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Analysis of cloud computing patent holders

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Prior to becoming an IBMer, I was fortunate to work at an intellectual property acquisition, management and consulting firm, Transpacific IP, headquartered in Asia. This unique experience gave me first-hand knowledge of how patents can serve as a vital strategic value to a corporation. As there has been little discussion regarding cloud computing patents, I thought it would be interesting to shed some light on who are the current primary cloud computing patent holders.

But before we delve into the topic, what is a “patent” exactly?

According to the United States Patent and Trade Office (USPTO):

A patent is a property right granted by the Government of the United States of America to an inventor “to exclude others from making, using, offering for sale, or selling the invention throughout the United States or importing the invention into the United States” for a limited time in exchange for public disclosure of the invention when the patent is granted.”

Please pay attention to the verb exclude. In essence, unless the patent owner is willing to license the rights, the patent owner is the only entity that can use the invention for commercial usage.

Please also note that a granted US patent is only valid in the US. In order to exercise the rights of the patent in other countries, the invention must go through the patent application process of that particular country. Consequently, for any strategically important patent, there will always be a patent family, where the same patent has been granted by multiple countries.

With no professional patent analysis tool on hand and limited free time, I narrowed down my search scope and concentrated on patents that included the phrase cloud computing in either the patent title, abstract or claims (claims define the scope of the patent protection). Although this only covers part of the overall patents that have been issued (some may not have the phrase cloud computing in it), it provides a glimpse as to who are the major players now.

The results of my analysis are presented in the following graphs and tables, with bullet points underneath them. The data was compiled with the help from a good friend using the Thompson Innovation patent analysis tool during November of 2013.

Figure 1 shows the number of issued US patents. The reason behind the special attention on US patents is because they can be considered more valuable than those granted by other countries. This is because many of the patent infringement cases are filed in the US.

Cloud computing patents

• As of November of 2013, there were a total of 167 issued US patents with the phrase cloud computing in either the patent title, abstract or claims.

• IBM currently tops the list with 42 patents. IBM appears serious in securing its leadership in the cloud computing industry.

• Although many well-known technology companies are seen in the graph, not all of them are present. Possible reasons include:

➢ Most of their cloud computing patents don’t have the phrase cloud computing in either the patent title, abstract or claims.

➢ Their inventions are still in the patent application phase.

➢ Number of patents they have are relatively lower.

• Excluding Sharp (Japan) and SAP AG (Germany), all of the companies listed in the graph are headquartered in the US. Cloud computing will likely be an important growth industry to the US economy.

Figure 2 portrays the number of patent families. The family consists of patents based on the same invention filed in different countries. It is worth noting that the family may not necessarily include a US patent. The purpose of this figure is to depict the cloud computing application trend.

Cloud computing patents 2

• As of November of 2013, there were a total of 1,616 patent families with the phrase cloud computing in either the patent title, abstract or claims.

• Mr. Zong Cheng Li tops the list with a whopping 957 patent families. This is astonishing, where a single inventor instead of a company is the owner for so many patent families. Most of the families probably consist of patents granted by the State Intellectual Property Office of the PRC (SIPO).

• Compared to the other technology companies in Figure 1, IBM and Microsoft are the most aggressive in building a comprehensive cloud computing patent family.

• Most of the companies in Figure 2 are China and Korea based. Evidently, the two countries are trying to establish a firm foothold in the cloud computing industry.

• The huge gap between the total number of patent families (1,616 total) and US patents (167 total) show most of the patents in the patent families are being filed with non-US patent offices.

Separately, Tables 1 and 2 respectively show the Top 6 and Top 10 IPC (International Patent Classification) codes that were assigned to the patent families and US patents. Simply put, these codes are used to classify the type of technology that is being covered.

The IPC code for Table 1 ends at the third hierarchal level, while Table 2 ends at the fifth (the technology classification for the latter is more detailed than the former). The reason for stopping at the third level for Table 1 is because the IPC code type increases sharply when at the fourth or fifth level. Thus, a significant amount of time would be needed to compile the statistics. Essentially, from these tables we can infer which codes are primarily used for cloud computing.

Cloud computing patents 3

•  The majority of the cloud computing patents appear centered around the following three IPC codes:

➢ H04L (Transmission of digital information)

➢ G06Q (Data processing systems or methods)

➢ G06F (Electric digital data processing)

Conclusion

Needless to say, cloud computing will be a technology that will revolutionize our world. But to fully tap the cloud computing market potential, players will need a strong patent portfolio to both protect themselves and to attack any patent infringers. IBM seems to have established a good start in this respect (well done, IBM!). Separately, a very surprising discovery from this research is the hundreds of patent families owned by Mr. Zong Cheng Li. It will be worth seeing how he intends to utilize these patent families.

I hope this article will help readers have a better understanding regarding the cloud computing industry from a patent standpoint. Or even better, maybe it will serve as a motivation in filing your own cloud computing patent!

Finally, before I wrap up this article, I would like to extend my special thanks to Neo, Alston and Blanche for their help and input!

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