When we closed our 2019 Q4 takeaways with the question ‘Will the coronavirus outbreak impact the patent market as well?’ Nobody could predict the rapid shift of events that occurred in the following weeks.
After the WHO recognized Covid-19 as a pandemic, Europe became its major hot spot. Now that the first-hit countries are cautiously easing some restrictions, the US is fighting to flatten the curve, while the curve is becoming steeper and steeper in South America.
Starting in late February, the major stock markets began experiencing what some analysts called “the worst downturn since the Great Depression” while most businesses had to put their activities on hold because of country-wide lockdowns.
The patent market will obviously be influenced as well but it is still too early to appreciate the magnitude of such an influence. However, this didn’t stop us from taking a snapshot of the current situation, so that in the future it will be easier to look at the bigger picture.
As always, before diving into the takeaways, here are a few remarks about the characteristics of the data that we collected and analyzed:
- The patent list includes patents registered at the USPTO up until 2020/04/08;
- The assignments took place between 2020/01/01 and 2020/03/31;
- We excluded patent assignments between affiliates or companies under the same parent company;
- The main unit for the charts is the number of patent applications;
- For portfolios, the number of assignments is calculated according to the number of distinct Reel/Frame IDs.
#1 — More patents in smaller portfolios were transacted
What caught our attention right away was the steep growth in the number of patents transacted compared to 2019 Q4: from 6,454 to 15,257 — an increase of 136%. The number of portfolios that contained these patents is also larger: 2,833 (compared to 976). These values resulted in an average number of patents per portfolio that decreased slightly from 7 to 5: a sign that the portfolios transacted in 2020 Q1 contained fewer patents.
#2 — Utility patents dominated the patent market
The totality of the assets transacted in the first quarter of 2020 were utility patents. In 2019 Q4, 3.4% of the total were design patents, a percentage that had already signaled a decrease compared to 9.8% in the previous quarter — does this partial trend suggest a diminishing interest in design patents?
#3 — Most patents transacted — once again — were active
The percentage of active patents among those in the portfolios transacted slightly decreased from 74.5% to 73.6%.
#4 — US-based companies acquired the most patents
A staggering 73% of the patents transacted were assigned to US-based companies. The percentage is in line with the previous quarter, in which US entities accounted for 72% of the total. It should be noted, however, that two of the major assignee companies from Bermuda and Switzerland (in the last quarter) are actually headquartered in the US.
#5 — A major NPE was the biggest assignor
Intellectual Ventures Management, an NPE that in the past has been named as the “most notorious patent trolling company”, the “ultimate patent troll”, and “the most hated company in tech”, was the major assignor of this year’s first quarter with 3,971 patents assigned (26% of the total). IBM followed in the second position with 945 patent assets (6%). Intellectual Ventures Management was also a major assignee, with 1,520 patents assigned (10%).
#6 — Fewer high-quality and high-value patents were transacted
Concerning patent quality and value, the percentage of the most desirable patents — high-quality and high-value — decreased slightly by 1.5% (from 9.9% to 8.4% of the total). On the other hand, high-value and low-quality patents increased by 7.6% (from 26.5% to 31.6% of the total). These figures are based on Patentcloud’s exclusive Patent Quality and Value Rankings.
#7 — Computer technology still leads the way (with a few exceptions)
In the worldwide rankings, the Computer technology sector still holds the top spot. It also holds pole position in the US, China, and the UK, which happen to be three of the countries from the Top 5 assignee countries list. The technology focus of Japan and Germany is on Electrical machinery and Other special machines respectively. In Japan, Computer technology is in position eight, while in Germany, it is out of the Top 10 transacted technologies.
What to expect next?
As we discussed before, patent assignment data should be a major element of every company’s patent strategy. In this period of uncertainty, data can provide some security and, above all, some of the objectivity that is much-needed right now.
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