sector 

[1]   Number of distinct patents (filed in 1991) for which patent life can be calculated (with high certainty) 

Note 1:  Data available only for European patents 
Note 2:  Patents can belong to more than one economic sector 
Note 3:  1991  has  been  used  as  the  sole  reference  year  for  patent  life  calculation  as  this  is  the  only  year  in 
which standard (non-extensible) patents have had the chance to reach their maximum term 

Source:  PATSTAT 10-2012, Dataset Gamma 

102 

 
 
 
 
Figure 20 -   Patents filed in 2001 that have been validated in at least one country, per 

type of applicant for each technology field 

[1]   Number of distinct patents (filed in 2001) that have been validated in at least one country 

Note 1: Data applicable only for European patents 
Note 2:  Patents can belong to more than one technology field 
Note 3:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’ 

Source:   PATSTAT 10-2012, Dataset Delta 

103 

 
 
 
 
Figure 21 -   Patents filed in 2001 that have been validated in at least one country, per 

type of applicant for each economic sector 

[1]   Number of distinct patents (filed in 2001) that have been validated in at least one country 

Note 1:  Data applicable only for European patents 
Note 2:  Patents can belong to more than one economic sector 
Note 3:  2001 has been chosen as the reference year since filing data for 2006 and 2011 was not complete. For 
further details see ‘Methodology overview and sources of information’ 

Source:  PATSTAT 10-2012, Dataset Delta 

104 

 
 
7.6  Literature review 

In  addition  to  the  references  cited  below,  another  important  source  of  information  is  Eurostat’s 
quarterly  review  of  literature  on  patent  statistics.  The  report  consists  of  an  extensive  targeted 
review  of  the  existing  and  currently  developed  methodological,  analytical  and  scientific  material 
and  of  the  most  recent  relevant  literature  in  the  following  domains:  Name  harmonisation  and 
gender; Existing information and databases at institutional or company level or business surveys: 
comparison and possible integration and matching of data for analytical purposes; Development of 
methods  on  patent  data  based  on  technical  fields:  biotechnology,  nanotechnology,  environmental 
technologies,  energy,  measurement  of  climate  change,  eco-innovation,  technological  innovation, 
and  other  emerging  fields;  Development  of  methods  for  compiling  information  on  patent  families 
and citations; Regionalisation. 

The  report  essentially  consists  of  a  collection  of  articles,  working  papers  and  other  publications 
available free of charge. The last available version of this report is available under the Eurostat web 
dissemination environment. 

Link: 

https://circabc.europa.eu/sd/a/cb91afc3-2426-487a-a24f-68d1ca58fbce/AR_patents_042013.pdf  

The internationalisation of technology analysed with patent data 

Authors: 

D. Guellec, Bruno van Pottelsberghe (2000) 

Abstract: 

This  paper  presents  three  new  patent-based  indicators  of  internationalisation  of  technology 
reflecting  international  cooperation  in  research  and  the  location  of  research  facilities  of 
multinational firms. They witness both an increasing trend towards the globalisation of technology 
in  the  OECD  area  and  large  cross-country  differences  in  the  extent  of  internationalisation.  An 
empirical  analysis  shows  that  the  degree  of  technological  internationalisation  is  higher  for  small 
countries and for countries with low technological intensity. Finally, two countries are more likely to 
collaborate  if  they  are  geographically  close  to  each  other,  if  they  have  a  similar  technological 
specialisation and if they share a common language. Being member of the European Union involves 
more cross-border ownership but does not entail more research  co-operation than it is implied by 
the above factors. Nordic countries have a particularly high propensity to collaborate together. 

Conclusions: 

This  paper  presented  and  analysed  three  indicators  of  internationalisation  of  technology  derived 
from  information  available  in  patent  data.  In  accordance  with  the  existing  literature,  these 
indicators  witness  an  increasing  trend  towards  the  internationalisation  of  technology  of  OECD 
countries.  However,  there  are  large  differences  in  the  extent  of  internationalisation  across 
countries. Internationalisation of a country’s technological activities decreases with the level of its 
GDP  and  with  its  R&D  intensity.  Researchers  in  larger  countries  find  more  easily  colleagues  for 
partnering in their own country, and countries with higher technological level do not need as much 
as others co-operation with foreign researchers since their own knowledge base is large. This partly 
explains the relative insulation of Japan for instance. On the other end, the UK and the USA seem 
to  be  more  open  than  their  size  and  research  intensity  would  lead  to  predict.  Language  may  be 
part  of  the  explanation,  as  suggested  in  results  concerning  geographical  patterns  of  international 
co-operation.  Another  insight  from  the  study  is  that  the  major  aim  of  multinational  firms  when 
establishing  research  facilities  abroad  is to  adapt  their  products  to  local  conditions  rather  than  to 
“tap” foreign technology: actually, the major stream of R&D investment abroad come from highly 
R&D intensive countries to low intensive ones rather than the opposite (as it would be the case if 
technology sourcing was the dominant objective).  

Who  co-operates  with  whom  is  largely  explained  by  geographical  proximity  and  technological 
proximity  (similar  specialisation)  of  the  partnering  countries.  In  addition,  sharing  a  common 
language  fosters  bilateral  links  in  technology.  Pairs  of  countries  that  are  both  members  of  the 
European  Union  have  slightly  more  cross-border  ownership  than  the  average,  but  not  more 
research co-operation than it is implied by their geographical and technological proximity. 

Link: 

http://www.oecd.org/sti/inno/40807432.pdf 

105 

 
 
 
Role of national patent offices, the European Patent Office, as well as the 
Japanese and USA patent offices in promoting the patent system 

Authors: 

IBM 

Abstract: 

The purpose of the study described in this report was to: 

Obtain  a  clear  and  detailed  picture  of  the  innovation  promotion  activities  currently  being 
undertaken by the national patent offices in the Member States of the European Union, and also by 
the European Patent Office, Japanese and USA patent offices. 

Provide an assessment of the effectiveness of these activities in meeting their intended objectives. 
Provide  an  assessment  of  the  scope  for  possible  future  activities  of  national  patent  offices  of  the 
Member States of the European Union. 

Identify  for  each  Member  State  any  areas  where  the  needs  of  –  in  particular  –SMEs,  private 
inventors  and  academic  institutions  for  patent-related  services  were  not  being  met.  For  the 
purposes  of  the  study,  innovation  promotion  activities  are  understood  to  mean  the  efforts  to 
disseminate/promote  the  use  of  patent  system  information  and  encourage  businesses,  academic 
institutions, other government departments/agencies and the public to use the patent system. 

First  Objective  is  met  in  a  rather  straightforward  way  by  generating  an  overview  of  the  activities 
patent  offices  currently  undertake  to  promote  the  patent  system.  Given  the  close  interrelation  of 
the other objectives, associated findings are presented in a more integrated manner. 

Link: 

http://ec.europa.eu/internal_market/indprop/docs/patent/studies/offices_en.pdf 

Patent renewal fees and self-funding patent offices 

Authors: 

Joshua S. Gans, Stephen P. King and Ryan Lampe (2004) 

Abstract: 

A  socially  optimal  structure  of  application  and  renewal  fees  for  patents  would  encourage  the 
maximal  number  of  applications  while  reducing  effective  patent  length.  We  find,  however,  that 
when  patent  offices  are  required  to  be  self-funding,  resource  constraints  can  distort  this  fee 
structure.  Specifically,  a  financially  constrained,  but  welfare-oriented,  patent  office  will  tend  to 
raise  initial  application  fees  while  lowering  renewal  fees.  This  creates  two  detriments  to  social 
welfare as it discourages the filing of some patents while extending the effective life of others. 

Conclusions: 

Our analysis shows that requiring the patent  office to be self-funding can distort  patent  fees in a 
way  that  lowers  social  welfare.  In  particular,  a  self-funding  patent  office  has  an  incentive  to 
encourage too many patent renewals from a social perspective. Increasing the number of renewals 
by lowering renewal fees increases inventors’ expected profit and this profit can be appropriated by 
the patent office through initial patent application fees. 

It might seem incongruous that a self-funding requirement for the patent office can lead to lower 
patent  renewal  fees.  However,  what  the  patent  office  does  when  faced  by  a  binding  self-funding 
constraint is to rebalance the patent fees. It is this rebalancing by lowering renewal fees but raising 
application fees that distorts social welfare. In our framework the same number of inventions are 
patented  but  from  the  social  perspective  too  many  of  these  inventions  effectively  gain  a  “long” 
patent. 

Our model provides a clear empirical prediction about the implications of introducing a self-funding 
requirement on a patent office. To the extent that this constraint binds, we would expect to see the 
patent  office  rebalance  its  fees  by  raising  application  fees  relative  to  renewal  fees.  Over  time  we 
would expect to see an increased incidence of patent renewals for inventions. 

Link: 

http://ssrn.com/abstract=515162 

106 

 
 
 
 
How does intellectual property support the creative process of invention? 

Authors: 

H. Hall et al. (2004)  

Abstract: 

Invention  as  a  human  activity  is  much  older  than  the  notion  of  intellectual  property.  People  had 
been  inventing  new  tools,  techniques  and  technologies  for  thousands  of  years  before  legal 
constructs  granted  individuals  and  organizations  limited  ownership  rights  for  the  ideas  they 
produced.  Systems  of  patenting  were  conceived  to  motivate  and  reward  people  not  only  for 
undertaking  invention  but  also  for  disclosing  their  ideas  to  society  in  order  to  promote  general 
progress. From the first patent law, in 15th century Venice, to the landmark English patent statute 
in the 17th century, to the  establishment  of  the  United States system  of patent protection in the 
1790s, to today’s international patent structures, such legal conceptions have changed dramatically 
over time. In addition, patents have evolved along with the larger web of intellectual property that 
includes forms such as trade secrets and copyrights. 

But like any set of laws and practices, these forms of protection sometimes get misinterpreted and 
misapplied,  and  they  sometimes  yield  inconsistencies,  loopholes,  and  unintended  consequences. 
Since  these  rules  and  laws  exist  to  support  and  stimulate  the  human  activities  that  gave  rise  to 
them in the first place, we ask these overarching questions: How well does our current system of 
intellectual  property  support  the  creative  process  of  invention?  What  are  the  ways  it  can  be 
improved? 

To  answer  those  and  related,  the  Lemelson-MIT  Program,  in  September  2003,  convened  a 
distinguished  group  of  experts  in  the  area  of  intellectual  property.  Our  participants  included 
professors of law, engineering and management, as well as patent attorneys, intellectual property 
researchers,  a  university  patent  office  director,  a  former  director  of  the  U.S.  Patent  &Trademark 
Office, as well as inventors and entrepreneurs, with many of our participants taking on more than 
one of these roles over the course of their careers. The goals of this report are to summarize the 
discussion  of  the  critical  aspects  of  intellectual  property  and  to  reach  conclusions  about  how  to 
change the system to better support and stimulate invention. 

Conclusions: 

The  Patent  System  Provides  Support  and  Incentives  for  Invention  Society  as  a  whole  is  the 
customer  of  the  patent  system.  Evidence  suggests  that  high  levels  of  invention  are  important  to 
our economic welfare and that the patent system supports invention. 

Inventors are motivated by a diverse set of factors, including financial gain, altruism, the intrinsic 
pleasure  of  inventing,  and  professional  recognition.  Patents  serve  as  an  effective  incentive  for 
inventors to disclose their knowhow to society in return for limited monopolies to exploit their own 
inventions.  This  bargain  encourages  investment  in  new  technologies,  prompts  corporations  to 
create  new  products,  and  gives  entrepreneurs  the  impetus  to  get  new  business  underway. 
Invention is cumulative; many inventions create the opportunity to build on their ideas. 

Link: 

http://web.mit.edu/invent/n-pressreleases/downloads/ip.pdf 

The value of the European patents, evidence from a survey of European 
inventors 

Authors: 

A. Gambardella et al. (2005) 

Abstract: 

The transition of the European Union towards the “knowledge-based economy” is a priority of the 
agenda  of  the  Lisbon  Summit  (European  Commission,  2003a).  The  investment  in  education, 
research and innovation is crucial to achieve these goals. 

This  report focuses  on  a number of ingredients that determine the innovative performance  of the 
European countries and their potentialities for economic growth. It includes key figures concerning 
the research inputs (such as the characteristics of the inventors, the motivations to innovate, the 
characteristics  of  the  innovation  process),  and  the  innovative  performance  of  six  European 
countries (i.e. the value of the innovations produced by European inventors). 

107 

 
 
 
 
Conclussions 

The  authors  show  evidence  from  a  survey  of  European  inventors,  where  relevant  data  about  the 
structure and competitiveness of SMEs in Europe can be found. 

One  of  the  most  relevant  findings,  most  inventors  do  not  change  jobs  after  their  invention  is 
patented.  The  EU6  share  of  inventors  who  never  moved  is  77.52%,  with  differences  across 
countries.  The  less  mobile  inventors  are  in  Spain,  Germany  and  France:  88.80%,  83.14%  and 
82.28%. Italy and the Netherlands follow with 75.43% and 69.88%. The UK is the country with the 
smallest  share  of  non-mobile inventors:  65.28%.  Most  of  the  inventors  who  changed  job,  moved 
only  once.  The  share  of  EU6  inventors  who  moved  more  than  three  times  is  0.80%.  Recent 
contributions  point  out  that  there  is  a  positive  correlation  between  the  researchers’  productivity 
and their mobility, and highlight the importance of human capital mobility as a mechanism through 
which  knowledge  spillovers  take  place  (Klepper,  2001;  Zucker,  Darby  and  Armstrong,  1998).  A 
goal  of  the  research  agenda  based  on  the  “PatVal-EU”  data  is  to  investigate  the  relationship 
between the inventors’ mobility and their innovative performance 

Link: 

http://ec.europa.eu/invest-in-research/pdf/download_en/patval_mainreportandannexes.pdf 

Study on evaluating the knowledge economy-what are patents actually worth? 

Authors: 

A. Gambardella, P. Giuri and M. Mariani (2006) 

Abstract: 

This  Report  deals  with  the  economic  value  of  European  patents  and  offers  a  comprehensive 
analysis  of  the  “state  of  the  art”  on  this  issue.  It  provides  a  complete  survey  of  the  existing 
scientific  literature  in  economic  and  business  studies,  and  it  uses  original  data  to  present 
descriptive statistics and elaborations on the value of European patents. 

