How COVID-19 Affected International Patent Filings

A new study from the Centre for Economic Policy Research tracks the COVID-19 pandemic’s effects on international patent filings and comes up with some surprising results. 

Economic downturns typically take a toll on the innovation economy, which, in turn, tends to result in a decrease in patent application filings. This was certainly the case during the Great Recession of the late 2000s and the dot-com bubble of the early 2000s. A new study from the Centre for Economic Policy Research titled “Resilience and Ingenuity: Global Innovation Responses to COVID-19” tracks the COVID-19 pandemic’s effects on international patent filings and comes up with some surprising results. 

Previous recessions compared 

The study compares the COVID-19 pandemic’s effects on international patent filings with those of two other recent economic recessions — the Great Recession and the dot-com bubble. During the dot-com bubble, the monthly three-month moving average growth in patents filed in the international phase of the Patent Cooperation Treaty fell from about 30% at the beginning of the recession to a low of 0% 12 months later (see Figure 1). During the Great Recession, growth fell from about 4% to a low of -6% 14 months later. The COVID-19 pandemic’s effect on international patent filings was more muted than these previous recessions, however, with international filing growth falling from about 9% in March 2020 to a low of about -2% 21 months later. 

The unique COVID-19 crisis

The study’s authors posit several theories as to why the COVID-19 pandemic has had a milder effect on international patent filings than previous recessions. They point to the nature of the crises themselves — broad financial market turbulence severely curtailed innovation funding during the Great Recession, while the dot-com crisis resulted directly from an overabundance of speculative investment in the innovation economy. The presence of Chinese patent applications, which continued to grow throughout 2020, also helped to slow the decline. With Chinese patent applications removed from the data, the decline in patent applications during the COVID-19 crisis looks similar to the decline during the Great Recession. Further, the authors note that the impact of the COVID-19 crisis varied by sector, with certain sectors showing large increases in patent filings during the pandemic that helped to offset the declines elsewhere. 

Winners and losers

The COVID-19 crisis is widely known for wreaking havoc in some industries (e.g., commercial real estate, tourism, hospitality) while facilitating massive gains in others (e.g, residential real estate, e-commerce, logistics). The same trend can be observed when examining the number of applications filed during the pandemic by sector. Three industry sectors — biotechnology, medical technology, and pharmaceuticals — saw notable spikes in the number of international patent applications filed beginning in Q2 and Q3 of 2020 (see Figure 2A). Other sectors saw commensurate declines over the same era, including audio-visual technology, digital communication, and semiconductors. 

It makes sense that healthcare-related technologies would show a marked increase in patent filings during a global pandemic, but it would be a mistake to jump to conclusions too quickly. The study’s authors point out that, while international patent filings showed large increases in healthcare-related technologies during the pandemic, most PCT applications are based on priority applications that are filed up to 12 months earlier in national patent offices. Thus, the international patent applications responsible for the increase in filings in the healthcare sector in 2020 and early 2021 predate the pandemic. 

Priority filing data paints a more nuanced picture of the pandemic’s effects by sector (see Figure 2B). Other than pharmaceuticals and digital communication, no sector shows a dramatic change in the number of applications being filed pre- and post-pandemic that could reasonably be attributed to the pandemic. However, the study’s authors note that more data is needed for a fuller assessment of the pandemic’s effects on patent filing. 

Bottom line

While data analysis of patent filings during the COVID-19 pandemic is still in its early phases, the study presents two key findings: 

1. The COVID-19 pandemic prompted a temporary downturn in patenting activity, but that downturn was shallower than past economic crises.
2. There is evidence that the COVID-19 pandemic may have caused an uptick in patent filings in healthcare-related technologies. 

As the COVID-19 pandemic recedes and more patent filing data from the COVID-19 era becomes public, we get ever closer to determining whether the pandemic’s effect on the innovation economy was merely a blip or a sea change. 

If the COVID-19 pandemic taught us anything, it is that the world can change seemingly overnight, and assumptions made one day can be upended the next. To see how Juristat can help you get a bird’s-eye view of the latest trends in the innovation economy, schedule a demo today.