Asia Pacific IP Scorecard 2009 – A Research Project Sponsored by the IP Academy (Singapore)

NUS Entrepreneurship Centre

Asia Pacific IP Scorecard 2009:

Benchmarking IP Creation in the Asia Pacific Economies

A synopsis of Key Findings

by:

Prof. Wong Poh Kam & Ho Yuen Ping

NUS Entrepreneurship Centre

1. Introduction

1.1 In 2006, the IP Academy of Singapore sponsored the NUS Entrepreneurship

Centre to conduct a study to generate the inaugural Asia Pacific IP Scorecard
2004, which aimed to use data on Asia Pacific-invented patents1 granted by
the US Patents and Trademark Office (USPTO) to produce a set of indicators
to benchmark and track annually the pattern of IP creation among 13 major
Asia-Pacific economies.

1.2 With the continuing sponsorship of the IP Academy, the NUS

Entrepreneurship Centre has updated and improved the IP Scorecard to
2009, providing a comprehensive picture of the rapid changes that have
occurred over the last 5 years in the patent landscape of Asia. This brief
synopsis highlights some of the salient findings from the new ScoreCard.

2. Patenting Output in the Asia Pacific

2.1 The number of patents invented in the Asia Pacific economies has risen
considerably since the mid 1990s, particularly in the East Asian economies
outside Japan. In 1995, patents from the Asia Pacific region ex-Japan
accounted for only 4% (23% if Japan is included) of total patents granted by
the USPTO. This share increased to in 9.4% in 2005 (29.9% including Japan)
and by the end of 2009, it has risen further to 13.3% (33.4% including Japan).

2.2 There is still very wide divergence in patenting intensity across the region:

o Japan and Taiwan produce over 300 patents for every million persons
in their populations

1
A patent is attributed to an Asia Pacific economy if at least one of the patent’s inventors is resident in
that economy.
Asia Pacific IP Scorecard 2009 – A Research Project Sponsored by the IP Academy (Singapore)

o The comparable figures for India and the ASEAN economies show
fewer than 1 patent invented per million population.

2.3 In terms of absolute number of patents, Singapore ranked 7th in the Asia
Pacific in 2009, up from its 8th ranking in 2005. Singapore contributes 622
patents or 0.32% of total USPTO patents in 2009, up from 466 patents
granted to Singapore inventors in 2005.

2.4 Patenting intensity (patents produced per capita population) in Singapore has
also increased since 2005. In 2009, Singapore ranked 4th in the Asia Pacific
with 134 patents per million population, up from 105 patents per million
population in 2005 (when Singapore ranked 3rd).

2.5 In the last 5 years, 2005-09, Singapore-invented patents grew at 8% annually,

up from 6.7% growth in the previous five year period, 2001-05. This is faster
than the average global growth rate of 5.6% growth. While this is lower than
the growth rates registered in China, India and the ASEAN economies, these
economies begin from relatively small bases. Singapore’s growth rate of 8%
is comparable to two other economies with similarly high patenting intensities,
Taiwan (8.5% growth) and Japan (5.3%).

2.6 Among the Asia Pacific economies, China is the fastest-growing patents
producer. In 2009, China contributed 3108 patents, or 1.6% of total patents
(ranking 4th in the Asia Pacific), compared to only 0.6% in 2005 (ranking 5th).
Between 2005 and 2009, China’s patents output grew at 36% per annum,
ranking 1st in the region in terms of rate of growth. This is also reflected in
China’s patenting intensity increasing over threefold from 0.7 patents per
million population in 2005 to 2.3 patents per million population in 2009.

2.7 India has also experienced significant growth in patenting output, with its
share of total patents rising to 0.51% in 2009, from 0.33% in 2005. India-
invented patents grew at 18% annually in the last five years.

