Yearly number of software patents granted ----------------------------------------- 1972 176 1975 107 1978 154 1981 157 1984 413 1987 820 1990 1,201 1993 2,007
In what may be judged as either ironic or deeply disturbing, most software patents are held by companies that history has proven -- and those within the computing industry judge -- to be totally incapable of delivering innovative software products in the marketplace.
The following constitutes our best estimates of the number of software patents granted to various companies between 1990 and 1992:
Software patents granted 1990 - 1992 ------------------------------------ IBM 500 Fujitsu 50 Lotus 7 Hitachi 400 HP 50 Novell 1 AT&T/Bell 150 Sun 50 Borland 0 DEC 150 Unisys 30 NeXT 0 Toshiba 150 Apple 20 Oracle 0 Sharp 100 Texas Inst. 20 Pyramid 0 Xerox 100 Microsoft 13 SGI 0 Canon 70 Intel 10 Sybase 0 Motorola 70 Matsushita 9 Symantec 0 Wang 60 Adobe 8 WordPerfect 0 Total software patents granted (1990 - 1992): 5000 Entities with fewer than 5 s/w patents: 1000 Entities with 5 or more s/w patents: 60
Because of the way patents are classified it is very difficult to gather accurate data on how many software patents exist. Also differences of opinion as to what precisely constitutes a software patent can also muddy things. The above data is indicative of the overall situation, but individual figures may have errors of anywhere up to 50%.
The above table tends to suggest a significantly negative correlation between the number of software patents granted to a company and its ability to bring innovative software products to market. Companies that form the backbone of the software industry: Microsoft, Adobe, Lotus, Novell, Borland, Oracle, and Sybase, have relatively few software patents, while companies that hardly have any market share: Hitachi, AT&T, Toshiba, Sharp, and Xerox, have many.
As an example of this, consider Sun's Network File System, NFS, which Sun designed and developed, which was for its time a highly innovative product, and which went on to become the standard file service protocol throughout the Unix industry. Although far from conclusive, a search for the string "NFS" on a small database of some 2000 patent abstracts which one of the authors maintains turned up five patents assigned to IBM, one to Auspex, and none to Sun. This is despite the fact that Sun developed NFS, and the other two companies have engaged in no more than the most trivial of tinkering around the edges.
When asked to name some companies responsible for the production of innovative software, Hitachi isn't one of the companies most people immediately think of.
IBM has a very strong software patent portfolio. It is oversized even in proportion to the size of IBM itself. This is a result of IBM's patenting every single trivial idea every employee ever comes up with, rather than having any great propensity to be truly innovative. IBM has never been considered synonymous with innovative software. IBM even has a patent, #5,247,661, on a software application to permit employees to automatically document ideas for later patenting.
Fortunately, when IBM was being investigated for antitrust (some time ago) it issued a consent degree permitting the automatic licensing of its patent portfolio. As a result any one patent can be licensed for 1% of royalties, and the entire suite for 5%. In this regard the downsizing of IBM that is currently occurring is cause for considerable concern. If IBM ever feels free to start exercising its full powers, its patent portfolio could pose a considerable threat to the entire computer industry. It has already recently increased the fee to automatically license its entire suite from 3% to 5%. The possibility of IBM selling off various divisions or deciding to break up is also cause for concern. A worst case scenario as far as the rest of the computer industry is concerned would involve some or all of IBM's patents winding up in a company that produces few or no real products.
None of the hardware or software companies that collectively constituted the microcomputer revolution hold significant numbers of software patents. Companies such as Microsoft, Borland, Novell, Adobe, Lotus, NeXT, Intel, Apple, Sun, and SGI all have relatively weak software patent portfolios. These are the companies that have created wealth in the computer industry over the last ten years by developing new and innovative products. They are very much responsible for turning the industry into the vibrant place it is today. Without these companies, the software industry would be virtually nonexistent.