The propensity to patent an innovation in Japan

Abstract: Patents have long been considered an essential intellectual property mechanism in Japan. Foreign firms have simultaneously struggled with obtaining patents and market shares in Japan. Therefore, the incentives for Swedish innovating firms to patent their innovation at the Japanese Patent Office are plenty and can facilitate market integration. This thesis explores the historical development of Swedish innovating firms’ patenting propensity at the Japanese Patent Office and aims to contribute to the debate on the role of patents for Swedish innovating firms if/when they are entering the Japanese market. The thesis utilizes patent-matched innovation data from the SWINNO-database over the period 1970-2015 and applies descriptive statistics, a decomposition analysis, and a logistic regression to examine the patent propensity. The results show that the propensity varies over time and across sectors. The probability of patenting is high in high-technology sectors and low for complex innovations. Two different patent trends are identified. The patenting practices increased during the first trend in the late 1970s and culminated in the early 2000s. The second trend began in 2002 and is characterized by a profound decrease in patent propensity. The results suggest that the incentive to patent an innovation at the Japanese Patent Office has declined since the early 2000s. This has implications for our understanding of the role of patents if/when a Swedish innovating firm is entering the Japanese market.