Tomorrow marks the release of our fifth annual Patent Intelligence Report, mapping the patent prosecution landscape as well as offering detailed insights into levels of activity and patenting trends. Covering a period of five years from January 1, 2018, to December 31, 2022, the report evaluates 130,458 entities that have applied and received patents in the United States, including both foreign and domestic applicants.

According to our data, 30,777 active patent attorneys and agents filed 2,332,609 applications and secured 1,846,457 patents for their clients. Beyond assessing the activity, efficiency, and performance of all stakeholders such as attorneys, agents, law firms, and patentees, the report also offers several statistics on patent prosecution. One of the highlights in the report is the unequal distribution of issued patents based on entity location, foreign or domestic.

We used Machine Learning (ML) and Natural Language Processing (NLP) techniques to process tens of millions of documents from the USPTO Public PAIR, allowing us to identify the attorney or agent responsible for each patent application. Following consultations with several patent attorneys, this year, we also gathered the names of attorneys who conducted interviews with USPTO examiners, as these attorneys often handle responses to office actions. While interviews are not always mandatory, they indicate that attorneys are working closely with examiners to obtain optimal claims for their clients. This process not only enhances the detection of attorneys by identifying new names in patent prosecution but also improves the ranking methodology for attorney activity, taking into account their presence in the application as well as conducting interviews.

Accounting for nearly half of the patent prosecution activity in the U.S., our Patent Reports have provided detailed insights into the activities of foreign countries. Foreign entities' portion of total patents issued has remained consistent over the past five years, averaging 47.9%, with a rise to 49.2% in 2022, as shown below. This equates to an average of 92 patents granted for every 100 issued to U.S. entities. Analysis of patent grants over a more extended period shows that foreign firms' shares have been steady for the past few decades. However, there was an increase in the percentage of patents granted to foreign entities in 2022.

The recent increase in the share of patents granted to foreign entities, which has led to a narrowing of the gap between patents issued to foreign and domestic entities, requires further investigation. It is important to consider the behavior and strategies of both foreign and domestic entities when attempting to understand this recent uptick in the share of patents granted to foreign entities.

In Patexia 136, we demonstrated how China has climbed to the second spot after Japan in the number of issued patents, particularly over the past several years. As a matter of fact, the Chinese entities have continued their growth by obtaining nearly 20% more patents in 2022 compared to 2021. Overall, the reasons for the foreign trend are multifaceted, and include factors such as global competition, increasing investment in research and development by foreign companies, and the appeal of the US market for innovation and technology. Additionally, the US patent system is regarded as one of the most robust and reliable in the world, offering strong intellectual property protections and legal remedies for infringement. This may further incentivize foreign entities to seek patent protection in the US, leading to a consistently high share of patents issued to foreign entities.

A comprehensive overview of the domestic activity in patent prosecution reveals different trends. The chart below summarizes the annual number of issued patents and published applications in the United States. In 2019, both published applications and issued patents reached a peak, with an increase of 8.90% and 16.35% respectively, from the previous year. However, in the subsequent years, there has been a gradual decline in the numbers, with 2022 recording 185,819 patents issued and 202,287 applications published.

The reduction in the number of patents and published applications can be attributed to various factors, such as changes in patent law, external factors such as the pandemic, and shifts in business strategies. While it's difficult to measure the effects of the pandemic or changes in law, our Patent Intelligence Report includes a full section dedicated to firms and companies that experienced the most significant growth or decline, comparing patents issued in 2022 to those issued in 2021. Among the top declining companies by the number of patents, International Business Machines (IBM) ranked first with 4,237 fewer patents issued in 2022, representing a decline of 47.19%. IBM has been the most active company by the number of issued patents for the past three decades. However, in 2022, they fell to second place with Samsung being the most active. IBM drew attention this year by changing its patent strategy. They moved away from focusing on quantity and record-breaking patent numbers and now prioritize quality and impactful advancements by taking a more selective approach to patenting. Microsoft, Ford, and General Motors were other companies that had significant declines in patents in 2022. Either due to shifts in strategies or other reasons, their share in domestic patents is high, so they have impacted the overall domestic numbers.

Our full Patent Intelligence Report goes further, providing high-level statistics evaluating and analyzing the activity of foreign countries as well as patent types, technology centers, filing and issuance trends, etc. Besides the top 100 rankings of attorneys, law firms and companies throughout the pdf document, the report is accompanied by an excel sheet, containing full rankings of the top 2,000 attorneys, law firms, and companies, with all of their metrics. This year for the first time we have included a section, reviewing the important lateral moves that took place during 2022 and early 2023. This section features attorneys from the top 2,000 most active list who have made a move or established their own firm since the release of our 2022 report.

Stay tuned as in the next weeks we will be publishing more insights related to highlights from this report, as well as begin to cover the best entities from our past Patent Litigation and ITC Section 337 Intelligence Reports.