Technology & Innovation
November 5, 2014

U.S. share of world intellectual property revenue – 39 percent.

By Edward Gresser

THE NUMBERS: 2013 share of worldwide –

Intellectual property revenue U.S. 39.0%
Manufacturing exports China 17.5%
Agricultural exports U.S. & EU** 10.0%
Energy exports Saudi Arabia 9.6%

* Combining the WTO figures for “royalties and license fees” with those for “audiovisual services.”

** U.S. and EU tie at 10.0 percent. This counts the EU as one big country rather than a lot of medium-sized and little ones, so it doesn’t include intra-European trade. If intra-EU trade were counted – Polish hams to the UK, or Dutch cheese to Denmark – the EU share would be 38 percent.

WHAT THEY MEAN:

The WTO’s count of “royalties and license fees,” in International Trade Statistics 2014, differs a bit from the American concept of intellectual property. This is because the WTO’s figures view movies and music as an “audiovisual services” category of trade, rather than as a branch of copyright industry. But combining the WTO’s $310 billion in royalty and license payments with their $19 billion for “audiovisual services,” the total for intellectual property revenues in 2013 comes to $329 billion. Two ways to put this in context:

(1) Worldwide: At $329 billion, royalties, license fees, and audiovisual services account for about 1.5 percent of the WTO’s $22.2 trillion in total flows for 2013. This is about the same as the level of trade in financial services or clothes. By country, American artists, inventors, and other IP holders brought in $128 billion, or about 39 percent of the total. In comparative terms, this is about twice China’s world-leading 17.5 percent of manufacturing exports, and four times the Saudi Arabian share of world energy exports; on the other hand, manufacturing exports were $11.85 trillion and energy $3.3 trillion. The $128 billion for the U.S. is in the following company:

World $329 billion
U.S. $128 billion
European Union* $122 billion
Japan $32 billion
Switzerland $21 billion
Canada $6 billion
Korea $5 billion
Singapore $2 billion
Taiwan $1 billion
China $1 billion
Israel $1 billion
All other $11 billion

* Including payments from one European country to another, as in Dutch payments for British music, Austrians for Swedish design, Belgians for Italian fashion, and so on. If intra-EU trade isn’t counted, EU exports would be $60 billion ($54 billion in royalties & licenses + $6 billion in audiovisual services), and the U.S. share of total revenue would be 48 percent.

(2) In U.S. trade: For the U.S., last year’s $128 billion in royalty and licensing income would be 6 percent of a $2.28 trillion export total. In comparison to other top-tier American exports, income from ideas and inventions would rank a bit below food and agriculture, a bit above financial services, and about equal to automotive-industry exports. A table:

2013 total $2,280 billion
Food & agriculture $162 billion
IP revenues $129 billion
Patents $45 billion
Software $43 billion
Film/TV/Music/Books $17 billion
Trademarks $17 billion
Other* $6 billion
Automotive $125 billion
Finance & Insurance $110 billion
IT goods $108 billion
Aerospace $105 billion

* “Other” includes live musical and sports performances, franchising fees, and miscellaneous others.

Divided more finely, the largest single clump of IP revenue for the U.S. is $45 billion for patent royalties, just above the $43 billion from computer software sales and licenses. Copyright royalties for movie showings, book sales and music downloads brought $17 billion; trademark revenues for Kansas City Royals hats and shirts, Disney princesses, university hoodies and so on an identical $17 billion.

FURTHER READING:

Data –

The WTO’s Trade Statistics 2014, with intellectual property figures in the services page at Table 4.6 for royalties and license fees, and 4.8.1 for audiovisual: http://www.wto.org/english/res_e/statis_e/its2014_e/its14_toc_e.htm

And the Bureau of Economic Analysis’ services-trade report for 2013, with intellectual property data at pp. 13-14 of the “International Services” article: http://www.bea.gov/scb/toc/1014cont.htm

More/context –

How will the figures change in the next decade? In comparison to the WTO’s first stab at IPR revenues (in 2005), the U.S. has dropped a bit, from 42.8 percent then to last year’s 39 percent. The main reasons for this appear to be (a) the enlargement of the EU, which has rapidly increased intra-EU payments (for example from Poland to the UK, or from Italy to the Czech Republic), and (b) rising patenting levels in Asia, which is more of a structural trend likely to continue. The World Intellectual Property Organization’s 2013 report provides some explanation for this:

Patent filings worldwide grew by 9.2% in 2012, representing the fastest growth recorded in the past 18 years. Following a 3.9% decrease in 2009, patent filings worldwide have now rebounded strongly, with accelerating growth rates – 7.6% in 2010, 8.1% in 2011 and 9.2% in 2012. This was mainly due to strong growth in filings at SIPO. The estimated 2.35 million patent filings worldwide in 2012 consisted of 1.51 million filed by residents and 830,000 by non-residents.

WIPO’s count makes the U.S. the center of industrial IP, with 2.24 million out of the world’s 8.66 million patents in force. This is more than a quarter of the world total and slightly ahead of the European Union’s 28 members combined; in aggregate, though, Asia has more patents. The top five are:

Worldwide 8.66 million
U.S. 2.24 million
EU (28) 1.96 million
Japan 1.71 million
China 0.90 million
Korea 0.75 million
All other 1.10 million

Looking a bit ahead, WIPO’s report finds China’s State Intellectual Property Office granting 217,000 patents in 2012, Japan’s Patent Office 274,000, and the USPTO 276,000. Numerical counts from different countries can be misleading – Asian patents may be narrower in scope than those in the U.S. or Europe – but the division of patent grants within the U.S. also shows a rapidly rising Asian share.

As a bit of extra context, the U.S. Patent and Trademark Office reports granting 303,000 patents in 2013. Of this total, 155,000 went to Americans, 48,000 to Europeans, and 91,000 to Asian countries and inventors. (Japan 54,170; Korea 15,745; Taiwan 12,118; China 6,575; India 2,747; ASEAN members 1,240; Hong Kong and Macau 767; 17 to other South Asian countries.) China’s awards are also evenly split between locals and foreigners; Japan’s are mostly to Japanese. All of which is to say, the WTO percentages may look a bit different in 2024.

WIPO’s World Intellectual Property Indicators 2013: http://www.wipo.int/ipstats/en/

And the U.S. PTO’s tabulation of patent awards by country and U.S. state: http://www.uspto.gov/web/offices/ac/ido/oeip/taf/reports_stco.htm