innovation in services: the role of r&d and r&d policy ... · –sector, looking at...

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Innovation in services: the role of

R&D and R&D policy (INNOSERV)

Second expert meeting

OECD, Paris 20-21 March 2012

Valentine Millot OECD/STI/EAS

Patent and trademark-based indicators

of service innovation

http://upload.wikimedia.org/wikipedia/en/5/5c/Seventh_Framework_Programme_logo.svg

Motivation

• Advantages of IP- based innovation indicators:

– Quantitative indicator

– Exhaustive

– Comparable across time

– Available for all countries

– Publicly available

• Patents extensively used to measure manufacturing and technological innovation. Less appropriate for service innovation, but they can bring some information notably regarding ICT activities

• Trademarks are used in all sectors of activity. Key protection strategy in service firms. But the link with innovation is not straightfoward.

Methodological considerations

• Two possible approaches of service innovation can be adopted:

– Sector, looking at innovation in service firms

– Activity, looking at service innovation across sectors

• In the sector approach, 2 methodologies are possible:

– Concordance between technological classes/classes of products and economic activities

• Patents: Schmoch et al. 2003

• Trademarks: to build

– Matching microdata of IPR and firm-level databases, based on the applicant name

• General issues:

– Cross-country comparison (triadic patents,…)

– Link with innovation

Patenting activity by sector

• Patents from service firms not negligible: in Ireland, Poland and UK, more than 50% of patents come from firms in business service sector

0

25

50

75

100

IRL POL GBR CHE BEL FRA ESP USA NOR AUT SWE DNK CAN CZE NLD PRT DEU ITA ISR JPN FIN CHN

%

Patent applications by sector, 2007-09

Business sector services, excluding real estate

High- and medium-high-technology manufactures Medium-low-technology manufactures

Other sectors

Source: OECD calculations based on the Worldwide Patent Statistical Database, EPO, April 2011; and ORBIS© Database, Bureau van Dijk Electronic Publishing, December 2010; matched using algorithms in the Imalinker system developed for the OECD by IDENER, Seville, 2011.

Note: USPTO and EPO patent applications.

Patenting activity by service sector


Note: USPTO and EPO patent applications. Sample restricted to firms with between 20 and 250 employees

0% 5% 10% 15% 20% 25% 30% 35%

Air transport

Water transport

Insurance and pension funding, except compulsory social security

Land transport; transport via pipelines

Supporting and auxiliary transport activities; activities of travel agencies

Renting of machinery and equipment

Hotels and restaurants

Financial intermediation, except insurance and pension funding

Activities auxiliary to financial intermediation

Sale, maintenance and repair of motor vehicles; retail sale of automotive fuel

Post and telecommunications

Retail trade; repair of personal and household goods

Computer and related activities

Wholesale trade and commission trade

Other business activities

R&D

USPTO and EPO patent applications 2007-09 by service sector (Nace Rev. 1)

Service sector patents by IPC classes



IPC classes of patent applications by service firms, 2000-09

A: Human Necessities

19%

B: Performing Operations, transporting

13%

C: Chemistry, metallurgy

17%

D: Textiles, paper 0% E: Fixed

Constructions 2%

F: Mechanical Engineering,

lighting, heating, weapons, blasting

6%

G: Physics 25%

H: Electricity 18%

Services




IPC classes of patent applications by sector, 2000-09


19%


13%


17%

D: Textiles, paper 0% E: Fixed

Constructions 2%



6%

G: Physics 25%

H: Electricity 18%

Services


25%


18%


14%

D: Textiles, paper 1%

E: Fixed Constructions

3%



6%

G: Physics 17%

H: Electricity 16%

Manufacturing


G06F Electric digital data processing 7.1%

A61K Preparations for medical, dental, or toilet purposes 6.3%

G01N Investigating or analysing materials by determining their chemical or physical properties 3.2%

C12N Micro-organisms or enzymes; compositions thereof 2.9%

G06Q

Data processing systems or methods, specially adapted for administrative, commercial, financial, managerial, supervisory or forecasting purposes; systems or methods specially adapted for administrative, commercial, financial, managerial, supervisory or forecasting purposes, not otherwise provided for

