14 DAY TRIAL // Microsoft is literally on top of the patent world. Its portfolio has grown substantially from 2006 to 2007, and is now at 8,500 issued patents in the U.S., with 15,000 more still pending. The Redmond company has managed to top the IT industry scorecards according to the Institute of Electrical and Electronic Engineers's November 2007 issue of IEEE Spectrum, as well as in terms of technology strength in Patent Board's January 2008 Scorecard for the Information Technology. In this manner, Microsoft has dethroned companies such as IBM and HP, from a position that is equivalent with the top innovator of the IT industry. The two organizations cited by Microsoft rank patent portfolios in accordance with both their quality and quantity.
"They measure the overall strength of companies' patent portfolios. Both rankings blend together quality and quantity metrics. The IEEE, which is the world's largest association of technical professionals, judged Microsoft's portfolio highest in the IEEE Spectrum scorecard in terms of what they call 'Pipeline Power,' which attempts to measure the overall impact of a patent portfolio. The Patent Board's IT Industry Scorecard characterized Microsoft as highest overall in "Technology Strength," an aggregate measure of patent quality and quantity, and in 'Science Strength,' an assessment of the degree to which a company's patent portfolio is linked to core science," explained Bart Eppenauer, Microsoft chief patent counsel and associate general counsel.
The volume of patent Microsoft is filing reflects accurately the immense funds poured into research and development. In 2007 alone, Microsoft spent over $7.1 billion on Research and Development, and is generating patent applications at the rate of 3,000 per year. Eppenauer explained that the explosion in patent filing over at Microsoft had as source statistics from a few years back that did not accurately reflect a correlation between R&D dollar invested and its intellectual property portfolio.
"Microsoft isn't in the licensing business for the money. Even in an optimistic scenario, licensing revenues would amount to only a small amount of Microsoft's annual revenue. Far more important to us are the opportunities for collaboration with other leaders and innovators in the technology industry. The days of the self-contained, go-it-alone company are over. Open innovation is one of the keys to Microsoft's future competitiveness. In today's world, open innovation is simply smart business; in tomorrow's, it will be an absolute necessity," Eppenauer added.