Inventors' concerns

Usage examples of patents.

Of the 153,492 patents issued by the USPTO in 1999, these top twenty companies received 17,842 patents in that year, only 11.

On a related issue, the number of patents held by individuals and small firms has risen from about 5 percent in 1970 to more than 20 percent in 1992.

As table 3-1 shows, 45 percent of these patents were held by companies headquartered outside the United States.

An antitrust action brought by the Federal Trade Commission forced the company to accept a consent decree requiring it to license its patents on a compulsory basis and to offer its machines for saleas well as on lease.

It led the industry in practically any category you can think of: It had the largest sales, the most profits, the highest market capitalization, the largest research budget, and the most patents of any company in the industry.

IBM also owned the patents that resulted from its research, and this was another source of value for the corporation.

IBM managed its patents with the goal of protecting its discoveries from being used by other companies.

Yet as I will discuss on the following pages, most patents are worth very little, and it is hard to know in advance which patents are valuable and which are not.

IP encompasses patents, copyrights, trade secrets, and trademarks, this chapter will focus primarily on patents.

patents are the leading source of trade in IP, and many of the issues in managing patents will also apply to the management of other types of IP.

According to a survey conducted in 1998, only about 60 percent of patents held by the top patenting firms around the world were utilized in mainstream businesses.

Many responding companies had hundreds of non performing patents, which were neither used in their own business nor licensed to any other business.

As will be discussed in the following paragraphs, however, most patents are not worth much.

Consequently, there may not be as many valuable patents among the 40 percent of non performing patents as IP management proponents think.

In this era, patents were valued primarily as a barrier to entry, not as a source of revenue and profit in their own right.