Despite quality and pendency initiatives, the JPO may continue to see a fall in the applications it receives

The Japan Patent Office (JPO) recently published its annual report for 2014. It reveals which companies and universities dominated in terms of JPO-issued patents last year - while also posing some difficult questions for the agency's pendency and quality goals.

Japanese entities were responsible for the vast majority of applications submitted to the JPO last year, filing a total of 265,959. Foreign applicants made 60,030 filings, with those from the United States leading the way by a huge margin (25,998 applications), followed by Germany (6,615), South Korea (5,682), France (3,452), China (2,531) and Switzerland (2,454).

It is little suprise, then, that a similar story is repeated in terms of patent grants, with the 10 leading recipients of Japanese patents last year all domestic. The tables below list the top 10 corporates and the top 10 universities for JPO grants in 2014.

Top 10 corporate recipients of Japanese patents 2014

Top 10 university recipients of Japanese patents 2014

If anything, this shows that large Japanese companies still have a strong appetite for patents, despite signs in recent years that they are re-evaluating their traditional volume-based approach to patenting in efforts to cut costs, increase efficiency and become more selective in obtaining IP assets that have superior value creation potential.

Regardless of the filing habits of some of the country's biggest corporates, the report underlines that the JPO has been recieving increasingly fewer patent applications in recent years than it did in times gone by. Of the IP5 - the examining agencies of China, Japan, South Korea, the United States, plus the European Patent Office (EPO) - the JPO has seen the most marked decrease in applications over the past few years. It received around 325,989 applications in 2014, down from 348,596 in 2009. Over the same period, all of the other IP5 offices experienced cumulative growth.

This may be something of a concern for the JPO, and not only because it is presumably making substantially less in fee revenue than it did a decade ago. It is no longer one of the world's two biggest patent offices alongside the the USPTO, having been overtaken by China's State IP Office a while back and now has the Korean IP Office (KIPO) hot on its heels. 

Perhaps in response, the Japanese authorities are instituting a number of measures aimed at improving the JPO's service levels. Almost one year ago, the office announced a new policy targeting faster examination of applications and higher quality grants. Moreover, it is also planning a 10% cut in the price of patent registration fees. 

Across the Korea Strait, KIPO is pursuing its own objectives for improving its services, putting the two offices head-to-head in a battle to offer the best to patent applicants in terms of speed and quality. But at both KIPO and the JPO, these considerable improvements will likely have to be achieved without a similarly significant increase in manpower. The USPTO and SIPO have both focused on expanding their examiner corps in recent years, from 4,779 and 2,046 respectively in 2006 to 7,831 and 5,730 in 2012. By 2016, SIPO hopes to have around 16,000 examiners in its employ. By comparison, the number of examiners at the JPO has grown from 1,468 to 1,713 between 2006 and 2012. A reduced workload due to falling patent applications may help; but how that translates smoothly into reduced pendency times and higher quality IP assets remains to be seen.

In any case, the real issue for the JPO may be that a growing number of applicants do not see any real benefit in owning Japanese assets. After all, a patent only becomes truly important if it is infringed and can be successfully enforced. Observers of the Japanese court system, though, will know that there are significant problems for plaintiffs in this regard. Suits are few and far between, but success rates in those that are launched are much lower than in other jurisdictions, while damages awards are comparatively small. What's more, the IP High Court's Samsung v Apple decision last year has also thrown into doubt the ability to obtain an injunction.

Until relatively recently, Japan was the one technologically sophisticated, large and prosperous Asian market. As such, it was an obvious place for patent owners to file. But with the rise of Korea and Taiwan, and now China, as global manufacturing centres and innovation hubs, that is no longer the case. There are now choices to be made; and for foreign, and even some Japanese entities, that do not enjoy unlimited budgets the enforceability climate in Japan may mean that the country is no longer top of the list. There is very little that the JPO, on its own, can do about that.