31 Jul
2015

The companies that abandon most US and EPO patents – and shoulder much responsibility for raising quality

In the latest issue of IAM magazine – available for subscribers to view online from today – Matthew Beers and Maria Lazarova of Ocean Tomo take a deep-dive look at patent abandonments data from both the USPTO and EPO. The full article contains a wealth of interesting data but, for the purposes of this blog we’ll take a sneak peek at the findings relating to IP owners and which of them abandon the most patents at both agencies. Perhaps unsurprisingly, about half of the top 50 companies by abandonment volume are also in the top 50 by number of applications filed. What’s more, of the top 50 companies by abandonment volume over the period examined by Beers’ and Lazarova’s analysis, well over two-thirds appear among the top abandoners at both the USPTO and the EPO.

Japanese companies, renowned for having pursued several decades’ worth of quantitative patent filing in both the United States and Europe, dominate at both offices. Seven of the top 10 rights holders by number of abandoned US patents and half of the top 10 by number of abandoned European patents hail from Japan.

There are no prizes for correctly guessing which company lets the most patent rights lapse in the United States. On average over the past decade, IBM has abandoned close to 2,000 US patents each year – almost twice as many as second-placed Panasonic. Here are the top 10 companies in terms of abandoned US patents over the past 10 years, with annual figures and compound annual growth rate (CAGR) of abandonments:
 

CompanyCountry2005200620072008200920102011201220132014CAGR
IBMUnited States        951     1,272     1,488     2,116     2,994     3,024     1,785        394     2,729     3,06413.9%
PanasonicJapan        793        769        522        888        732     1,271     1,342     1,061     1,451     1,5777.9%
SonyJapan        629        890        799        585        522     1,361     1,155     1,181     1,223     1,1356.8%
ToshibaJapan        436        267        357        413        652     1,230     1,404     1,336     1,558     1,46014.4%
HitachiJapan        719        908        796        745        870     1,278     1,078        838        768        8672.1%
CanonJapan        903        965     1,024        765        507        632        616        672        708     1,3164.3%
PhilipsNetherlands        695        837        915        837        487        693        752        556        474        364-6.9%
Samsung ElectronicsSouth Korea          99        100        115        217        418        859        821     1,029     1,094     1,25632.6%
FujitsuJapan        284        304        462        463        517        854        907        804        637        6088.8%
FujifilmJapan        206        326        174        245        406        759        748        794     1,027     1,07720.2%


The abandonment rate - ie, the number of abandoned patents as a percentage of all in-force, issued patents - is higher for European than US assets, though abandonment numbers are generally lower with regards the former. Beers and Lazarova suggest that this reflects the considerably higher and more frequent renewal fees in Europe and the resulting strategy of maintaining patents only in those EPO jurisdictions where GDP is higher and enforcement is perceived to be more effective. The top 10 companies in terms of abandoned European patents over the past decade are as follows:
 

CompanyCountry2005200620072008200920102011201220132014CAGR
Siemens Germany         428        421        464        678        779        814        480        437        857        7145.9%
Panasonic Japan         198        361        614        913        555        760        495        401        793        48310.4%
Canon Japan         588        535        492        545        518        643        500        485        490        395-4.3%
Philips Netherlands         429        418        380        596        359        511        452        252        569        234-6.5%
BASF Germany         350        308        325        428        342        362        587        428        445        289-2.1%
Bosch Germany         200        167        245        206        211        339        438        323        682        4178.5%
Bayer Germany         423        204        254        420        382        240        365        259        315        189-8.6%
Sony Japan         174        147          54        135        101        617        155        222        521        46311.5%
Fujifilm Japan         150        290          27          42        223        312        382        308        479        2666.6%
Toshiba Japan        119          76        323        457        388        485        153        129        253          91

-2.9%


The authors note that - in the United States - the trend appears to be that rights holders are increasingly abandoning patents later in the lifetime of the assets – more often than not in the period just before the final and most sizeable maintenance fee is due to be paid, 11-and-a-half years after grant date.

Nevertheless, the fact that so many are being abandoned before their 20-year term is up suggests that plenty of applications are being filed for patents that have negligible strategic value for their would-be owners. As the authors point out: “A first to file mentality continues across the globe, with maintain versus abandon decisions being made later in the life of the asset as technology and commercialisation proof of concepts are measured.”

There is certainly an argument to be made for patenting as voluminously as possible in areas of technological or commercial strength, or with heavy competition. However, to do so means substantial up-front cost and an even greater challenge in convincing the C-suite of the value of filing and maintaining patents in the first place.

An additional problem with this approach is the potential impact it has on the market as a whole. The reality is that the vast majority of patents hold little strategic value; and the chances are that most of those will be abandoned at some point in their lifetime. All of those filings submitted by the companies listed above equate to a whole lot of patent examiners’ time being spent on processing a large number of applications that end up being inconsequential to their holders (and most likely to third parties as well, based on the admittedly idealistic assumption that if they had any value they could, and would, be sold). One can’t help but think that if there really is a significant problem in terms of too many low-quality patents being granted, as many argue, then at least part of cause lies here.

Jack Ellis

Writer