By Manny Schecter, IBM Chief Patent Counsel
For 18 consecutive years (1993-2010), IBM has received more U.S. patents than any other organization. In 2010, IBM inventors were granted over 5,000 U.S. patents, setting a record for the most patents granted in a single year. However, something we are frequently asked is “What does it mean beyond the numbers themselves?” and, “How do patents benefit IBM?”.
First and foremost, patents promote innovation. Innovation is central to our business model and has defined IBM as a company since our founding. Patents are a critical link between innovation and the company’s ability to serve its clients, and thereby, its growth and commercial success. As part of our culture of innovation, employees are encouraged to invent and seek patent protection for their innovations, and they are recognized and rewarded for doing so. Our patents are not managed as a “back room” function; rather, our business executives invest their time to understand and strategize on the most important patent issues.
Each year, patents also help IBM generate about $1 billion in income from the licensing and sale of intellectual property (IP). This income demonstrates a measurable return for our shareholders on the company’s annual investment of approximately $6 billion in research and development.
Patents also help protect IBM’s freedom of action – the ability to design and market our products and services, and to innovate on behalf of our clients. This freedom of action benefit also inures to clients who are concerned about the impact of intellectual property on their ability to run their business and serve their customers.
IBM also uses its patent portfolio in less direct ways, such as influencing the direction of technology and promoting public welfare through public pledges not to assert patents in certain ways. Examples of such pledges by IBM include those removing potential barriers to success of the Linux operating system and allowing the use of inventions relating to health, education, and the environment.
Finally, IBM’s position of patent leadership lends credibility to our views when we advocate for IP policy reforms – through judicial, legislative and academic channels – that we believe are critical to more effectively promoting the benefits of innovation in all industries.
Patents clearly are versatile assets that are good for innovation, and the business of innovators like IBM.