IBM Awarded the Most U.S. Patents in 2010

The United States Patent and Trademark Office (USPTO) granted an all-time high 219,614 United States utility patents in 2010 – up 31 percent over 2009. All but one of the companies in the Top 50 are up from 2009, most shattering records and many posting double-digit percentage gains.

IBM continues to hold down the #1 patent rankings position, which it has done for 18 consecutive years, with a record 5,896 patents, up 20 percent from 4,914 in 2009. IBM is the first company to Break 5,000-Patent Mark in a Single Year.

IBM’s 2010 patent total nearly quadrupled Hewlett-Packard’s and exceeded the combined issuances of Microsoft, Hewlett-Packard, Oracle, EMC, and Google. More than 7,000 IBM inventors residing in 46 different U.S. states and 29 countries generated the company’s record-breaking 2010 patent tally.

IFI CLAIMS® Patent Services, a division of Fairview Research, compiled a ranking of global companies awarded the most U.S. patents in 2010.

I spoke with Darlene Slaughter, general manager of IFI CLAIMS Patent Services and she said that they provide statistical data to perform preliminary patent searching, infringement searches or freedom to operate searches.” With that information companies can:

• Determine which companies are key players in a particular technology
• Identify strategic partners
• Gain an insider’s view of a competitor’s patenting activity
• Review the number of new patents in each category for the past year
• Track patenting trends across industries

Darlene Slaughter, reiterated that protecting innovation through the patent office is not slowing down

“Companies with the most patents focus on their IP and believe that protecting the innovation through patent is important in maintaining an edge on its competition.”

Is this increase in patent grants a sign that innovation is not slowed by recession? Or is it a sign that United States Patent and Trademark Office is becoming more efficient at prosecuting patent applications and the increased number of patent examiners are reducing the back log of patent applications?

I think the increased number of patent grants can be directly tied to the number of applications filed.

In his Director’s Forum: David Kappos’ Public Blog the USPTO director posted that “Improving Key Patent Processes and Sub-processes” is the big reason for the increased patent grants and he quotes a couple remarkable numbers:

For the year 2010 the USPTO Technology Center Technical Support Staff of 274 legal instrument examiners and legal document review clerks:

• Entered more than 2.9 million documents;
• Verified more than 264,000 allowed patent applications;
• Reviewed and counted over 2,300,000 office actions; and
• Processed more than 257,000 new patent applications.

These stats represented all-time records for the USPTO, reflecting all-time record workflow through the Agency including interviews conducted, office actions processed, notices of allowance, and final rejections. David Kappos

The bottom line is that the United States patent office has been swamped with a rising flood of applications over the past 20 years:

• 174,711 applications were filed in 1990 and 100,975 patents were issued.
• 478,649 applications were filed In 2010 and 219,614 applications were issued.
• The 1990 gap between patent applications filed versus issued patents was 73,736
• The 2010 gap has grown to 259,035.

Okay we know it is not humanly possible for 6,000 examiners to keep up with the 721,831 backlog of patent applications… but have the examiners increased their ability to process applications?

Dennis D. Crouch of Patently-O Blog posted a chart comparing the yearly number of patents issued per examiner over the course of the past decade. Dennis points out that apart from the “2007-2009 period where the grant rate dropped so precipitously” this chart does not suggest that the examiners are any more efficient today of disposing patents than they were in previous years.

So I would guess that the only solution to decreasing the backlog of patent applications is to hire more examiners.

John Schmid of the Milwaukee Journal Sentinel reports that despite efforts to improve, U.S. patent approvals are moving slower. And because of the huge backlog and the fact that the US publishes entire patent applications online 18 months after they are filed, “That puts American ingenuity up for grabs, free to anyone with an Internet connection.” In the article he quotes Paul Michel, recently retired chief justice of the United States Court of Appeals for the Federal Circuit, as saying

“In China, there are thousands of engineers who don’t work in laboratories inventing new technologies. “They sit in computer rooms reading U.S. patent applications on the Internet. And they can use the technology anywhere in the world, including in America, for free.

But even with all the suppoed deficiencies of the United States Patent and Trademark Office, foreign and US corporations want to protect their innovations and have filed a record number of applications this year.

