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Beware of Buzz

If I were to ask you which company was issued the greatest number of patents in 2021, who would you guess?


Google? Nope. Google's parent company (Alphabet) ranked #17.


Amazon? Nope. They filed 2,110 patents, but that was only good enough to secure the #15 spot on the list.


Microsoft? Nope... #12, with 2,453.


Apple! It has to be Apple, right? Nope. They're #11... the 2,591 patents they were granted didn't even put them in the Top 10.


The company that was issued the greatest number of U.S. Utility patents in 2021 -- an astonishing 8,540, to be exact -- was...


IBM.


And according to Visual Capitalist, old Big Blue has been topping the U.S. patent list for the last 29 years.


Google, Amazon, Microsoft, and Apple are all inarguably remarkable companies. And they happen to be four of my very favourites.


But if you agree the number of patents successfully issued to a company is a strong indicator of that company's innovativeness, then IBM was three times more innovative than Apple last year, a fact I suspect most of you never would have guessed before stumbling across this post.


What's the lesson here?


The ones getting the most buzz aren't always the ones doing the most work.


Addendum: after this blog post was sent to my newsletter subscribers, one of my regular readers replied to my email and asked a question: "What, specifically, do those patents do to help make that company more successful?" I emailed him a response -- which included a few caveats -- but he liked my reply and suggested I share it publicly. So here's what I wrote:


I'm not knowledgeable enough about IBM's specific patents to be able to answer how they help IBM be more successful, but in general, patents are good for one of two reasons:


1. They give you a proprietary advantage over your competition. Amazon had a patent on "one-click buying" until it expired, and the result was that it was faster and easier to buy on Amazon than on any other shopping website... which led to more people choosing Amazon. Not only that, but because Amazon "locked up" that patent, nobody else could use it... making all other shopping sites inferior for the life of the patent. Imagine if Apple had a patent on touch-screens, and thus Apple products were the ONLY products on the market that would allow users to interact with their screens in such a way... we would ALL own iPads!


2. They give you a tangible asset you can licence out to others. Say IBM owns a patent on a camera addition that can take a photo of something and then describe the resulting picture in natural language. (I'm making this up... I don't know if such a patent exists.) IBM may not want to use that at all, but a medical company that makes devices to help blind people might find that extremely useful and might be willing to pay IBM a licencing fee to use it... so that's revenue for IBM, which they can use for purposes more central to their business.


I'm sure there are other ways patents can be used, but I'm only halfway finished my first coffee of the day... :)

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