Conclusions 

The authors constructed 10 classes for the value of the patents, ranging from those that are worth 
less  than  30,000  EUR,  up  to  patents  that  are  estimated  to  produce  more  than  300  million  EUR. 
Consistently  with  the  well-known  skewness  of  the  distribution  of  the  patent  value  (i.e.  only  few 
patents produce high economic returns, Harhoff et al. 1999a, 2003, and Scherer and Harhoff 2000 
who  report  on  several  stochastic  model  simulations,  concluding  that  the  set  of  profit  potentials 
tapped  by  innovators  is  itself  skew-distributed  and  that  the  number  of  entrants  into  innovation 
races is more likely to be independent of market size than stochastically dependent upon it.) only 
7.2% of the patents in their sample are worth more than 10 million EUR, and 16.8% have a value 
higher than 3 million EUR. A share of 15.4% has a value between 1 and 3 million EUR. However, 
the largest share of patents falls in the left-end of the distribution. About 68% of all their patents 
produce less than 1 million EUR, and about 8% have a value lower than 30,000 EUR. 

At the country level, Spain, the Netherlands and the UK have a share of high value patents larger 
than  the  EU6  share.  The  share  of  patents  with  a  value  higher  than  10  million  EUR  is  12.79%  in 
Spain,  8.86%  in  the  Netherlands  and  11.12%  in  the  UK.  Italy  follows  with  7.68%.  Germany  and 
France are in the bottom of the list with 5.19% and 5.58% of patents with a value higher than 10 
million EUR. Symmetrically, the share of patents whose value is lower than 1 million EUR is lower 
in  Spain  (54.13%),  the  UK  (53.73%)  and  the  Netherlands  (61.04%)  compared  to  the  EU6  share 
(67.8%). Italy comes fourth with 67.83%, while Germany (74.95%) and France (74.9%) have the 
largest share of comparatively lower value patents. 

Link: 

http://ec.europa.eu/internal_market/indprop/patent/index_en.htm#studies 

108 

 
 
 
 
 
The cost factor in patent systems 

Authors: 

B. van Pottelsberghe and D. François (2009) 

Abstract: 

The  objective  of  this  paper  is  to  assess  whether  and  to  what  extent the  cost  of  patenting  affects 
the demand for patents. The empirical analysis, which focuses on the patent systems of the USA, 
Japan,  and  Europe  during  the  year  2003,  leads  to  the  following  methodological  and  empirical 
observations:  i)  after  the  grant,  the  translation,  validation  and  transaction  costs  induced  by  an 
effective protection in several European countries witness a highly fragmented and very expensive 
European market for intellectual property; ii) for a proper international comparison, the size of the 
market and the average number of claims must be accounted for; iii) when the cost per claim per 
capita  (the  3C-index)  is  considered,  a  negative  linear  relationship  appears  between  the  cost  of 
patenting  and  the  number  of  claims  that  are  filed;  iv)  for  a  patent  designating  13  European 
countries,  the  3C-index  is  about  10  (2)  times  higher  than  in  the  USA  (Japanese)  system  (for 
process and translation costs up to the grant); v) The European  market being more than twice as 
large 
the 
3C-index suggests that there would be a clear justification for higher nominal examination fees at 
the EPO, that would ensure a rigorous granting process. 

inhabitants, 

market 

terms 

USA 

the 

as 

of 

in 

Conclusions: 

Contrarily  to  what  could  logically  be  expected,  there  is  no  apparent  relationship  between  the 
market  size  of  a  country  or  region  and  the  number  of  patent  applications  it  receives  each  year. 
Even if the number of claims is taken into account instead of the number of patent filings, being a 
larger  economic  area  does  not  translate  into  the  filing  of  a  larger  number  of  claims.  The  reason 
underlying this lack of relationship between market size and patent applications is partly due to the 
cost of patenting, which is not straightforward to measure. We have put forward a method for cost 
evaluation  that  consists  in  taking  first  the  “procedural”  costs,  which  include  all  official  fees  up  to 
the  grant  of  a  patent  and  its  validation  in  the  desired  countries  for  protection.  The  second 
component is related to the translation costs. It occurs exclusively for the EPO, once the patent is 
granted,  and  is  required  in  order  to  be  validated  in  each  national  patent  office.  The  third 
component is the most difficult to approximate. It  is related to the external services (professional 
services,  attorneys,  etc..)  that  companies  can  either  outsource  or  bear  in-house.  The  fourth 
component varies with the duration of the protection. Renewal fees are required to keep the patent 
in force in each designated country. In this paper the cost of a 10 year and 20 year protection have 
been  computed.  In  addition,  as  the  cost  of  a  patent  applied  at  the  EPO  depends  on  the  desired 
geographical scope for protection, we have computed the average cost for a protection in the three 
most frequently designated EPC states and for the 13 EPC states that were designated by at least 
60% of the patent filing. 

The results clearly show that the European patent system is much more expensive than the USA or 
Japanese  patent systems. A  European patent that  is renewed  for 20 years in 3 (13) EPC Member 
states costs more than EUR 40,000  (120,000),  against about EUR 14,500 and EUR17,300 for the 
USA patent system and the Japanese patent system, respectively. The Japanese patent system is 
the  least  expensive  for  the  process  costs.  For  a  20  years  protection  the  USA  system  is  the  least 
expensive.  As  Japanese  patents  are  composed  of  much  less  claims  (on  average,  about  7)  than 
European (18) or American patents (23), we argue that  it is more appropriate to analyse the cost 
per  claim.  For  instance,  the  process  and  translation  costs  of  a  claim  that  is  granted  by  the  EPO 
goes from more than EUR 400 for 3 designated states to more than EUR 1,100 for 13 designated 
states,  as  compared  with  EUR  80  and  EUR  220  per  claim  in  the  USA  and  Japan,  respectively.  A 
European  patent  designating  13  countries  appears  to  be  nearly  11  times  more  expensive  than  a 
U.S. patent if process and translation costs are considered. For the total costs with up to 20 years 
of protection the European patents would be nearly 9 times more expensive. Japanese patents are 
less  expensive  than  USA  patents  at  the  beginning  of  the  process  and  become  gradually  more 
expensive.  If  the  analysis  focuses  on  the  claims,  the  cost  differences  increase.  One  claim,  the 
lowest common  denominator  of  a patent, is 6  to 14 times more expensive in Europe (with “only” 
13 designated states) than in the USA, depending on the type of cost considered. 

Several attempts to reach a more integrated market are currently tackled by policy makers. A first, 
although  incremental,  possibility  for  improvement  would  be  to  harmonize  the  validation  and 
renewal fees across the EPO Member States. In this respect the 3-C index could be a useful tool. A 
second  and  significant  potential  improvement  of  the  system  lies  in  the  current  proposals  of  the 
European Patent Litigation Agreement (EPLA) and/or the London Protocol. While the former would 
simplify the complexity and the cost of litigation in Europe (through a centralized court) the latter 
would substantially reduce  the  translation  requirements, and  hence  the cost of patenting. Finally, 
the most important advance in reducing the complexity and the cost of patenting in Europe would 

109 

 
be  reached  through  the  Community  Patent  -  i.e.,  a  unique  gateway  for  patenting,  with  an 
automatic reach of the whole European market, one fee structure and lower translation costs. 

Link: 

http://www.un-
lj.si/files/ULJ/userfiles/ulj/razis_razv_projekti/intelektualna_lastnina/%C5%A0tudija-
The%20cost%20factor%20in%20patent%20systems.pdf 

When small is beautiful measuring the evolution and consequences of the 
voluminosity of patent applications at the EPO 

Authors: 

E. Archontopoulos, D Guellec, N. Steevnsborg, B. van Pottelsberghe and N. van Zeebroeck. (2007) 

Abstract: 

The  joint  increase  in  the  number  and  size  of  patents  filed  around  the  world  puts  patent  systems 
under pressure. This paper addresses  issues in measuring the voluminosity of patent applications 
and  highlights  patterns  in  its  evolution.  The  results,  based  on  a  database  of  2  million  EPO 
applications,  show  that  the  average  size  of  applications  has  doubled  over  the  past  20  years  and 
that this is mainly associated with PCT applications having a USA priority. Voluminosity indicators 
are influenced by geographical origins and technological areas and strongly impact the workload of 
the EPO, justifying the need for regulatory and policy actions. 

Conclusions: 

Patent voluminosity has become a real issue for patent offices around the world and for the EPO in 
particular. The objective of this paper was to investigate possible measures of this phenomenon as 
well  as  its  main  potential  drivers  and  broad  impact  on  the  patent  system.  The  most  appropriate 
indicators  of  voluminosity  seem  to  be  the  number  of  claims  and  the  number  of  pages  in  patent 
applications.  Both  figures  have  experienced  a  dramatic  increase  over  the  past  20  years,  and 
although  these  two  indicators  may  diverge  in  their  determinants  they  seem  to  converge  in  their 
consequences. The broad descriptive analysis of these indicators reveals a wide range of potential 
drivers,  from  the  fee  structure  to  the  complexity  of  inventions.  Apparently  driven  by  specific 
national  systems,  especially  the  American  one,  technological  specificities  (e.g.  biotech  and 
computers),  and  a  growing  interest  for  the  internationalization  of  patenting  procedures  and 
markets  (e.g.  the  PCT  route),  this  escalation  may  be  a  common  result  of  the  accelerating 
complexity of new technologies and of the harmonization process of international patent laws. More 
generally,  it  appears  that  any  voluminosity  indicator  is  influenced  by  the  geographical  origin  and 
the  technological  area  of  the  patent.  No  matter  its  roots,  not  only  does  the  surge  in  the  size  of 
incoming  applications  rapidly  increase  the  workload  of  patent  offices,  which  if  not  mastered  will 
inevitably lead to widened backlogs and delays in  grant decisions; it also raises important quality 
issues.  Indeed,  one  may  for  instance  question  whether  patent  examiners,  who  are  on  average 
supposed to treat each application in the same amount of time, can reasonably provide the same 
quality in their examination on both small, medium or increasingly larger applications. Yet another 
open  question  is  whether  disruptive  strategies,  such  as  creating  uncertainty  by  polluting  the 
technological  field  or  circumventing  the  disclosure  requirement  by  hiding  major  inventions 
(Stevnsborg  and  van  Pottelsberghe,  2007),  are  the  major  factor  behind  this  escalation  in 
voluminosity. Alternatively, is the increase in the number of claims actually revealing a better and 
more systematic use of fallback positions in patent drafting and number of pages a more thorough 
disclosure of inventions for which protection is being sought? These questions are calling for more 
formal statistical testing. Such tests are conducted in van Zeebroeck et al. (2006a). 

Link: 

http://www.sciencedirect.com/science/article/pii/S0167624507000145 

Patent validation at the country level - The role of fees and translation costs 

Authors: 

D. Harhoff et al. (2007) 

Abstract: 

One  feature  of  the  European  patent  system  that  is  heavily  criticized  nowadays  is  related  to  its 
fragmentation  and  the  induced  cost  burden  for  applicants.  Once  a  patent  is  granted  by  the  EPO, 
the assignee must validate (and often translate) it and pay the renewal fees to keep it in force in 
each country in which protection is sought. The objective of this paper is to assess to what extent 

110 

 
 
 
validation  and  renewal  fees  as  well  as  translation  costs  affect  the  validation  behaviour  of 
applicants. We rely on a gravity model that aims at explaining patent flows between inventor and 
target  countries  within  the  European  patent  system.  The  results  show  that  the  size  of  countries, 
their  wealth  and  the  distance  between  their  capital  cities  are  significant  determinants  of  patent 
flows.  Validation  fees  and  renewal  fees  further  affect  the  validation  behaviour  of  applicants. 
Translation  costs  seem  to  have  an  impact  as  well.  The  implementation  of  cost-reducing  policy 
interventions like the London Protocol will, therefore, induce a significant increase in the number of 
patents validated in each European country. 

Conclusions: 

Overall,  our  results  show  that  fees  and  translation  costs  do  influence  the  patenting  behaviour  of 
firms. It is plausible that this relationship does not only apply to post-grant fees (analysed in this 
paper) but also to application or examination fees. Consequently, an increase in the application or 
examination fees charged by the EPO could be used as a policy instrument to influence the volume 
of  filing  fees  which  in  turn  facilitates  the  examination  process  and  decreases  the  time  to  grant. 
One example for the implementation of a new fee strategy is the increase of the claim-based fees 
implemented  by  the  EPO  as  of  April  2008.  In  particular,  before  2008,  the  EPO  charged  D  45  per 
claim in excess of 11 claims. From April 1st, 2008, the EPO charges D 200 per claim in excess of 16 
claims. An additional increase of the claim-based fees will take place in April 2009. 

Link: 

http://www.sciencedirect.com/science/article/pii/S0048733309001243 

Firm level implications of early stage venture capital investment – An empirical 
investigation 

Authors: 

Engel and Keilbach (2007) 

Abstract: 

The  paper  analyses  the  impact  of  venture  capital  finance  on  growth  and  innovation  activities  of 
young  German  firms.  Among  other  variables,  our  panel  of  firm  data  includes  data  on  venture 
capital funding and patent applications. With a statistical matching procedure we draw an adequate 
control group of non-venture funded firms. The analysis gives evidence that innovative firms will be 
able to close a venture capital deal with higher probability. Once the firms are venture funded, they 
display higher growth rates but do not differ in their innovative output from otherwise comparable 
firms. We derive strategic implications. 

Conclusions: 

In  this  paper,  we  investigate  the  implication  of  venture  capital  funding  on  firms’  growth 
performance  and  innovative  behaviour.  This  is  done  using  a  sample  of  roughly  50,000  German 
firms  of  which  roughly  1  per-cent  is  venture  funded.  We  find  evidence  that  firms  with  higher 
innovative output (measured by patent applications, corrected for size) and with a higher educated 
management have a larger probability of being venture funded. Then we compare venture funded 
and non-venture funded firms with respect to growth and innovative behaviour. This is done using 
a  statistical  matching  approach  that  compares  venture  funded  firms  with  non-venture  funded 
“twin”-firms. The aim of this approach is to make sure that the results are not biased with respect 
to firms’ characteristics. 

