Norwegian patent application decline: a riposte

Last Thursday, in an apparently innocent post entitled "Stats from Norway", the IPKat published the thoughts of the pseudonymous Norman regarding a sudden decline in the number of Norwegian patent applications.  

Right: "this patent system isn't dead, it's pining for the Norwegian fjords ..."

Today the IPKat received a response to Norman from a fellow Norwegian who was not merely pseudonymous but actually anonymous. He writes:

"As an avid Norwegian reader of your blog, I am somewhat surprised by the coverage of Norway lately. In your latest posting you asked whether anyone could see why the decline has been so large, I would actually have a few educated guesses. Briefly on my background, I have worked with an agency for a number of years before now working at a TTO [the IPKat assumes this stands for 'Technology Transfer Office' and not 'Trondheim Tourist Office' or some such] for the past few months. I evidently don’t have that much industry experience, although I am opinionated.

First, Norway is a marginal market. Thus, given the crisis, it makes sense to exclude the marginal markets first. A full filing in Norway is expensive, full translation needed, expensive agents, high costs all round, thus I would postulate that in times of crisis Norwegian patent applications would not easily be prioritized. This would explain the rapid decline of filings in the latter half of last year.

Secondly, if one looks at the numbers 2007 was actually an exceptional year, possibly having the highest number of filings of any time. A decline from a very high level to a level more or less the same as previous years makes sense in times of crisis.

Thirdly, one of the major contributions to the decline are the “yellow” applications. This is perfectly natural. Instead of filing directly into the Norwegian national phase, the applicant has the possibility to file directly in to the European national phase, less costly, covers more ground, and might actually be a freebie, if you intend to file in Europe. There is a decline of 400 applications in this regard.

In conjunction with a small decline in the national filings, probably due to the crisis, I would consider the total decline perfectly explainable.

Thus instead of trying to explain the decline by assuming that applicants are clueless, I would explain the decline by the applicants being rational. I find this more satisfying.  After all, this isn’t the first time a country has joined the EPO. They have managed the transition in earlier years, so why assume that they can’t now?

As a final point, the redundancies at the offices are one of the natural responses to the major upheavals we are facing in Norway in preparation for a significant proportion of the PCT applications to be filed at the EPO instead of at NIPO. This will evidently greatly influence the patent agent industry, in particular those agencies dependent on the foreign applications. Some have 95 % of their work from these applications, and they will need to adapt or die".

The IPKat sees the correspondent's point, and wonders whether readers from any other 'marginal countries' would like to offer their thoughts and comments.  Merpel says, Norway is the most marginal country in the world: it seems to consist almost entirely of borders and edges.

Three things Norway is famous for here, here and here

Stats from Norway

The IPKat's anonymous Norwegian friend (let's arbitrarily call him Norman), who previously expressed some concern about the unexplained drop in ex-PCT applications in 2008 after Norway joined the EPC, has written again with some more concrete information.  Norman writes (with some clarifying IPKat editing):

"Statistics from the Norwegian Patent Office (their preferred English name is now the "Norwegian Industrial Property Office" - NIPO) is now available in Norwegian. English translation is coming up, however I am happy to provide a quick translation of the essentials regarding patenting.

In the graph below (available here), grey represents PCT applications brought into national phase in Norway, yellow represents national application filed by foreign applicants (utenlanske), and cream represents national application filed by national applicants (innenlandske).

The reason for the relatively large cream fraction is possibly applications relating to offshore industries and fish farming, where it is not worth the cost to bring the application through the PCT process

As can be seen there is a decline. What is not apparent is that the major part of the decline took place in the last few months of 2008. There have already been multiple rounds of redundancies, something I don't think has ever happened in the Norwegian IPR firms before. The entire industry is going through a major reorganisation and this is not painless.

First of all it must be said that for a country where subtlety is on par with Ben Elton going full tilt on a Saturday night live [IPKat comment: younger readers may not recall, but Ben Elton was once a well known stand-up comedian], NIPO is showing remarkable restraint and more than a touch of understatement when stating (translated) ' In 2009 NIPO received 5420 patent applications, a decline of 18.5% compared to 2007. A certain amount of decline was expected due to entering the EPO, however this is larger than calculated. One possible cause is that some foreign applicants have mistakenly believed that international applications (PCT applications) dated prior to 1 January 2008 and filed with EPO for regional phase during 2008 would lead to rights in Norway. This, however, is only possible for applications with international filing date later than 1 January 2008.'

Norwegian text:
I 2008 mottok Patentstyret 5 420 patentsøknader, en nedgang på 18,5 % i forhold til 2007. En viss nedgang i antall søknader var forventet på grunn av EPO-medlemskap, men denne er større enn beregnet. Én sannsynlig årsak er at en del utenlandske søkere feilaktig har trodd at internasjonale patentsøknader (PCT-søknader) datert før 1. januar 2008 og innlevert til EPO for behandling i regional fase i løpet av 2008, også ville kunne føre til rettigheter i Norge. Dette er imidlertid bare mulig for søknader med internasjonal søknadsdato etter 1. januar 2008.

So in summary there is a significant decline in Norway but not in Sweden (see http://www.prv.se/Patent/Statistik/).

Statistics for Denmark are also now available:
   National  ( http://www.dkpto.dk/media/34655/statistik_patent.pdf ) only minimal change,
   International ( http://www.dkpto.dk/media/34658/statistik_international_patent.pdf ) again only minimal change for PCT or for EP."

The IPKat can see Norman's point, and cannot think of any other reason that would explain why the number of national phase applications in Norway fell so rapidly in 2008.  Can anyone else?

A plea from Norway

Norway became a member state of the European Patent Organisation on 1 January 2008. This allowed European applications filed on or after that date to be eventually granted with effect in Norway, thereby avoiding the need to file a separate national application. For PCT applications, the date of filing as far as the EPO is concerned is, however, the date of filing the international application, not the date a request is made to enter the European phase. A concerned Norwegian-based attorney has written to the IPKat to inform him that this fact does not appear to have been properly realised by many applicants.

The concerned attorney (who wishes to remain nameless) has noticed a substantial drop in national phase applications being filed in Norway in 2008, which cannot be adequately explained by the fact that Norway has now joined the EPO, because no PCT applications filed before 1 January 2008 and reaching the national phase deadline in 2008 will have been able to validly designate Norway in a request to enter the European phase.

The concerned attorney calculates that about 3-4000 applications may be lost as a result of this, and is beginning to wonder if applicants are even aware of this situation. An attempt was made to bring this to the attention of applicants via the PCT Newsletter in 2008 (issue 10: see page 11), in an answer to a hypothetical question posed about whether a state that had recently joined the EPO could be designated from a PCT application filed before 1 January 2008. The answer included the following:

"It is important that applicants and their agents be vigilant as to which Contracting States are covered by a regional patent when they enter the national phase, to ensure that they do not make the mistake of presuming that they will be able to obtain a regional patent in a particular State, when they should in fact be taking the necessary steps to enter the national phase in that State directly with the national Office concerned."

The IPKat wonders too whether this is a situation that all those concerned are truly aware of. He cannot imagine that any qualified European patent attorney would not know about which countries a European application designates on filing, for the simple reason that states have been joining the EPO regularly since it was founded. He suspects that the problem may be more related to applicants and attorneys outside Europe, who simply assume that their request to enter the European regional phase will automatically extend to Norway. Their European patent attorney will, the IPKat suspects, usually have no reason to ask whether the applicant intends to include Norway. Is this perhaps a situation where thousands of potential Norwegian patents will simply be lost in the communication gap between Norwegian and European patent attorneys? Do any readers know how this could be fixed?