Tag Archives: Nokia

Drops (& gains) in patent grants to top holders reflect changing times

Every picture tells a story. So does each increase or decrease in the number of U.S. patents major businesses receive over the prior year.

The recently published IPO Top 300 patent recipients for 2016 encourages scrutiny. While overall grants were up 1.6% over 2015, there were several unexpected swings, and a number of notable gainers and losers.

Only four of the top ten U.S. patent recipients in 2016 were foreign-based companies, down from 2011, when eight out of the top ten recipients were non-U.S. It is difficult to tell if that change reflects more filing on the part of U.S. companies or less interest on the part of foreign filers. Probably, the latter.

Those receiving fewer patents in 2016 over 2015 include Toshiba, -33.3%, GM Global Technology, -14.8%, Johnson & Johnson, -14.1%. Broadcom, -24.3%, Blackberry, -28.1%, and DuPont, -35.5%. ABB Ltd., down 142%, was still granted 317 patents. NXP Semiconductor, which was acquired by Qualcomm in the fourth quarter, was down 70.3% in U.S. patents received.

Multiple Factors

Depending on the company and industry the grant losses can be attributed to several factors, including reduced R&D budgets; a lower regard for the value of patents due to changes in the law and decisions in the courts; reduced concern over patent counts; and the desire on the part of more companies to obtain fewer, better quality patents.

“It is difficult to attribute reasons or trends as to why a company may have had more or less patents issued from one year to the next,” Brian Hinman, Chief IP Officer for Philips told IP CloseUp. “Patents issuing in 2015 may still be reflecting the impact of the patent application filing surge just prior to enactment of the AIA hence the decline in 2016.  

“We also may be seeing the impact of more companies deciding to maintain their innovation as trade secrets especially in light of enactment of the DTSA [Defend Trade Secrets Act].”

It should be noted that some companies choose to spread their patent grants among multiple entities, obscuring the actual number received. Companies which had been actively filing software and business method patents in previous years, are likely to be doing less of that, now that those types of patents are more difficult to obtain and uphold.

Notable Increases

On the upside, among the top 21 recipients, Intel was up 30.1%, Taiwan Semiconductor & Manufacturing, 28.6% and Ford Global Technologies, 27.6%.  Amazon, 15th on the overall patent recipient list for 2016 with 1,662 grants, was up 46.3 % over 2015. This may reflect a new seriousness about entering or acquiring other businesses.

Other notable gainers include Nokia, up 73.8%, GlobalFoundries, up 136.5% and Hyundai Motor Co., up 39.1%. (GlobalFoundries acquired IBM Microelectronics in 2015.)

Among financial institutions, Bank of America was up 20.8%, having received 279 patents.  Perennial annual U.S. patent leader IBM, was up 7.8%, receiving 8,023 patents, the most of any company.

For the complete list of top 300 patent recipients, go here 

For an interactive list of top 50 assignees, go here.

Image source: statista.com; wikepedia.com; public.tableau.com

Poor ROI from top R&D companies is a red flag, says Forbes columnist

Which companies are truly (disruptively) innovative and which are merely using their R&D to maintain a low-growth franchise has become the subject of worthy debate.

Forbes columnist Alan Hartung, believes that some of the largest tech companies – not coincidentally some of the biggest R&D spenders and patent holders – are the worst investments for shareholders. And he has data to back it up.

In a compelling column here Hartung argues that big companies want to spend to keep themselves in business, not to break new ground and grow significantly. Companies best suited for that are sometimes spending their R&D dollars more wisely.

Moribund tech leaders try invest in startups, Google and even many others do, or buy companies through M&A like Pharma companies do, but they tend to wait to secure others’ success rather than initiate their own, similar to when they were start-ups. .

“Most big R&D spenders are not really seeking innovations” says Hartung, a business growth expert.  They are spending money on historical programs, following historical patterns and trying to defend and extend the historical business.  In other words, they are spending vast sums attempting to sustain (or recapture) historical success.  And, as the list shows, largely doing a pretty lousy job of it.

A more effective formula for innovation/IP management today could be expressed something like this:

R&D + IP rights (+ M&A) = >ROI

Top R&D Spenders

biggest-corporate-spenders

IP rights without the right timing and reliability do not mean much. It appears from Hartung’s timeless 2012 story that in most cases extraordinary R&D spending is no guarantee of success. In fact, he thinks it is an indication of weakness. The really great innovations are not necessarily about spending more. Besides, much of R&D is accounting anyway, with little R and a very big D when it comes to costs.