2.7%

H04L Transmission of digital information, e.g. Telegraphic communication 2.6%

A61B Diagnosis; surgery; identification 2.5%

C07D Heterocyclic compounds 2.4%

A61P Specific therapeutic activity of chemical compounds or medicinal preparations 2.4%

H01L Semiconductor devices; electric solid state devices not otherwise provided for 2.0%

C07K Peptides 1.8%

H01R Electrically-conductive connections; structural associations of a plurality of mutually-insulated electrical connecting elements; coupling devices; current collectors

1.6%

H04N Pictorial communication, e.g. television 1.5%

C12Q

Measuring or testing processes involving enzymes or micro-organisms; compositions or test papers therefor; processes of preparing such compositions; condition-responsive control in microbiological or enzymological processes

1.4%

G06K Recognition of data; presentation of data; record carriers;handling record carriers 1.2%

A61M Devices for introducing media into, or onto, the body; devices for transducing bodymedia or for taking media from the body ; devices for producing or ending sleep or stupor

1.2%

G02B Optical elements, systems, or apparatus 1.1%

C07C Acyclic or carbocyclic compounds 1.0%

H01M Process or means, e.g. Batteries, for the direct conversion of chemical energy into electrical energy 1.0%

B60R Vehicles, vehicle fittings, or vehicle parts, not otherwise provided for 0.9%


Top 20 IPC classes in service firms patents, 2000-09


Software and business method patents

Source: OECD Patent Database

Notes: USPTO patent grants and EPO patent applications, by filing date Software patents: IPC class=G06F 3,5,7,9,11,12,13,15, G06K 9,15, K04L 9, based on Graham and Mowery 2003 Business method patents: IPC class=G06Q

0%

2%

4%

6%

8%

10%

12%

14%

19

81

19

82

19

83

19

84

19

85

19

86

19

87

19

88

19

89

19

90

19

91

19

92

19

93

19

94

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

20

06

20

07

20

08

20

09

Share of software and business method patents at EPO and USPTO

Business methods - EPO Software-EPO Business methods - USPTO Software-USPTO

Software patents



0 0.1 0.2 0.3 0.4

Other

Manufacture of other non-metallic mineral products


Supporting and auxiliary transport activities; travel agencies

Financial intermediation, except insurance and pension …

Sale and repair of motor vehicles; retail sale of automotive fuel

Manufacture of fabricated metal products

Publishing, printing and reproduction of recorded media

Manufacture of motor vehicles, trailers and semi-trailers

Manufacture of furniture; manufacturing n.e.c.

Manufacture of chemicals and chemical products



Manufacture of machinery and equipment n.e.c.


Manufacture of electrical machinery and apparatus n.e.c.

Manufacture of medical, precision and optical instruments



Research and development

Manufacture of office machinery and computers


Manufacture of radio, television


Share of software patent by applicant sector (Nace Rev. 1)

Business method patents



0 0.1 0.2 0.3 0.4

Other

Manufacture of fabricated metal products

Manufacture of basic metals

Sale and repair of motor vehicles; retail sale of automotive fuel


Manufacture of electrical machinery and apparatus n.e.c.

Manufacture of food products and beverages

Manufacture of furniture; manufacturing n.e.c.

Supporting and auxiliary transport activities; travel agencies

Manufacture of chemicals and chemical products

Manufacture of pulp, paper and paper products

Publishing, printing and reproduction of recorded media

Insurance and pension funding


Manufacture of office machinery and computers

Manufacture of machinery and equipment n.e.c.

Financial intermediation, except insurance and pension funding

Manufacture of radio, television


Manufacture of medical, precision and optical instruments







Share of business method patents by applicant sector (Nace Rev. 1)

Software and business method patents



Manufacturing 36%

Services 64%

Software

Manufacturing 14%

Services 86%

Business methods

Share of software/business method patents by sector of applicant

Patents and other IPRs in services

0%

5%

10%

15%

20%

25%

30%

Share of service firms with technological innovation using IPR (product, process, ongoing or abandoned)

Applied for a patent Registered an industrial design Registered a trademark Claimed copyright

Source: CIS 2006 (Eurostat Database)

Trademarks • What is a trademark?

