The United States is Slipping in Triadic Patents

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Many recent studies  have shown that America is no longer winning the global innovation race, as demonstrated by manufacturing-sector decline, lacking public policy measures, poor advanced-sector job growth, faltering support of R&D, and overall  low international rankings. The latest indication of America’s slipping innovation potential is triadic patents. Since 1999, the U.S. has experienced a sharp decline, with 13 percent fewer triadic patents, a product of America’s lethargic approach to fueling innovation.

Triadic patents are patents filed jointly with the United States Patent and Trade Office, the European Patent Office, and the Japanese Patent Office to guarantee intellectual property (IP) protection worldwide. Because they represent inventions with global impact, triadic patent numbers are in many cases a better indicator of invention and innovation than regular patents.

From 1999 to 2011, U.S. triadic patent filings decreased from 32 percent to 29 percent of global triadic patents. When controlling for increases to the U.S. working age population over this time period, the United States produces a full 25 percent fewer triadic patents per person than it did in 1999. This troubling statistic sharply contrasts with the United States’ reputation as a leader in global innovation, especially in the advanced fields where triadic patents are common. While the U.S. was the top filer in 1999, that honor now goes to Japan, with 31 percent of total triadic patents. When weighing by overall population levels, Japan dominates by even more, with 2.5 times more triadic patents per person than the United States. Switzerland’s numbers are also double the United States’ per capita figures, and five other European nations, the Netherlands, Denmark, Finland, Sweden, and Germany, lead the U.S. in per capita terms (according to OECD data).

In fact, the overall global decline in triadic patent families since 1999 can be entirely explained by fewer patents from the United States. While total triadic patents declined by 3 percent over the period, growth of triadic patents outside the U.S. actually grew by 2 percent. This unfortunate turnaround follows a period from 1985 to 1999 when global triadic patents averaged 4.8 percent annual growth. It also runs completely counter to overall trends in patent filings. From 1999-2011, U.S. patent filings more than doubled, although much of this growth was from foreign companies taking out U.S. patents. Many other countries exhibited similar growth, with a total of 85 percent growth in patents among OECD countries. In fact, only 5 percent of U.S. patents end up in triadic patent families, compared to over 30 percent in several European countries (and 49 percent in Belgium).

In contrast to the United States, China’s triadic patent filings increased by over 1,500 percent over the period (albeit from a very small base), now comprising 2.2 percent of global triadic patents. South Korea’s growth has also been impressive, with the country now filing 4 percent of total triadic patents. Considering triadic patents per person, the United States now only narrowly leads South Korea, despite the fact that South Korea does not have a ‘home-field advantage’ by having an office located in their country. South Korea is the world’s fifth most prolific triadic patent filer, behind only France, Germany, the U.S., and Japan.
These trends in triadic patent are consistent with other sources which say that the U.S. is losing its position of dominance in world innovation, as ITIF argues in its book Innovation Economics: The Race for Global Advantage.

If this trend is not reversed, America will continue losing jobs in high value-added, innovation-based industries. Moreover, lower levels of invention make it more likely that the new industries that have yet to be invented, but are sure to change the world we live in, will develop outside the United States. The United States could combat these trends with increased support for both public and private R&D. Furthermore, measures should be taken to help researchers in labs and universities coordinate and collaborate with the private sector to more efficiently bring innovations from raw ideas to commercial products and processes on the global marketplace.

The United States can still recover its position as a global innovation leader. But as triadic patent statistics show, we cannot expect to do that without giving serious support to our researcher, inventors, and entrepreneurs here at home.

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About the author

Adams Nager is an economic research analyst at ITIF. Areas of interest include macroeconomic growth, competitiveness, and tax theory. Prior to ITIF, Adams was a student at Washington University in St. Louis, where he earned a M.A. in Political Economy and Public Policy and a B.A. in Economics and Political Economy.