Cloud Computing The Irish Perspective. July 2012 New Morning IP

Transcription

1 Cloud Computing The Irish Perspective July 2012 New Morning IP

2 Cloud Computing: The Irish Perspective An Analysis of Worldwide Patent Filings Relating to Cloud Computing by Irish Resident Applicants and Inventors New Morning IP, Capel Street, Dublin 1, Ireland T:+353 (0) While Ireland is an attractive location for multinational companies to develop and hold cloud computing patents, indigenous Irish companies have not adopted strategies to build globally significant patent portfolios and are beginning to lag competitors globally. Our survey of cloud patenting in Ireland shows dominance by a small number of US firms and a relatively weak and uncompetitive indigenous Irish cloud computing sector. Introduction Cloud computing is considered to be one of the key evolving technologies that will revolutionise how organisations will run their operations in the future. In Ireland cloud technology has been identified as a priority area for investment and job creation. It has been estimated that the development and adoption of cloud technologies in Ireland could generate up to 20,000 jobs and be worth 9.5 billion to the economy by The recently published report of the Research Prioritisation Steering Group of Forfás identified future networks and communications, an area underpinned by cloud computing, as one of the priority areas for research and development in Ireland 2. Earlier this year the Irish government announced a new initiative in cloud computing research when it provided funding of 1.2 million to make Ireland a world leader in cloud computing 3. The funding will be used to establish a new Cloud Computing Technology Research Centre based in Dublin City University, NUI Cork and Athlone Institute of Technology. According to a recent report commissioned by Microsoft 4 : New Cloud Computing based products and services represent a huge opportunity for new product development and exports by Irish firms. Large new markets for exports, which Irish based firms are ideally placed to enter, are opening up at exactly the time that Ireland needs to seek export led growth. Given the export potential of cloud technology it is essential that Irish firms fully understand the patent landscape in which they operate and make the fullest use possible of the global intellectual property system to protect their innovations, remain competitive and enable them to generate sustainable profits from the global market. Patent database records provide a rich source of high quality data on the evolution of commercially oriented technology investment. Patent search and analytics reveal trends in invention and investment. Unlike most other forms of published corporate and national statistics and content, patent literature is structured, relatively authoritative and represents a substantial investment by the applicant and is likely to have genuine strategic significance at the time of filing. In this context, we therefore analyse global patent filings relating to cloud technology by Irish resident applicants and inventors. 1

3 Cloud Computing: The Irish Perspective What is Cloud Computing? According to NIST 5, cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and so on) that can be rapidly provisioned and released with minimal management effort or service provider interaction. For example, Gmail, YouTube, DropBox and SalesForce are all applications that are hosted remotely, can be accessed from a web browser and can be configured easily through a simple interface. Other embodiments include Software as a Service (SaaS), Platform as a Service (PaaS) and Infrastructure as a Service (IaaS). It should be noted at the outset that cloud computing is not a well-defined technology. The majority of relevant patents do not mention the word cloud in the specification. In fact cloud computing is a combination of several technologies and applications but is not a concept that has yet been accommodated with a convenient classification by the world s patents offices. The search strategy used was guided by a landmark publication by an important regulatory authority 6 and by desk research about the evolution of cloud computing, and finally by word-mining patent records containing the keyword cloud computing for other suitable keywords. Our chosen search strategy employed a variety of technical concepts characteristic of cloud computing and widely used by cloud computing developers, organised as a hierarchical system comprising a taxonomy of keywords and synonyms. A condensed version of the search strategy used is given in the categories listed on the vertical axis of Figure 10. While our search is representative of cloud computing, the diversity of relevant technologies means that it virtually impossible to exhaustively identify all publications relevant to cloud 2 computing. However our search is adequately representative of cloud computing technologies and permits benchmarking and broad insights to be derived. We searched the full text of the main English language patent authority databases, and title, abstract and claims of other language databases including the German, Japanese, Chinese and Korean databases. The search took place in early June 2012 and after elimination of patent family duplicates (number of patent families is a good proxy for number of distinct inventions filed) yielded 28,167 published patent application or granted patent records relating to cloud computing. Global Trends A patent applicant s choice of priority country is often an indication of where protection is most desired. In the case of cloud computing another factor however is the greater ease of prosecuting software patents through the USPTO. The majority of cloud computing patents are software patents so it is not surprising to see US patents dominate, as seen in Figure 1. Figure 2 shows the top applicant countries in cloud computing. The most striking observation is the dominance of US applicants, which accounted for 59% of patent families, almost an order of magnitude more than those from applicants resident in the next country, South Korea. Ireland lies 16th in this metric; 91 (0.32%) of all records were filed by Irish-resident applicants. Figure 3 shows where cloud computing inventors were resident. We see that 113 (0.4%) of all records named one or more Irishresident inventors, placing Ireland 17 th globally according to this metric.

