The remarkable growth in filings for EU trade marks and designs by Chinese applicants may have come to prominence during 2020 – especially following the onset of the COVID 19 pandemic – but this story starts much earlier.
The latest China Focus Report was initially compiled to look at the exponential growth in interest by Chinese applicants over the decade from 2010 to 2019, but the EUIPO felt that the picture would not be complete without bringing it up to date, and including the consequences during 2020 of this unprecedented upheaval.
However, the global COVID 19 pandemic is currently impacting and disrupting human societies, provoking health and economic crises in major economies and developing countries. Several of the ‘Top 10’ countries, in terms of EUTM and RCD filings, are amongst the hardest hit. Therefore, the EUIPO feels that the picture would not be complete without an update on the impact this unprecedented upheaval is having on the filings for EU IP rights.
This analysis focuses specifically on the preponderant influence of demand from China on overall application volumes for both EUTMs and Direct RCDs since the pandemic began to spread globally, that is, during the first few months of 2020. This general expansion can clearly be seen in the notable increase in the Chinese share of overall EUTM filings (from 9.5 % in 2019 to 16.2 % in 2020) and Direct RCD filings (from 14.3 % in 2019 to 19.1 % in 2020).
The predominance of technology-based enterprises, such as Huawei, in the Top 10 ranking of EUTM applicants from China is echoed in the distribution of the Top 10 Chinese EUTM classes filed for, with Class 9 (electrical apparatus; computers) accounting for 20 % of all Chinese EUTM class filings from 2010 to 2019.
The most relevant fluctuation in Chinese EUTM class filings for 2020 concerns Class 10 (medical apparatus & instruments). Indeed, more than 25 % of overall Class 10 filings in 2020 originated from Chinese applicants. This fact demonstrates a strong correlation between the increased global demand for personal protective equipment (PPE) and Chinese efforts to meet this demand by significantly increasing their production and supply of goods such as medical-grade gloves and masks.
The commercial appeal of the European Union (EU) common market is underscored by the exponential growth in the demand for EU Intellectual Property rights by Chinese applicants during the last decade.
European Union Trade Mark (EUTM) application filings from China experienced remarkable growth from 2010 to 2019, with an average annual growth rate of 33.2% and an overall growth rate of 1,027.9% when comparing the 2019 and 2010 filing volumes. More than 63,000 EUTM filings, including over 116,500 goods and services classes, were filed by more than 47,000 individual applicants.
Direct Registered Community Design (RCD) filings from China also demonstrated a strong average annual growth rate of 31.4% during the last ten years and an overall growth rate of 890.4% when comparing the 2019 and 2010 filing volumes.
Almost 21,000 applications, with an average of 2.7 designs per application, were submitted to the European Union Intellectual Property Office (EUIPO) during this period, leading to nearly 57,000 individual design filings by over 11,000 individual applicants.
The first months of the pandemic motivated sharp decreases in the overall demand for the EUIPO’s main products. Nevertheless, a robust recovery trend in filings, beginning in June 2020 and primarily driven by a highly substantial increase in Chinese demand, mitigated the initial negative COVID-19 impact and the EUIPO finished 2020 with a momentous overall EUTM filings growth of 10.2% vs. 2019. Additionally, the overall EUTM growth trend observed since the Summer of 2020 should continue in a moderately sustained fashion in 2021.
The considerable increase in Chinese EUTM filings (+88.8% in 2020 vs. 2019) has been the main driving force behind the overall recovery trend, given that many Top 10 filing countries such as the United States have either stagnated or decreased their demand since the beginning of the pandemic.
The impact of COVID-19 on the overall demand for Direct RCDs is presented in the next chart. A comparison of the monthly Direct RCD filing volumes in 2020 vs. 2019 reveals significant negative variations during the Spring (March-May), followed by positive variations during the beginning of Summer (June-July), in a similar pattern to the observed behaviour of EUTM filings. However, unlike EUTMs, the recovery and growth trend for Direct RCD filings stalled in August and monthly volumes remained lower than in 2019 until October. Nevertheless, a significant surge in filings during November and December, largely fuelled by Chinese applications, resulted in an overall annual growth rate of 2.8% for 2020 vs. 2019.
The evolution of the sizable annual increase in Chinese Direct RCD filings (+37.6% in 2020 vs. 2019) is clearly visible when comparing the monthly filings volumes from the two years under consideration. With the exception of February (-8.6%) and October (-22.4%), monthly Direct RCD filing inflows from China were consistently and significantly higher in 2020 vs. 2019, particularly during the final months of the year (+58.9% in November and +91.7% in December).
The COVID-19 pandemic clearly influenced the overall demand for EUTMs and RCDs during 2020, at first provoking sharp decreases in filings for both EU IP rights. However, an extremely strong recovery dynamic in EUTM filings, primarily driven by significant increases in Chinese demand, has sustained overall EUTM growth since June 2020.
Although the progress in the recovery of overall Direct RCD filing volumes has been less linear than that observed for EUTMs, China decisively contributed to mitigating the negative impact of the pandemic on the overall demand for this right by substantially increasing its filings during 2020.
The pandemic did not produce major changes regarding the basic composition and share distribution of the Top 10 overall EUTM and Direct RCD filing classes in 2020, although certain variations were most likely driven by COVID-19.
However, some substantial shifts in the 2020 Chinese Top 10 filing classes rankings for both EU IP rights provide insight into China’s efforts to adjust its industrial outputs in order to meet the changing needs of global consumers and health authorities during the pandemic. This is clearly visible in the general upsurge in class filings for medical, personal and public hygiene, entertainment and household-related goods and products.
China's preponderance on EUTM and Direct RCD filings during 2020 is quite evident and was clearly decisive in sustaining the overall growth dynamic for the EUIPO’s main products under extremely difficult circumstances. The Office will closely monitor the evolution of filing volumes from China and other countries in order to properly adjust strategies and capabilities aimed at continuing to meet the needs of its users with excellent quality and timeliness.