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International Business Machines Corporation received a record number of U.S. utility patents in 2012, which made IBM the No. 1 patent recipient for the 20th consecutive year. The world’s biggest computer-services provider received 6,478 patents in 2012—up nearly 5 percent from 2011, according to IFI Claims Patent Services, which maintains patent databases and compiles an annual list of the top 50 patent recipients. Some of IBM’s 2012 patents were inventions used in IBM’s Watson Computer, which is best known for taking the top prize in the TV game show Jeopardy! by beating two Jeopardy! champions. These are the types of innovations that followers of technology hope will advance major shifts in computing. “We’re very proud that we’ve continued to build on our research and development,” Manny Schecter, IBM’s chief patent counsel, told CorpCounsel.com before the numbers were released. “We’ve propagated a culture of innovation throughout the company.” In the IFI report, Samsung Electronics Company came in second, with 5,081 patents—up nearly 4 percent, and Canon Inc. placed third, with 3174 patents—up 12 percent. Sony Corporation, which ranked seventh in 2011, moved up to fourth place in 2012 with 3,032 patents—an increase of nearly 33 percent. It leaped over Panasonic Corporation, which dropped down to fifth place with 2,769 patents. Seven of the top 10-ranked companies are based in Asia, according to IFI. IBM, Microsoft Corporation, which ranked sixth with 2,613 patents, and General Electric Company, which ranked ninth with 1,652 patents, were the three U.S.-based companies that made the top 10 list. General Electric ranked eleventh in 2011. Apple Inc. and Google Inc., archrivals in the high-stakes smartphone patent wars, appear to be battling neck-and-neck for new patents as well. Google made its first appearance in the top 50 in 2012, ranking 21st and edging out Apple by only 15 patents. The Mountain View, California-based company increased its patent count by 170 percent—the highest gain in the top 50—jumping from 65th place in 2011. Apple, which ranked just behind Google as No. 22, was No. 39 in 2011, and its patent count increased 68 percent. Apple made IFI’s top 50 list for the first time in 2010. But for IBM, the 20th consecutive year as No. 1 serves as validation of the company’s strong commitment to research and development. “Our 2012 patent record and the two decades of leadership it extends are a testament to thousands of brilliant IBM inventors—the living embodiments of our devotion to innovation,” IBM chairman and CEO Ginni Rometty said in a statement. The company invests about $6 billion a year in R&D, has a team of about 250 people managing its patents, and credits more than 8,000 IBM inventors from 46 states and 35 countries for its 2012 patent tally. IBM’s extensive patent portfolio provides the Armonk, NY-based company with licensing revenue of about $1 billion a year and protects it against intellectual property infringement lawsuits, according to Schecter. “We’ve been enforcing our patents a lot longer than others and have learned how to do it well,” he said, noting that IBM moves quickly to show infringers how they are infringing rather than just lobbing a lawsuit at them. “That way we often can avoid litigating,” he said. The company’s 2012 patents include inventions related to cloud computing, a low-cost method of manufacturing flexible semiconductor materials, and a technique for enabling wireless encryption for mobile transactions. Among the Watson-related patents, which have already been applied to technologies in the healthcare and finance sectors, is one that describes a technique that enables a computer to take a question expressed in natural language, understand it in detail, and deliver a precise answer to the question. Another relates to algorithms and circuits for efficiently mimicking the learning function of a brain’s synapses. “We’re seeing a lot of interest in the patents that went into Watson, and the applications for this type of technology will broaden,” Schecter said. IBM won its first patent on July 25, 1911—for a “perforating machine,” essentially a punch-card system used for tabulation. The company has received more than 70,000 U.S. patents since then. About 38,000 are still active. The U.S. Patent and Trademark Office issued 253,155 utility patents in 2012—the highest annual number on record and an increase of approximately 13 percent over 2011, according to IFI. All but nine companies in the top 50 saw an increase in patent production over the previous year. Among the gainers, 32 saw double-digit or better growth, a showing that demonstrates just how important the race for patent accumulation has become, IFI said. “For the past five years, the world’s appetite for U.S. patents has been seemingly insatiable,” said Mike Baycroft, CEO of IFI Claims Patent Services. “Again this year, we’re seeing a new record for the total number of grants in a single year.” The race for patents is continuing at an unprecedented rate. According to Dennis Crouch, who writes the popular IP blog Patently-O, the PTO issued 5,633 utility patents on January 8, 2013—the most ever issued on a single day. The prior two weeks rank second and third on the all-time list, he said. If current rates hold, Crouch predicted the PTO will issue more than 290,00 patents in 2013. http://www.patentlyo.com/ In addition to issued patents, pre-grant applications are also an important indicator of where a company is heading, according to IFI. IBM leads the pre-grant list with a staggering 7,294 pre-grant applications—up 58 percent from 4,625 in 2011, according to IFI. “We have a healthy pipeline of applications pending and we’d love to be No. 1 again next year,” Schecter said.

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