Patent Share Definition

What Is Patent Share?

Patent share is the percentage share of a universe of patents owned or created by one subset of that universe. This term usually applies to a comparative share between nations. Patent share has been subdivided not only across nations, but within industry groups and even between companies relative to each other. Patent share is becoming increasingly important to competitive advantage as the applicability of patents extends into information processes, computer software, chemical formulas, and other intangibles.

Understanding Patent Share

Patents grant exclusionary rights to an invention—a product or process that is a solution to a specific technological problem, or in general, a new way of doing something. To get a patent, inventors must provide technical information about the invention to a public agency, which then becomes public information. Information and data about patents and patent share are published by the U.S. Patent and Trademark Office (USPTO) and the World Intellectual Property Organization (WIPO). They can be used to indicate innovation, track rates of technological change or progress, or monitor the health of research and development. 

By examining countries and industries that are growing their market shares in patent discoveries, investors can get a sense of the health and vibrancy of an industry or economy. For individual companies, patents and patent share within their industry are important indicators for future value.

Companies that maintain their innovative edge by developing and protecting patents build their competitive advantage. That drives economic outcomes for these companies and their investors. Monitoring patents and patent share can give investors insight into future growth trends and stock performance that might not be reflected in traditional financial metrics.

Patents are especially important in industries with high amounts of research & development (R&D) expenditure, such as technology, biotech, and pharmaceuticals. Technology in food chemistry, IT methods for management, and special machinery exhibited the highest annual growth rates from 2007 to 2017.

In 2020, IBM had 9,130 patents granted to them, making it the single corporation with the largest growth in patent share in the world that year. IBM was followed by Samsung Electronics (6,415 patents), Canon (3,225 patents), Microsoft (2,905 patents), and Intel (2,867 patents).

The United States had a worldwide patent share of 47.1% as of 2020. The United States Patent and Trademark Office (USPTO) keeps track of the percentage of new patent issues that belong to every country on the globe, as well as the ratio of company-owned patents to those held by individuals. In 2020, about 52.9% of patents granted by the U.S. Patent and Trademark Office were filed by foreign companies. In 2018, over 300,000 new patents were granted in the U.S. and more than 14 million patents were in force worldwide.

The Guinness Book of World Records currently names Shunpei Yamazaki as having more patents than any other single person. At the time, he had been granted 11,353 patents in 10 different countries and Europe, which was cumulative of more than 40 years of inventions. As of February 2021, Yamazaki holds 5,749 United States utility patents.