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17.9.2010 Innovation suffers during the downturn

Many brand owners reduced innovation spending as a result of the recession, although companies like Microsoft, L'Oréal and Apple boosted their outlay. The World Intellectual Property Organisation estimatedthe number of patent applications worldwide rose by just 2.6% in 2008, a more modest pace than previous years, to 1.9m. Provisional data covering 80% of global output for 2009 anticipate a 2.7% decrease on an annual basis, which would constitute the first decline since 2002 should it ultimately mirror overall figures. Elsewhere, the amount of applications through the Patent Corporation Treaty – supporting simultaneous international claims – dropped 4.5%, having increased consistently from 1970.
 

Multinational trademark requests started to see expansion rates slow in 2006, and actually contracted by 12.3% in 2009 to 3.3m. "The world economy is recovering from the steepest economic downturn since the Great Depression of the 1930s," said Francis Gurry, WIPO's director general. "In such a situation, companies' strategies and public policies towards innovation and intellectual property rights are central to promoting sustained economic growth and a confident approach to the future." Based on statistics filed with the US Stock Exchange, WIPO reported R&D spending among 2,450 featured organisations fell 1.7% between 2008 and 2009.
 

Pharmaceutical giant Hoffmann-la-Roche provided the most substantial improvement in expenditure, as budgets grew 11.6%. Microsoft, the information technology specialist, generated a 10.4% surge, trailed by electronics firm Samsung on 5.4% and healthcare group Novartis on 3.5%. Automakers delivered the largest declines, with General Motors off 24.5%, Toyota down 19.8%, Honda registering a 17.7% slide and Daimler's budget falling 5.9%. In the FMCG sector, Procter & Gamble's outlay slipped 7.6% and Unilever's costs shrank by 3.9%, although French cosmetics manufacturer L'Oréal posted a 3.7% uptick.
 

Many technology firms slashed their R&D expenses in 2009 according to WIPO, as Pioneer cut back by 34.3%, a total standing at 22.5% for Motorola, 20.4% for HP, 14.8% for Sharp, and 13% for Sony. However, Apple heightened its investment by 20.2%, having scored hits with original gadgets like the iPod, iPhone and iPad. Chinese operator ZTE drove a 44.8% spending improvement and Huawei's new product development funding jumped 27.4%, part of a broader trend in the country. Patent applications by domestic and foreign players in China climbed 18.2% in 2008 and 8.5% in 2009 and trademark requests leapt 20.8%, measured against decreases across the US, Japan and Germany.

B.L. 17.9.2010