Based  on  this  approach  we  find  evidence  that  venture  funded  firms  display  significantly  higher 
growth rates compared to their non-venture funded homologues. On the other hand, there is only 
very weak evidence for the innovative behaviour of both groups to be different. In our view, these 
results can be interpreted as follows: venture capital firms screen potential portfolio firms to select 
out  those  with  the  best  growth  perspectives.  The  innovative  potential  (as  signalled  by  patent 
applications  and  by  the  founders’  education  levels)  plays  an  important  role  in  that  respect.  This 
screening  process  is  very  selective  though  successful  since  venture  capital  funded  firms  display 
indeed higher (twice as large) growth rate as compared to firms of a control group. This stronger 
growth  rate  seems  to  be  a  result  of  a  commercialization  of  previous  innovations  since  innovation 
outputs  of  venture  funded  firms  do  not  differ  from  non-venture  funded  but  otherwise  strongly 
similar  group  of  firms  of  a  control  group.  A  plausible  explanation  for  this  finding  could  be  that 
venture capital investors assist their portfolio firms in this commercialization effort, rather than in 
further  innovation  effort,  in  an  attempt  to  maximize  sales,  hence  value,  of  their  portfolio  firms. 
Commercialization  is  probably  done  by  financial  means  but  also  by  means  of  management 
assistance. It is also possible that venture investors are more aware of possible commercialization 
channels.  

Link:  ftp://ftp.zew.de/pub/zew-docs/dp/dp0282.pdf 

111 

 
 
Filing international patent applications under the patent cooperation treaty 
(PCT): Strategies for delaying costs and maximizing the value of your 
intellectual property worldwide 

Authors: 

Anne M. Schneiderman (2007) 

Abstract: 

Obtaining  international  patent  protection  for  an  invention  can  present  a  significant  financial 
commitment  for  an  early-stage  company,  entrepreneurial  venture  or  not-for  profit  organization 
with  a  limited  budget  for  intellectual  property  management.  This  chapter  examines  the  use  of 
patent  application  filings  under  the  Patent  Cooperation  Treaty  (PCT)  to  delay,  consolidate,  or 
minimize  the  costs  of  patenting  overseas.  Using  the  PCT  to  file  internationally  enables  a  patent 
applicant  to  delay,  generally  for  up  to  30  months  after  the  first  (priority)  filing  date,  strategic 
decisions  about  the  countries  in  which  to  pursue  patent  protection.  The  delay  offers  a  significant 
advantage, since it allows the applicant more time in which to evaluate commercial demand for the 
invention, the likelihood of its success in overseas marketplaces, and the likelihood of obtaining a 
patent  grant  in  a  particular  country,  prior  to  filing  national-phase  patent  applications  in  the 
countries in which patent protection is sought. 

Conclusions: 

Filing  a  patent  application  under  the  PCT  enables  the  applicant  to  delay  strategic decisions  about 
where to pursue patent protection by: 

•  Consolidating patent prosecution costs: single-application format, language, and set of fees. 

•  Providing the applicant with preliminary feedback regarding patentability of the invention. 

•  Providing  the  applicant  with  the  opportunity  to  present  arguments  for  patentability,  to  amend 
claims, and to strengthen the application prior to filing with national patent offices enabling the 
applicant to delay filing the application in individual national patent offices for up to 30 months 
after  the  first  (priority)  filing  date  delaying  prosecution  costs  of  filing  applications  in  multiple 
countries streamlining the process of filing applications in multiple countries. 

Delaying international patent prosecution provides more time to determine: 

•  The value of IP to applicant or owner. 

•  The strength of commercial demand abroad. 

•  Which claims in a patent application are likely to be patentable. 

•  Which countries are most attractive for pursuing patent protection. 

•  The likelihood of obtaining a patent grant in target countries. 

Link: 

http://www.iphandbook.org/handbook/chPDFs/ch10/ipHandbook-
Ch%2010%2007%20Schneiderman%20PCT%20Filing%20Strategies.pdf 

112 

 
 
 
 
Per un pugno di dollari: A first look at the price elasticity of patents 

Authors: 

B. van Pottelsberghe and G. de Rassenfosse (2007) 

Abstract: 

This paper analyses the role of patent filing fees requested by the Member States of the European 
Patent Convention (EPC). We provide first empirical evidence showing that the fee elasticity of the 
demand for priority applications is negative and significant. Given the strong variation in absolute 
fees  and  in  fees  per  capita  across  countries,  this  result  witnesses  a  suboptimal  treatment  of 
inventors  across  European  countries  and  suggests  that  fees  should  be  considered  as  an  integral 
part  of  an  IP  policy,  especially  in  the  current  context  of  worrying  backlogs.  In  addition,  we  show 
that  the  transfer  rate  of  domestic  priority  filings  to  the  EPO  increases  with  the  duration  of 
membership  to  the  EPO  and  the  GDP  per  capita  of  a  country,  suggesting  that  Member  States 
experience a learning curve within the EPC. The high heterogeneity in the transfer rates casts some 
doubts  on  the  practice  that  consists  in  relying  on  filings  at  the  EPO  or  at  the  USPTO  to  assess 
innovative performance of countries. 

Conclusions: 

There is a strong variation in absolute and relative patent fees across European countries: smaller 
countries generally display higher fees per capita. It is more expensive to protect a market unit in 
small countries than in  large countries.  Second,  and  contrarily to a common  believe,  patent  filing 
fees have a significant and negative impact on the number of priority filings. A 10 per cent increase 
in  filing  fees  would  lead  to  a  reduction  of  about  5  per  cent  in  the  demand  for  patents.  Added 
together,  these  results  witness  a  suboptimal  treatment  of  inventors  across  European  countries, 
which in turn substantially affects their filing behaviour. 

This  “fee”  issue  is  generally  not  at  the  forefront  of  the  debates  on  patent  systems.  The  results 
presented  in  this  paper  however  suggest  that  filing  fees  could  be  effectively  considered  as  an 
integral  part  of  an  IP  policy.  This  is  especially  true  in  the  current  context  of  the  boom  in  patent 
filings and backlogs of pending applications observed at regional patent offices. Priority applications 
at  the  national  patent  offices  of  EPC  Member  States  constitute  a  stepping  stone  towards 
subsequent filings at the EPO. Therefore, understanding the determinants of the transfer rate from 
the former to the latter is an important concern, which has been investigated in the final part of the 
present paper. 

It turns out that there is a high level of cross-country heterogeneity in the transfer rate of domestic 
priority  filings  to  the  EPO  and  that  this  heterogeneity  can  be  partly  explained.  The  empirical 
analysis reveals that two main factors do not have any impact on the number of priority filings but 
rather significantly affect the transfer rate of national priority filings towards the EPO. These factors 
are the relative wealth of a country (measured with its GDP per capita) and its age of membership 
within the EPC. 

The wealthier a country is and the older its membership in the EPC, the higher is the share of its 
priority filings that are transferred to the EPO. These results suggest first that more resources allow 
bearing the cost of an effective internationalisation of priority filings. Second, the Member States of 
the  EPC  go  through  a  learning  curve,  which  predicts  a  continued  increase  in  the  workload  of  the 
EPO.  As  a  side  effect,  the  degree  of  predictability  of  the  transfer  rates  to  the  EPO  casts  some 
doubts -or calls for a very cautious interpretation- on the practice that consists in relying on second 
filings (be it at the EPO or at the USPTO) to assess the innovative performance of countries. 

Link: 

https://dipot.ulb.ac.be/dspace/bitstream/2013/53933/1/RePEc_sol_wpaper_07-022.pdf 

113 

 
 
 
 
Essays on the empirical analysis of patent systems 

Authors: 

N. van Zeebroeck (2007) 

Abstract: 

The  European  patent  system  has  been  affected  by  substantial  changes  over  the  past  three 
decades, which have raised vigorous debates at different levels. The main objective of the present 
dissertation is to contribute to  these debates through an exploratory analysis of different changes 
in patenting practices – in particular the way applications are drafted and filed to patent offices  –, 
their drivers, association with the value of patents, and potential impact on the patent system. The 
coming essays are  therefore empirical in  their  essence, but are  inspired by economic motivations 
and  concerns.  Their  originality  is  threefold:  it  resides  in  the  novelty  of  the  main  questions 
discussed,  the  comprehensive  database  specifically  built  to  address  them,  and  the  range  of 
statistical  methods  used  for  this  purpose.  The  main  argument  throughout  these  pages  is  that 
patenting  practices  have  significantly  evolved  in  the  past  decades  and  that  these  developments 
have affected the patent system and could compromise its ability to fulfil its economic purpose. The 
economic  objective  of  patents  is  to  encourage  innovation  and  its  diffusion  through  the  public 
disclosure of the inventions made. But  their  exploitation in the knowledge economy has assumed 
so  many  different  forms  that  inventors  have  supposedly  developed  new  patenting  and  filing 
strategies to deal with these market conditions or reap the maximum benefits from their patents. 
The present thesis aims at better understanding the dimensions, determinants, and some potential 
consequences of these developing practices. 

Conclusions: 

The  potential  economic  consequences  and  some  policy  implications  of  the  findings  from  the 
dissertation  are  discussed  in  chapter  7.  The  evolution  of  patenting  practices  analysed  in  these 
works has some direct consequences for the stakeholders of the patent system. For the EPO, they 
generate  a  considerable  increase  in  workload,  resulting  in  growing  backlogs  and  processing  lags. 
For  innovative  firms,  this  phenomenon  translates  into  an  undesired  increase  in  legal  uncertainty, 
for it complicates the assessment of the limits to each party’s rights and hence of the freedom to 
operate on a market, which is precisely what the so  called “patent trolls” and “submariners” may 
be  looking  for.  Although  empirical  evidence  is  lacking,  some  fear  that  this  may  result  in 
underinvestment  in  research,  development  or  commercialization  activities  (e.g.  Hall  and  Harhoff, 
2004). In addition, legal uncertainty is synonymous with an increased risk of litigation, which may 
hamper the development of SMEs and reduce the level of entrepreneurship. Finally, for society, we 
are left with a contrasted picture, which is hard to interpret. The European patent system wishes to 
maintain  high  quality  standards  to  reduce  business  uncertainty  around  granted  patents,  but  it  is 
overloaded with the volume of applications filed, resulting in growing backlogs which translate into 
legal  uncertainty  surrounding  pending  applications.  The  filing  strategies  that  contribute  to  this 
situation  might  reflect  a  legitimate  need  for  more  time  and  flexibility  in  filing  more  valuable 
patents, but they could also easily turn into real abuses of the system, allowing some patentees to 
obtain  and  artificially  maintain  provisional  rights  conferred  by  pending  applications  on  inventions 
that might not meet the patentability requirements. Distinguishing between these two cases goes 
beyond  the  scope  of  the  present  dissertation,  but  should  they  be  found  abusive,  they  should  be 
fought for they consume resources and generate uncertainty. And if legitimate, then they should be 
understood  and  the  system  adapted  accordingly  (e.g.  by  adjusting  fees  to  discourage  some 
strategies,  raising  the  inventive  step,  fine-tuning  the  statutory  term  in  certain  technologies, 
providing more legal tools for patent examiners to reject unpatentable applications, etc.) so as to 
better  serve  the  need  of  inventors  for  legal  protection  in  a  more  efficient  way,  and  to  adapt  the 
patent system to the challenges it is or will be facing. 

Link: 

http://theses.ulb.ac.be/ETD-db/collection/submitted/ULBetd-02042008-
170122/unrestricted/nvz_phd.pdf 

114 

 
 
 
 
The London Agreement and the cost of patenting in Europe 

Authors: 

B. van Pottelsberghe and M. Mejer (2008) 

Abstract: 

This  paper  analyses  the  consequences  for  the  European  Patent  System  (EPS)  of  the  recently 
ratified  London  Agreement  (LA),  which  aims  to  reduce  the  translation  requirements  for  patent 
validation procedures in 15 out of 34 national patent offices. The simulations suggest that the cost 
of  patenting  has  been  reduced  by  20  to  30  per  cent  since  the  enforcement  of  the  LA.  With  an 
average  translation  cost  saving  of  €3,600  per  patent,  the  total  savings  for  the  business  sector 
amount to about €220 millions. The fee elasticity of patents being about ‐0.4, one may expect an 
increase in patent filings of eight to 12 per cent. Despite the translation cost savings, the relative 
cost  of  a  European  patent  validated  in  six  (thirteen)  countries  is  still  at  least  five  (seven)  times 
higher than in the United States. 

Conclusions: 

In  nominal  terms,  for  the  average  patent  which  targets  six  countries  for  protection,  the  cost 
savings are about 3,600 EUR. Given the fact that the EPO grants about 60,000 patents each year, 
the  total  saving  for  the  business  sector  is  about  €220  million.  As  well  as  these  substantial  cost 
savings, one may expect an increase in the demand for patents of eight to 12 per cent, everything 
else being equal. 

It  is  important  to  keep  in  mind  that  translation  costs  still  have  to  be  supported  for  the  claims’ 
section  of  a  patent,  and  that  cumulated  (over  the  number  of  countries  targeted  for  protection) 
national  validation  and  renewal  fees  outperform  by  far  the  renewal  fees  observed  elsewhere. 
Despite  the  substantial  reduction  induced  by  the  London  Agreement,  the  relative  cost  of  a 
European  patent  is  still  at  least  four  times  higher  than  in  the  USA  (and  any  other  large  national 
patent  office).  With  a  larger  geographical  scope  for  protection  the  relative  cost  of  a  patent  in 
Europe could increase up to ten times the cost of a USA patent. 