2.8 South Korea achieved very strong growth rates in patent production in the last
five years, at 21% per annum (ranking 2nd in terms of growth rates). This
corresponded with South Korea’s patenting intensity more than doubling
between 2005 (97 patents per million population, ranking 4th) and 2009 (202
patents per million population, ranking 3rd)

3. Quality of Patents in the Asia Pacific economies

3.1 The propensity of a patent to be cited by other patents as prior art is one
possible indicator of the quality of the patent. A simple citation-based
measure of the quality of a nation’s patent output is the average number of
times the nation’s patents is cited by other patents as prior art.

o Singapore leads other economies in the Asia Pacific with the highest
average number of citations received for patents invented in the last
10 years. This maintains Singapore’s number 1 ranking from 2005.
Detailed analysis reveals that Singapore’s patents in two technological
classes, Electronics and ICT, are among the most highly cited in the
region.
Asia Pacific IP Scorecard 2009 – A Research Project Sponsored by the IP Academy (Singapore)

o India has registered the most significant improvement in ranking on

this measure of patent quality. From a ranking of 11th in 2005, India
patents are now ranked 3rd in the Asia Pacific. The improvement in
India’s patent quality is due to increased concentration on ICT related
patents in India’s recent patent production, and the presence of highly-
cited ICT patents in India’s patents portfolio.

3.2 The Relative Citation Index (RCI) measures the relative patent quality among
Asia Pacific economies. It is computed by comparing the share of patents
citations received by each economy relative to its share of total world patent
output2.

o On this measure, Singapore is ranked first in the Asia Pacific in 2009,

a position which was also held by Singapore in 2005.

o India’s ranking on the RCI has improved from 8th in 2005 to 3rd in
2009.

o On the other hand, China’s ranking on the RCI has dropped from 7th in
2005 to 10th in 2009. The drop in China’s ranking is attributed to a
large increase in the number of patents granted, and the changing
composition of its patenting activities, shifting to fields such as ICT.

4. Scientific Content of Patents

4.1 The scientific content of patents is an indication of the extent to which

inventions embody basic science or basic R&D. It is believed that patents with
high scientific content are more cutting-edge and will have farther reaching
and longer term influence on technological development.

4.2 The Bibliographic Citations Ratio is a measure of the scientific content of the
“typical” patent produced in an economy.

o Singapore invented patents in the last 4 years, 2006-09, have a BCR

value of 11.8% (ranking 3rd in the region), an increase from 8.7% in
the previous 4-year period 2001-2005 (Singapore ranked 4th) .

o Generally, scientific content of the typical patent invented in the Asia

Pacific has increased since 2005 (8% in 2001-05 vs 8.8% in 2006-
2009). However, the region still lags the global average, although the
gap is closing. This finding suggests that Asia Pacific patents may be
orienteering towards more science-based emerging technology fields
that are expected to grown in importance in the future.

4.3 Another measure of Scientific Content is the Share of Science Based Patents.
This measures the proportion of patents that have BCR values above 50%.
Such patents are regarded as relying heavily on scientific knowledge (ie.
scientific sources of knowledge account for over 50% of the prior art cited by

2
The forward citations are truncated at the year of reporting. RCI values for 2005 are obtained for
patents invented over a 10 year period 1996-2005, receiving citations from patents invented up to 2005.
RCI values for 2009 are obtained for patents invented over a 10 year period 2000-2009, receiving
citations from patents invented up to 2009.
Asia Pacific IP Scorecard 2009 – A Research Project Sponsored by the IP Academy (Singapore)

the patent). Economies with high Share of Science Based Patents are seen
as having systems that translate investments in R&D to commercially viable
technologies, embodied in IP assets such as patents.

o On this measure, Singapore ranked 4th in 2009, with 6.8% of its

recently granted patents being science-based. This is an improvement
over its 6th place ranking in 2005, with 4.1% of patents being science-
based.

5. Technology Composition of Asia Pacific patent portfolios

5.1. Generally, patents invented in the East Asian NIEs have become more
technologically specialized over the years (ie. larger proportions of patents
being concentrated in a small number of technological areas.)

o The region overall is producing a much larger share of patents in the

ICT (Computer & Communications) area compared to 10 years ago
(19% of patents in the 1990s were in ICT vs 29% of patents produced
in 2006-09).

5.2. Singapore has among the most technologically specialized patents portfolios
in the region:

o Very high concentration in the Electronics area (accounts for 50% of

patents invented in Singapore in 2006-09) and the ICT area (25% of
patents invented in Singapore in 2006-2009).

o In the last few years, there has been a slight redistribution of patenting
towards the Drugs & Medical area (now constitutes 5% of patents, up
from 2% for the period 2001-05)

5.3. In China, more than one third of patents are in the Electronics & Electrical
field. However, in the last 4 years 2006-09, there has been a significant shift
towards the field of Computers & Communications (now contributes 24% of
Chinese patents, compared to only 12% in 2001-05).

