Thursday, January 14, 2010

Patent Portfolios: More Value, Less Volume?

Business Week has been running a series of articles recently on IP and innovation, where they discussed patents and the latest reports on large-business filings in the USPTO.   As previously reported on the 271 Blog, the number of issued patents for 2009 continued to go up, and numerous tech companies enjoyed substantial increases in the number of issued patents (Microsoft enjoying a 43% increase in 2009).

In a recent effort to "look behind the numbers", Business Week reached out to Ocean Tomo to look at the top patenting companies to determine who might have the most valuable portfolio.  Accordingly, Ocean Tomo sorted through U.S. patents granted to the world's 1,000 biggest companies (by revenue) from 2005 to 2009. Ocean Tomo then assessed the patents' value by tallying, among other things, patent filing trends, litigation rates, and how many times each was cited by other applicants or in scientific and technical journals. The data were aggregated into a patent value index number and ranking.

According to the report, IBM did not have the most valuable portfolio.  In fact, IBM ranked 8th overall, despite being the patent leader for 17 years and having patents covering over 40,000 inventions.  The winnner?  Microsoft.  Ocean Tomo assessed that Microsoft's portfolio value was 3.3 times that of IBM's.   IBM's "weakness" (if you can call it that) is that their portfolio" includes a large number of service-related patents, which do not command as high a price as the video-game and software patents that heavily weigh in Microsoft's portfolio"

Without further ado, here are Ocean Tomo's 25 most valuable portfolios:

(1)  MICROSOFT - Patent value: 185,004
(2)  SAMSUNG - Patent value: 128,727
(3)  CANON - Patent value: 109,650
(4)  HEWLETT-PACKARD - Patent value: 101,502
(5)  INTEL - Patent value: 96,610
(6)  HITACHI - Patent value: 70,450
(7)  RICOH - Patent value: 57,501
(8)  IBM - Patent value: 57,414
(9)  PANASONIC - Patent value: 51,577
(10)  SEIKO EPSON - Patent value: 49,573
(11)  TOSHIBA - Patent value: 48,221
(12)  MEDTRONIC - Patent value: 46,288
(13)  3M - Patent value: 46,187
(14)  SONY - Patent value: 43,747
(15)  TEXAS INSTRUMENTS - Patent value: 36,905
(16)  XEROX - Patent value: 33,809
(17)  FUJITSU - Patent value: 31,057
(18)  PFIZER - Patent value: 29,329
(19)  EXXON/MOBIL - Patent value: 28,426
(20)  SUN MICROSYSTEMS - Patent value: 27,497
(21)  APPLE - Patent value: 25,587
(22)  QUALCOMM - Patent value: 21,149
(23)  GENERAL ELECTRIC - Patent value: 19,649
(24)  NOKIA - Patent value: 18,658
(25)  BRYSTOL-MYERS SQUIBB - Patent value: 16,295

Should companies become more discriminating when filing for "strategic" patents?  Cisco thinks so:

Cisco changed its patent strategy three years ago . . . like most high-tech companies, Cisco used to pursue quantity, in what he says was an patent arms race. Everyone wanted as many patents as possible to stake claims and defend their IP. The thinking was that the patents might hinder competitors or at least require them to pay royalties to license patented tech. Cisco has more than 5,000 patents and another 10,000-plus pending.

A few years ago, Cisco regularly applied for 1,000 patents a year. Now it files for no more than 700, choosing only breakthroughs in market adjacencies or the most critical inventions. To help him choose, Chandler now employs a half-dozen highly skilled, highly trained “innovation managers” who work directly with engineering teams. These managers, btw, are also all lawyers.

For more information, see Business Week: "The World's 25 Most Inventive Companies" (link)

Read Busniess Week: "IBM May Not Be the Patent King After All" (link)

3 Comentários:

Anonymous said...

I would be interested in hearing more about people's experiences with past moves away from "quantity" filing strategies towards "quality" or "smart" filing strategies. I think there is a certain amount of quality in quantity, in that it is difficult to determine which patents are really the best ones at early stages (e.g., before claims are even drafted), and filing more means less gems will be dropped. But I also see the need to reduce in difficult financial times. When filings drop, it is usually pitched to management as smart filing. But, it is really a response to the economy. If it were otherwise, we would always file "smart" (read: with smaller budgets and fewer filings).

Gena777 said...

The change in focus from quantity to quality of filings is a welcome change in patent enforcement. However, one hopes that the Ocean Tomo study doesn't result in dissuading more companies from pursuing "service-related" patents, in favor of opting for more entertainment-related products.

Senthil said...

Good comparision to understand their strength of intellectual property. May I know how they might have valuated the patent. Is there any technque to the value from the patent portfolio.


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