Top Seven Patent-Earning Companies
Fresh and interesting article posted on Fortune about the top seven patent-earning tech companies in 2014.
Happy reading!
"Patents are the lifeblood of the tech industry—and if last year’s numbers are any indication, that sector is performing with vigor.
More than 300,000 utility patents—those are the ones for inventions, rather than designs—were issued by the United States Patent and Trademark Office last year, a record high. Such patents allow companies to put their inventions on lockdown for up to two decades, reaping rewards for significant R&D investments. And there’s another incentive: allowing businesses to stock up their intellectual property warchests and fortify their legal defenses.
“If you’re a bully you’re not going to pick on the big kids,” says Larry Cady, vice president of marketing and senior patent analyst at IFI Claims Patent Services, a firm that maintains a database of patents. “You’re going to pick on the pipsqueaks.”
So which companies are the head honchos? And what ideas are they bent on securing?
Fortune partnered with IFI Claims, which last month ranked the top 50 patent assignees of 2014, in order to examine the major players’ patents—most of which involve computing, hardware and software manufacturing, and mobile technology. A word to the wise: technology patents can be, well, technical. Sometimes, mind-numbingly so. “A lot of patents tend to be very regular,” Cady says. “They’re not fun to read. Once in a while you see something like an Apple Watch, but that’s like finding a needle in a hay stack.” (Apple ranked 11 on IFI Claims’ 2014 list.)
Well, we dug in anyway. Fortune peeked inside the patent caches of last year’s top earners to spot companies’ latest additions. What follows is a list expanding on our 2014 list of the top 10 R&D-spending companies, revealing with finer granularity where and how companies spend their innovation bucks.
Here’s what we found.
1. IBM
Photograph by Sean Gallup — Getty Images
Patents earned: 7,534
Representative patent: "Operating System Migration with Minimal Storage Area Network Migration" (US-8924499)
Country: United States
IBM is untouchable, effectively. Even as the computing and consulting company posts dismal financials, it leads the patent pack for its 22nd straight year. In fact, the company IBM 1.18% is the first ever to exceed 7,000 patents in a single year—trouncing runner-ups on the list. IBM's innovations land all over the map; its most common areas include computers, semiconductors, telecommunications, business applications (like advertising in virtual reality)—even antimicrobial agents. While the patent we've highlighted—described as "a method for migrating an operating system from a source computer to a destination computer"—may seem more humdrum, it's a representative example of the company's most common patent classification: electrical digital data processing, a.k.a. computers.
2. Samsung
Photograph by Edgar Su — Reuters
Patents earned: 4,952
Representative patent: "White Light Emitting Diode and Liquid Crystal Display Including the Same" (US-8919998)
Country: Korea
Korea's primary patent powerhouse Samsung stayed put at second place in the latest ranking. Nearing 5,000 patents, the electronics company is a formidable IP winner—despite IBM largely blowing it (and the rest of the competition) out of the water. Semiconductor devices are the company's most active area of activity; in August Samsung earned a patent for a "richer" white LED backlight. As its filing summarizes: "Richer colors may be realized by including a wider region of color space when a white color coordinate is adjusted in order to realize a white color." Shine on, Samsung.
3. Canon
Photograph by Tomohiro Ohsumi — Bloomberg via Getty Images
Patents earned: 4,055
Representative patent: "Focus Detection Apparatus" (US-8922703)
Country: Japan
Camera king Canon leads the list for Japan, plunking down in third place. The company, which achieved a personal best of more than 4,000 patents, has been a mainstay in the top five of the annual list for nearly three decades. A majority of Canon's patents fall under the category of pictorial communication, which includes television. An example of one such patent blueprints a device "for performing automatic focus adjustment control effectively used with an imaging apparatus such as a video camera." That's one way Canon keeps new ideas in its line of sight.
4. Sony Share iconsPhotograph by Kiyoshi Ota — Bloomberg via Getty Images
Patents earned: 3,224
Representative patent: "Extensions to Trigger Parameters Table for Interactive Television" (US-8925016)
Country: Japan
Like Canon, Sony's speciality is pictorial communication (e.g. television). Certain optical patents granted in years past have helped the company grab, a spokesperson estimates, 43% market share for image sensors in smartphones. ("In general our technology is two years ahead of our competitors," says the spokesperson.) Here we highlight a Sony SNE 2.63% patent that involves "receiving content from a content source, and displaying the received content on a display." Elaborating within the filing, the patent's authors detail Sony's interest in so-called interactive TV. Imagine, for example, that your big screen dishes out updated statistics for athletes while they compete in sporting events. This patent undergirds that technology. (No telling yet how CEO Kazuo Hirai new business plan that deemphasizes TV will affect it.)
