IEEE Spectrum November, 2007 - 29

subfield of IT, the same two or three companies appear among
the top three or four. In fact, the top scorer changed in only one
of the nine subfields: the newly merged Alcatel-Lucent overtook
Motorola in Telecom Equipment.
The more things change, the more they stay the same, the
French say...until, they might add, things really do change. This
year, as this issue goes to press, Americans may at last see some
real change in a patent system that almost every analyst considers seriously flawed. In fact, Congress is debating a reform
bill that appears to have been developed in an intellectual and
rational process, an event as happy as it is rare.

Patent Push
Leading Company

Subfield

Boeing

Aerospace

Seiko Epson

Computer Peripherals

Number of Patents Awarded
2006

2005

Percent Change
(2006/2005)

478

405

18%

1212

887

37%

IBM

Computer Systems

3651

2972

23%

Hitachi

Electronics

3198

1941

65%

Boston Scientific

Medical Equipment

551

293

88%

Applied Materials

Semiconductor
Equipment
Semiconductor
Manufacturing

369

371

Flat

The reform proposal began to take shape about three years
Samsung
48%
2474
1676
ago, when a unit of the National Academy of Sciences headed by
Alcatel-Lucent,
885
552
60%
Telecom
Equipment
Motorola*
(Alcatel-Lucent)
(Motorola)
Stephen A. Merrill produced a report called "A Patent System
17%
Telecom Services
1514
1294
for the 21st Century." The report recommended creating a pro- Siemens
cedure for challenging patents after they are issued, bolster- *Alcatel acquired Lucent in 2006; had they been one company in 2005, they would
ing the traditional standard that patents should be confined have led the field in that year as well, instead of Motorola.
to "nonobvious" ideas, and strengthening the overwhelmed
U.S. Patent and Trademark Office. It also questioned U.S. rules
that grant triple damages for "willful" infringement and give the biomedical and pharmaceutical industries, which together
priority to those who are the first to invent something over account for most U.S. patents, says Frank.
those inventors who are the first to file for a patent.
Biomedical and pharmaceutical companies want ironclad
The result was the proposed Patent Reform Act of 2007, spon- patent protection, because they depend on a tiny handful of
sored in the Senate by Patrick Leahy (D-Vt.) and Orrin Hatch blockbusters to defray the billions of dollars they spend inves(R-Utah) and in the House by Howard Berman (D-Calif.) and tigating hundreds of drug candidates that never pan out. Those
Lamar Smith (R-Texas). It would establish a procedure for chal- blockbusters typically stand or fall on one or two patents. In IT,
lenging patents after their issuance, limit the ability of litigants on the other hand, a winning product often results from a great
to shop around for courts deemed sympathetic, redefine what many patents-MP3, Wi-Fi (IEEE 802.11), and 3G cellular teleconstitutes willful infringement, and set damages based on the phony are excellent examples. Here, "things are less clear-cut"
patent's contribution to a product's value, rather than on the than with pharmaceuticals, Frank says, as it's less obvious that
product's total value (a policy known as balanced apportion- any particular patent is essential to accomplishing any particular
ment). This last point addresses the issue in the Microsoft MP3 thing. The big IT companies typically worry about being held
case. Microsoft's penalties were evidently set according to the liable by too many different parties for exorbitant damages.
total value of MP3 use involving its Windows Media Player.
Lobbyists include, on one side, the Business Software Alliance
Who will gain and who will lose if the bill becomes law? (composed of Microsoft, Apple, Hewlett-Packard, and a host
Basically, lobbying on the legislation has pitted the IT industries- of others) and on the other side, the Biotechnology Industry
including electronics, computing, and semiconductors-against Organization and the Coalition for 21st-Century Patent Reform
(representing, among others, drug maker Eli Lilly & Co. and
consumer goods maker Proctor & Gamble). But even within the
broad IT and pharmaceutical groupings, there are significant
differences of opinion.
A survey last year of U.S. members of the IEEE found that
they were not unanimous on the merits of the proposed bill. The
Subfield Rank Number of Patents Pipeline Power
Company
Subfield
2006
2005
2006
2005
2006
2005
IEEE's volunteer-driven lobbying arm, IEEE-USA, has submitted
critical opinions about the draft legislation, saying it wants a
Symbol Technologies
Computer Peripherals
7
11
119
61
536
92
bill but a better bill.
MediaTek
Computer Peripherals
11
20
105
32
460
20
Under the circumstances, it's more than a little remarkable that
Microsoft
Computer Systems
1
3 1469
780 5300 1699
a bipartisan consensus has formed around a patent reform bill that
largely captures the spirit of what the NAS and what other critics
Digimarc
Computer Systems
5
9
77
36
1695
283
such as Adam B. Jaffe and Josh Lerner have had in mind [see "Patent
Oracle
Computer Systems
10
16
211
104
396
79
Prescription," by Jaffe and Lerner, IEEE Spectrum, December 2004].
Hon Hai Precision
Electronics
8
17
474
295
548
133
Taken together with two significant Supreme Court decisions this
Industry
year, which reinforced the "nonobvious" standard and limited the
Guidant
Medical Equipment
3
17 230
41
676
33
right to obtain an immediate injunction following a patent victory,
Ethicon (subsidiary of
Medical Equipment
5
16
113
59
26
48
Johnson & Johnson)
enactment of the patent reform bill "would be a major step in the
Semiconductor
ASML
1
3
297
144
1897 968
direction" of what Jaffe and Lerner proposed, says Jaffe, of Brandeis
Equipment
University, in Waltham, Mass.
Semiconductor
Altera
9
20
202
118
822
252
Manufacturing
At press time, it's considered a toss-up as to whether patent
Qualcomm
Telecom Equipment
4
8
415
211 1285
319
reform passes this year before the presidential election cycle
begins. In any event, Lerner, of Harvard, expresses satisfaction
AT&T
Telecom Services
1
3
763
305
1445
346
that at least "something's finally happening after a long time of
Sprint Nextel
Telecom Services
4
9
191
98
323
97
nothing happening."
n

Patent Performers
on the Move

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Table of Contents for the Digital Edition of IEEE Spectrum November, 2007