America's Ten Most Innovative Companies

The term “innovation” is difficult to quantify when it comes to large companies across different industries.

24/7 Wall St. chose to look at global patent filings, filings by field, and increases in R&D spending to define innovation. The initial universe of our analysis began with the fifty companies with the highest number of patent filings, according to data compiled under the World Intellectual Property Organization’s Patent Cooperation Treaty s (“PCT”) for 2009, a specialized agency of the United Nations. All 50 companies are large and well-known multinational firms.

Data collected for the “World Intellectual Property Indicators 2010” study shows that the United States is still among the most active nations  for patent filings. Fourteen of the firms in the top 50 are headquartered in the US. Fifteen Japanese companies made the list. Five German companies were included. China had only two.

24/7 Wall St. analyzed patent filing information from 2009 among the top fifty firms with figures on the size and growth rate of R&D spending from 2009 to 2010. Some American companies continue to increase R&D sharply. Among these are Microsoft (NASAQ:MSFT), Apple Inc. (NASDAQ: AAPL), and handset chip giant Qualcomm (NASDAQ: QCOM). American companies that have slowed down R&D spending include old and weak US firms including GM, Eastman Kodak (NYSE: EK), and Motorola (NYSE: MOT).

24/7 Wall St. took the 14 US companies in the top 50 and considered additional data for each, including sales growth, industry leadership, and stock and financial performance. Whether R&D expenditures rose or fell over the last two years was also noted.

These are 24/7 Wall St.’s Ten Most Innovative Companies in America.

1. Qualcomm (2009 PCT patents filed: 1,280, up 373 from 2008) Qualcomm is not well-known outside the technology industry. It is one of the primary inventors and manufacturers of complex chips for portable devices. It has been in pitched patent wars with a large customer–Nokia (NYSE: NOK)–and a direct competitor–Broadcom (NASDAQ: BRCM)–the outcome of which could decide billions of dollars in sales. Qualcomm was one of the few large tech firms worldwide that sharply increased R&D spending last year.

2. Microsoft (2009 PCT patents filed: 644, down 161) Microsoft spreads its intellectual property needs over a broad array of products and services. It has one of the largest tech budgets in the world– one which rose sharply last year. Microsoft also has operations that require significant intellectual property work, including search engine advancement, upgrades to the Windows operating system, its business and server software and its gaming platforms.

3. Procter & Gamble. (2009 PCT patents filed: 341, down 71). P&G dropped its R&D spending less than 10% during the worst part of the recession. Most of the company’s patents are for the components and mixtures used in its household, personal care, and fragrance businesses, which the firm makes unlike most other large patent filers and holders. Its recent applications include one for air freshener and for a fabric care compound.

4. IBM. (2009 PCT patents filed: 401, down 283.) Another US company that made only modest cuts in its R&D expenditures in 2009. IBM says that its worldwide patent portfolio is now more than 40,000. In most years, the US grants more patents to IBM than any other company. Most of the company’s IP work is in the areas of electronic storage, displays, servers, software, and microelectronics.

5. 3M. (2009 PCT patents filed: 688, up 25) The company produces more than 55,000 products, most of which are adhesives, abrasives, laminates,fire protection products, dental, electronics, and optical devices. Some of the patents the company has applied for recently are for simple products like tape dispensers. Others, like those for compounds such as hydrophilic porous substrates, involve more complex R&D.

6. Hewlett-Packard. (2009 PCT patents filed: 554, up 58) HP is now the largest technology company in the world. It cut R&D spending modestly during the recession, but the process is necessary to keep up its growth in the hardware, enterprise software, and IT services industries. HP holds 33,000 patents, many of which are for storage, micromechanics, memory devices, and semiconductors.

7. DuPont. (2009 PCT patents file: 509, down 8 ) DuPont may have one of the widest arrays of patents by sector of any company in the world. Its paper products unit has a number of patents for packaging and printing. DuPont also does substantial research on biochemical, chemical, and engineering intellectual property. DuPont kept R&D spending in 2009 flat.

8. Baker Hughes. (2009 PCT patents filed: 375, up 79) The company is one of the largest oilfield services and reservoir products and services companies in the world. Baker Hughes manages more than 3,000 oil rigs. Most of the firm’s applications are for collecting and distributing data from wells, imaging, and hardware and software
used to manage drill sites.

9. GE (2009 PCT patents: 307, down 19) The world’s largest conglomerate has complex operations in the design and manufacturing of engines, healthcare systems, appliances, lighting and electrical services, and oil and gas equipment. The firm has recently filed patents for wind technology, microwave technology, energy exchange, and nanoparticles.

10. Corning. (2009 PCT patents filed: 285, up 57). Corning is the world’s leader in fiber optics, display, and glass technologies. Recent technology advances from Corning include green lasers, sunlight to energy converters, and products that help the advanced purification of chemicals.