5. Microsoft
Photograph by Kiyoshi Ota — Bloomberg via Getty Images
Patents earned: 2,829
Representative patent: "Automatic Batching of GUI-based Tasks" (US-8924329)
Country: United States
Microsoft MSFT -0.14% held steady for another year in fifth place. Safeguarding one of its breakthrough products—the motion sensing Kinect—the company "has filed nearly 600 patents to protect intellectual property related to the device," says a company spokesperson. For Microsoft's featured patent, we picked one that aims to lessen the hassle of performing repetitive actions on a computer. Say, for instance, you would like to resize hundreds of digital photos. The patent outlines a way for the computer to intuit your intentions and automate the process—without you having to learn how to script a single line of code. Most of the software and electronics company's patents fall into the bucket of electrical digital data processing, a.k.a. computers—just as IBM's do.
6. Toshiba
Photograph by Graham Crouch — Bloomberg via Getty Images
Patents earned: 2,608
Representative patent: "Semiconductor Device" (US-8921920)
Country: Japan
With tech conglomerate Toshiba clocking in at sixth place, Japanese companies retain a strong showing on IFI Claims' 2014 list—despite Japan's share of U.S. patent grants having declined 2.5% over the past five years. (While the U.S., Korea and China's share of patent grants continues to grow steadily—China's share actually doubled, though it still only accounts for a meager 2% of the year's total—Japan and Europe's shares are in decline. Cady attributes this trend to "general belt-tightening in those markets.") The company's most popular patent category is semiconductor devices, where one may find the provocatively titled patent "Semiconductor Device." The filing mentions its purpose as producing a device "improved both in data retention characteristics and read characteristics."
7. Qualcomm
Share iconsPhotograph by Simon Dawson — Bloomberg via Getty Images
Patents earned: 2,590
Representative patent: "Optimal Sleep / Paging Cycle Duration in a Wireless Network" (US-8923895)
Country: United States
Qualcomm QCOM 0.61% performed spectacularly on the latest list, jumping to seventh place from ninth a year prior. The company landed within spitting distance of Toshiba—less than 20 patents behind—and has increased its patent count by 23% over last year. One of Qualcomm's patents, which can be grouped under its most popular header: wireless communications networks, aims to conserve the battery power of mobile devices by managing their "sleep cycles." Periodically, these devices awaken to monitor lines of communication with cell sites. The patent is a method for saving battery-life while keeping them quickly responsive. Roger Martin, senior vice president and chief IP strategist, is proud of the company's legacy. He points to another patent the company is particularly excited about as well: "Automatic Interfacing between a Master Device and Object Device" (US-8818274). As he describes it, the a means of using optical recognition to pair "Internet of Things" devices. The idea is to, say, point your phone at your smart watch and they'll automatically configure together.
BONUS: 8. Google Share iconsPhotograph by Mark Blinch — Reuters
Patents earned: 2,566
Representative patent: "Changing a Rank of a Document by Applying a Rank Transition Function" (US-8924380)
Country: United States
Although Fortune intended to cap this list at seven companies, we would be remiss not to include one of the year's biggest winners—Google GOOG 0.79% , which debuted for the first time in the top 10. The company, which was awarded 38% more patents this year than the year prior (most of them in the electrical and digital data processing—a.k.a. computers—category), entered the top 50 list only two years ago. (For the curious, Amazon snuck onto the top 50 list this year for the first time in the ultimate spot.) Google's ascendency from out of seemingly nowhere surprises Cady."It was a stunning move," he says—especially on a list that stays mostly stagnant from year to year. Aptly, Google's highlighted patent involves an algorithm that determines multiple rankings for a document, and creates a transitional ranking between the two. The purpose is to hamper people who manipulate Google's search results with so-called rank-modifying spamming. Here we see Google modifying its own ranking on the IFI Claims patent list, to great effect."
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