IBM Wins Most Patents in 1997,
But Its Fruits of R&D Fall 8%
.......this gives a good idea of who will win in the end--the tech leaders
By RAJU NARISETTI
Staff Reporter of THE WALL STREET JOURNAL
NEW YORK -- International Business Machines Corp. received more U.S. patents than any other company in 1997, grabbing the top spot for the fifth consecutive year on a list dominated by Japanese companies. But the number of IBM patents fell 8% from 1996.
IBM's 1,724 patents outpaced last year's No. 2 receiver, Canon Inc., by a hefty 346 awards. But IBM's 1997 figure ended a four-year growth streak and raised questions about possible repercussions from a big cut in research and development spending imposed several years ago by IBM Chairman Louis V. Gerstner Jr.
Mr. Gerstner, who joined IBM in 1993, cut the company's annual R&D spending by $1 billion to about $5 billion as he sought ways to turn around the then-ailing computer giant. It takes about 22 months on average for a company to obtain a patent, so the latest data represent work that IBM researchers were doing at least two years ago, after the R&D cuts.
Some observers have wondered if IBM's cuts and its narrower focus on product-oriented research would prompt its scientists to avoid long-shot projects that nevertheless might yield a home run. Moreover, a decline in patents could hurt what has become a big IBM revenue stream: Its patent portfolio generates about $1 billion in annual royalties, up from about $350 million in 1993.
To be sure, the number of patents issued in any year depends on many factors, including processing time at the U.S. Patent Office, which issued 112,091 patents and received about 230,000 applications last year. Moreover, a $5 billion budget, $600 million of that solely for its Nobel Prize-winning IBM Research Divisions puts the company in the top echelon of R&D spenders. In terms of patents obtained last year, IBM's closest rival in the U.S. computer industry was Texas Instruments Inc., ranked a distant 14th with 610 patents.
IBM executives dismissed the dip in patents as a "statistical aberration." Marshall Phelps Jr., vice president of intellectual property and licensing, said IBM patent applications jumped 25% last year and were running at a "historic high." Mr. Phelps, citing competitive concerns, declined to give precise figures about patent applications. But he said he expects the increased pace of applications to show up in patents issued two years from now.
Mr. Phelps, who manages a 130-person patent department at the Armonk, N.Y., company, said about 30% of patents issued to IBM last year were already being used in products. "You don't want to be No. 1 for the sake of being No. 1 and spend money on a bunch of lousy patents," he said.
Some of IBM's research successes last year were well chronicled. It received 50 patents for a breakthrough that could sharply boost the power of computer chips by using copper instead of aluminum. Other IBM patents covered techniques to extend battery life in laptop computers and discover viruses on the Internet. They also include some that could be fodder for talk shows, such as "veggie vision," which allows grocery checkout machines to sort produce by color and appearance.
IBM said nearly a third of its patents last year were software-related, and 15% were connected to network computing, reflecting Mr. Gerstner's focus on growth markets rather than old-line hardware. IBM's 550 software-related patents exceeded the total of all patents obtained by Hewlett-Packard Co., which ranked 19th with 532 patents; Intel Corp., 25th with 407 patents; and Microsoft Corp., 50th with 199 patents.
Trailing IBM were Canon (1,378 patents), NEC Corp. (1,095), Motorola Inc. (1,058), Fujitsu Ltd. (903), Hitachi Ltd. (902), Mitsubishi Corp. (893), Toshiba Corp. (862), Sony Corp. (860) and Eastman Kodak Co. (795), according to data scheduled for release Monday by IFI/Plenum Data Corp., a Wilmington, N.C., provider of patent information. Among the top 50 companies obtaining U.S. patents last year, 18 were Japanese. |