4 Original Inventor Country Cloud Computing: The Irish Perspective US 72.22% These simple statistics (highlighted in red in Figures 2 and 3) summarise the Irish contribution to cloud computing invention. While it is encouraging that Ireland features in the top 20 applicants on both metrics, those in peer countries including Finland, Australia, Sum Netherlands of Sum of Orig-Inventor_Country and Occurrences Israel filed substantially more cloud Original patents Inventors than Irish by Country applicants. Number of Patent Applications filed United States South Korea ,750 KR 6.5% CN 5.24% JP 3.82% EP pubs 2.63% WO pubs 2.11% GB 1.41% TW 0.59% DE 0.55% AU 0.51% FR 0.49% Unknown 1.65% IN 0.33% CA 0.31% Others 0.22% China P.Rep. Canada Germany United Kingdom Japan India Figure 1 Priority Country of patent family records. Israel 500 Taiwan 320 Patent Applicants by Country United States South Korea 1940 China P.Rep Japan 1158 Germany 745 Canada 579 United Kingdom Sweden Finland Sweden Australia Finland Netherlands Singapore Italy Ireland Belgium Switzerland Denmark Spain Macau Russian Federation Figure 2 Top applicant countries by count of published patent families. 3 Israel Taiwan Netherlands India Switzerland Australia Ireland Singapore Italy Spain Denmark New Zealand Belgium Figure 3 Top Inventor Countries by count of published patent families. The data suggests that Irish companies need to increase their research and development effort and to file more patents if they are to compete in the key US market with companies from other jurisdictions. At the same time the US dominance in patent ownership offers an opportunity to Irish companies to build relationships with US companies with operations in Ireland. Focus on Irish Cloud Patenting Trends There is an important complication in this picture, which is the distorting effect of

5 Country of Inventor Total - all Applicants Total - Listed Applicant Countries OAC=US OAC=Israel OAC=UK OAC=Finland OAC=Ireland Cloud Computing: The Irish Perspective foreign direct investment (FDI) in Ireland. Given the nature of the Irish economy and the role that FDI plays, it is important to understand the structure of cloud computing patent ownership by Irish companies. ACCENTURE GLOBAL SERVICES LTD (IE) SKYPE LTD (IE) BUSINESS OBJECTS SOFTWARE LTD (IE) IE, Country of Applicant Total - all Inventors Total - Listed Inventor Countries OIC=US OIC=Israel OIC=UK MARKPORT LTD (IE) Toll Text International Ltd (IE) CORVIL LTD (IE) TRINITY COLLEGE DUBLIN (IE) YOUGETITBACK LTD (IE) HESNAN JOHN (IE) SOFTMARK LIMITED (IE) Changing Worlds Ltd (IE) MOBILEAWARE TECHNOLOGIES LTD (IE) Figure 4 Irish resident applicants with two or more published patent families. Figure 4 shows all Irish resident applicants which have two or more publications Notably the distribution shows that filing of cloud computing patent families by Irish resident applicants is dominated by three global companies; Accenture and Skype (acquired by Microsoft in 2011), and Business Objects Software (acquired by SAP AG in 2007). They collectively account for almost half of the total. Many of these publications lack Irish resident inventors indicating that the Irish company is acting as a holding company for all or a portion of the wider group s patents. Referring to Figure 5 we can see that of the 91 published inventions by Irish resident applicants, only 46 have named one or more Irish-resident inventors. This indicates that half of inventions filed by Irish resident applicants were in fact invented outside of Ireland. IE, OIC=Finland OIC=Ireland Figure 5 Patent family co-occurrence between applicants and original inventors for 5 Countries. 1 We find that 45 were created by one or more non-irish resident inventors, among which USresident inventors figure most prominently, yet filed by Irish-resident applicants. In terms of Irish resident inventors, 49 of the 113 documents with named Irish inventors were filed by non-irish applicants, among which US corporations dominate, with 36 records. This suggests that US and other companies are investing in commercially-focused cloud patenting in Ireland on a scale which is comparable to that of the indigenous sector. Evidence of the internationalisation of cloud computing invention is also apparent in the UK statistics, in that more UK inventors are named by US applicants than are named by UK applicants. On the other hand, the overwhelming majority of UK applicants filed patents originated by UK inventors. A very similar pattern is apparent when examining Israeli patterns of invention, except for the relatively exclusive interaction of Israeli and US inventors and applicants. Finnish applicants are seen to largely work with Finnish inventors, while Finnish inventors overwhelmingly invent for Finnish applicants. 4 1 Note that due to counting of records with multiple applicants or inventors totals for listed inventorcountries and listed applicant-countries are always less than the sum of the respective records)

