Bloomberg News

IBM Granted Most U.S. Patents for 20th Straight Year

January 10, 2013

IBM Granted Most U.S. Patents for 20th Year With Overseas Help

International Business Machines Corp.'s 6,478 patents in 2012 mark a record high for the company, research firm IFI Claims Patent Services said in a statement. South Korea’s Samsung Electronics Co. and Tokyo-based Canon Inc. ranked second and third. Photographer: Scott Eells/Bloomberg

International Business Machines Corp. (IBM:US) racked up more U.S. patents than any other company for the 20th straight year, helped by increasing contributions from its researchers in other countries.

IBM’s 6,478 patents in 2012 mark a record for the company, research firm IFI Claims Patent Services said in a statement. South Korea’s Samsung Electronics Co. (005930) and Tokyo-based Canon Inc. (7751) ranked second and third. Google Inc. took a spot in the top 50 for the first time, with 15 more patents than Apple (AAPL:US) Inc.

About 30 percent of IBM’s patents were produced by inventors outside the U.S., up from 22 percent in 2010. Research centers in Germany, Japan, Canada, the U.K. and Israel were especially productive, the Armonk, New York-based company said. The percentage of its patents coming from overseas is expected to continue growing as newer labs in Brazil and Kenya ramp up, said Manny Schecter, IBM’s chief patent counsel.

“Intellectual property flows from where markets are flourishing,” he said in an interview. “You’ll see upticks in the amount of technology and intellectual property which we generate outside the U.S.”

IBM’s flow of patents lets the computer-services giant produce about $1 billion a year in licensing revenue. The intellectual property also gives it the freedom to move into new businesses with less risk of being sued over technology.

Qualcomm’s Bounty

Still, some other technology companies get much higher royalty revenue from a smaller number of patents. Qualcomm Inc. (QCOM:US), a designer of mobile-phone chips, made $6.33 billion (QCOM:US) in technology licensing in the most recent fiscal year -- even though it’s not in the top 10 of IFI’s list.

Apple, whose innovations helped revolutionize computing and mobile phones, also isn’t one of the biggest recipients of U.S. patents. The maker of the iPhone and iPad spends about half as much as IBM on research and development.

Even so, Apple did make gains in this year’s list, jumping to No. 22 from 39th place. Google, Apple’s biggest rival in smartphone software, rose to 21st place. Both companies are embroiled in lawsuits (AAPL:US) over intellectual property -- along with other mobile-phone makers such as Samsung -- giving them more incentive to increase their store of patents.

Broader Trend

Companies are applying for more U.S. patents in general, Mike Baycroft, chief executive officer of Madison, Connecticut- based IFI, said in the statement. This year, the U.S. Patent and Trademark Office issued a total of 253,155 patents, a record.

IBM, which has more than 430,000 employees worldwide, invests about $6 billion in R&D each year. With more than 67,000 patents since 1993, about half of which are active, it is easier for the company to avoid courtrooms, Schecter has said. Eight thousand inventors in 46 states and 35 countries contributed to last year’s patents.

The latest crop of patents underscores the kinds of markets IBM is trying to enter. In computer security, the company has a patent for blocking attacks from an intruder to a network. In the realm of IBM’s Smarter Planet initiative, the company was granted one patent for predicting traffic patterns using GPS in vehicles and another for remotely monitoring and adjusting power usage across an electricity grid.

The patents also included a technique for providing precise answers to natural-language questions. This is the technology that IBM uses for Watson, the computer that beat humans on the “Jeopardy!” quiz show and is now being applied to health care and finance.

“Our future intellectual property strategy is a reflection of our business strategy,” Schecter said. “We like being the leader and will continue to be very aggressive.”

The Top 10 U.S. Patent Winners of 2011:
1)  IBM                  6,478
2)  Samsung              5,081
3)  Canon                3,174
4)  Sony Corp.           3,032
5)  Panasonic Corp.      2,769
6)  Microsoft Corp.      2,613
7)  Toshiba Corp.        2,447
8)  Hon Hai Precision    2,013
9)  General Electric Co. 1,652
10) LG Electronics Inc.  1,624

To contact the reporter on this story: Sarah Frier in New York at sfrier1@bloomberg.net

To contact the editor responsible for this story: Nick Turner at nturner7@bloomberg.net


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