The  question  that  directly  pops  up  when  these  results  are  considered  is  whether  these  factors 
affect the behaviour of applicants, and if yes, whether it is good or bad for patent systems. On the 
first question, the evidence suggests that the propensity to patent is affected, although through a 
low price elasticity of ‐0.4. Is this then good for the patent system? A more expensive patent is not 
particularly bad for an economy, provided it correlates with the quality of the examination process, 
and  provided  the  costs  are  not  too  prohibitive.  In  Europe  the  high  costs  actually  constitute  a 
prohibitive barrier to patenting, as witnessed by the relatively small attractiveness of the European 
market  (which  has  only  half  the  attractiveness  of  the  USA  patent  system  in  terms  of  total 
applications,  including  PCT  international  applications).  Given  the  current  backlog  issues  raised  by 
the  heads  of  the  USA,  Japanese  and  European  patent  offices,  one  would  be  tempted  to  conclude 
that  it  is  actually  good  for  the  economy,  as  it  limits  somewhat  the  number  of  applications. 
However, it must be kept in mind that the simulations presented in the present paper all too amply 
demonstrate  that  what  makes  a  European  patent  relatively  expensive  is  to  a  large  extent  due  to 
the  remaining  translation  costs  and  national  renewal  fees  that  must  be  paid  in  the  countries 
targeted for protection. In other words, the high costs are no reflection on the quality of the patent 
system, but the managerial complexity and financial burden induced by a highly fragmented patent 
system. 

Link: 

http://www.ecares.org/index2.php?option=com_docman&task=doc_view&gid=46&Itemid=20 

115 

 
 
 
 
Venture capital and industrial innovation 

Authors: 

Ueda and Hirukawa (2008) 

Abstract: 

For  the  sample  period  of  1965-1992,  Kortum  and  Lerner  (2000)  find  that  venture  capital  (VC) 
investments have a positive impact on patent count at industry level, and this impact is larger than 
that  of  R&D  expenditures.  We  confirm  that  this  positive  impact  continued  to  be  present  and 
became even stronger in late 90s during which VC industry experienced an unprecedented growth. 
We then proceed to study if this positive impact of VC is also present on productivity growth, which 
is a measure of innovation alternative to  patent count. Unlike the impact  on patent count,  we  do 
not find that VC investment affects total factor productivity growth. We do find that VC investment 
is  positively  associated  with  labour  productivity  but  this  positive  impact  is  originated  from  the 
technology  substitution  from  labour  to  other  productive  inputs  such  as  energy  and  material. 
Therefore,  our  finding  suggests  that,  at  industry  level,  VC  investment  increases  the  patent 
propensity  but  may  not  necessarily  improve  the  productive  efficiency.  Various  interpretations  are 
offered why this may be the case. 

Conclusions: 

This paper asks the following questions. First, did VC investment continue to be a highly effective 
driver of patent activities during the explosive VC boom in late 90s? Second, does VC money spur 
industrial innovations or patents? The answer to our first question is yes. By extending the sample 
period  till  2001,  we  reconfirm  the  results  of  KL.  We  find  that  VC  investments  are  more  effective 
than  R&D  in  generating  patents  and  its  effect  became  stronger  during  the  extended  period.  The 
answer  to  our  second  question  is  that  VC  money  spurs  patents  but  not  necessarily  industrial 
innovation. In particular, we find that VC investments are not significantly related with TFP growth; 
labour  productivity  is  positively  and  significantly  related  with  VC  investments.  Nevertheless,  this 
positive  relation  is  driven  by  the  VC  investment's  impact  on  the  substitution  of  energy  and  non-
energy  material  against  labour.  This  labour  saving  behaviour  in  VC  intensive  industries  may  be 
driven  by  strong  corporate  governance  by  venture  capitalists  or  by  firms'  desire  to  boost  labour 
productivity  and  also  stock  prices.  We  also  speculate  that  availability  of  VC  may  increases  the 
patent  propensity  of  new  firms  and  nor  the  industry  average  patent  propensity  because  VC 
stimulates  new  firm  start-ups.  Overall,  our  results  suggest  that  the  impact  of  VC  investment  is 
complex  and  a  further  examination  is  needed  to  understand  what  VC  investment  does  to 
innovations. 

Link: 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1242693 

Long live patents: The increasing life expectancy of patent applications and its 
determinants 

Authors: 

N. van Zeebroeck (2011) 

Abstract: 

Relying on a comprehensive dataset including detailed information on all patent applications filed to 
the  EPO  from  1980  to  2000  and  on  the  renewal  of  those  of  them  that  were  granted,  this  paper 
presents  the  first  survival  time  analysis  of  the  determinants  of  patent  length.  The  results  are 
twofold:  first,  they  clearly  establish  that  the  life  expectancy  of  patent  rights  has  significantly 
increased  over  the  past  decades  strategies  very  strongly  influence  the  overall  length  of  patents, 
possibly due to induced delays in the examination process. This suggests that such strategies may 
result  in  higher  and  longer  lasting  legal  uncertainty  on  the  markets,  with  unknown  consequences 
on the dynamic efficiency of the patent system. 

Conclusions: 

First,  the  present  paper  clearly  establishes  that  the  length  of  patent  rights  in  Europe  has 
significantly increased over the eighties and the nineties despite an apparent decline in the average 
grant  rate.  This  increase  may  be  due  to  the  dilatation  of  the  examination  process  (significant 
increase  in  patent  renewals),  or  both.  More  work  would  be  needed  to disentangle  these  potential 
factors, but they readily suggest that monopolistic rents may be extracted over longer periods by 
patent holders, with unknown consequences on the dynamic efficiency of patents. 

Second,  these  developments  were  not  even  across  technology  fields.  In  particular,  our  results 
suggest  that  emerging  technologies,  which  also  make  the  most  controversial  subject  matter  in 

116 

 
 
today’s  patent  system  (i.e.  biotechnologies,  computers  and  telecommunications),  are  associated 
with  the  longest  patent  rights.  This  may  be  due  to  evolving  patenting  standards  in  these 
technological fields, resulting in a smaller predictability of the patentability requirements and hence 
more  complexity  in  the  examination,  but  also  to  specificities  in  competitive  processes  on  these 
markets that induce a particular focus on IP rights. 

Third, it clearly appears that most filing strategies are associated with longer patent rights, but it 
appears  that  they  may  affect  the  length  of  patents slightly differently  before  and  after  grant,  i.e. 
they may have different impacts on the duration of the examination process and on renewal rates. 
In particular, although increasingly popular, the filing of divisionals remains an exceptional practice 
(about  4.5%  of  applications  filed  in the  late  nineties  were  divisionals),  but this  practice  seems  to 
have  a  major  impact  on  the  length  of  the  patents.  This  is  of  great  importance,  because  such 
strategies are in fact procedures allowed by the European Patent Convention that are actionable by 
firms, for instance when they deem it in their interest to delay the grant decision on their patents, 
at the expense of a greater legal uncertainty on the markets. 

These results therefore suggest the exclusive rights offered by patents tend to be exploited by the 
patentees over longer periods, but that this is not only a matter of patents being more important 
and valuable and therefore renewed for longer periods after grant, but it is largely a matter of filing 
strategies  used  by  firms  with  effect  to  delay  the  grant  decision  on  their  patents.  It  is  hard  to 
imagine why such a growing uncertainty on the market would be beneficial to competition, to the 
functioning of technology markets, and to society at large. Still, further research would be greatly 
needed to  disentangle  the  influence  of  filing  strategies  on  the  granting  process  and  on  grant  and 
renewal rates and to better understand the motivation of the firms who rely on such strategies. 

Link: 

http://www.rei.unipg.it/rei/article/view/41 

Languages, fees and the international scope of patenting 

Authors: 

D. Harhoff, K. Hoisl and B. van Pottelsbergue (2009) 

Abstract: 

This paper analyses  firms’  choices  regarding  the geographic scope  of patent protection within the 
European  patent  system.  We  develop  an  econometric  model  at  the  patent  level  to  quantify  the 
impact  of  office  fees  and  translation  costs  on  firms’  decision  to  validate  a  patent  in  a  particular 
country  once  it  has  been  granted  by  the  EPO.  These  costs  have  been  disregarded  in  previous 
studies. The results suggest that both translation costs and fees for validation and renewals have a 
strong influence on the behaviour of applicants. The estimates are then employed to simulate the 
impact of the London Protocol, a recent policy reform which reduces translation requirements in the 
European  patent  system.  National  validations  of  patents  granted  by  the  EPO  are  estimated  to 
increase by 29%. 

Conclusions: 

The  European  patent  system  provides  an  interesting  field  for  the  empirical  analysis  of  patent 
systems.  The  variation  in  our  data  allows  us  to  investigate  to  what  extent  patent  applicants  are 
influenced  by  both  the  fees  and  translation  costs,  as  well  as  by  physical  distances  and  market 
attractiveness (represented by its size, its wealth or the technical position of the validation country 
relative to the applicant country). Our paper analyses a particularly clear decision- making situation 
where  fees  and  translation  costs  are  the  only  remaining  expenses  that  separate  applicants  from 
patent  protection.  The  empirical  results  are  applied  to  assess  the  impact  of  an  important  patent 
policy  reform,  the  London  Protocol,  which  has  had  a  major  impact  on  the  translation  costs  of 
European patents. 

The empirical analysis essentially aimed at testing the role of languages (i.e., translation costs) and 
the role of fees for validation and early renewal. A patent-level probit model was used estimate the 
incidence of patent validation of an EPO-granted patent in a given EPC country. Economic variables 
such as the size and the wealth of the countries of origin (the country of residence of the applicant) 
and of the countries of destination where the patent is validated are important determinants of the 
validation probability. In general, the characteristics of the validation country (where the patent is 
validated and enforced) have a much stronger impact on validations than the characteristics of the 
origin country. 

Technological  specificities  and  geographical  distance  were  included  as  additional  explanatory 
variables.  These  characteristics  are  important  factors  affecting  the  probability  of  validation  of  a 
patent  in  a  given  country.  The  world  may  have  become  more  globalized,  but  it  certainly  has  not 
become  “completely  flat”.  Physical  distance  still  matters,  and  so  does  the  distance  in  culture  and 

117 

 
 
languages.  The  empirical  analysis  also  shows  that  translation  costs  have  a  negative  impact  on 
validations. Furthermore, our results show that early renewal fees and validation fees substantially 
reduce the likelihood of validating a patent in a given country. The unique and rich dataset which 
exploits the institutional detail of the European patent system also permits us to make predictions 
regarding the number of additional validations that EPC Member States may expect in the future. A 
simulation  of  the  validation  decision  under  London  Protocol  translation  regulation  shows  that  the 
countries  that  ratified  the  London  Protocol  face  an  increasing  probability  of  validations.  In 
particular, we predict that  the number of additional validated patents will increase  between 29%. 
Should  all  EPC  Member  States  ratify  the  London  Protocol,  the  increase  could  reach  59.3%  of  the 
validations  performed  in  2003.  Our  estimates  only  capture  the  impact  of  the  marginal  cost  of 
patenting on validation.It is highly likely that the cost reduction coming with the implementation of 
the London Protocol will affect the overall number of filings at the EPO, and hence the number of 
grants which are then subject to the validation decision studied here.33 We plan to investigate the 
overall impact of current reforms and reform proposals in future work building on the econometric 
results described in this paper. 

Link: 

http://epub.ub.uni-muenchen.de/10456/ 

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Economic cost-benefit analysis of a unified and integrated European patent 
litigation system 

Authors: 

D. Harhoff (2009) 

Abstract: 

The patent system in Europe is still incomplete. Appropriating returns from patented technology is 
impaired by the fact that patent-holders may have to enforce their patent rights in multiple courts. 
Moreover,  third  parties  interested  in  showing  that  particular  patent  rights  have  been  granted 
erroneously are disadvantaged by having to initiate revocation proceedings in multiple jurisdictions.  

Given  that  the  successful  pursuit  of  these  two  objectives  can  generate  welfare  gains  for  the 
European economy, a unified European patent litigation system has immediate appeal. The current 
study seeks to provide approximate cost and benefit calculations in order to inform policy-makers 
in Europe about the choices they face in this important field of public policy. The study groups cost 
and benefit effects into the following categories: (i) effects from  avoiding duplication of litigation; 
(ii) effects from changes in the demand for litigation, induced by changes in the cost structure; (iii) 
effects from changed incentives for patenting. Towards performing an assessment of the first two 
effects, the report collects data from a variety of sources in order to support the estimates and to 
test  the  plausibility  of  a  number  of  necessary  assumptions.  Given  that  no  official  data  on  the 
incidence,  outcomes  and  cost  of  patent  litigation  exist,  an  effort  is  made  to  triangulate  data  and 
estimates in order to demonstrate that the approximations are justified. 

Conclusions: 

The following results are particularly important. Avoiding duplication of infringement and revocation 
cases  is  likely  to  generate  large  benefits  for  the  European  economy.  The  results  obtained  here 
suggest that currently, between  146  and  311 infringement cases are being duplicated annually in 
the  EU  Member  States.  By  2013,  this  number  is  likely  to  increase  to  between  202  and  431 
duplicated cases. Total private savings from having access to a unified Patent Court in 2013 would 
span the interval between  EUR 148  and  289 million.  An assessment of the operating costs of the 
proposed  Patent  Court  is  obviously  subject  to  a  large  number  of  caveats.  Based  on  data  from 
earlier  efforts  (in  particular  the  Working  Party  on  Litigation  set  up  under  the  auspices  of  the 
European Patent Organisation), an upper-bound estimate for the operating costs of a court with a 
capacity of 940 cases indicates that the Court would cause operating costs of EUR 27.5 million. 

Hence,  the  cost-benefit  assessment  focusing  on  avoided  duplication  leads  to  a  highly  positive 
evaluation of the proposal. Even if the low estimate of savings (EUR 148 million) is taken, the new 
system would create substantial benefits and reach a benefit-cost ratio of 5.4. However, this view 
may  be  unduly  conservative,  and  the  benefit-cost  ratio  could  be  as  high  as  10.5.  Additional 
benefits  could  flow  in  case  of  additional  litigation  activity,  be  it  in  terms  of  infringement  or 
revocation actions. The availability of a low-cost litigation path offered by a unified Patent Court is 
likely  to  lead  to  additional  activity  from  parties  in  countries  which  currently  do  not  use  the 
European  patent  system  extensively.  Moreover,  the  cost  level  of  litigation  in  the  unified  Patent 
Court system  is likely to be below  the  cost levels currently observed in some Member States and 
parties in these Member States are also likely to engage in more litigation activity in the medium-
run. These effects will also contribute to generate private and public benefits. 

