Sunday, September 25, 2005

Number of patents not correlated with innovation

In the last few months, there has been discussion of "number of patents" or "number of patents/employee" correlating with innovation. This is likely nonsense. Innovation is one thing; invention is another. Sometimes they are related; sometimes not.

From [cnet]:

Piling up patents, though, can have as much to do with business strategy as with inventing things. Nowhere is that more true than at software companies, which make products that weren't even patentable in the U.S. until 1981, and which still have widely varying approaches to the task of managing their intellectual property. Those approaches are being shaped by multiple factors, from the part of the market the companies serve to the threat or opportunity they perceive in the burgeoning open-source software movement, which is dramatically affecting the IP rules in this maturing (but far from mature) industry.

Consider: IBM, the fourth great power in software, has more patents than anyone, a reflection of its heritage as a broader-based information technology company as well as its success over the years at building up a famously lucrative licensing operation serving all its businesses. All told, the Armonk, N.Y.-based behemoth has about 40,000 patents. Yet IBM is also the biggest backer of open-source software, which is why it made some 500 relevant patents freely available to all comers in January. What that will mean for Microsoft, the company with the most to lose from open source, isn't yet clear. But figuring it out is partly the job of Marshall Phelps, the IP luminary who built up IBM's licensing operation--and since 2003 has worked for Microsoft.


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