6 All Applicants Irish Applicants Cloud Computing: The Irish Perspective Applicant trends All Applicants Irish Applicants The top 25 worldwide applicants are shown in Figure 7. The top Irish resident applicant Accenture, which has 20 publications, lies 30 th on the overall list of top cloud computing applicants Figure 6 Filing trend by priority year. The historical profile of cloud computing invention worldwide, indicated in Figure 6, shows a rapid growth in the number of cloud inventions each year globally, following the advent of the Internet. After some contraction attributable to the dotcom bubble, rapid growth ensues again, which is maintained post This reflects the growing importance of cloud computing technologies and the importance of patents to the owners of those technologies. By contrast cloud patent publications by Irish applicants lag for several years following the dotcom bubble, only recovering in 2006, whereupon strong growth from a very low base is observed. In 2010 an enormous expansion in publication takes place, mostly reflecting a sharp increase in activity by a single applicant - Accenture. It is interesting to note that not one of the 20 inventions recorded by Accenture Global Services Ltd names an Irish inventor. Overall, the data shows that the increase in Irish patent publications is almost entirely due to three FDI applicants: Accenture, Skype and Business Objects Software. After filtering out those records, the number of publications by indigenous Irish applicants is not growing in line with global growth, indicating that the indigenous Irish cloud sector is falling behind in terms of patenting activity Unsurprisingly the world s largest cloud computing portfolios are owned by wellknown multinational companies including IBM, Microsoft, SAP, Samsung and Cisco. Notably more than half of the top 20 have operations in Ireland. Total IBM ATT CORP. MICROSOFT CORPORATION SAP AG SAMSUNG CORP LG ELECTRONICS INC ALCATEL LUCENT HEWLETT-PACKARD CO ZTE CORP ERICSSON TELEFON AB L M HUAWEI TECH CO LTD NOKIA CORP CISCO TECH INC SONY CORP ORACLE CORP VERIZON BUSINESS GLOBAL LLC FUJITSU LTD GENERAL MOTORS LLC CITRIX SYSTEM INC QUALCOMM INC HITACHI LTD MOTOROLA, INC. RESEARCH IN MOTION LTD SIEMENS AG NEC CORP Figure 7 Top 25 applicants worldwide. Figure 8 shows the top 10 applicants for patent families which name at least one Irish resident inventor. Firms including IBM, HP, Ericsson, Amazon and Nortel Networks have all filed patent applications which have included at least one Irish resident inventor. This shows that Ireland is an attractive location for foreign firms to engage in cloud computing research and development and with approximately 50% of cloud publications with Irish resident inventors; the FDI sector is similar to the indigenous Irish technology sector in patenting output. In the indigenous cloud computing sector there are a small number of patent owners, 5

7 Cloud Computing: The Irish Perspective the majority of whom have filed only one patent. This is surprising given the prominence of the software sector in Ireland. In the academic sector only four cloud computing records were found, owned by four universities, a situation that will no doubt change as Irish public research investment policy evolves under the recently published research prioritisation exercise. IBM (US) HEWLETT PACKARD DEVELOPMENT CO (US) ERICSSON TELEFON AB L M (SE) NORTEL NETWORKS CORP (CA) Toll Text International Ltd (IE) CORVIL LTD (IE) SUN MICROSYSTEMS INC (US) DAON HOLDINGS LTD (US) YOUGETITBACK LTD (IE) MOBILEAWARE TECHNOLOGIES LTD (IE) MICROSOFT CORP (US) None WESTERN UNION CO (US) Amazon Technologies Inc (US) TRINITY COLLEGE DUBLIN (IE) ROCKSTAR BIDCO LP BUSINESS OBJECTS SOFTWARE LTD (IE) Changing Worlds Ltd (IE) SOFTMARK LIMITED (IE) Snap-on Incorporated (US) OIC=IE, Figure 8 Applicants globally with two or more inventions which name at least one Irish-resident inventor. Profiles of Irish Applicants To illustrate the diversity of ownership of cloud computing patents by Irish companies, it is worth profiling some of the more prominent Irish resident patent applicants. Accenture is a global management consulting, technology services and outsourcing company which relocated its place of incorporation to Ireland in Earlier this year Accenture announced plans to create 100 jobs at its Analytics Innovation Centre based in Dublin. Skype is a peer-to-peer voice over internet protocol telephony service with 663 million users registered as of the end of September It was acquired by Microsoft in 2011 and has its corporate headquarters in Luxembourg. Corvil is a provider of network latency management systems to the world s leading trading organisations. Headquartered in Dublin it was founded in 2000 by a group of mathematicians from the Dublin Institute of Advanced Studies. According to filings in the Companies Registration Office, Markport is a subsidiary of a Dutch company and while we have not investigated the ownership of Markport, its directors are also senior executives of Acision, a global leader in mobile messaging which is partly backed by Atlantic Bridge Ventures, an Irish venture capital fund. Technology Trends The nature of the inventions represented by the patent family publications found, can be summarised by looking at the patent classification codes assigned by patent examiners during examination. The USPTO s classification scheme is more representative for cloud computing patents than the international classification scheme given the large number of cloud patents that have been filed in the US. Figure 9 shows the relative proportion of cloud patents citing the ten most common main US classification codes, and how this has evolved over time. The declining focus on traditional point-to-point telecoms invention during the 1990 s is apparent, reflecting the maturity of wired telecoms technologies. This decline appears to have been offset by user-interface technology development during the latter 1990 s. Also apparent is a rising trend in information security invention approximately two years following the Sept 2001 attacks in the US. Another view of the types of inventions being filed can be obtained by employing full-text word-mining. The heatmap of Figure 10 6

