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Monday, December 3, 2012

Google Cranks Up Its Patent Engine

Google has been accelerating its patent production impressively in the last few years, even before it bought Motorola Mobility last year for $12.5 billion.

That is one nugget in a new report from Thomson Reuters. The report, “2012 Top 100 Global Innovators,” released on Tuesday, includes Google. Last year, the first time Thomson Reuters compiled the list, Google did not make the cut.

In assembling the list, the research group uses four measures of patent activity as its yardstick of innovation. The four are patent volume, patent grant success rate, global reach of the patent portfolio and citations of patents. The combination of factors seeks to take into account patent quality and the influence of patented ideas. And companies' patents are tracked over a three-year period, with the 2012 list covering applications, grants and citations from 2009 to 2011.

“So for Google, we 're looking at indigenous patents,” said David Brown, managing director of intellectual property research for Thomson Reuters. “Motorola Mobility is not in this analysis.”

Google paid $12.5 billion for Motorola, including its several thousand patents, mostly for wireless technology. In a later filing with the Securities and Exchange Commission, Google valued the intellectual property in the Motorola purchase at $5.5 billion.

Google had a high ratio of patents granted, 45 percent in the three-year period, Mr. Brown said. That is impressive because there is such a backlog in patent offices, it can take up to three years before an examiner even begins to study some patent applications. The comparatively high grant-success performance, Mr. Brown said, means Google is making high-quality applications. Google also invests to routinely file patent applications at all the world's major patent offices - the United States, Europe, Japan and now China.

Google's stepped-up patent activity, Mr. Brown said, combines elements of playing corporate defense and offense, as well as being a byproduct of the industries where it is investing aggressively, especially in the smartphone market.

“Patents are weapons in the smartphone patent wars,” Mr. Brown said. “But smartphones are also composites of many innovations, and the pace of innovation is only accelerating.”

The Thomson Reuters list is not ranked, so the companies and institutions are merely listed alphabetically. It is a roster of leading global companies including Apple, Boeing, Dow Chemical, Exxon Mobil, I.B.M., Intel, Microsoft, Roche, Samsung Electronics, Siemens, Sony, Toshiba and Toyota Motor.

Conspicuously unrepresented on the list is China. By contrast, Japan has 25 entrants on the list, and South Korea, seven.

In recent years, China has become a prodigious producer of patents. But Chinese patents are not widely cited for influencing innovation elsewhere, and only 6 percent of the country's patents are filed overseas, as well as in China.

“But long term, we're certainly going to see China rise,” Mr. Brown said.