5.4. The technological composition of Indian patents has undergone the most
dramatic change over the last few years. This may account for the
improvement in India’s ranking on quality indicators. There has been a large
shift away from Drugs and Medical patents (27% of patents in 2001-05 vs
12% in 2006-09) towards the Computers & Communications area (rising from
19% share in 2001-05 to a massive 43% share in 2006-09).

6. Ownership of Asia Pacific Patents

6.1 Across the Asia Pacific economies as a whole, domestic ownership of locally
invented patents has increased over the years. This indicates that indigenous
organizations are controlling a larger share of the inventions emerging from
the region.

6.2 However, with the exception of the East Asian economies of Japan, Korea
and Taiwan, the majority of patents invented in Asia Pacific economies are
assigned to foreign entities or individuals.
Asia Pacific IP Scorecard 2009 – A Research Project Sponsored by the IP Academy (Singapore)

o In the case of Singapore, domestic ownership of patents increased

substantially in the mid 1990s (when indigenous entities owned for
25% of patents) and has since stabilized at around of 45% of locally
invented patents. This reflects the continued significance of MNCs in
the inventive activities of Singapore

o Domestic ownership of China’s patents has risen from 27% in 2001-05

to 36% in 2006-09. The surge in patenting activities in China may
therefore be attributed in part to this great jump in patenting by
indigenous Chinese firms and organizations

6.3 Although foreign entities maintain their importance in Singapore’s innovation

landscape, the pattern of institutional ownership of Singapore patents
indicates an increase in indigenous capabilities for producing IP in recent
years:

o Prior to 2006, US firms dominated the list of top patent assignees of

Singapore invented patents

o In the last 3 years, three of the top five patent assignees in Singapore
are local organizations (A*STAR, Chartered Semiconductor and
Creative Technologies). Additionally, this recent period saw the
emergence of Stats Chippac, a Singapore headquartered company,
as a prolific local patenting organization.

o For the period 2007-2009, A*STAR emerged as the leading patenting

organization in Singapore, overtaking Chartered Semiconductor which
has held the top position since the mid 1990s. The growing
importance of A*STAR suggests that local public R&D activities are
being realized as IP assets and technologies with potential
commercial applications.

7. Overall Observations

7.1 The contribution of Asia Pacific economies to world patenting has increased
in significance.

7.2 However, this expansion of innovative activities has been highly uneven
across the economies in the region. There is still very wide divergence in
patenting propensity, with the East Asian economies leading the way while
the ASEAN economies lag behind.

7.3 A significant trend in the last few years is the large surge of patenting activity
in China

o This is attributable to a great jump in patenting by indigenous Chinese

firms and organizations, as well as a sharp increase in foreign firms
conducting R&D in China

o While India has also experienced substantial growth in patenting

output, its growth trajectory is overshadowed by China
Asia Pacific IP Scorecard 2009 – A Research Project Sponsored by the IP Academy (Singapore)

7.4 The quality of patents invented in the Asia Pacific (as measured by forward
citations) varies considerably across the different economies.

o Singapore’s patents are of the highest quality in the region, a position

maintained since 2005

o India has improved substantially in its ranking on quality-related

indicators. This may be attributed to the increased concentration of
Indian patents in the ICT area and the presence of high-cited ICT
patents in India’s patent portfolio.

7.5 The scientific content of Asia Pacific patents is on the rise. This suggests that
patents in this region are orienteering towards emerging technological areas.

7.6 The pattern of institutional ownership of Singapore patents has changed in

the last 3 years.

o Three of the top 5 patent assignees in 2007-09 are local

organizations, vs one in 2000-2006.

o Emergence of A*STAR as the top producer of Singapore invented

patents in last 3 years (ranked 6th in terms of total portfolio of
Singapore invented patents). NUS has also emerged as among the
top patenting organizations in Singapore.

o Findings suggest that there is increasing technological capabilities

among the major innovating organizations in Singapore.

7.7 Singapore has generally maintained its position among the top patent
producing economies in the Asia Pacific IP Scorecard:

o 4th in the region in terms of patenting intensity

o 1st in terms of quality of patents relative to output

o 3rd in terms of scientific content of patents