Patent pendency, the time it takes for patent review and approval, is an important measure of innovation, and significant for the pharmaceutical industry. So how does the US stand?
A recent report shows that the US ranks behind the Republic of Korea and China in patent pendency and Europe also trails. DCAT Value Chain Insights examines the implications for the pharmaceutical industry.
Patent pendency: what is the problem?
A recent report by the Center for the Protection of Intellectual Property (CPIP), “The Long Wait for Innovation: The Global Patent Pendency Problem,” outlines what it terms a growing global challenge of patent pendency or the length of time a patent application is left pending while under review. The CPIP is part of Antonin Scalia Law School at George Mason University in Arlington, Virginia and provides scholarly analysis of intellectual property rights and the technological, commercial, andinnovation they facilitate. The report was highlighted in a recent communication by the Pharmaceutical Manufacturers of America, the US-based association representing pharmaceutical and biopharmaceutical companies.
The report found that while every country faces its own unique problems related to the backlog of patent applications, new trends and leaders in patent innovation have emerged. For example, countries such as the Republic of Korea are strengthening commitments to patent processing and currently experiencing pendency of 2.8 years compared to 6.3 years in India.
|Table I: Average Time from Patent Application to Approval from Select Countries, 2008-2015.
||Number of years
|Member states of the European Patent Office*
The European Patent Office (EPO) is composed of 40 European countries. For listing see the EPO website.
Source: The Center for Intellectual Property, George Mason University.
Korea leads all countries with the fastest approval times for patents or lowest rate of patent pendency at 2.8 years followed by China at 2.9 years and then the US at 3.5 years (see Table I ). Europe, as represented by the members states of the European Patent Organization, which consists of approximately 40 countries ranks sixth on global basis in patent pendency at 5.5 years, trailing Korea, China, the US, Australia, Egypt, and Japan. Two of the largest emerging markets, India and Brazil rank lower with patent pendency of 6.3 years for India and 10.1 years for Brazil (see Table 1 ).
In terms of the number of filings, the report offers some data. The World Intellectual Property Organization reported global growth of patent filings in 2014 of 4.5%, with some developing countries experiencing surges of nearly three times the global rate. In 2014, there were 2.7 million applications filed worldwide. Leading the way in total number of applications in 2014 was China, with 928,177 filings, followed by the US (578,802), Japan (325,989), the Republic of Korea (210,292) and the European Patent Office (EPO, 152,662). China saw growth of 12.5% in 2014 and, if the trend continues, is poised to become the first patent office with over one million applications received in one year.
While application growth rate was more restrained in the US (1.3%), the EPO (3.2%), and the Republic of Korea (2.8%), countries with developing patent systems saw percentage increases in applications on par with, and sometimes surpassing, China’s substantial rate of growth, notes the report. The Philippines (9.3%), Thailand (7.1%), and Vietnam (11.3%) all saw significant increases in applications in 2014, but the largest increase was in the Republic of Iran, which experienced a growth of 18.5%.
In commenting on the report in a blog on the PhRMA website, Mark Grayson, senior director, communications and public affairs, pointed out the process for patents is an important consideration and for certain countries needs to be reformed. “While the issues of patent rights, effective patent life and research and development investment often lead patent and intellectual property discussions, particularly around biopharmaceutical products, an examination of the systems that process patent applications and inconsistencies in the pendency from country-to-country are often overlooked,” he said. “Lost in this is the fact that many countries have patent review and processing systems that have become inefficient and unable to keep pace with the accelerating speed of innovation across all industry sectors, including in the life sciences and biopharmaceutical industry. This translates to a backlog of patent applications, which slows the pace of innovation and the delivery of valuable new products and new treatments for patients.”
He also points to data that show the financial implications with respect to delays in approving patents. He cites that the United Kingdom’s Intellectual Property Office estimated that combined losses from each year of backlog in the US Patent and Trademark Office, Japan Patent Office, and European Patent Office cost the global economy more than $10 billion a year.
The report further points to several key trends from its analysis as outline below.
Neither national wealth, nor relative lack of it, determines how quickly a country’s patent office can process applications. The report points out that although the US is the wealthiest country in the report’s sample, its 3.5- year pendency average is not quite the fastest. A similar observation is true for the members of the European Patent Office, which despite relative wealth, rank toward the middle of the sample at 5.3 and 5.5 years, and that there is great disparity among major emerging markets such as China (2.9 years) and Brazil (10.1 years).
Long patent pendency for certain countries, particularly Brazil and Thailand. On average, it takes 10 years to get a patent in Thailand and 10.1 years in Brazil. The report points out that while faster may not always be better, these extended delays are long in terms of inventors’ lifespans and even longer in terms of business developments.
New leaders in patented innovation are emerging. The report points out that Korea and China, which respectively have the lowest patent pendency at 2.8 years and 2.9 years, show a commitment to efficient patent processing.
The issue of lengthy pendency times for patent applications is not industry specific. The report concludes that slow processing appears to be an issue that is consistent across a patent office’s operations, rather than confined only to “difficult” fields that may have more complex technology or other issues that would delay patent approvals.
Lengthy pendency is an issue for the high-tech and life-sciences industries. Both mobile technology and the life sciences suffer from high average pendency periods in Brazil, Thailand, and other countries. “This finding indicates a problem with resources across the board, rather than with shortages of particular types of expertise or oddities with respect to certain types of applications,” concludes the report.
In many industries, some countries’ average wait times render patents largely futile. The report points out that in some countries, applicants in some fields must, on average, burn through more than half the length of a patent term while waiting for approval. Although multinational companies and other large businesses may have the resources to sustain momentum over such long waiting periods, individuals and small and medium enterprises lack the resources and time to wait. Long wait.
Within the life-sciences industry, the report found that generally, life sciences pendency averages followed the same trends in high-tech industries (i.e., mobile technologies) and “mature” technologies. The report found that the more efficient countries tend to process these applications in anywhere between two and four years on average, and countries at the other end, such as Thailand and Brazil consistently average well over 10 years in life-science application pendency.