The Most Innovative Companies

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After a decline in 2015, U.S. patenting activity rose to a record high in 2016. The U.S. Patent and Trademark Office granted 304,126 patents last year, up from 298,407 in 2015. The increase was largely driven by West Coast technology companies, including Amazon, Apple, AT&T, Boeing, IBM, Intel, Google, and Microsoft.

According to a 24/7 Wall St. analysis of data provided by Information for Industry (IFI) Claims Patent Services, Korean conglomerate Samsung Electronics was granted the most patents in 2016. Including its major subsidiaries, Samsung was awarded more than 8,500 patents, slightly higher than IBM’s 8,088 awarded patents.

Tech companies and others spend hundreds of millions, and often billions, of dollars to discover the next big thing and gain an advantage over competitors. Based on the number of patents awarded in 2016, 24/7 Wall St. reviewed the most innovative companies.

Click here to see the most innovative companies.

In an interview with 24/7 Wall St. Larry Cady, senior analyst with IFI Claims, explained that patenting activity tends to increase at companies based in countries with strong economies. Because the U.S. economy is doing well, patent activity at U.S. companies increased last year. By contrast, with Japan’s economy flagging in recent years, patents awarded to a number of Japanese companies, including Canon, Honda, Panasonic, Sony, Toshiba, and Toyota, decreased in 2016.

Last year, about half of all patents were granted to U.S.-based companies, with the remainder awarded primarily to Asia-based corporations as well as companies operating in European nations such as Germany and Scandinavian countries such as Sweden. The fact that foreign companies are seeking U.S. patent grants underscores the extraordinary demand for access to the U.S. market — the largest in the world. Most Japanese companies perform their work in Japan but still file U.S. patents.

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Source: IFI Claims Patent Services

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Many years often pass before companies gain value from research investments, even when the research results in a patent grant. As Cady noted, “Not all those developments are going to be earth shattering.” Allocating resources to research and development is for this reason a highly strategic decision, and companies leverage patent portfolios in a variety of ways. In addition to searching for breakthrough technologies, for example, companies will develop a large patent portfolio as defense against litigation. For this reason, “one of the drivers of patenting is litigation,” Cady said.

The most frequently patented technologies are in the categories of computers, transmission of digital information, wireless communication networks, and pictorial communication. According to Cady, the high patenting activity in these areas is due to their novelty. “Any kind of new and emerging technology that has a lot of potential value in the future is going to see a lot of patenting.”

While it is reasonable to expect less patenting activity in more mature industries, this is certainly not always the case. For instance, although cars have not changed considerably in the past several decades, patents granted to companies in the auto manufacturing sector rose substantially last year. While a patent in a newer high tech field like artificial intelligence may represent a major scientific breakthrough, recent patents in the more staid automobile industry reflect relatively small improvements. Cady acknowledged the growing interest in self-driving cars, but noted these developments have not yet moved the needle in patent grants.

To identify the 25 most innovative companies, 24/7 Wall St. reviewed the companies with the 1,000 highest total number of U.S. Patent and Trademark Office grants in 2015 from IFI Claims Patent Services. IFI produces these data based on the entity listed as holding the patent. In order to arrive at a figure that more closely reflects a company’s total, 24/7 Wall St. combined the grants awarded to a company and its subsidiaries. It is important to note that while IFI Claims Patent Services provided the data on USPTO grants, 24/7 Wall St. aggregated the grants of multiple entities under the same parent corporation. This number is an estimate only as it excludes any patent-holding subsidiaries of a company that do not share the company’s name, and it does not include companies outside of the top 1,000 patent grantees.

These are the 25 most innovative companies.