“Any sign, or any combination of signs, capable of distinguishing the goods or services of one undertaking from those of other undertakings, shall be capable of constituting a trademark” (TRIPs Art. 15)

• Key reputational asset for firms: basis for advertising

• May be used to appropriate the benefits of innovation (Davis 2006)

• Various papers in the empirical literature finding a positive correlation between trademarks and other innovation indicators at the firm-level (Mendonça et al. 2004, Schmoch 2003, Malmberg 2005)

• Especially important in services where innovation is often non-technological and non-patentable

• Issues (both conceptual and methodological):

– Link with innovation

– Cross country comparisons

– Nice Classifications not equivalent to classification of economic activities

What types of firms do file TM?

• BIG

• OLD

• TECHNOLOGY/KNOWLEDGE- INTENSIVE

Source: OECD calculations based on ORBIS© 2006 matched with INPI/OHIM trademark data

0%

20%

40%

60%

Proportion of trademarking firms by number of employees

0%

1%

2%

3%

4%

0/2 3/5 6/10 11/15 16/20 21/25 26/30 31/35 36/40 >40

Proportion of trademarking firms by age

0%

1%

2%

3%

4%

High-tech manufacturing

Low-tech manufacturing

Knowledge Intensive Services

Less Knowledge Intensive Services

Proportion of trademarking firms by group of sectors

0% 5% 10% 15% 20%

Food, beverages, tobacco

Textile

Wearing apparel,fur,leather

Wood products and cork

Pulp, paper

Publishing, printing

Coke, refined petrol. pdcts, nuclear

Plastic & non metallic mineral pdcts

Basic metals

Fab. metal prdts

Oth.transport equipment

Furniture; manufacturing n.e.c, recycling

Construction

Cosmetics

Chemical pdcts, except perfumes

Machinery and equipment n.e.c.

Office machinery and computers

Electrical machinery and apparatus

Radio, tv, communication equip.

Medical, precision & optical inst.

Motor vehicles, trailers


Financial intermed.

Insurance

Renting of mach. & oth. goods




Electricity, gas, steam,water supply

Wholesale & retail trade, repair of goods


Transport

Real estate activities

Low

Tec

h M

anu

fact

uri

ng

Hig

h T

ech

Man

ufa

ctu

rin

g K

no

wle

dge

-in

ten

sive

Se

rvic

es

Oth

er S

ervi

ces

Trademarks only

Patents only

Trademarks and patents

Source: OECD calculations based on ORBIS© 2006 matched with INPI/OHIM trademark data

Proportion of trademarking firms by sector (agregation based on Nace Rev.2), 2006

What types of firms do file TM?

0%

5%

10%

15%

20%

25%

30%

35%

TM PAT TM PAT TM PAT TM PAT TM PAT

All firms High Tech Low Tech KIS - except R&D Less KIS

Product innovating firms

Not product innovating firms

TM and product innovation

Share of firms filing TM applications according to product innovation success

Source: OECD calculations based on CIS 2008 results matched with ORBIS© 2006 and INPI/OHIM trademark data

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

Trademarks Patents Trademarks Patents Trademarks Patents

Marketing Design Sales method

Firms innovating in marketing

Firms not innovating in marketing

Firms filing TMs, by marketing innovators

Share of firms filing TM applications according to marketing innovation success

Source: OECD calculations based on CIS 2008 results matched with ORBIS© 2006 and INPI/OHIM trademark data

TM and innovation types

EU France

CTM_nb CTM_dummy TM_nb TM_dummy

Innoproduct 2.048***

(3.89)

1.891***

(4.61)

1.203

(1.33)

1.153*

(2.52)

Innoprocess 0.801

(-1.15)

0.721**

(-3.22)

0.884

(-0.86)

0.933

(-1.40)

Innomkting 1.335

(1.44)

1.308**

(2.78)

1.547**

(3.10)

1.286***

(5.37)

Lsales 1.283***

(4.36)

1.085**

(2.58)

1.376***

(9.55)

1.067***

(4.86)

Lage 0.983

(-0.17)

0.987

(-0.20)

1.225***

(2.70)

1.019

(0.62)

EpPAT_period 1.549*

(2.40)

1.174

(1.50)

CTM_previous_use 58.68***

(19.11)

39.25***

(19.45)

High_Tech 0.739

(-1.65)

0.811*

(-2.15)

1.071

(0.58)

0.947

(-1.22)