The above estimates and considerations are based on the assumption that the unified Patent Court 
will offer litigation at roughly the same cost level as the three largest low-cost national systems. In 
a robustness check, the report explores to what extent the gains from saved duplication would be 
dissipated  if  the  cost  level  were  higher.  The  computations  show  that  even  with  a  substantial 
average  cost  increase,  benefit-cost  ratios  remain  above  one,  and  for  most  scenarios  considerably 
above one. 

It  is  more  difficult  to  predict  cost-induced  changes  in  the  demand  for  litigation.  The  relevance  of 
such  changes  will  depend  on  the  level  and  type  of  costs  imposed  on  users  of  the  new  system. 
These will be mostly determined by the private costs for legal support and advice, but also by the 
fees  levied  by  the  Court  itself.  Measures  to  contain  the  private  costs  to  parties  in  litigation  are 
important, and the Presidency’s proposal includes a number of such measures which are discussed 
in  the  report  with  respect  to  their  impact.  A  particularly  promising  measure  is  to  admit 
representation of parties by specialized European Patent Attorneys. Another measure of importance 
is the contribution from the Community budget and from States which are not EU Member States 
to the Court’s budget, in order to keep fees at low levels.  

The  report  also  discusses  –  in  a  qualitative  manner  –  effects  which  emerge  from  changes  in 
patenting  and  litigation  incentives.  It  is  argued  that  effects  will  be  beneficial  if  the  unified  patent 
litigation  system  puts  emphasis  on  fast  and  low-cost  proceedings,  high  quality  judgement,  and  a 
fair  balance  between  the  legitimate  interests  of  patent  holders  and  alleged  infringers.  It  is 
emphasized  that  particularly  strong  positive  welfare  contributions  can  be  expected  if  an  effective 

119 

 
and rapid, low-cost revocation procedure is available. The latter feature should provide an effective 
means  against  strategic  and  (possibly)  frivolous  litigation  activity  which  could  be  mounted  in  the 
future by “patent trolls”. The report also comments on particular design choices in the Presidency’s 
proposal.  

To summarize, this report recommends strongly that the Presidency should proceed in its efforts to 
establish  a  unified  and  integrated  patent  litigation  system  for  European  patents  and  future 
Community patents. For conservative estimates of the relevant parameters, the economic benefits 
from  such a system  are  likely to exceed the  costs of  the establishment and operation of the new 
court by a large multiple of between 5.4 and 10.5. Moreover, with prudent design choices it should 
be possible to implement a litigation system that will be balanced and supportive of overall efforts 
to improve the quality of patents in Europe. 

Link: 

http://ec.europa.eu/internal_market/indprop/patent/index_en.htm#studies)  

Economic Incongruities in the European Patent System 

Authors: 

M.Mejer and B. van Pottelsberghe (2009) 

Abstract: 

This paper argues that the consequences of the “fragmentation” of the European patent system are 
more  dramatic  than  the  mere  prohibitive  costs  of  maintaining  a  patent  in  force  in  many 
jurisdictions. First, detailed analysis of judicial systems in several European countries and four case 
studies  provide  evidence  suggesting  that  heterogeneous  national  litigation  costs,  practices  and 
outcome induce a high level of uncertainty. Second, a high degree of managerial complexity results 
from systemic incongruities due to easier “parallel imports”, possible “time paradoxes” and the de 
facto  paradox  of  having  EU-level  competition  policy  and  granting  authority  ultimately  facing 
national jurisdictional primacy on patent issues. These high degrees of uncertainty and complexity 
contribute  to  reduce  the  effectiveness  of  the  European  patent  system  and  provide  additional 
arguments in favour of the Community patent and a centralized litigation in Europe. 

Conclusions: 

Litigation  costs  vary  significantly  across  jurisdictions,  including  within  Europe.  While  absolute 
litigation costs are somewhat lower in continental Europe than in the USA or the UK, relative costs 
are much higher in the UK and in smaller countries like the Netherlands. The multiplicity of small 
markets  (as  compared  to  the  USA)  increases  the  already  prohibitive  costs  of  managing  and 
enforcing patents in Europe, especially when multiple parallel litigation occurs. 

Furthermore,  as  legal  procedures  differ  across  jurisdictions,  there  is  a  clear  possibility  of 
substantially  different  judgements  occurring  on  the  same  subject  matter.  Despite  the  efforts  to 
harmonize the enforcement of intellectual property rights (including patent rights) at the European 
level  disparities  will  still  prevail.  But  the  current  architecture  of  the  European  patent  system 
generates  even  more  complexity  and  uncertainty  for  patentees.  The  lack  of  a  single  market  for 
innovations, where the industrial property rights are generally enforced in a few countries, together 
with  the  supremacy  of  national  jurisdictions  in  patent  issues,  entails  three  related  economic 
incongruities:  an  EU  wide  competition  policy  but  national  patent  rights;  intra-EU  “parallel”  trade 
and  patent  protection;  and  a  time  paradox.  Four  case  studies  illustrate  these  incongruities  and 
their  implications  for  managers.  There  is  no  Europe-wide  market  for  technology,  and  even  the 
supposedly  centralised  procedure,  the  substantive  examination  performed  by  the  EPO,  is  actually 
not  really  “centralised”  or  “European”:  it  is  possible  for  a  national  court  to  invalidate  a  patent 
granted by the EPO, or to grant a patent that has not been granted by the EPO. And such decisions 
may occur in up to 34 countries. These “incongruities” and the prohibitive costs of enforcement or 
litigation in Europe generate both a high level of uncertainty regarding the validity of a patent (and 
its market reach) and considerable managerial  complexity which clearly  reduces  the effectiveness 
and the attractiveness of the European patent system in terms of stimulating innovation. Resolving 
these  incongruities  would  require  the  implementation  of  a  Community  patent  together  with  a 
centralised jurisdiction mechanism. The national patent offices of the European Union are de facto 
deliberately blocking the implementation of a truly European patent system, thereby hindering the 
speed of internationalisation of their own small and medium-sized firms. Special tax incentives may 
help,  but  they  will  certainly  not  alleviate  the  problem  of  the  cost,  complexity  and  diversity  of 
practice which generate a lack of confidence in the system. 

Link: 

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1345668 

120 

 
 
 
A policy insight into the R&D-patent relationship 

Authors: 

G. de Rassenfosse and B. van Pottelsberghe (2009) 

Abstract: 

Contrary to an accepted wisdom, this paper shows that cross-country variations in the number of 
patents per researcher  do not  only reflect  differences  in the propensity to patent but also signals 
differences  in  research  productivity.  We  put  forward  and  test  an  empirical  model  that  formally 
accounts  for  the  productivity  and  the  propensity  component  of  the  R&D–patent  relationship.  The 
two  components  play  an  important  role,  as  witnessed  by  the  impact  of  several  policies,  including 
education, intellectual property and science and technology policies. Indicators based on domestic 
priority filings reflect research efforts and are primarily affected by varying propensities to patent. 
In  contrast,  international  filings,  especially  triadic  patents,  rather  capture  variations  in  research 
productivity. 

Conclusions: 

Three policy implications may be drawn from the present results. First, the simultaneous impact of 
several  policy  tools  (IP,  S&T  and  education  policies)  calls  for  a  more  coordinated  approach, 
especially  between  the  policies  that  directly  influence  the  researchers’  productivity  and  their 
propensity to patent. Second, the negative and highly significant impact of fees suggests that the 
demand  for  patents  is  partly  influenced  by  their  price.  Against  the  current  background  of  high 
numbers of applications and the resulting backlogs at the main patent offices, the results suggest 
that  national  patent  offices  might  use  fees  as  policy  leverage.  Such  a  move  would  need  to  think 
about a potential lowering of fees for SMEs as it exists in the USA and other countries. Finally, even 
though  priority  filings  are  appealing  for  obvious  reasons  —  and  the  wider  diffusion  of  the  Patstat 
database  may  contribute  to  their  popularity  —  they  are  highly  influenced  by  the  propensity 
component.  In  this  respect,  the  triadic  patent  statistics  produced  by  the  OECD  remain  the  least 
biased  indicator  of  innovation  performances,  at  least  regarding  international  comparison.  Policy 
makers should look more closely at this readily available source of information. 

Link: 

http://www.sciencedirect.com/science/article/pii/S0048733308002977 

Patent fees for sustainable EU community patent 

Authors: 

B. van Pottelsberghe and J.Danguy (2010) 

Abstract: 

The objective of this report is to suggest a sustainable fee structure for the EU patent, also known 
as  Community  patent  and  abbreviated  as  “COMPAT”  in  the  remainder  of  this  document.  In 
particular, the following dimensions are investigated: 

•  Focus on pre-grant and post-grant (or renewal) fees. 

•  Illustrate the differences between Euro-Direct applications and PCT applications. 

•  Perform a break-even analysis based on unit-costs provided by the EPO. 

•  Suggest and simulate the effects of a cost reduction schedule for SMEs. 

121 

 
 
 
 
Conclusions: 

The  research  analises  EPO  and  PCT  fee  structure  and  its impact on  the  sustainability of  the  EPO. 
The key findings are:  

•  About 30% of the total patent applications filed at the EPO contribute to compensate for the net 

cumulated losses generated by the remaining 70% of patent applications. 

•  With the current EPO pre-grant fee schedule and 50% of the NPOs’ post-grant renewal fees, the 

EPO actually loses nearly 800 EUR per Euro-Direct patent application 

•  With the current fee schedule the EPO loses about 1,700 EUR per PCT-international application. 
To some extent, Euro-Direct applications reduce (or compensate for) the losses associated with 
PCT applications. 

•  High  fees  (pre-  and  post-grant)  have  the  advantage  of  improving  self-selection  mechanisms, 
ensure  sustainability  of  the  system,  and  provide  an  effective  correction  mechanism.  However, 
they might constitute a barrier to entry for small entities. 

The  authors  study  the  impact  of  the  VCOM  (200+)  fee  structure  suggested  by  Danguy  and  van 
Pottelsberghe (2009), starting at 600 EUR on year 6 and adding 200 EUR each year. From year 15 
onwards  an  exponential  trend  is  adopted.  The  key  aspects  of  the  proposed  fee  structure  for  the 
COMPAT are: 

•  VCOM(200+) renewal  fee  structure  for the COMPAT  has the advantage of 1) being  compatible 
with  the  economic  literature,  2)  being  globally  competitive  in  relative  terms,  3)  ensuring  a 
financial sustainability for the system, and 4) matching what the business sector is paying in the 
current system. 

•  With the new fee schedule put forward in this report, the net cumulated income of the COMPAT 

becomes positive, and is even higher for PCT applications than for Euro-Direct. 

•  With the new fee schedule put forward in this report, the absolute cost (cumulated fees for 10 
years of protection) would be similar than in the current system, but the relative cost (cost per 
million  capita)  would  drive  the  European  patent  system  towards  a  much  more  competitive 
position, thanks to a large market composed of 500 million inhabitants. 

•  A 50% fee reduction for SMEs could be set for entry fees, with an eventual pay-back process if 

the patents are sold, licensed, or maintained for more than 6 years. 

The  new  fee  schedule  proposed  in  this  report  would  make  the  European  patent  system  more 
attractive with lower costs for the EU patent relative to the current European patent covering only 
6 Member States. At the same time, the new schedule provides a financially sustainable model for 
the  system  by  preserving  relatively  high  absolute  fees  but  allowing  for  possibilities  of  fee 
reductions  for  SMEs/young  innovative  companies  and  public  research  organisations  to  facilitate 
entry to the patent system. 

Link: 

http://ec.europa.eu/internal_market/indprop/docs/patent/patent_fees_report_en.pdf 

Cost-Benefit Analysis of the Community Patent 

Authors: 

B. van Pottelsberghe and J.Danguy (2009) 

Abstract: 

For  more  than  40  years,  governments  and  professional  associations  have  acted,  voted or  lobbied 
against  the  implementation  of  the  Community  Patent  (COMPAT).  The  econometric  results  and 
simulations  presented  in  this  paper  suggest  that,  thanks  to  its  attractiveness  in  terms  of  market 
size and a sound renewal fee structure, the COMPAT would drastically reduce the relative patenting 
costs for applicants while generating more income for the European Patent Office and most national 
patent  offices.  The  loss  of  economic  rents  (€400  million  would  be  lost  by  patent  attorneys, 
translators  and  lawyers)  and  the  drop  of  controlling  power  by  national  patent  offices  elucidate 
further the observed resistance to the Community Patent. 

Conclusions: 

The present paper contributes to the economic literature on the patenting behaviour of applicants. 
An  econometric  model  explaining  the  observed  maintenance  rates  of  European  patents  in  17 
countries over the past 20 years shows that five main factors play a significant role: the GDP size 
of  a  country,  the  age  of  the  patent,  the  level  of  renewal  fees,  the  strength  of  a  country’s  patent 

122 

 
 
system,  and  the  length  of  time  that  a  country  has  been  a  member  of  the  European  Patent 
Convention. The estimated impacts of these five variables allow in turn to derive the maintenance 
rate of the COMPAT and hence the renewal fees income it would generate for patent offices. 

The simulations show that the  EPO  and  most  NPOs would actually gain from each patent granted 
under the COMPAT if an ‘appropriate’ fee schedule is adopted. This is mainly due to a price effect 
(higher  absolute  fees)  combined  with  a  size  effect  (a  new  market  for  technology  of  about  500 
million  inhabitants)  which  would  lead  to  a  longer  duration  of  patents.  The  main  office  that  might 
see a significant drop in its renewal fees income is the German Patent Office, which has historically 
benefited  from  its  ‘largest  economy’  status  in  Europe  and  hence  generates  above  the  expected 
validation and maintenance rates. 

The  new  centralized  system  would  sharply  reduce  translation  and  intermediation  costs,  and  the 
costs  induced  by  parallel  litigations  with  heterogeneous  outcomes.  Under  the  very  conservative 
assumption of 50,000 patents granted each and the VCOM(200+) renewal fee schedule put forward 
in this paper, the COMPAT would result in total financial surpluses of €250 million for the business 
sector, €43 million for the EPO and €78 million for NPOs, compared to total losses of €270 million 
for  patent  attorneys  and  translators  and  at  least  €121  million  for  lawyers,  due  to  a  sharp  fall  in 
parallel litigations.  

