Patent Volume Isn't the Best Innovation Gauge

Posted by: Michael Arndt on November 22, 2009

Patent volume, based on new analysis, isn’t necessarily a valid proxy for innovation. Tallies of U.S. patent grants are published every year, giving IBM reason to strut since it invariably comes out on top. (Last year, as IBM notes here, it was the first entity to bag more than 4,000.) And recently I wagged a finger at Ford Motor in a blog post, based on patent data from Thomson Reuters that showed Ford ranked far behind in new patents for alternative energy and other innovative automotive technology.

But a study by the Patent Board, an intellectual-property consultancy, shows there are other—and better—ways to quantify innovation. The company looked at all active U.S. patents in one field, automobile collision-avoidance technology. Ranked by sheer volume, Honda Motor is No. 1, with 54. That’s almost twice second-place Panasonic, which has 28. (Only two U.S.-based companies make the Top 10: TRW Automotive, in fifth place with 22, and Delphi, which is tied for eighth with 17.)

Ranked by other metrics, though, Honda isn’t a leader. In a scorecard in November’sIntellectual Property Today, the Patent Board publishes five more ways to put a value on patent portfolios, including citations by other patent seekers, innovation cycle time, and age. Honda does no better than second and as poorly as sixth. Delphi leads, for instance, when it comes to having the newest patents, while Fuji Heavy Industries is fastest at turning ideas into patents.

Remember this when the list of 2009 patent winners is announced.