KIS 0.337*

(-2.55)

0.641*

(-2.15)

0.599

(-1.63)

0.825

(-1.03)

LessKIS 0.789

(-0.54)

0.863

(-0.50)

1.352

(0.86)

0.852

(-0.93)

natPAT_period 1.315*

(2.25)

1.170***

(3.25)

natTM_previous_use 29.84***

(23.90)

14.30***

(26.77)

N 4136 4136 4136 4136

Pseudo R-square 0.613 0.452 0.533 0.319

Exponentiated coefficients ; t-statisitics in parenthesis ; *p<0.05, **p<0.01, ***p<0.001

Robust Poisson / Probit estimates Dependent variable: number of / dummy for TMs applied for 2002-2004

Cross country comparison

Trademark applications at JPO, OHIM and USPTO, ratio to GDP, 2007-09 average

GDP in billions of USD PPP, OECD and BRIICS countries

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00

USPTO OHIM JPO

Magnified23.9

Trademarks over GDP in billions USD

0.0

0.5

1.0

1.5

2.0

17.2

Source: OECD, STI Scoreboard 2011, based on US Patent and Trademark Office (2011), "The USPTO Trademark Casefile Dataset (1884-2010)"; OHIM Community Trademark Database; CTM Download, April 2011; JPO Annual reports 2008-2010; OECD, National Accounts Database, June 2011; IMF, World Economic Outlook Database, June 2011.

• Home bias in trademark applications:

Cross country comparison

• Trademarks abroad: estimate the level of TM activity based on three offices (USPTO, OHIM, JPO). Enable cross-country comparison

Patents and trademarks per capita, 2007-09 Average number per million population, OECD and G20 countries

Source: OECD, STI Scoreboard 2011, based on OECD, Patent Database, May 2011; US Patent & Trademark Office (2011), "The USPTO Trademark Casefile Dataset (1884-2010)"; OHIM Community Trademark Database; CTM Download, April 2011; JPO Annual reports 2008-2010.

BRA

BRIICS

CAN

CHE

CHL

CHN

DEU

ESP

EU27

FINFRA

GBR

IND

ISR

ITA

JPNKOR

MEX

NLD

NOR

OECD

POL

RUS

SWEUSA

0

1

10

100

0 1 10 100

Triadic patent families per capita

Trademarks abroad per capita

500

500Axes in logarithmic scale

0%

2%

4%

6%

8%

10%

12%

14%

1

3

5

7

9

11

13

15

17

19

21

23

25

27

29

31

33

36

38

40

42

44

Applications by designated classes of products, 2007

USPTO

OHIM

JPO

Services Goods

Classes of products

Source: OHIM and JPO annual reports, WIPO data for USPTO

Service trademarks

Source: US Patent and Trademark Office (2011), "The USPTO Trademark Casefile Dataset (1884-2010)"; OHIM Community Trademark Database; CTM Download, April 2011.

Service-related trademarks applications at USPTO and OHIM, OECD and BRIICS, 1997-99 and 2007-09

As a percentage of total trademark filings at OHIM and USPTO

0

5

10

15

20

25

30

35

40

45

50

2007-09 1997-1999%

KIS trademarks

0

10

20

30

40

50

60

70

Business Finance Telecommunications R&D%

Trademarks in knowledge-intensive services, OECD and BRIICS, 2007-09

Source: US Patent and Trademark Office (2011), "The USPTO Trademark Casefile Dataset (1884-2010)"; OHIM Community Trademark Database; CTM Download, April 2011.

Conclusions

• IPR data constitute a quantitative, exhaustive, publicly available source of information on innovative activity in general and on service innvoation in particular

• Service innovation can be analysed at the sector level but also across sectors based on the IPR-related classifications (IPC, Nice classification of products)

• The patent picture is only partial, but they can bring information on software and business methods inventions.

• The trademark picture is broader, but the link with innovation is not straightfoward. Further understanding and evidence of this link are necessary.

• Challenges & next steps:

– Matching IPR microdata with firm-level databases

– Country coverage: acquire national trademark data (to improve cross country comparisons, to extend the matching exercise)

– Concordance between Nice classification of products and sector activities

– Other types of IPR could be envisaged

innovation in services: the role of r&d and r&d policy ... · –sector, looking at...

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