And as a result US companies own about half and the rest of the world owns the other half of the granted patents this past year. (see chart below World Wide Ownership of US Patents 2010)

Top-50 US Patent Assignees in 2010 (As reported by IFI)

1. International Business Machines Corp 5896
2. Samsung Electronics Co Ltd (Korea) 4551
3. Microsoft Corp 3094
4. Canon K K (Japan) 2552
5. Panasonic Corp (Japan) 2482
6. Toshiba Corp (Japan) 2246
7. Sony Corp (Japan) 2150
8. Intel Corp 1653
9. LG Electronics Inc (Korea) 1490
10. Hewlett-Packard Development Co L P 1480
11. Hitachi Ltd (Japan) 1460
12. Seiko Epson Corp (Japan) 1443
13. Hon Hai Precision Industry Co Ltd (Taiwan) 1438
14. Fujitsu Ltd (Japan) 1296
15. General Electric Co 1225
16. Ricoh Co Ltd (Japan) 1200
17. Cisco Technology Inc 1115
18. Honda Motor Co Ltd (Japan) 1050
19. Fujifilm Corp (Japan) 1041
20. Hynix Semiconductor Inc (Japan) 973
21. Broadcom Corp 958
22. GM Global Technology Operations Inc 942
23. Micron Technology Inc 917
24. Siemens AG (Germany) 873
25. Xerox Corp 858
26. Denso Corp (Japan) 853
27. Texas Instruments Inc 829
28. Honeywell International Inc 824
29. Sharp K K (Japan) 818
30. Toyota Jidosha K K (Japan) 802
31. Infineon Technologies AG (Germany) 774
32. Brother Kogyo K K (Germany) 771
33. Nokia AB Oy (Finland) 760
34. Silverbrook Research Pty Ltd (Australia) 752
35. LG Display Co Ltd (Korea) 738
36. Semiconductor Energy Laboratory Co Ltd (Japan) 734
37. Mitsubishi Denki K K (Japan) 700
38. Koninklijke Philips Electronics N V (Netherlands) 685
39. NEC Corp (Japan) 680
40. Boeing Co 662
41. Qualcomm Inc 657
42. SAP AG (Germany) 649
43. Oracle America Inc/Sun Microsystems Inc* 646
44. Bosch, Robert GmbH (Germany) 593
45. Fuji Xerox Co Ltd (Japan) 574
46. Apple Inc 563
47. Du Pont de Nemours, E I & Co 509
48. Sanyo Electric Co Ltd (Japan) 504
49. 3M Innovative Properties Co 496
50. Freescale Semiconductor Inc 494

*Sun Microsystems changed name to Oracle.

Do you think an increase in the amount of patents equates to an increase of productivity? Will that translate into bigger profits at the stock market? Here are the biggest percentage gainers on the 2010’s Top 50 Companies Awarded a Patent List:

1. Apple, +94%
2. Qualcomm, +84%
3. NEC, +74%
4. SAP, +70 %
5. GM Global Technology, +68%
6. Hynix Semiconductor, +65%
7. Silverbrook Research, +58%
8. 3M Innovative Properties, +53%
9. Toyota, +50%
10. Brother, +45%
11. Hon Hai Precision Industry, +44%
12. LG Electronics, +40%

In 2010, American-headquartered companies collectively recaptured a lead on the total number of U.S. patent grants (just over 50%) after losing out slightly to foreign companies for the previous two years. In 2009, American firms received less than a majority at 49 percent. Here is a chart showing the ownership percentage number of patents awarded by country.

Market Sectors with the Heaviest New Patent Activity

• Multiplex Communications (US class 370) 3.3 %
• Solid-State Devices and Transistors (US class 257) 3.1 %
• Semiconductors (US class 438) 2.72 %
• Data Processing and File Management (US class 707) 2 %
• Computers and Processing Systems (US class 709) 2 %
• Drug Compositions (US class 514) 2.1 2 %
• Biotechnology (US classes 435 and 530) 2%

IFI’s full report, which offers comprehensive 2010 patent information on more than 2,000 companies, can be accessed online through IFI’s Patent Intelligence & Technology Report, available on its website in a free-trial version.