Patent Trends in Europe

May 2021

Patent Trends in Europe

The last year has seen some extraordinary events in Europe and worldwide as businesses struggled to adapt to new working pressures. However despite the considerable disruption caused by the pandemic, patent activity at the EPO has remained extremely strong. Indeed the number of patent applications in Europe last year was almost unchanged from 2019 – with only a 0.7% reduction.

Irish companies performed particularly well – filing more European patent applications than ever before with a huge 10 % increase on the previous year. And this is not a one-off event somehow triggered by the coronavirus situation. Rather it is a continuation of a stable trend with successive increases in patenting activity in Ireland over the last decade. The number of patent filings from Ireland has increased by almost 50% compared to the levels of 2011. This improvement is not shared across all countries. Some of the traditional powerhouses of patenting in Europe, such as Germany and Netherlands, experienced a reduction in patent filings last year.

Ireland still has plenty of scope for improvement. Despite these encouraging developments over the last decade, Irish companies are only 11th highest in EU in terms of the number of patent filings. Steps have been taken over the last 20 years to enhance the awareness and importance of intellectual property rights in Ireland. At the government level tax incentives are available in the form of R&D tax credits and the Knowledge Development Box. Venture capital is also available from a variety of sources both private funds and from Enterprise Ireland, and Knowledge Transfer Ireland has a central repository of resources and advice for university Technology Transfer Offices. Yet Ireland is still lagging behind other countries - even taking into account the relatively small size of the economy, Ireland has only the 8th highest patent activity per size of population in EU.

The EPO report also tells us more about the most active fields of technology. The top area is Medical Technology with a massive 14,000+ new patent filings last year. In the light of the extreme medical emergency worldwide, it is not surprising that there was an increase in patenting in the healthcare sector. Research and development (R&D) teams at companies such as Johnson & Johnson, Medtronic, Boston Scientific, and Edwards Lifesciences, were busy protecting their new medical inventions in Europe. All of these companies have a presence in Ireland which has a long history of patenting MedTech innovations. The level of patent activity is an indication that investment in R&D remains strong for new medical devices, prosthetic implants, and diagnostic equipment.

Other areas of technology that also increased patenting activity last year were Digital Communication and Computer Technology. Companies such as Ericsson and Qualcomm ensured that over 27, 000 patent applications were filed at the EPO to protect inventions in major technologies, such as the Fourth Industrial Revolution, 5G communication, and artificial intelligence (AI). We have all seen how video conference calls have been crucial to smoothing the transition to working from home during the pandemic. The technology infrastructure behind these tools is a substantial scientific achievement – from the audio codecs, to the communication transceivers, to the smartphone display, and there are multiple patents underpinning these innovations. The next years will see even further advances relating to the Internet of Things revolution with AI systems playing a key role in analysing and making sense of the vast quantities of data produced by sensors in everything from driverless cars to domestic appliances. Ireland is already home to many of the world’s leading companies in Digital Communication and Computer Technology, with Huawei, Google, and Apple having significant presence. The top two Irish companies filing patent applications last year are both highly focussed on AI inventions.

Other technologies are at an earlier stage of development. One of the most exciting is quantum computing which still has only a few practical applications working today. Nevertheless researchers are busy exploring new innovations in this field and are already filing patent applications to protect their work.

To protect inventions in Digital Communication and Computer Technology it is vital to highlight the technical character of the invention. The EPO practice in these areas of technology is to adopt a stringent approach when examining whether to allow a patent application proceed to the stage of grant. The patent specification must explain how the invention address an existing problem related to the technology and solves this problem by means of a technical effect. An example of a technical advance would be an improved feature of a telecommunications network to enable greater bandwidth for transmission of data. The EPO will effectively disregard non-technical features – such as business steps or accounting ideas or financial practices. Expert consideration is required when preparing patent applications and during the examination process at the EPO to successfully protect these innovations. It is false to say that software patents are not allowed in Europe. Each year thousands of patents are filed and granted by the EPO which involve software at some level. The key is to carefully explain the invention in terms of an advance in the technology to convince the EPO that a patent should be granted.

But it not only large companies that are concerned with patenting. Over 25% of patent filings in Europe come from SMEs, spin-out enterprises, and universities. Trinity College, NUI Galway, and UCD were all in the top 10 of Irish patent filers last year. For many start-ups, it is essential to establish a partnership with a larger company to fund clinical trials, to expand a manufacturing facility, or to distribute the final product. Protecting new ideas and research with patents can be a key tool to attract the required investment. Most early stage SMEs will have few if any assets other than their new innovation. Patent protection will be crucial to create a real asset to advance negotiations with a potential partner.

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