IBM received nearly 23 patents per working day in 2010 -- will big companies become patent trolls?
The US Patent and Trademark Office awarded IBM an average 16 patents per day in 2010, for a total 5,896. Second-ranked Samsung received 12.5 patents per day, or 4,551 for the year. Not be left out, Microsoft's daily average was 8.5, or 3,094 last year. So, the three companies awarded the most patents, all from the tech sector, received 13,541 patents, or 37 per day. But wait! There are only 261 days in a typical working year, making the per-day totals for IBM, Samsung and Microsoft much higher: 22.6, 17.4 and 11.8, respectively.
Utility patent awards rose 31 percent year over year to 219,614 (according to IFI Claims Patent Services) from 167,349 (according to the US Patent and Trademark Office). IBM accounted for about 2.7 percent of patents issued -- with Samsung and Microsoft 6.25 percent. The top-10 receivers, all of them tech companies, were issued 27,594 patents, or 12.5 percent of the 2010 total.
The year 2010 was the first where patent awards topped 200,000, according to USPTO, and it's a colossal surge. The number topped 100,000 in 1994 and 150,000 in 1999, remaining fairly steady thereafter, with a dramatic drop to 143,806 in 2005 and sudden surge to 173,772 the following year. But nothing is like the jump from 2009 to 2010.
Assuming an employee spends at least one day on one patent, that works out to a whole lot of employees dedicated to IBM. The total USPTO program cost was slightly more than $2 billion during the government agency's fiscal year ending Sept. 30, 2010, according to the USPTO's annual report. The agency's workforce was 9,507 federal employees, at the end of fiscal 2010, which included 6,225 patent examiners and 378 trademark examining attorneys. These 9,500 people completed an average 814 each working day.
But the numbers I've presented are grossly understated. There is no way one employee could spend one day per patent. The so far given numbers are for utility patents awarded. The numbers for patent filings are much higher. In 2009, the USPTO received 456,106 utility patent applications but only awarded the aforementioned 167,349, some of which were filed in previous years.
The US Patent and Trademark Office has set out a goal of improving efficiency so that it can process patents even faster. The number of patents filed electronically rose from 14.2 percent in fiscal 2006 to 85.9 percent in fiscal 2010. One of the agency's major goals is "increasing examination capacity," according to the annual report. The agency is reaching for this goal in part with "new hires with [intellectual property] experience. The major benefits to hiring IP experienced hires are that they require less training time and they can begin examining applications quicker than non-IP hires."
The USPTO also is building a nationwide workforce. "The plan targets hiring experienced IP professionals interested in joining the USPTO, but who do not want to relocate to the Washington, D.C. region. This model is expected to result in a lower attrition rate and faster transition for new examiners to become productive."
Whenever some unknown holding company wins a big lawsuit for some patent for which they have no real product(s), someone invariably asks: "What's wrong with the US patent system?" I wonder: Are these mind-boggling numbers the answer, or a good part of it? Somebody is processing patents pretty damn fast, which raises reasonable questions about how thorough are the reviews.
Tell me, what did IBM invent last year or the few before that warranted more than 5,000 patents? Patents used to be about invention. These days they seem to be more about someone thinking up processes for doing things and gaining patents that either lock out competitors or require them to pay onerous fees. Tomorrow's patent trolls may be companies like IBM, Samsung and Microsoft.
The top-10 receivers of patents in 2010, according to IFI Claims Patent Services:
1. IBM (5896); United States
2. Samsung (4551); South Korea
3. Microsoft (3094); United States
4. Canon (2552); Japan
5. Panasonic (2482); Japan
6. Toshiba (2246); Japan
7. Sony (2150); Japan
8. Intel (1653); United States
9. LG Electronics (1490); South Korea
10. HP (1480); United States
The top 10 is filled with tech companies, but only four are from the United States. Actually, among the top-20 companies awarded patents in 2010, only six are US-based.
What's perplexing are the differences between the companies. Exactly where is Microsoft innovating compared to, say, Apple? If you asked the person on the street which company was innovating more, Apple would be the more likely answer because of products like iPad and iPhone. Yet Apple ranked 46 with 563 patents awarded. That said, Apple patent awards were up 94 percent in 2010, more than any other company in the top 50. By the way, IBM has held to top spot for 18 consecutive years.
Patents and intellectual property rights are typically hot topics, so I must ask what do you think of this data? Please respond in comments.