The latest IEEE Patent Power Scorecard suggests that EDA companies are less innovative than others in the computer systems and software market.
One way to measure meaningful technological innovation is through the creation of intellectual property patents. I’ve reported on such efforts in the past, most recently citing studies from the Patent Board’s, “ Telecommunication and Communication Patent Scorecard.” (see, “Whose IP is Better? Check the Scorecard”)
Another source of IP patent tracking is the IEEE, which reports on trends that emerge from an annual survey conducted by 1790 Analytics. Located in Mount Laurel, N.J., this research firm specializes in analyzing patent citations.
Each of these two different research and reporting efforts cover much of the same industry. Yet each group uses different criteria to evaluate IP patents. According to a reference linked to the Wall Street Journal, the Patent Scorecard is a quarterly assessment of patent activity based primarily on a combined ranking of the quality and quantity of a company’s patent portfolio. All indicators are based on a 13-week rolling average. There are over 50 indicators that track, “global patent activity relating to companies’ innovation, technology, and science strengths.”
The Patent Board defined “technology strength” as an aggregate rating measuring the overall quality of a company’s patent portfolio. The “science strength” was an aggregate rating measuring the degree to which a company’s portfolio is linked to a core science.
Conversely, the 1790 Analytics survey – which formed the basis for the IEEE annual “Patent Power” report – emphasizes how frequently a company’s patents are cited by other patents. Greater citation means a higher score in the ranking. Other criterion includes the diversity of the patent portfolio and how that diversity helped, “nurture and expand the portfolio in recent years.”
Admittedly, the criterion metrics – the secret sauce, if you will – for both research groups is vague. Another obstacle in comparing these two approaches to ranking the most innovative US companies is that they use different categories. For example, the Patent Board groups telecommunication and communication companies into one category, while the closest grouping for the 1790 Analytics survey is categorized as “Communication and Internet Equipment.” (see Figures 1 and 2, respectively).
What does this all mean? That’s difficult to tell without a better understanding of the specific details of the criterion and the process used to generate the actual scores.
Far more telling is the absence of EDA-IP companies from the recent IEEE report. In 2010, both Cadence and Synopsys held prominent positions in the report. However, both are absent from the 2011 study. Why? At first I thought that the 2011 IEEE report is no longer based upon work done by 1790 Analytics. A recent email from the company confirmed their continuing partnership with the IEEE.
Perhaps a more likely reason for the EDA absence can be traced to category changes that occurred in the 2011 report, namely, the separation of “Computer Systems” and “Computer Software” into two separate categories.
One additional discrepancy in the IEEE-1790 Analytics report is the total absence of Mentor Graphics. Yet Mentor holds important patents in both chip-level EDA, IP and board-level design. Indeed, one of the reasons why investor activist Carl Icahn has been interested in Mentor is due to their patent holdings. (see, “Icahn Breaks Even on Finances but Gains on IP”)
The answers to all of these questions will have to wait for a future blog.