Top Patent Holders Of 2020

IBM - Shutterstock photo
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Companies spend billions of dollars on research and development (R&D) to come up with groundbreaking innovation. This makes patenting an innovation a crucial step to secure and control the commercial use of their inventions and convert R&D efforts into potential economic gains.

Despite being a very tough year, companies managed to continue to invest in R&D: There was only a slight drop of 0.68% from the previous year in terms of total patents. Here’s a list of top patent holders for 2020 (based on rankings by IFI Claims): 

IBM maintained its patent leadership: International Business Machines (IBM)

2020 marked the 28th consecutive year for IBM being awarded the most number of patents to a U.S. company in a year. The company’s scientists and researchers received 9,130 patents in 2020. However, in terms of the cumulative patent holdings globally, IBM ranked second with 38,541 active patent families. Since 1920, IBM has received more than 150,000 U.S. patents. Its current portfolio of patents is focused on technologies such as Artificial Intelligence (AI), cloud and hybrid cloud technologies, quantum computing, and cybersecurity. IBM’s strategic investments in advanced technologies have improved its competitive position and profit dynamics. According to its recent earnings report for the full year, IBM’s total cloud revenue was more than $25 billion, up 20%—constituting 37% of its total revenue. The company invests around 7% of its total revenue on R&D, “focusing on high-growth, high-value opportunities.”

Samsung took the second spot: Samsung (SSNLF)

With 6,415 patent grants during 2020, Samsung is placed at the second spot. However, when seen in terms of cumulative patent holdings, Samsung is the world leader with 80,577 active patent families. Samsung’s research is guided by its vision to "shape the future with innovation and intelligence." Core research includes AI, data intelligence, robotics, next-generation communications & visual technology, and security. In particular, it is expanding its research scope to new promising fields based on AI technologies that will help benefit lifestyles. The South Korean conglomerate is one of the largest R&D spenders globally; Samsung spent ₩21.11 trillion in 2020 (8.9%) of its sales compared to ₩19.91 trillion (8.6% of sales) in 2019. Samsung’s capital expenditures in 2020 reached a total of ₩38.5 trillion.

Canon, a leader in digital imaging, is firmly placed at the third spot: Canon (CAJ)

With 3,225 patents, Canon Inc. ranked third for the number of U.S. patents awarded in 2020. Canon, a well-known global brand of Japanese origin, is a leading provider of consumer, business-to-business, and industrial digital imaging solutions. Canon has now ranked in the top five for the number of patents granted for 35 consecutive years. Canon topped Japanese companies for the 16th consecutive year. When seen in terms of cumulative patent holdings, Canon holds the third position with 36,161 active patent families.

Canon believes that in the long run, “by combining Canon’s powerful hardware with software technologies that employ AI, we will be able to develop diverse solutions to meet society’s needs.” The company is working to accelerate growth across four key business areas: commercial printing, network cameras, and medical and industrial equipment. Canon’s working concept has been to "make the invisible visible” and to make that possible, it has been allocating 8-9% of its net sales for R&D purposes. 

With robust R&D efforts, Microsoft is at the fourth spot: Microsoft (MSFT)

Microsoft Technology Licensing LLC (MTL) entered the top five in 2019. In 2020, it has maintained its position at the fourth spot with 2,905 patents. When ranked by the active patent families, Microsoft is again placed at the fourth spot, moving one step up from 2019 with 30,042 patents. Microsoft Technology Licensing is a subsidiary of Microsoft, and is responsible for licensing patents for Microsoft and its other subsidiaries.

Microsoft spent $19.27 billion on R&D during 2020, an increase of 14% compared to 2019. Microsoft’s R&D efforts focused on three interconnected ambitions: a) Reinventing productivity and business processes, b) Building the intelligent cloud and intelligent edge platform and c) Creating more personal computing. Overall, R&D spending has remained constant at around 13% of revenue each year for the last many years. The 2020 R&D expenses have largely been driven by efforts and investments in cloud engineering, LinkedIn, Devices, and Gaming. Microsoft’s portfolio reflects its long-time investment in R&D across multiple technology areas, ranging from operating systems, security, productivity, and cloud computing to emerging technologies like AI, mixed reality, and quantum computing.

Move towards a data-centric company places Intel in the fifth place: Intel (INTC)

Closely behind Microsoft is Intel with 2,867 patents in 2020. However, Intel slides to the ninth place when ranked in terms of active patent families globally. Intel is focused on delivering the world’s best semiconductors for an increasingly data-centric world. Over the last few years, Intel has changed its strategic priorities which are moving it away from a PC-centric company to a data-centric company. “Innovation, and the intellectual property (IP) that underlines it, are central to our business. Intel believes that a balanced, fair approach to IP systems is the best way to incentivize innovation,” according to Intel. During 2020, Intel invested $13.6 billion in research and development and $14.3 billion in capital expenditures while focusing to strengthen its core CPU business, improve execution, and accelerate growth.

Rounding Out The Top 10

While the top five rankings have remained unchanged, there have been some changes in the next five positions:

  • Taiwan Semiconductor Manufacturing (TSM) is a new entrant in the top ten. While a majority of companies have seen a drop in patents in 2020 from 2019, TSM registered a 22% growth, and moved up from 12th place in 2019 to the sixth spot. It was awarded a total of 2,833 patents in 2020.
  • With 2,831 patents, LG Electronics is seventh, one rank down from 2019.
  • Apple (AAPL) witnessed a 12% increase in patents during 2020, taking the tally to 2,791 patents. Last year, it was at 7th place and is now in 8th.
  • China's Huawei moved one spot up to the ninth place in 2020 with a 14% increase in its patents. Overall, Huawei was awarded 2,761 patents.
  • With 2,276 patents, Qualcomm (QCOM) moved up a place to make it into the top ten in 2020.

Two companies—Ford (F) and Amazon (AMZN)—lost their spots in the top ten.

In Percentage Terms

While the rankings above are in absolute numbers, the top three names when seen in terms of parentage increase in patents are:

  • Kia Motors is up 44% and 17 places with a total of 1,323 patents.
  • Texas Instruments moved up by 28% and 13 places to a total of 1,147 patents.
  • Sharp registered a 27% increase and a jump of 14 places. It was awarded a total of 1,042 patents.

In terms of countries, the most patents were granted to the U.S., followed by Japan, South Korea, China, and Germany.

Disclaimer: The author has no position in any stocks mentioned. Investors should consider the above information not as a de facto recommendation, but as an idea for further consideration. The report has been carefully prepared, and any exclusions or errors in it are totally unintentional. Company-specific data is based on earnings and annual reports.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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Prableen Bajpai

Prableen Bajpai is the founder of FinFix Research and Analytics which is an all women financial research and wealth management firm. She holds a bachelor (honours) and master’s degree in economics with a major in econometrics and macroeconomics. Prableen is a Chartered Financial Analyst (CFA, ICFAI) and a CFP®.

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