The  simulations  were  indeed  performed  under  the  constraints  of  the  current  patent  system  and 
under  the  conditions  set  by  political  negotiations  related  to  fees  and  translations.  One  important 
condition relates to the 50/50 split between national patent offices and the EPO. Nothing, however, 
precludes the reader to dream of an alternative redistribution scheme of the EPO ‘surplus’. 

The  COMPAT  would  drastically  simplify  the  system,  reduce  the  uncertainty  currently  associated 
with the fragmented system and make it attractive for companies (domestic and foreign), and less 
incongruous  for  SMEs  and  universities;  it  would  give  some  motion  to  the  invisible  hand,  with 
undoubtedly  large  benefits  for  the  business  sector  in  general,  and  high-tech  entrepreneurs  in 
particular. 

123 

 
 
 
 
The Role of Fees in Patent Systems: Theory and Evidence 

Authors: 

B. van Pottelsberghe and G. de Rassenfosse (2010) 

Abstract: 

This  paper  reviews  the  economic  literature  on  the  role  of  fees  in  patent  systems.  Two  main 
research questions are usually addressed: the impact of patent fees on the behaviour of applicants 
and  the  question of  optimal  fees.  Studies in  the  former  group  confirm that  a range  of  fees  affect 
the behaviour of applicants and suggest that patents have low elasticity. Studies in the latter group 
provide grounds for both low and high application (or pre-grant) fees and renewal (or post-grant) 
fees,  depending  on  the  structural  context  and  on  the  policy  objectives.  The  paper  also  presents 
new stylized facts on patent fees of thirty patent offices worldwide. It is shown that application fees 
are  generally  lower  than  renewal  fees,  and  renewal  fees  increase  more  than  proportionally  with 
patent age (to the notable exception of Switzerland and the U.S.). 

Conclusions: 

In  the  current  context  of  an  apparent  decline  in  the  quality  of  patents  and  of  congested  patent 
offices  due  to  a  record  number  of  applications,  it  is  worth  looking  at  the  tools  available  to 
policymakers  to  fix  the  patent  system.  One  such  tool  is  the  fee  policy,  which  has  received 
increasing attention over the past ten years. The paper starts by presenting key statistics on patent 
fees across thirty  patent offices. Two  key  findings must be emphasized.  First, relative fees at the 
USPTO have been decreasing for 200 years. Over the years, U.S. patents have become more and 
more affordable. Second, comparisons of patent fees across a large number of patent offices show 
that  yearly  application  fees  are  by  and  large  lower  than  yearly  renewal  fees,  and  renewal  fees 
increase  more  than  proportionally  with  patent  age.  Switzerland  and  the  U.S.  are  among  the  rare 
countries where yearly renewal fees are lower than yearly pre-grant fees. 

As a rule of thumb, the optimal structure of fees is  one where (i)  application fees are  sufficiently 
high  to  deter  the  filing  of  patents  with  low  marginal  value  (especially  in  the  current  context  of 
highly congested patent offices) and (ii) renewal fees increase more than proportionally with patent 
age in order to make sure that only the commercially valuable patents are held in force. However, 
one  should  not  forget  that  fees  are  only  one  policy  leverage  among  others.  The  quality  of  the 
examination  process,  the  coverage  of  patent  rights  or  the  process  put  in  place  to  challenge  a 
patent are as many dimensions that also impact the good functioning of the patent system. They 
should be taken into account when policy action is considered. 

Link: 

http://onlinelibrary.wiley.com/doi/10.1111/j.1467-6419.2011.00712.x/abstract 

Digital Opportunity. A review of intellectual property and growth 

Authors: 

I.Hargreaves (2011) 

Abstract: 

In  advanced  economies  like  the  UK’s,  innovation  is  crucial  to  competitive  edge.  That  makes 
Intellectual  Property  (IP)  policy  an  increasingly  important  tool  for  stimulating  economic  growth.  
Every  year  in  the  last  decade,  investment  by  UK  business  in  intangible  assets  has  outstripped 
investment  in  tangible  assets:  by  £137  billion  to  £104  billion  in  2008.  Global trade  in  IP  licences 
alone  is  worth  more  than  £600  billion  a  year:  five  per  cent  of  world  trade  and  rising.  Small  and 
young innovative firms are of crucial importance in terms of growth and jobs but proliferating use 
of IP rights can push up IP transaction costs and block these new players from entering markets. 

Conclusions: 

Although recommendations stemming from the study are directed at the British government, most 
of  them  can  be  extended  to  other  countries.  According  to  the  author  Government  should  ensure 
that development of the IP System is driven as far as possible by objective evidence. Policy should 
balance  measurable  economic  objectives  against  social  goals  and  potential  benefits  for  rights 
holders  against  impacts  on  consumers  and  other  interests.  These  concerns  will  be  of  particular 
importance in assessing future claims to extend rights or in determining desirable limits to rights. 

Governments should resolutely pursue its  international  interests in  IP, particularly with respect to 
emerging economies, based upon positions grounded in economic evidence. They should attach the 
highest  immediate  priority  to  achieving  a  unified  EU  patent  court  and  EU  patent  system.  They 

124 

 
 
should  work  to  make  the  Patent  Cooperation  Treaty  a  more  effective  vehicle  for  international 
processing of patent applications. 

In order to limit the effects of these barriers to innovation, the Government should:  

•  take a leading role in promoting international efforts to  cut backlogs and manage the boom in 
patent applications by further extending “work sharing” with patent offices in other countries; 

•  work to ensure patents are not extended into sectors, such as non-technical computer programs 
and business methods, which they do not currently cover, without clear evidence of benefit; 

•  investigate ways of limiting adverse consequences of patent thickets, including by working with 
international  partners  to  establish  a  patent  fee  structure  set  by  reference  to  innovation  and 
growth  goals  rather  than  solely  by  reference  to  patent  office  running  costs.  The  structure  of 
patent  renewal  fees  might  be  adjusted  to  encourage  patentees  to  assess  more  carefully  the 
value of maintaining lower value patents, so reducing the density of patent thickets. 

NPOs should draw up plans to improve accessibility of the IP system to smaller companies who will 
benefit  from  it.  This  should  involve  access  to  lower  cost  providers  of  integrated  IP  legal  and 
commercial advice 

Link: 

www.ipo.gov.uk 

Venture capital and industrial innovation for Europe 

Authors: 

A.Popov and P. Roosenboom (2011) 

Abstract: 

We provide the first cross-country evidence of the effect of venture capital investment on industrial 
innovation. Using  a panel of  21 European countries and 10 manufacturing industries covering the 
period  1991-2005,  we  study  the  effect  of  venture  capital,  relative  to  R&D,  on  the  number  of 
granted patents. We address concerns about causality by exploiting variations across countries and 
over time in private equity fundraising and in the structure of private equity funds. Our estimates 
imply  that  while  the  ratio of  venture  capital  to  R&D  has  averaged  around  6%  between  1991  and 
2005, VC has accounted for 9.7% of industrial innovation during that period. We also find that VC 
is  relatively  more  successful  in  fostering  innovation  in  countries  with  less  stringent  labour 
regulations and with higher human capital. 

Conclusions: 

Our  estimates  of  the  impact  of  a  euro  of  venture  capital  relative  to  a  euro  of  industrial  R&D  are 
generally positive, but their significance tends to vary depending on the sample partition used, and 
the  implied  VC  potency  is  considerably  lower  than  in  similar  USA  studies.  For  example,  the  only 
case  when  the  estimate  on  VC/RD  is  significant  is  in  the  reduced  sample  of  non-transition 
economies with good data coverage, with an implied relative VC potency of 2.94. The mean ratio of 
VC investment to total disbursements (venture capital plus industrial R&D) between 1991 and 2005 
in that sample is 3.85%. Using these two values, we calculate that venture capital investment has 
accounted  for  around  10.2%  of  industrial  innovation  in  15  European  countries  since  the  early 
1990s.  However,  taking  an  average  of  the  estimates  implies  that  VC  has  accounted  for  around 
8.5% of industrial innovation. While the estimated relative VC potency in our sample is lower than 
what Kortum and Lerner (2000) estimate using USA data for the 1965-1992 period (a relative VC 
potency  of  around  4,  when  both  VC/RD  and  Log  R&D  are  instrumented),  we  show  that  VC.s 
contribution  to  innovation  in  the USA  also declined during  the  1991-2005  period.  Finally,  we  also 
demonstrate that part of the reason VC has a lower effect on innovation than in the USA in earlier 
periods is due to more stringent employment practices and to Europe’s still rudimentary knowledge 
networks. 

While  the  European  venture  capital  industry  has  developed  rapidly  in  recent  years,  with  some 
countries  surpassing  at  times  the  USA  in  terms  of  share  of  the  industry’s  share  of  GDP,  labour 
market  reforms  have  been  slow  and  the  deregulation  of  investment  activity  by  large  institutional 
investors like pension funds and insurance companies has only recently been enacted. Confounding 
the 
of 
regulatory measures which are  designed to  limit systemic risk, but which could also result in less 
funds  being  raised  to  finance  risky  innovative  enterprises.  Our  study  suggests  that  the  combined 
effect  of  slow  labour  and  institutional  reforms  and  of  stringent  financial  regulations  can  further 
diminish Europe’s innovative potential. 

unleashed 

a  wave 

problem, 

financial 

recent 

global 

crisis 

has 

the 

Link: http://www.cepr.org/meets/wkcn/9/981/papers/popov_roosenboom.pdf 

125 

 
 
The study on the quality of patent systems in Europe 

Authors: 

G. Scellato (2011) 

Abstract: 

This  study  is  dedicated  to  a  comprehensive  assessment  of  the  quality  of  the  patent  system  in 
Europe.  An  effective  system  for  the  protection  and  enforcement  of  intellectual  property  rights 
represents  an  essential element  for the  growth  of  economies,  which  are  based  on  the generation 
and  exploitation  of  new  scientific  and  technological  knowledge.  The  well-known  risks  of  market 
failures  in  the  private  financing  of  innovation  investments  call  for  a  continuous  effort  of  policy 
makers  to  the  improvements  of  the  tools  that  are  expected  to  guarantee  proper  private  returns 
from  R&D  activities  while  protecting  also  the  interests  of  consumers  and  society  at  large.  The 
increased  salience  of  patents  to  companies  competing  in  the  knowledge  economy  has  raised 
concerns  throughout  the  world  in  the  past  decade  about  the  actual  effectiveness  of  the  current 
patent systems. 

The  correct  functioning  of  patent  systems  has  been  seriously  challenged  in  recent  years  by 
different  factors,  both  exogenous  and  endogenous.  Among  the  exogenous  factors,  it  is  worth 
recalling the emergence of new technological and scientific fields that have posed questions about 
the extent of patentable subject matter, the increasing complexity of new technologies that makes 
more difficult and time consuming the assessment of both inventive step and actual scope of each 
patent, the increased activity in innovation from companies in emerging countries that have started 
to  file  an  constantly  growing  number  of  patent  applications  with  a  non-trivial  impact  on  the 
backlogs of the main patent offices worldwide. 

We  acknowledge the complexity of patent  systems,  whose  functioning is based on the  interaction 
of a wide array of heterogeneous actors (large firms, SMEs, Patent Offices, International Granting 
Authorities,  patent  attorneys,  local  and  international  legislators,  and  judiciary  systems,  among 
others) that carry specific interests. Hence, the assessment of quality requires the adoption of an 
analytical  framework  that  encompasses  multiple  instruments  and  the  need  to  clearly  state  the 
boundaries  of  the  concept  of  quality  that  will  be  investigated.  Taking  into  consideration  these 
important methodological concerns, the quality of the European patent system will be analysed in 
this study along two complementary perspectives: the first one relates to the quality of the granted 
patents per se, in terms of compliance with their fundamental legal requirements, and the second 
one relates to the quality of patent by a systemic perspective. The assessment of patent quality at 
systemic  level  requires  the  analysis  of  additional  factors  beyond  the  efficacy  of  the  substantive 
examination process, like the costs for obtaining, managing and enforcing a patent. Understanding 
such dual nature of quality is necessary to identify complementarities and synergies generated by 
prospective policy interventions. 

Conclusions: 

Survey respondents made a clear point on the fact that ex-post enforceability is a key component 
of the perceived quality of a patent system. The improvement in the enforceability can be achieved 
along different trajectories: 

First, improve the quality of the litigation system through a centralised court exclusively. Second, 
reduce the costs of access to justice. 

Third, reduce the cost and duration of proceedings.  

Fourth,  limit ex-ante  the  likelihood  of trials due  to  uncertainty  on  the  patentability  of  the  subject 
matter. 

Fifth,  speed  up  the  opposition  proceedings  in  order  to  avoid  uncertainty.  The  uncertainty  during 
opposition procedure is aggravated if the patent holder enforces the opposed patent in court.  

To  conclude,  the  European  intergovernmental  patent  regime  allows  to  retain  institutional 
arrangements  within  Member  States  and  to  prevent  any  moves  to  delegate  responsibility  outside 
the  national  sphere.  This  intergovernmental  patent  regime  is  characterised  by  a  fragmented 
European  Patent  System  of  national  translation,  validation  and  enforcement.  Stakeholders  in  this 
study consider some characteristics of fragmentation as failings of the system due to higher costs 
and uncertainty, and low quality.  

How  can  problems  caused  by  such  a  fragmentation  be  solved  institutionally?  There  is  no  single 
approach, but at least two options can be constructed.  

Make a unitary title and a centralised patent court legitimate for competitiveness of the European 
single market and for innovation in the knowledge economy. This will provide policy coherence and 
cohesion by defining what the regime is and what it does in relation to the economy. Agreements 
will  succeed  with  a  conviction  of  why  Europe  is  lagging  behind  in  terms  of  innovation  and 
competitiveness  in  the  knowledge  economy.  Over  domestic  negotiations,  Member  States  absorb 

126 

 
the  concern  of  domestic  actors  and  builds  coalitions  with  them.  Allow  for  parallel  regimes  when 
there is a tension between strongly institutionalised differences across Member States, and a desire 
of  policy  makers  and  stakeholders to  adapt  common  rules  for  mutual  advantage  in  the  European 
Patent  System.  One  way  of  giving  a  chance  to  Member  States  that  support  a  unitary  title  and  a 
centralised patent court is by means of enhanced cooperation, which allows those Member States 
that  wish  to  continue  to  work  more  closely  together  to  do  so.  Parallel  regimes  and  enhanced 
cooperation  are  therefore  a  strategy  and  not  a  final  outcome.  The  ultimate  goal  would  create  a 
single  institutional  architecture  by  means  of  a  unitary  title  and  a  centralised  patent  court  for  the 
single market of the EU provided that patent-related costs were lower and legal certainty raised. 

