Comment: Patent data shows growth in UK-based innovation activity

The Patent Index Report 2022, published by the European Patent Office (EPO) on March 28^th, 2023 shows that UK-based innovators filed 5,697 European patent applications last year, up 1.9 per cent on the previous year. This increase follows two years of decline, when European patent applications originating in the UK fell by -1.9 per cent per cent in 2021 and  -7 per cent  in 2021.

Globally, the volume of patent applications made to the EPO has never been greater. The data shows that a record-breaking volume of European patent applications were filed in 2022 - 193,460 in total, which is 2.5 per cent up on the previous year.

For the UK, this indication that innovation activity is growing again is good news for the UK economy. It suggests that following the deceleration in patent-filing activity seen during the pandemic, domestic innovators are back in the driving seat and pressing head with their R&D programmes.  

MORE FROM POLICY & BUSINESS

While we expected to see an increase in European patent filings originating in the UK this time, the 1.9 per cent increase is slightly stronger than expected bearing in mind the challenging conditions that many businesses are facing with high inflation and rising interest rates, which have added to cost of borrowing.

With so much innovation activity happening domestically in diverse areas like composite materials, digital technologies, clean energy, MedTech and drug development, the outlook for Britain as a global R&D hub is positive. The UK government’s plan to turn the UK into the next Silicon Valley is also very promising. However, more concrete incentives and support are needed for research programmes at every stage, from the earliest, seed-funded R&D activity, which typically spins out of UK universities, through to cross-border research initiatives.

The increase in European patent filing activity originating in the UK is mirrored in some European countries, such as France (+1.9 per cent), Switzerland (+5.9 per cent) and the Netherlands (+3.5 per cent), but it is by no means evident everywhere. For example, the volume of European patents filed at the EPO by innovators based in Germany fell by 4.7 per cent in 2022, largely due to declines in areas such as transport (including automotive), electrical machinery/apparatus/energy and organic fine chemistry. Innovators based in Italy also filed 1.1 per cent fewer European patent applications last year.

When we consider the volume of European patent applications that originated in the UK on a per capita basis, it is clear that there is considerable room for improvement. With a population of around 67 million in the UK, domestic innovators are only filing 84 European patent applications per million inhabitants, which is far fewer than most other developed nations in Europe and beyond. Switzerland, at number one spot here, achieves over 1000 patent filings at the EPO per million population whereas the UK languishes in 17^th position.

While the UK has a strong track record in sponsoring innovation activity and leading research programmes, many SMEs lack the resources and funding to prioritise intellectual property advice. Unlike in the US (still the top filer at the EPO), where the value of entrepreneurial support and IP protection are widely understood, there are cultural blocks in some fields of tech that can lead to a lack of commercial rights ownership. Without greater prioritisation of IP, the full economic potential of UK-based research activity could be lost.

Unilever was the top UK filer, filing 486 patent applications at the EPO in 2022. British American Tobacco was in second place, filing 287 patent applications from the UK. Other top UK filers included Linde (201 filings), Rolls-Royce (197 filings), BAE Systems (188 filings), British Telecommunications (125 filings) and Glaxo Smith Kline (98 filings).

From a global perspective, the growth in patent filings made to the EPO in 2022 is further indication of post-pandemic recovery. Much of the growth was fuelled by filings from China (+15.1 per cent), which have more than doubled in the past five years, as well as the US (+2.9 per cent) and the Republic of Korea (+10 per cent).

China continues to go from strength to strength as an innovation leader for the rest of the world to follow, and the Chinese government’s focus on IP is key to the country’s success. By showing the rest of the world that it respects IP rights, China has reinvented itself as a global R&D hub that can industrialise its ideas quickly.

Karl Barnfather, partner and patent attorney at Withers & Rogers.