The “Power” in “Patent Power” More Than Numbers

The just-released who’s who in patenting innovations by Patent Power should be an eye-opener for innovative companies.

Surprisingly, Cree Inc. with only 129 U.S. patents enjoyed an easy victory for the number one position in the Semiconductor Equipment Manufacturers category. How did the smaller company top industry heavyweight Applied Materials with 407 U.S. patents?

The simple answer is that these rankings consider the “growth, impact, originality, and general applicability” of the IP for each company.

For now, I’ll skip the relative value of this metric and focus on how these Pipeline Impact numbers were calculated. According to the original survey, there are several methods employed: counting the number of U.S. granted patents, how this number changed compared to prior years, measuring the breadth of the technologies being patented, measuring the ratio of self-citations and measuring the number of patents that cite a company’s patents as prior art.

Just so you know, counting these “forward citations” is a rough indicator of how important other people found that patent to be compared to their idea.

The important lessons for innovators:

• People are monitoring company IP assets more closely than ever before and your company’s IP may draw increasing scrutiny in the future. Note the recent explosion of articles about Google and Apple’s patents and patenting activities.
• After seven years of publication, the “Pipeline Power” methodology moves closer into the mainstream as an innovation metric. In the future, public companies might be required to declare their “Pipeline Power” in financial statements.
• Continuously monitoring your IP is more important than ever.
• Simply monitoring for “forward citations” to your company’s patents could warn you that other patent applicants are attempting to block your company’s anticipated patents and inhibiting your company’s growth.

Incidentally, just because a company’s patents are highly ranked by their “Pipeline Power” doesn’t necessarily mean that they’ll have better chances of monetizing those patents or that that company is much safer from its competitors…yet.