Link: 

http://ec.europa.eu/internal_market/indprop/patent/#studies 

Patent Backlogs at USPTO and EPO: Systemic failure vs deliberate delays 

Authors: 

M. Mejer and B. van Pottelbergue 

Abstract: 

This  paper  first  describes  the  so-called  patent  backlogs  and  assesses  the  extent  to  which  they 
might affect the examination process in major patent offices. Second it puts forward that the root 
causes of these backlogs in Europe and in the USA are different. The backlog at the United States 
Patent and Trademark Office (USPTO) is three times larger than one at the European Patent Office 
(EPO)  and  is  essentially  due  to  very  low  fees  and  a  weak  rigor  of  the  examination  process.  The 
observed long pendency at the EPO is more due to applicants’ strategic filing behaviors that aim at 
delaying the grant date, as it marks the start of high expenses due to translation requirements and 
multiple  validation  or  renewal  fees.  Since  the  root  causes  of  backlogs  diverge  between  EPO  and 
USPTO, their cure should also be different. 

Conclusions: 

The paper first shows that backlogs are first and foremost an American issue; Europe suffers less 
from  this  disease,  as  witnessed  by  a  three  times  smaller  number  of  pending  applications  at  the 
EPO. In addition, average pendency durations have decreased at the EPO over the past five years, 
as opposed to the USPTO. 

It is argued that the USA backlog finds its origin in the design of its system, whereas pendency at 
the EPO could be a result of the delay caused by applicants’ filing behavior. The backlog in the USA 
is due to a systemic failure. Its profound causes find their roots in the chosen design of the patent 
systems  regarding  four  critical  elements:  (i)  the  number  of  patentable  subject  matters;  (ii)  the 
adequacy of the search report; (iii) the rigor of the examination process and (iv) the relatively low 
patent  fees.  The  evidence  presented  in  this  paper  suggests  that  the  backlog  in  the  USA  is 
essentially due to the easiness to get a patent granted and to the very low patent fees. In Europe 
the problem is different; it is related to its fragmentation in many national systems, which have the 
ultimate  power  on  patent  validity  and  enforcement.  Deliberate  delays  are  observed  at  the  EPO, 
where  applicants  might  rely  on  lawful  drafting  practices  in  order  to  substantially  delay  the  grant 
date  and  hence  the  sudden  occurrence  of  high  costs  (due  to  translations,  validation  and  renewal 
fees). 

Curing  the  problem  of  backlogs  should  not  only  address  the  symptoms  that  are  similar  across 
patent offices, but first and foremost tackle their main root causes. Addressing the USA symptoms 
through the on-going Patent Prosecution Highways (PPH) projects might actually negatively affect 
the  examination  process  in  Europe.  Given  the  structural  differences  between  patent  systems, 
introduction  of  PPH  will  result  in  the  situation  where  examiners  at  the  EPO  will  need  to  apply 
accelerated examination procedure to the patents granted under the system with the lower quality 
factor leading to the quality deterioration of EPO granted patents. 

What  Europe  needs  to  cure  its  own  disease  is  to  limit  the  possibilities  to  delay  the  grant  date. 
Gradual  steps  have  been  taken  with  the  amendments  to  procedural  practices  introduced  in 
December  2007  and  the  recent  revision  of  the  guidelines  for  examination  procedure.  The  latter 
included  accelerating  prosecution  and  limiting  an  applicant’s  ability  to  file  divisional  applications. 
This  is  a  temporary  solution,  as  companies  will  most  probably  find  other  ways  to  delay  the 
examination  process.  An  alternative  and  more  efficient  way  would  be  to  suppress  the  sharp 
increase in costs once the patent is granted, which might be achieved with the Community (or EU-) 
patent.  The  USPTO  challenge  is  to  tackle  its  own  backlogs,  probably  by  re-designing  its  system, 
with higher fees and the recruitment of more (long term) examiners. 

Link: 

http://www.sciencedirect.com/science/article/pii/S0172219010001298 

127 

 
 
The changing face of innovation 

Authors: 

WIPO (2011) 

Abstract: 

Understanding  these  changes  is  important.  In  modern  market  economies,  innovation  is  a  key 
ingredient  of  sustained  economic  growth.  In  high-income  countries,  studies  have  estimated  that 
innovation accounts for as much as 80 per cent of economy-wide growth in productivity. Research 
at the firm level has shown that firms that innovate outperform their non-innovating peers. Less is 
known about innovation and  its economic impact in low and middle-income economies.  However, 
the  available  evidence  similarly  suggests  that  innovating  firms  in  those  economies  are  more 
productive – especially if applying a broad view of innovation that includes incremental product and 
process improvements. Indeed, the experience of several East Asian economies has demonstrated 
how innovation can spur economic catch-up – even if innovation may be only part of the success 
story of those economies. 

Conclusions: 

WIPO’s  first  World  IP  Report  explores  the  changing  face  of  innovation.  We  aim  to  explain,  clarify 
and  contribute  to  policy  analysis  relating  to  IP,  with  a  view  to  facilitating  evidence-based 
policymaking. 

Clearly,  this  Report  leaves  many  questions  open.  Where  the  available  evidence  is  insufficient  for 
making  informed  policy  choices, the  World  IP  Report  formulates  suggestions  for  further  research. 
This first edition does not address all the important IP themes – notably, trademarks and branding, 
copyright and the cultural and creative industries, or the protection of traditional knowledge.  

Link: 

www.wipo.int 

Internationalisation of business investments in R&D and analysis of their 
economic impact 

Authors: 

B. Dachs et. al. (2012) 

Abstract: 

Enterprises  not  only  produce  and  sell,  but  increasingly  also  develop  goods  and  services  outside 
their home countries. Today, it seems to be the rule, not the exception, that large European firms 
have  R&D  activities  at  different  locations  inside  and  outside  the  Single  Market.  In  addition,  firms 
from  the  United  States  and  other  non-European  countries  have  considerably  extended  their  R&D 
activities  in  the  European  Union,  and  new  players  from  emerging  economies  are  entering  the 
scene:  India,  the  People’s  Republic  of  China,  and  other  locations  have  come  into  focus  as  host 
countries for the R&D activities of European multinational enterprises (MNEs) in recent years.  

Conclusions: 

Firms not only sell or produce their products and services abroad, but increasingly also do research 
and  development  (R&D)  at  locations  outside  their  home  countries.  We  call  this  development  the 
internationalisation of business R&D. The results of the project indicate that the member countries 
of the European  Union are  active  players in  the internationalisation  of  business R&D  and  that  the 
EU  benefits  from  this  process  to  a  considerable  degree.  There  is  evidence  that  the 
internationalisation  of  business  R&D  has  strengthened  intra-EU  integration  and  the  exchange  of 
knowledge between EU countries. Around half of all R&D expenditure of foreign-owned firms in the 
EU can be assigned to firms from other EU Member States. 

Data  collected  in  the project  indicates that the  European  Union is  also  an  attractive  R&D  location 
for  firms  from  outside the  EU-27.  Non-EU  firms,  have  continuously  increased  R&D  expenditure  in 
the EU since the 1990s. Multinationals from India, China, Brazil or other emerging economies are 
just about to make their first steps into the EU as a location for their R&D activities. EU countries 
benefit  from  R&D  activities  of  foreign  owned  firms.  Their  R&D  expenditure  raise  overall  R&D 
intensity  in  order  to  achieve  the  goal  of  3%  research.  Moreover,  R&D  expenditure  and  labour 
productivity of foreign-owned affiliates is positively related to labour productivity of domestic firms 
which may indicate spillover and competition effects. 

EU  firms  are  also  very  active  in  R&D  abroad.  The  home  countries  may  benefit  from  the  global 
expansion  and  from  reverse  knowledge  spillovers.  Based  on  today’s  empirical  evidence,  it  is 
unlikely that these overseas R&D activities are a substitution for similar domestic activities. 

128 

 
 
 
The analysis also identified some blind spots where more knowledge is needed. One of these areas 
is  the  role  of  emerging  economies,  including  China  and  India,  for  which  considerable  data  gaps 
exist. Another blind spot is the service sector. Detailed data on R&D of foreign-owned firms in the 
service  sector  is  missing  in  a  number  of  countries.  Moreover,  there  is  only  limited  knowledge  on 
what  happens  inside  multinational  firms,  how  knowledge  and  people  move  inside  multinational 
firms  between  countries,  or  how  specialisation,  roles  and  mandates  of  subsidiaries  change  over 
time. 

Policy can help in various ways to maintain Europe’s favourable position in the internationalisation 
of business R&D. First, policy makers should try to create a research-friendly environment. Rather 
than  trying  to  attract  R&D  intensive  foreign-owned  firms,  results  from  the  econometric  analysis 
indicate  that  policy  should  look  to  maintain  stable  economic  ‘fundamentals’,  increase  the  skills  of 
the  workforce,  strengthen  university  research  and  increase  the  innovative  capabilities  of  firms. 
Second,  in  order  to  maximise  spillovers  from  foreign-owned  firms,  policy  should  raise  the 
capabilities  of  domestic  organisations  to  absorb  knowledge  and  help  foreign-owned  firms  to 
integrate into domestic innovation networks. Third, policy makers should not be too worried about 
R&D  activities  of  EU  firms  outside  the  European  Union.  There  is  no  evidence  that  these  activities 
substitute  domestic  research;  in  contrast,  they  are  a  means  to  open  up  new  markets  and  may 
contribute to growth at home. 

International patent protection for small businesses 

Authors: 

USPTO (2012) 

Abstract: 

Recent economic research shows that small businesses are the primary driver of job creation in the 
United States, with young start-up companies, which are by their nature small businesses, creating 
on  average  three  million  U.S.  jobs  per  year.  Though  this  pattern  of  job  creation  has  largely  held 
true  for  over  thirty  years,  the  capacity  of  American  small  businesses  to  create  jobs  is  at  risk. 
American  firms  compete  and  grow  by  supplying  products  and  services  that  consumers  demand, 
and  by  internationalizing  their  businesses  through  licensing,  franchising,  or  exporting.  For  many 
small  companies,  patent  protection  prevents  competitors  from  simply  copying  their  innovations, 
and  aids  in  attracting  investor  capital  needed  to  grow,  build  market  share,  and  create  jobs.  Yet 
small  companies  face  significant  financial  challenges  in  acquiring,  maintaining,  and  enforcing 
patents  outside  the  United  States.  Therefore,  supporting  small  firms  and  fostering  job  creation 
requires a thorough understanding of these challenges and an exploration of possible remedies. 

Conclusions: 

Available  information,  including  the  comments  and  testimony  that  the  USPTO  received,  indicates 
that  while  patenting  appears  relatively  uncommon  among  U.S.  small  businesses,  it  tends  to  be 
concentrated  in  high  technology  companies  and  can  aid  in  securing  for  them  a  competitive 
advantage. 

Many small companies grow and create new jobs by following an internationalization strategy, and 
in this regard international patenting  –  when done early  in the  life  of a company  –  can  provide a 
platform  for  tapping  new  markets  later  in  life.  Evidence  also  suggests  that  U.S.  small  businesses 
may  be  patenting  less  frequently  than  larger  firms,  and  that  they  face  high  costs  in  pursuing 
international patent protection. 

These high patenting costs often occur early in the life of these companies, when funding and cash 
flows are generally limited. These international patenting costs are also often exacerbated for U.S. 
small  companies  because  –  unlike  the  USPTO,  which  gives  discounts  to  eligible  small  businesses 
from  all  over  the  world  –  foreign  patent  offices  do  not  generally  provide  discounts  for  small 
businesses. 

Link: 

http://www.uspto.gov/aia_implementation/20120113-ippr_report.pdf  

129 

 
 
 
 
 
Patent Litigation in Europe 

Authors: 

Cremers et al. (2013) 

Abstract: 

We  compare  patent  litigation  cases  across  four  European  jurisdictions  –  Germany,  France,  the 
Netherlands, and the UK – covering cases filed during the period 2000-2008. For our analysis, we 
assemble a new dataset that contains detailed information at the case, litigant, and patent level for 
patent  cases  filed  at  the  major  courts  in  the  four  jurisdictions.  We  find  substantial  differences 
across  jurisdictions  in  terms  of  case  loads.  Courts  in  Germany  hear  by  far  the  largest  number  of 
cases  in  absolute  terms,  but  also  when  taking  country  size  into  account.  We  also  find  important 
between-country differences in terms of outcomes, the share of cases that is appealed, as well as 
the characteristics of litigants and litigated patents. A considerable number of patents are litigated 
in multiple jurisdictions, but the majority of patents are subject to litigation only in one of the four 
jurisdictions. 

Conclusions: 

The  European  patent  system  is  currently  undergoing  fundamental  changes.  The  institutional 
reforms  that  are  being  implemented  are  controversial.  The  discussions  concerning  the  reforms  of 
the  European  patent  system,  and  especially  the  discourse  regarding  changes  to  the  legal  and 
procedural  framework  of  patent  enforcement  have  been  characterized  by  a  striking  lack  of 
representative quantitative evidence. 

With  respect  to  the  results  of  the  study,  we  show  that  the  number  of  cases  heard  by  German 
regional  courts  exceeds  by  far  the  number  of  cases  heard  in  the  other  three  jurisdictions.  Even 
when  we  account  for  the  over-counting  of  cases  due  to  bifurcation,  idiosyncratic  practices  at 
regional courts and procedural differences, the number of cases in Germany exceeds the combined 
number of cases in the other three jurisdictions over the same time period. We also demonstrate 
that the number of cases has increased in the UK and Germany over time, but there is no evidence 
for an upward trend in case filings in France and the Netherlands. 

