Guest Commentary: Innovation means more than numbers

Submitted by Todd Van Thomme

Here’s a simple formula: Patents equal innovation. Except it’s not that simple. The number of patents often does not accurately represent the level of innovation, and innovation certainly occurs without patenting. 

Although the number of patents filed is a convenient way to quantify innovation, especially for stakeholders, to truly understand the level of innovation you must look deeper. 

Patents protect innovations. That’s their economic role. But all patents are not created equal.

The U.S. Patent and Trademark Office reports 597,175 utility patent applications were filed in 2020. In 1990, only 164,558 patent applications were filed. That doesn’t mean the innovation rate more than tripled in 30 years. Instead, the sharp increase in patent filings is likely an indication of how companies prioritize patent filings to protect innovations. At least two factors may contribute to increased patent application filings:

Patents are likely to be filed to protect more nuanced aspects of a product or process rather than the broad concepts that were traditionally filed.

Corporations and the public have a greater recognition of the value of patent protections.

If you’re not protecting your intellectual property, you’re giving it away. Whether you’re an individual, startup or established company, a patent paves the way for financial benefits. Although somewhat dated, a 2009 Australian study found a 13% decrease in the likelihood that an invention makes it to market if a patent application is not granted for whatever reason.

Certainly, the number of patent applications a company files speaks to the fiscal support it provides to protect its innovation. Patent application filings show a commitment to protect innovation, but they can be misleading. Though one company files a large number of patents, the scope of the patents may be commercially equivalent to that of another company filing only a few. 

“Your goal should not be to get patents,” Kirk Goodwin, head of global innovation IP at Whirlpool Corp., says. “Your goal should be to get innovation that you can protect through intellectual property.”

In a conversation with Nyemaster attorney Jeff Harty for the “On Intellectual Property” podcast, Goodwin noted that how you measure innovation determines your company’s innovation path. “Whatever you measure, you tend to do,” he says. “If you determine your value by the number of patents you create, that’s what you’re going to do.”

When it comes to spurring innovation, patents also encourage inventors to disclose their invention to the public. That enables future inventors to innovate even further, and the cycle continues. Disclosing how to make and use an invention — as required in global patent applications — provides building blocks for other inventors to build on. 

In another “On Intellectual Property” podcast conversation, David Kappos, former director of the USPTO and a respected leader in intellectual property, calls out one example of the impact patents have on innovation. He notes that the patent system creates an economic equation for drug companies to invest billions of dollars to bring a drug to market despite the approximately 90% failure rate of getting through the regulatory cycle. “It’s so much about having incentives,” he says. “And what are those incentives? They’re patents.”

Goodwin says the key for Whirlpool’s internal innovation efforts is communication. “We don’t need to incentivize people to innovate, but we need to help them know where to innovate, what to do, and what the consumer needs,” he says. “Innovators want to innovate. That’s part of their DNA, so you just need to facilitate that.”

Innovation is alive and well in the United States. The World Intellectual Property Organization’s Global Innovation Index 2022 uses 80 indicators to track trends in 132 economies. They ranked the United States second only to Switzerland. 

“Companies can’t take their foot off the pedal if they want to stay competitive,” Harty says.

While the number of patent applications filed can be an indicator of innovation, perhaps even a significant indicator, the numbers alone only provide pieces. They don’t show the complete mosaic of innovation. To truly understand the level of innovation, one must look deeper than the simple statistics of patent applications. That’s the only way to discover the true scope of innovation happening. ν

Todd Van Thomme is a Des Moines-based patentattorney and shareholder with the law firm Nyemaster Goode PC.

Protecting an innovation

Don’t share your innovation with anyone who doesn’t have an obligation of confidentiality. Until you file, any public disclosure, offer for sale, or sale of that invention likely bars protection in most countries. In the United States, it starts a one year grace period to file a patent application.

Interview patent attorneys or patent agents. Talk to more than one. You’re likely to have a long-term relationship, and it’s important that you work well together.

Don’t be afraid to talk to your legal counsel early. They can help you decide if more details need to be hashed out or if it’s time to file.

File as soon as possible. In the United States, patents are granted on a first-to-file basis.