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  Chapter Fourteen:
 
BUSINESS
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  Gross Domestic Product
  Business Cycles
  Business Revenues
  Trading Volume
  Dow Jones Average
  Stockholders
  Crude Oil
  Energy Consumption
  Patents
  Imports and Exports
  Foreign Investment

  

 

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BUSINESS

Patents

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As the number of U.S. patents grew, fewer patents were issued to individuals and more were issued to corporations. The proportion of U.S. patents issued to foreigners increased.
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Patents allow their owners to prohibit others from making, using, or selling the invention for a period of twenty years from the date of application for the patent. About 95 percent of all patents are issued for inventions, as distinct from the small number of patents issued for designs and botanical plants. Prior to 1986, the charts show only patents for inventions; starting in 1986, patents of all types are included. 

The lone inventor whose Yankee ingenuity enables him to build and patent a better mousetrap is a stock American hero. In 1901, four out of five U.S. patents were issued to individuals. In 1999, more than four out of five were issued to corporations (see upper chart). Some of this change occurred as individuals incorporated their businesses, but the trend toward larger-scale organization of technological innovation is clear. 

In the early part of the century, nearly all U.S. patents were issued to Americans. The lower chart shows the steadily increasing share of foreign corporations receiving U.S. patents. The ten largest recipients of patents from 1977 through 1999 were evenly divided between U.S. and Japanese corporations: IBM, Canon, GE, Hitachi, Toshiba, Mitsubishi, Motorola, Eastman Kodak, U.S. Philips, and NEC. Foreign individuals also received about a quarter of the small number of patents issued to individuals. Counting corporations and individuals, the foreign share of U.S. patents issued in 1999 was 44 percent. 

The trends shown in these charts are attributable primarily to two related factors: the rising cost of the patent process and globalization. As the patent archives grew, the process of searching and validating a patent claim became the domain of experts whose services could be formidably expensive. Moreover, because a U.S. patent provides no protection against imitations produced and sold abroad, and only partial protection against imitations produced abroad and imported into this country, significant inventions had to be patented worldwide. Unlike U.S. patents, many foreign patents require annual maintenance payments to remain in force. These procedures are far beyond the means of the typical individual inventor. Furthermore, nearly all corporate organizations, including universities and research centers, reserve the right to patent any invention made by an employee, often, but not always, with some financial reward for the inventor.


Chapter 14 chart 9

Source Notes
Source Abbreviations

HS series W 100102. See U.S. Patent and Trademark Office, TAF Special Report: All Patents, All Types, January 1977December 1999, at www.uspto.gov/web/ offices/ac/ido/oeip/taf/reports.htm#PSR (accessed September 1, 2000). For patents issued to the U.S. and foreign governments, see SA 1998, table 886. A tiny fraction (less than 1 percent in 1999) of patents are issued to the U.S. government and to foreign governments. These patents are not included in the charts.

 

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