An article lets us infer quite a bit about the complexity of patent practices in legal departments

The Economist, Oct. 2, 2010 at 72, draws on data from the World Intellectual Property Organisation to show that patent applications in 2009 were 450,000 in the United States, 350,000 in Japan, 310,000 in China and 140,000 in Europe (my estimates from a chart). Small wonder that translation costs are so high and that IP-focused legal departments have dozens of foreign patent agents.

The article also mentions that Chinese companies “pay foreign companies more than $10 billion in licensing and royalties annually, and that amount has been growing 20% a year.” Increasingly, IP activity doesn’t stop with obtaining a patent, but continues with licensing arrangements.

On another point, the article notes that American patent filings show a foreign co-inventor on nearly 40% of all applications. This gives a glimpse of the immigration work involved for many high-tech companies as well as the globablization of research and development.

Finally, the Economist says that Japan has the largest number of patents in force (19 million) compared with 14 million for America. It adds that countries where the greatest number of foreign patents are legally based are Barbados, Luxembourg, Liechtenstein and Ireland. Many western companies house their patents in those jurisdictions to reduce the taxes they pay on licensing revenue.

All this information on patents helps understand trends for IP groups in legal departments. The work is hugely international, much involves licensing and royalty agreements, inventors are spread around the globe, and tax planning complicates IP ownership and application decisions.

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