Newswise — Quality--not quantity--counts when it comes to patent portfolios. For evidence, look no further than Micro Technology, in Boise, Idaho, the world's second largest maker of memory chips. Micron logged 1569 U.S. patents in 2005, just over half of IBM's 2972. Now consider the resonance of those patents: how many other people cited them, how diverse the patent portfolio was, and how that diversity helped nurture and expand the portfolio in recent years. It quickly becomes clear that while IBM's assemblage yelled, Micron's roared.
In fact, Micron beat out thousands of organizations, including numerical patent champ IBM, to stake a claim to having the world's most powerful patent pipeline in IEEE Spectrum's first annual patent survey. The survey was conducted for Spectrum by 1790 Analytics, in Mount Laurel, N.J., a research firm whose specialty is analyzing patent citations. The company considered 271 organizations with the most influential and potentially most lucrative patent portfolios. It found that Micron's patent portfolio beat out not only IBM's but also those of such perennial patent powerhouses as Hewlett-Packard, Intel, and Microsoft. All in all, it was a pretty sweet victory for a company whose US $603 million R&D budget last year was roughly one-tenth the size of IBM's--not even big enough to crack the top 100 R&D companies.
How did Micron come out on top as the leader in patent portfolios? Basically, by patenting innovations that frequently led to further innovations, both inside and outside of Micron. In determining the overall strength of a portfolio, 1790 Analytics' methodology goes beyond patent counts to emphasize how frequently a company's patents are cited by other patents.
While the survey considers innovative companies worldwide, it is based only on their U.S. patents--for two reasons. First, citation metrics based on U.S. patents tend to be more robust, because most of their citations are to other U.S. patents. In contrast, many citations in patents from, say, the European Patent Office are to patents from specific national systems rather than to other EPO patents. Second, most large organizations, regardless of where they are headquartered, patent many if not most of their inventions in the United States.
To derive a Pipeline Power score, 1790 Analytics first counted the number of U.S. patents the company obtained last year. To avoid statistical anomalies, only companies that were awarded 25 or more patents in 2005 made the cut. The research firm then multiplied the patent count by the product of four variables that it calls Pipeline Growth, Pipeline Impact, Pipeline Generality, and Pipeline Originality.
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