The patent system enshrined in the Constitution is one of the most important engines of U.S. economic growth. It's also a good indicator of corporate smarts: The U.S. companies that won the most patents last year also had high earnings and returns on capital, meaning they've been good at wringing profits out of the money they invest.
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IBM
Microsoft
The next company was Microsoft (MSFT, news, msgs), which received 2,906 U.S. patents. Intel (INTC, news, msgs), with 1,537 patents, was third. (Microsoft is the publisher of MSN Money.)
Other companies on the list included General Electric (GE, news, msgs), Broadcom (BRCM, news, msgs), Texas Instruments (TXN, news, msgs), Honeywell International (HON, news, msgs) and Hewlett-Packard (HPQ, news, msgs).
The statistics were compiled by IFI Patent Intelligence, a unit of Dutch media company Wolters Kluwer, from U.S. Patent and Trademark Office filings.
Smart means more than a big patent portfolio, of course. Otherwise, once-prolific inventors such as AT&T (T, news, msgs) and Westinghouse would still be generating high returns.
IBM had an ROIC of 29% in 2009, according to Worldscope, while Microsoft's was 36% and Intel's was 10%. Samsung Electronics and Canon (CAJ, news, msgs) had ROICs below 10%, and Panasonic (PC, news, msgs) and Toshiba (TOSBF, news, msgs) were negative. The average for the Standard & Poor's 500 Index ($INX) was 9% last year; for tech companies, it was 9.5%.
IBM invests $6 billion a year in research and development. It has eight pure research labs around the world where scientists work on projects unconnected to any specific business proposal. It generated 39% of its $96 billion in revenue last year from services, which utilize technology but consume relatively little capital compared with manufacturing.
Measured according to earnings per patent, General Electric led with $11.3 million per patent, followed by Cisco Systems (CSCO, news, msgs) at $6.6 million and Hewlett-Packard (HPQ, news, msgs) at $6.3 million
| Rank | Company | US patents in 2009 | Return on invested capital | Details at Forbes.com |
|---|---|---|---|---|
1 | 4,914 | 28.5% | ||
2 | 2,906 | 35.7% | ||
3 | 1,537 | 10.3% | ||
4 | 1,237 | 14.3% | ||
5 | 979 | 3.5% | ||
6 | 966 | -16.2% | ||
7 | 913 | 14.1% | ||
8 | 714 | 1.7% | ||
9 | 655 | 15.3% | ||
10 | 652 | 15.4% |
Who's missing? Energy company Exxon Mobil (XOM, news, msgs), chemicals manufacturer Dow Chemical (DOW, news, msgs) and drug giants Pfizer (PFE, news, msgs) and Merck (MRK, news, msgs), which arguably derive more value from a given patent than any other type of company. In recent years, consumer-technology companies have risen to the top of the patent list, displacing them.
"A single patent by a drug company involves more research and more protection," said Darlene Slaughter of IFI Patent Intelligence. "A cell phone technical advance might last for a year."
This article was reported by Daniel Fisher and Jonathan Fahey for Forbes.com.