  • Microsoft is #5, spending $9 billion and nearly 13% of revenue,” write Hartung.  “For this massive investment customers and investors in 2012 received —- updates to the aging operating system and office automation software.  Updates which failed to register favorable reviews by industry gurus, and are considered clear updates – but far from innovative.  And Nokia, which is so floundering some consider it a likely bankruptcy candidate, is #7! Despite spending nearly $8 billion on R&D in 2011 Nokia is now completely reliant on Microsoft if it is to even survive.”

Innovation and IP Needs

It’s difficult to believe that a business today, no matter how smart or solvent, can fill all of its innovation and IP needs internally. Hartung is suggesting that companies that believe they can by outspend each other on R&D are effectively chasing their own tail. That’s why they are bad investments.

Image source: BusinessInsider.com

Mobility Patents Now Comprise 21% of all U.S. Grants

Report Details Surprising Shift in IP Haves and Have-Nots

In the first quarter of 2012 better than one in five patents granted in the U.S. were related to mobile communications. This is up from just 5% in 2001.

Not only has the filing pace picked up, but according to a report written by a wireless industry consultant who analyzed some 7 million patents granted by the USPTO and the EPO since 1993, it has provided some players with a surprising arsenal and others with holes that need to be filled. The research, Mobile Patents Landscape: An In-Depth Analysis, examines the evolution of IP filings and grants in the mobile industries, and who are the apparent winners and losers. (It is available by clicking on the highlighted title.)

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One of analyst Chetan Sharma’s centerpiece graphs (shown on the left side of this page), Mobile Related Patents Issued, 1993-2011, breaks out USPTO and EPO grants. Samsung, Nokia, Alcatel-Lucent and IBM are the top four.

Nokia, which recently announced 10,000 layoffs and whose credit has been has been downgraded to non-investment grade, looks to be in a good position to get top dollar (or Euro) for selling a portion of its patents, should it choose to.

Alcatel-Lucent is the European leader, while IBM, surprisingly, is the U.S. leader in mobile communications by far with about 9,500 patents. Apple is shown to have barely 1,000 mobility-related patents and perhaps only 100 in Europe.

Mobile Patents Landscape makes for fascinating reading for anyone interested in mobile communications patents and holders.

Illustration source: iClarified.com

$12.5b Motorola Sale Nets $1b for “Activist” IP Investor Carl Icahn

Recognition of Patent Value Results in Big Shareholder Win –

In developments discussed recently in IP CloseUp, activist IP investor Carl Icahn has made a truly historic impact on the wireless and intellectual property industries with the sale of Motorola Mobility to Google for $12.5 billion.

A couple of weeks ago in an SEC filing Icahn put pressure on Motorola Mobility management, demanding it explore the sale of patents in the wake of the Nortel’s $4.5 billion auction. This move resulted in yesterday’s announcement.

His 26.8 million shares are now worth over $1 billion, up from $655.8 million on Friday. They were worth less than $500 million when Icahn filed an amended 13D on July 20 to suggest that management explore patent sale options. Icahn also urged Motorola two years ago to split into the company into two entities, the Droid-owning Mobility (MMI) and Motorola Solutions (MSI).

It appears that patent-hungry Google has come away a winner, with more than 17,000 focused patents and about 4,000 applications. It also has acquired a business that appears to be in the turnaround mode, reporting strong profits. Shares of InterDigital, whose patents had been sought by Google, dropped just under 20% on Monday. InterDigital will likely continue to be pursued by other smartphone providers, probably at a lower valuation.

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Yet to be answered: What will the deal mean to Google’s Android users like HTC, Samsung, Kyocera and LG?

With Motorola, Google be competing more directly with them in smartphones. Might its OEM partners choose to seek an operating system like Microsoft’s Windows Phone 7 or other non-competitive alternatives. Microsoft and Nokia already have agreed to work together.

If so, a Google hardware spin-off may be not-too-far down the road.

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Icahn’s victory is not without its dark side: According to Fortune, “Based on Google’s $40 per share acquisition price, Icahn’s MMI stake currently is valued at around $1.07 billion. His MSI position is at around $1.23 billion. If we add that to the $1 billion in earlier disposals, Icahn has realized or holds around $3.3 billion in Motorola and its successor companies. That’s just 3.5% below Icahn’s original investment — or $120 million — compared to the double-digit percentage losses he previously was facing. For example, he was down more than $700 million when Bloomberg did its math.”

This is not the first time good patents have bailed out investors. It won’t be the last.

Image source: onenewspage.co.uk


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