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Mike Pellegrino is the Founder and President of Pellegrino & Associates, LLC. As a leading expert in the embedded software and intellectual property valuation industry, he focuses on providing credible and equitable valuations for investment and tax reporting purposes. With his cutting-edge... More
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  • Apple Zones In On Patents 0 comments
    Jan 6, 2013 6:47 AM

    Apple is considered around the world as one of the most valuable, if not the most valuable company.[1] With a strong business and marketing sense, Apple is a master at providing innovative technology products that consumers scramble to purchase. With the invention of the iPod, Apple revolutionized content delivery of the music industry. And it continues to introduce other wildly successful products such as the iPhone. While some people may argue that other tech savvy companies have better products, few people can ignore the fact that Apple is a world famous brand and that its products continue to sell at high rates.

    While Apple's business practices, marketing methods, and products have provided it with great success, the company falls behind some of the major players in one area that has become essential in the technology industry-intellectual property, specifically patents. Patents provide protection in the event that a company is sued. Patents also allow companies to exclude others from the market for a specific timeframe. Without patents, companies would find it difficult to reap the rewards for inventions that are rightfully theirs. As Apple continues to dominate patent litigation headlines, it is aggressively working to improve its patent portfolio.

    In 2010, Apple lagged behind its competition with awarded patents. It ranked 46 behind some of its biggest competitors including IBM, Microsoft, and Samsung.[2] According to IPAnalytx, a propriety patent database created by IP Software, Inc. (a sister company to Pellegrino & Associates), as of December 2012, Apple ranked in the top 20 with more than 1,400 patent grants in 2012. For patent applications, Apple ranked 22 with more than 900 applications. While these are great improvements for building its patent portfolio, Apple hasn't stopped there. Apple is also aggressively buying patents from other companies. In 2012, Apple purchased more than 1,000 patents. A significant number of those purchases were for telecommunications technologies that will likely fill gaps in Apple's portfolio for technologies related to smartphones.

    A Stanford University analysis reveals that the smartphone industry alone spent $20 billion in patent litigation and patent purchases in the last two years.[3] In fact, these companies now spend more money on litigation and patents than they do on research and development. Therefore, Apple's strong interest in building its patent portfolio is a smart move. In 2012, Apple won a $1 billion patent infringement case against Samsung. This case alone provides proof of patent power.

    [1] www.forbes.com/sites/scottdecarlo/2011/0.../


    [3] www.nytimes.com/2012/10/08/technology/pa..._r=0

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