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US patent grants slow in wake of Supreme Court business methods ruling

Peter Sayer | Jan. 14, 2016
IT giants are no longer driving growth in U.S. patent grants.

US patent grants slow in wake of Supreme Court business methods ruling
The West Pediment located above the front entrance of the Supreme Court building. Credit:US Supreme Court

There are some big changes in the patent landscape hiding behind a small drop in the number of utility patents granted by the U.S. Patent and Trademark Office last year.

The 1 percent decline in utility patent grants -- the first since 2007 -- follows three successive years of more than 8 percent growth, according to analysis by IFI Claims Patent Services.

Grants to IT companies have driven growth in recent years but even IBM, which has topped the patent rankings for 23 years, received fewer grants last year (7,355) than in 2014 (7,534).

Behind the stagnation in overall numbers are some big changes in the classes in which the USPTO is granting patents.

Patent grants in the business method and data processing class, for example, fell 24 percent year-on-year to 8,828 -- a drop that, by itself, could account for almost the entire overall decline in grants.

IFI blames the business method turnaround on the U.S. Supreme Court's June 2014 decision in Alice vs CLS Bank International.

In that landmark case the court ruled that encoding a business method in software does not make it patentable -- or, as Justice Clarence Thomas put it in the first paragraph of the ruling, "Merely requiring generic computer implementation fails to transform that abstract idea into a patent-eligible invention."

There are signs that ruling has not just had a chilling effect on grants of business method patents, but also that it has led to the overturning of numerous others.

If the Alice ruling has knocked some of the lowest-hanging fruit off the patent tree, there are still plenty more opportunities for those willing to make a little more intellectual effort. Grants of patents for the notoriously math-intensive fields of image data processing and recognition of data were up by 14 percent and 18 percent respectively, although those patent classes accounted for fewer total patents than the business methods class.

The computers and electrical digital data processing class accounted for the largest share of patent grants, with 43,652 of the 299,365 total. Telecommunications was next, with 28,117, followed by semiconductors (25,409).

It's been years since Apple came up with the pentalobe screw to make it harder for people to repair their iPhones, but maybe repair sites such as iFixit will be railing about some of the 25,108 patents granted in the fourth-largest patent class, metalworking and hardware -- fasteners and connectors.

Pictorial communication via television and video accounted for 16,602 patent grants, and wireless communication networks were close behind with 16,629. With the decline in business methods patents, the pharmaceuticals (12,197) and medical diagnostics (11,921) classes were comfortably in seventh and eighth place.

 

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