Regarding  the  settlement  of  disputes,  our  analysis  also  reveals  significant  differences  across 
countries. More than 60% of cases in Germany end with a settlement, whereas this is true for only 
around  40%  of  cases  in  the  UK.  When  cases  are  decided  by  a  judge,  outcomes  differ  across 
jurisdictions.  In  the  UK,  revocation  is  the  most  likely  outcome  regardless  of  whether  the  initial 
claim  is  for  infringement  or  revocation.  Infringement  is  most  likely  to  be  found  by  German  and 
Dutch  courts.  In  France,  the  large  share  of  patents  that  is  held  not  to  be  infringed  (but  valid) 
stands out. 

The data also allow us to compare the time it takes to obtain a judgment in the first instance. The 
time lag that lapses between the filing of a claim for infringement and a first decision is less than 
one  year  in  Germany,  the  Netherlands,  and  the  UK.  Infringement  cases  take  almost  one  year 
longer in France to reach a decision. Claims for invalidity are decided fastest in the UK (within less 
than  a  year),  but  take  considerably  longer  in  Germany  (on  average  18  months).  Moreover,  our 
evidence  indicates  that  the  PHC  in  the  UK  does  not  decide  faster  when  there  is  only  either 
infringement or validity at issue. 

We  also  obtain  insights  regarding  one  of  the  main  motivations  for  the  current  reforms  of  the 
European patent system: fragmentation. We show that most EPO-granted patents that are litigated 
in a given jurisdiction have also been validated in all other jurisdictions (possibly with the exception 
of  the  Netherlands).  This  means  that  there  is  scope  for  parallel  litigation  of  the  same  patent  in 
multiple  jurisdictions.  However,  our  data  reveals  that  the  share  of  duplicated  cases  (cases  that 
involve the same patent and litigating parties in multiple jurisdictions) is low in Germany (2%) and 
France  (6%).  Nevertheless,  the  share  attains  26%  in  the  UK  and  15%  in  the  Netherlands.  This 
provides mixed evidence for fragmentation and the resulting need for parallel litigation in multiple 
jurisdictions.  Quantifying  the  cost  of  duplication  that  arises  from  such  parallel  litigation  deserves 
further work. However, we note that the vast majority of patents are litigation only once. 

130 

 
 
 
Our  data  also  allow  us  to  look  at  the  characteristics  of  the  litigating  parties  across  the  four 
jurisdictions.  We  find  large  shares  of  claimants  and  defendants  that  are  domestic  entities.  The 
share of only domestic entities is largest in Germany (over half of claimants and defendants) and 
smallest  in  the  UK  (less  than  40%).  Most  of  the  litigating  parties  are  registered  companies, 
although there is a significant share of individuals involved in the disputes, in particular in Germany 
(24%  among  claimants  and  29%  among  defendants).  Looking  at  the  distribution  of  litigating 
companies  across  industries,  we  note  a  concentration  of  companies  in  pharmaceuticals/chemistry 
and  in  electronic  products  in  the  UK,  whereas  litigating  companies  in  Germany  are  concentrated 
mostly  in  the  areas  of  machinery  and  engines.  The  distribution  of  companies  across  economic 
activities  is  also  reflected  in  the  distribution  of  patents  across  technology  areas.  Most  litigated 
patents in the UK protect pharmaceutical and chemical inventions, as well as inventions related to 
telecommunication  and  digital  data  transmission.  In  Germany,  most  patents  are  in  the  area  of 
mechanical engineering. 

Link:  

http://ftp.zew.de/pub/zew-docs/dp/dp13072.pdf  

131 

 
 
 
Comparing patent litigation across europe: a first look 

Authors: 

Stuart J.H. Graham & Nicolas Van Zeebroeck (2013) 

Abstract: 

Although  patent  litigation  has  become  increasingly  global,  with  litigants  earning  billion-dollar 
verdicts  and  seeking  judgments  in  many  different  jurisdictions  around  the  world,  scholarship  has 
been almost completely silent on how such litigation develops outside the United States. This void 
in  understanding  is  particularly  glaring  in  Europe,  where  U.S.  and  other  litigants  are  increasingly 
drawn, and to which policy makers interested in  harmonizing the U.S. patent system  look in vain 
for answers. Courts, litigants, commentators, and policy makers speculate about how litigation and 
judicial  outcomes  differ,  but  have  no  factual  basis  for  comparing  or  understanding  what  actually 
transpires. With a view to settling this uncertainty and allowing for the emergence of a more robust 
body of scholarship, this Article sets forth the results of an empirical study of a database including 
nearly  9,000  patent  suits  from  seven  of  the  largest  and  most  judicially  active  countries  in  the 
European Union during 2000-2010. In the process, it shows that the incidence of litigation and the 
bases  of  judicial  outcomes  diverge  radically  across  the  different  countries  and  types  of  patented 
technologies  in  Europe.  Accordingly,  the  Article,  for  the  first  time,  provides  an  empirically 
grounded,  factual  basis  for  examining  stubborn  questions  relevant  to  those  needing  clarity  about 
the legal environment in Europe, and to comparatively study the United States’ system. 

The  results  unveiled  in  this  Article  are  profound,  bringing  clarity  to  a  legal  environment  that  has 
been  heretofore  shrouded  in  shadow.  The  results  show  that  the  frequency  of  patents  reaching  a 
judgment  in  litigation  varies  widely  across  European  countries  in  ways  that  belie  the  simple 
differences  associated  with  the  quantity  of  domestic  stocks  of  enforceable  patents.  By 
demonstrating that disputes are much more frequent in some countries (e.g., the Netherlands and 
France)  as  compared  with  others,  the  Article  uncovers  that  practitioners’  estimates—the  sole 
previous  baseline  source—are  not  accurate.  By  showing  how  litigation  varies  widely  across 
technologies,  this  Article  provides  critical  insights  into  the  likelihood  of  different  kinds  of  patents 
reaching  a  judgment  in  the  diverse  European  courts.  It  also  offers  surprising  evidence  regarding 
how litigants’ raising of patent validity and infringement claims differs from one European court to 
another, and how outcomes too are starkly different.  

The main policy implications of the Article follow from the reported patent litigation patterns across 
technologies and countries. The findings highlight both the fragmentation and variation within the 
European  patent  system,  and  the  fundamentally  different  dynamics  that  will  continue  to  shape 
patent  enforcement  across  technology  sectors  and  industries.  The  patterns  also  underscore  the 
variation  in  predictability,  and  differences  in  legal  certainty,  that  innovators,  patent  holders,  and 
their technology competitors experience in the fragmented European system. These cross-country 
differences  highlight  institutional  variation  among  the  jurisdictions,  which  in  turn  drives  the  costs 
and incentives to use the courts, helping to provide critical comparative data as Europe moves to a 
continent-wide  Unitary  Patent  and  Unitary  Patent  Court  in  2015.  Moreover,  since  several  of  the 
changes  proposed  in  Congress  closely  resemble  rules  already  in  place  in  the  several  European 
jurisdictions,  the  Article’s  findings  are  relevant  to  current  U.S.  policy  debates  on  potential  patent 
reform.  The  Article’s  important  and  unprecedented  empirical  analysis  enable  comparative  patent 
system policy debate in a way which previously was impossible. 

Conclusions: 

There  is  ample  evidence  that  patent  litigation  is  a  critical  issue  because  it  conditions  the 
enforcement of patents and therefore helps to set their value and significance in the market place. 
The  balancing  act  that  courts  must  undertake,  in  deciding  questions  of  the  scope  of  validity  and 
infringement,  helps  determine  incentives  to  innovate,  to  commercialize,  to  litigate,  and  even  to 
copy  (or  not)  competitors.  If  courts  fail  to  enforce  valid  patent  rights,  or  do  so  too  generously  in 
favor of infringers, then infringement will tend to be a dominant strategy. If courts impose complex 
rules and procedures so that enforcement is made more expensive, then the threat of infringement 
actions  may  not  be  credible,  with  patent  owners  enforcing  fewer  rights  at  the  margin.  Similarly, 
excessively strong IP rights, enforced too severely by courts at a relatively inexpensive price, may 
produce  a  greater  supply  of  infringement  actions,  with  possible  reduced  entry  due  to  excessively 
high  threats of  litigation. Nevertheless, the  effective  operation of  the patent system  is predicated 
upon market players having the capacity to challenge invalid patents at reasonable prices, and so 
courts  face  a  delicate  balancing  act  between  procedural  and  substantive  rules  of  law  which  will 
invariably  influence  the  cost  of  litigation  and  the  relative  attractiveness  of  enforcement  and 
infringement.  

132 

 
The European patent litigation system has been intensively debated and finally subject to political 
agreements  that  will  transform  it  substantially.  These  changes  include  the  creation  of  unitary 
protection and the creation  of  a Unified Patent Court. But the design of the new litigation system 
and  the  rules  for  allocating  cases  across  sections  of  the  central  division  of  the  UPC  have  been 
decided largely in the absence of reliable statistics on the actual incidence and character of patent 
litigation in Europe.  

Using new and never-before analyzed data on patent litigation  in several  of the  largest European 
countries,  this  study  offered  a  first  view  into  the  complex  and  fragmented  European  patent 
litigation  environment.  This  exceptionally  rich  data  source  provided  the  opportunity  for  a  first 
cross-country empirical analysis of patent litigation in Europe. Our analysis provides well supported 
orders  of  magnitude  and  identifies  country,  technology,  and  procedural  patterns  in  European 
patent  litigation,  contributing  meaningfully  to  our  knowledge  of  legal  disputes  over  European 
patent rights. The results both challenge and complement practitioners’ estimates of the frequency 
of patent litigation in Europe, which have heretofore been used as a baseline.  

Our  analysis  suggests  that  the  dynamics  of  patent  litigation  and  its  practices  are  substantially 
different  from  country  to  country  and  from  technology  to  technology.  Following  prior  theoretical 
models,  the  difference  in  patent litigation  incidences  across  industries  may  suggest,  in  particular, 
that the fixed cost to engage in litigation is not perceived evenly across industries, that the stakes 
are  lower  or  higher  across  industries,  that  the  asymmetries  of  information  vary  substantially 
(possibly  influenced  by  the  predictability  of  the  courts  decisions),  or  any  combination  of  these. 
More  research  is  therefore  desirable  to  aid  in  uncovering  how  these  different  litigation  systems 
perform in an otherwise unified Europe.  

The differences that our data uncover in the rates and incidence of suits across countries may be 
driven by technological specialization (which we know exists among the oft-patenting countries of 
France,  Germany,  and  the  U.K.)  or  by  institutional  differences,  local  laws,  and  country-specific 
factors.  These  latter  differences  may  include  litigation  costs  (much  higher  in  the  U.K.  than  in 
continental courts) or the “attractiveness” of each system as it relates to the types of disputes or 
competitive realities among parties. While our findings suggest that opportunities for and instances 
of  forum-shopping  exist  in  Europe,  more  research  is  needed  to  uncover  the  exact  dimensions  of 
that phenomenon.  

Overall,  our  data  confirm  the  existence  of  substantial  variation  across  countries  in  the  European 
patent  litigation  system.  Some  commentators  have  suggested  that  such  variability  creates 
uncertainty, and that a solution may lie in the type of unified system that European policy makers 
are now implementing. Since prior research has shown that more harmonization and consistency of 
decisions  across  courts  and  over  time  tends  toward  easier  and  faster  settlement  in  disputes,  the 
Unitary Patent Court scheduled to begin operations in 2015 may yield benefits to society. While we 
remain  agnostic  about  such  a  solution,  we  believe  that  our  data  and  analyses—which  offer  some 
tantalizing first insights into the system of European patent litigation—deserve to be complemented 
by more research in this area. We are confident that this research is forthcoming, now that more 
European  litigation  datasets,  including  the  one  we  describe  here,  are  becoming  available  to 
researchers and students. 

Link: 

http://stlr.stanford.edu/pdf/patentlitacrosseurope.pdf  

133 

 
 
 
International Patent Litigation  

Authors: 

CMS (2013) 

Abstract: 

The document provides an overview of litigation procedures across key jurisdictions in Europe and 
both Russia and China from the perspective of practitioners. The guide provides information on the 
courts,  the  trial  format  and  timing,  appeals,  remedies  (including  injunctions)  and  alternative 
dispute resolution mechanisms. 

Link: 

http://www.cms-cmck.com/Hubbard.FileSystem/files/Publication/45f4b798-fa2b-414e-88aa-
ffdd6174430e/Presentation/PublicationAttachment/c9c99da2-ef4f-495d-8b35-
02c62542b121/CMS%20International%20Patent%20Litigation%20Guide%202013.pdf 

134 

 
 
 
 
Glossary 

BERD 

CAGR 

Business Enterprise Expenditure on R&D 

Compound Annual Growth Rate 

CRISP-DM 

Cross Industry Standard Process for Data Mining 

EC 

EP 

EPC 

EPO 

EU 

EU-28 

EUR 

European Commission 

European Patent 

European Patent Convention 

European Patent Office 

European Union 

European Union of 28 Member States 

Euros 

EUROSTAT 

Statistical Office of the European Communities 

GDP 

GERD 

HERD 

IP 

IPC 

NACE 

NPO 

OECD 

Gross Domestic Product 

Gross Expenditure on R&D 

Higher Education Expenditure on R&D 

Intellectual Property 

The International Patent Classification 

Statistical Classification of Economic Activities 

National Patent Office 

Organisation for Economic Cooperation and Development 

PATSTAT 

EPO Worldwide Patent Statistical Database 

PCT 

PLI 

PO 

PPP 

PRO 

R&D 

RB 

SME 

SRA 

VC 

Patent Cooperation Treaty 

Patent Litigation Insurance 

Patent Office 

Purchasing Power Parity 

Public Research Organisation 

Research and Development 

Roland Berger 

Small and Medium-sized Enterprise 

Single Renewal Approach 

Venture Capital 

WIPO 

World Intellectual Property Organisation 

135 

 
 
 
 
 
 
 
 
 
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While patents play a key role as regards the 
technological output of research and innovation 
systems, their costs and relative affordability still varies 
widely between countries. 

The report gives a statistical overview of patent costs 
and their key elements such as administrative, 
maintenance, process and translation costs for the EU, 
EFTA and key partner economies. 

It also provides information on average patent life and 
the number of validated countries by technology fields. 

The report furthermore analyses the impact of patent 
cost differences on innovation and economic outcomes. 

Studies and reports 

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ISBN 978-92-79-45520-9