IBM Patent Portfolio

Company Overview and Patent Portfolio

IBM

The American IBM dates back to 1911 and is one of the largest players in the IT industry. With 433,362 employees in 2011, they are the largest of the sample and have the second highest sales. IBM has been engaged in many sectors in the IT industry, but in recent years has shifted its focus from supplying hardware to B2B solutions and consulting.

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Region and Number of Patent Application

IBM’s patent activity has been growing steadily and with 125,847 patent applications published, they are just above the sample average, while maintaining an R&D investment that is below average. This could be due to an above average ability to turn R&D investment into patents, but it might as well be a result of their large number of employees. Even though an employee is not working in the R&D department, he or she might have new ideas that can be used by the company, and many employees can lead to more patent applications being published, if the company is good at tapping into the knowledge of their employees. IBM’s patent activity is a textbook example. Both their absolute and relative applications published are high and growing, despite a low R&D intensity.

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Citation Analysis

Unlike Hitachi, IBM has not fallen into the trap of just having a high patent output to the detriment of patent quality. To the contrary, they have the highest amount of forward citations in the sample. With 1,067,370 citations, it is more than twice the average. This also results in the sample’s highest ratio between forward citations and total applications published, which shows that IBM is not only producing many patents, but that those are also of a high technological relevance. However, as seen with Hitachi, many of their citations are internal, but compared to Hitachi’s 41,823 citations, IBM’s 50,555 citations are, in proportion to the company’s total amount of forward citations, significantly fewer.

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Conclusion

Despite the high patent activity and broad focus in the IT industry, IBM has a narrower technological focus than the sample average, which is evidence of a strong presence within these technological core areas, as their high activity and high number of forward citations show. Even though IBM has old roots and could be expected to be a dinosaur (old and slow) in the industry, they have a below average age of the top patents, which clearly shows that IBM is capable of adjusting to the market and staying competitive.
In order to stay in their technologically leading position, IBM has to continue publishing a steady amount of patent applications that gets acknowledged and cited by the rest of the industry.

Analysis of the Patent Portfolio (PDF)

You can find the complete patent portfolio analysis of IBM below:

IBM_Company_Patent_Report