IBM Piles on the Patents, Promises to Publish Plenty

Published: January 19, 2009

by Dan Burger

Can anyone remember a time when IBM wasn't the dominate technology company when it comes to patents? This is the 16th consecutive year that Big Blue has piled up more patents than any of its competitors. Sixteen years is a long time for anyone to stay on top of anything. IBM makes it look easy. It removed the element of suspense in this annual announcement a long time ago. No one asks "Who won?" It's more like: "How many patents did they get this year?"

In 2008, IBM was awarded 4,186 U.S. patents. No company has ever crossed the 4,000-patent threshold before. Rivals Microsoft (2,030 patents) and Intel (1,776 patents) ranked fourth and fifth in this contest, but their combined number of patents could not match IBM. Microsoft's patent total climbed compared to 2007. Intel's slid.

Of course, IBM sent out a press release tooting its own horn while happily (my assumption) noting it had slapped Hewlett-Packard--the largest high tech company in the world based on sales--with a three-to-one patent differential. HP (1,424 patents) was ranked 10th on the patent leader board.

According to the U.S. Patent and Trademark Office, 157,774 patents were granted in 2008, which was a slim increase over the 157,248 granted the year before.

Although IBM put some monumental numbers on the board, the statistic that is causing tongues to wag is that only 49 percent of the patents were granted to U.S. businesses. That makes 2008 the first year that less than half of the patents granted by the USPTO were designated to red, white, and blue organizations. You'll also find the top 10 patent-grabbing companies in 2008 are no longer dominated by U.S. businesses. Japan has five of the top 10, while the USA has four. All is not lost just yet, however. After counting all the new patents, U.S.-based companies remain on top. Following up are Japan, Germany, South Korea, and Taiwan.

But that won't stop "brain drain" from being a hot topic in the blogosphere, around the office break rooms, and maybe even the halls of Congress. Has the fountain of math and science whiz kids born in the USA all but dried up? Using patent awards as the measuring stick, there seems to be a continuing drought. The questions to be debated, however, are will U.S. companies continue to fade in terms of intellectual stamina and will anything be done to regain it? That's a boiling pot and there are plenty of people stirring it. But not me, not today. May I suggest you bug Timothy Prickett Morgan about this topic? He opens and eats a can a worms for breakfast every day. This country's collective, but shriveling, engineering brain power is a topic I'm sure he would enjoy.

Right now there's more to this story about IBM's cache of patents.

How would you expect IBM to cash in its cache? Intellectual property is worth a fortune, right? Yes, it is, but not entirely in the old school proprietary scenario that first comes to mind. IBM, a company not particularly well known for its altruism, says it will make more of its patents public than it will keep private. In 2009, we should see somewhere in the vicinity of 3,000 of its patented technical inventions published, which means they become public property. The company press release claims this is an increase of 50 percent over the number of technical inventions it previously made available in any one year. Worthy of some back patting, I would say, even if these will feather the nest in areas such as infrastructure, open source software, and software interoperability--along the lines that IBM prefers to see those things go.

As IBM sees it, the publication of its chosen patents "protects inventors from allegations of infringement by placing the intellectual property into the body of prior art. Publications also improve patent quality, since they can be cited by patent offices in limiting the scope of patent applications. Publication also helps spur follow-on innovation that ensures dynamic business growth."

That's very generous, but at the same time, you can bet IBM will continue to be very protective--as it should be--of a great number of its patents new and old. Last time I checked, Santa Claus didn't wear a dark blue suit, but he also doesn't give everybody everything they want. Here's how "Sometimes Santa" views the situation.

"IBM's leadership in the strategic use of intellectual property is based on balancing proprietary and open innovation," said explained John Kelly, senior vice president and director of IBM Research. "Our goal is helping stimulate innovation as public investments in large infrastructure projects are being planned to boost global economies. We also anticipate that adding additional transparency to the patent system will help tackle the continuing patent quality crisis, which is impeding inventors, entrepreneurs and companies of all sizes."

To demonstrate that Big Blue is truly in a giving mood, the company also noted that it would contribute statistical and analytical tools to the open source community. The tools, developed at IBM Research, were designed to measure the quality of patents--an issue that many regard as the reason the patent process is both slow and plagued by legal challenges. Rick Lawrence, manager of predictive modeling for IBM Research, emphasized the importance of working with the academic and legal communities on patent quality initiatives to increase the effectiveness of the patent system and encourage the patenting of "truly important innovations."

IBM researchers, by the way, are part of a Patent Quality Index (PQI) project focused on the issue of patents that are of questionable quality and the backlogs they create, intellectual property rights, and the increased speculation and litigation created by these factors.

While we're on the topic of generosity, I'll be generous, too, and make believe that all of IBM's 4,186 patents last year were of the highest quality--especially the intellectual property in those patents to be made public. Regardless, I figure it's not the gift that counts. It's the thought, right?

The fact that IBM is giving away anything is a bit surprising. Question the company's motives if you must, but obtaining this intellectual property isn't cheap and it isn't often turned over to the world. Interest in protecting intellectual property, both in the United States and abroad, is on an up-swing according to the research firm IFI Patent Intelligence. (IFI actually does the patent counting these days; USPTO stopped issuing releases a few years back.)

In a statement, Darlene Slaughter, general manager of IFI, said "although data suggest that American companies garnered a minority share of the total number of corporate U.S. patents last year, it's important not to confuse quantity with quality. What's clear is that many of the world's largest companies are placing a higher priority on protecting their intellectual property." She went on to say, "Securing patents may be even more important in a down economy, since it gives patent holders an edge over their competitors."

In a down economy, we'll take what we can get.

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