Volume 16, Number 2 -- January 15, 2007

IBM Wins U.S. Patent Count Again as Vendors Build Up Patent War Chests

Published: January 15, 2007

by Timothy Prickett Morgan

Some stories in the IT business have their seasons. About this time of the year, it is typical for the United States Patent and Trademark Office to put out a press release trumpeting the number of patents that were issued in America during the prior year just ended. But this year, USPTO didn't put out a release, and I called up the public affairs office to find out why.

To my astonishment and amusement, I was politely told by the public affairs officer that USPTO was concerned that the industry was focusing too much on the quantity of patents awarded and wanted to shift the dialog out there in the tech world over to the quality of the patents awarded each year. She then hung up the phone.

At first, I wanted to laugh, and then I got angry, and as it typical when you are surprised by a situation, I didn't think of the comeback line until a half-second after she said goodbye. Which is: If the USPTO was concerned about the number of patents being issued, then maybe the patent officers and lawyers who are awarding the patents could say "No" once in a while? Maybe they could admit publicly that a patent system that allows DNA and processes that can only vaguely be called software to be patented is in desperate need of fixing? Maybe USPTO could say something intelligent about the patent war chests that companies are building up merely to defend against and offend with lawsuits with their rivals?

Even though the USPTO didn't put out a press release on patents awarded in the United States for 2006, IFI Patent Intelligence, which has created a searchable database of patents called CLAIMS, did its own analysis of the patents awarded last year.

According to the company's analysis, America awarded 173,772 patents last year, up nearly 21 percent from 2005 patent count. The count of issued patents was actually down in 2004 and 2005, and this seems to indicate that companies are renewing their efforts to secure patents for defensive and offensive maneuvers. It also suggests that USPTO is making some progress on working down its backlog of patent applications. What the CLAIMS database did not show is how many patents were denied in 2006, which would be a very interesting statistic to see.

As it has for the past 14 years, IBM once again topped the list of patent holders, with 3,651 patents awarded last year, according to IFI's analysis. Samsung Electronics, the Korean electronics manufacturer, came in a distant second with 2,453 patents, followed closely by Canon with 2,378 patents, Matsushita Electric (which we know by the Panasonic brand) gained 2,273 new patents last year. The number five on the patent list was Hewlett-Packard, with 2,113 patents, followed by Intel, with 1,962; Sony, with 1,810; Hitachi, with 1,749; Toshiba, with 1,717; and Micron Technology, with 1,612. Software giant Microsoft came in at number 12 on the list, with 1,463 patents awarded in 2006, just behind Fujitsu, which had 1,513 patents.

Incidentally, companies based in the United States only took seven out of the top 20 slots, compared to nine for Japanese-based companies applying for U.S. patent protection for their inventions. The electronics industry still dominates patent awards, The number of biotech patents was up 29 percent compared to 2005, and pharmaceutical patents (which are in a distinct category) grew by 22 percent, according to IFI's analysis of the numbers.

Of equally important note, IBM is the only company in history to ever have more than 2,000 patents issued to it by Uncle Sam in a year--until 2006. The remaining top four patent holders--Samsung, Canon, Matsushita, and HP--all broke 2,000 patents for the first time in their histories.

Do I hear 3,000 for 2007? How about 4,000? The sky's the limit.

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Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Shannon O'Donnell,
Mary Lou Roberts, Victor Rozek, Kevin Vandever, Hesh Wiener, Alex Woodie
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