Is Red the new Blue? Will IBM’s Patent Strategy shift under new leadership?

For the past 27 years, IBM has been a global leader in obtaining patents. In 2019, IBM obtained a record-breaking 9, 262 patents in the US, bringing their patents owned to over 140, 000. IBM has consistently touted the benefits of their patent strategy, which includes earning revenue through licensing, rewarding employee innovation, and using patents as leverage in negotiations.

It is undeniable that IBM has invested heavily in diversifying their patent portfolio. In recent years, the company has been patenting in areas such as artificial intelligence, cloud technologies, security applications, blockchain, and quantum computing. In an interview Mark Ringes, Vice President and Assistant General Counsel for IBM, stated that

“We focus more broadly because any one of those areas might take off and be very successful for us and so we’re fortunate that we have a sizeable research and development budget … ultimately, some of those will hit, and for others we will decide that it wasn’t necessarily good money invested there, but we don’t know today what’s going to be successful four or five years from now.”

IBM’s ability to invest broadly is not a patent strategy that can be adopted by most companies, but their eagerness speaks volumes about their faith in the strategy and its ability to position the company to meet their mid and long term goals. 

In February 2020, IBM announced that current CEO and President Ginni Rometty will be stepping down in April and will be replaced by Arvind Krishna as CEO and Jim Whitehurst as President. Krishna is an IBM veteran who led the $34 billion Red Hat acquisition last year. Jim Whitehurst will continue as Red Hat’s CEO alongside his new role. The acquisition and leadership changes at IBM is a definitive signal that the company is invested in their cloud technology, but what does it mean for their overall patent strategy?

With Krishna and Whitehurst at the helm, IBM could be heading in an exciting new direction. IBM’s leadership in obtaining patents will likely remain unchanged, with Krishna continuing the tradition. Krishna, remarking on AI, cloud, and quantum computing, stated that “[o]ur work in these areas, and others, began long before there were practical enterprise uses for the technology, and that spirit of research for the sake of discovery is what has propelled us to lead the field in patent grants for more than a quarter of a century”. However, we may see the company shift how they use their patent portfolio. For decades, Whitehurst has been a pioneer for the open source movement. He has consistently discouraged patent aggression by committing Red Hat to not one, but two Patent Promises. With this philosophy, Whitehurst built up Red Hat’s platforms and created new business opportunities. In his new role, Whitehurst could convert IBM’s extensive and diverse patent portfolio into a more collaborative and innovative future. It remains to be seen how IBM’s patent strategy will change, but the combined experience and expertise of Krishna and Whitehurst gives IBM a breath of fresh air.

Written by Ryan Wong, a second year JD Candidate at Osgoode Hall Law School. He is a guest contributor with the IPilogue and is one of the Student Coordinators with the Innovation Clinic.

 

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