8 smart networks Infrastructure as a Service data centre technology platform as a service cloud computing Software as a Service Applicant Country Cloud Computing: The Irish Perspective summarises cloud computing patent families broadly according to technological topics identified as relevant to cloud computing by NIST. It can be seen that the focal areas for Irish cloud patenting is little different from that of other jurisdictions, with the exception of low levels of Irish patenting in the fields of Business SaaS Applications and Software Development Applications. There has been no patenting to date in the areas of auctions and exchanges. These areas are all associated with the innovation of high potential startup firms, and the superior performance of Israeli and British applicants in these areas is apparent. Keyword Category Software as a Service Communications SaaS Apps Electronic Banking Apps Digital Content Distribution Business SaaS Apps Software Development Apps Auction and Exchange Apps E-Learning Access Control and Intrusion cloud computing demand computing thin client interface cloud service cloud IT solution cloud virtualization cloud based software Totals Global US GB FI IL IE 23,017 13, ,479 12, ,124 5, ,615 5, ,191 5, ,666 1, ,439 1, ,889 2, platform as a service 1, utility computing % 726: Information security multi-tenant systems 8 8 data centre technology 3,819 3, % 725: Interactive video distribution systems grid computing energy efficiency 3,732 3, % 70% 60% 715: Data processing: presentation processing of document, UI and screen saver processing 713: Electrical computers and digital processing systems: Support liquid cooling Infrastructure as a Service hardware as a service virtual machine P2P file sharing ,606 2, ,413 1, % 709: Electrical computers and digital data processing systems: Input/output cloud storage storage as a service % 30% 20% 707: data processing: Database and file management or data structures 705: Data processing: Financial, business practice, management, or cost/price determination 455: Telecommunications data hosting service desktop virtualization smart networks power by the hour building management system building management system % 0% Publication Year 379: Telephonic communications 370: Multiplex communications Figure 10 Number of patents referencing common cloud computing subject-matter areas for Ireland and other applicant countries. Discussion Figure 9 Variation in relative proportion of Top 10 US Main Classes, by year of publication. (applies to US publications only). It is clear that there is a wide range of firms both domestic and foreign who create manage and monetize cloud computing patents in Ireland. The data reveal a sophisticated ecosystem for cloud computing intellectual property developing in Ireland. The ownership of cloud computing patents by Irish applicants is dominated by two large global corporations. We see this as evidence 7

9 Cloud Computing: The Irish Perspective of the attractiveness of Ireland for holding cloud computing intellectual property and in our view it offers Irish policy makers the opportunity to use this attractiveness as a means of further developing creation and exploitation of cloud computing technologies in Ireland. The indigenous sector holds few patents and is weak. The sector is clearly not globally competitive given the giant portfolios created by large multinational corporations and has fallen behind in the rate of filing of new patent applications. It is all too common today that those companies with weak or non-existent portfolios are attacked for patent infringement by non-practising entities or by specialised licensing companies acting on behalf of the owners of large portfolios. Such targeting is almost assured in the US market once cloud software companies reach a size that makes them a good prospect for royalty payments. This represents a significant real threat to the development of a globally significant cloud computing industry in Ireland and we urge CEOs and policymakers alike to take action to develop an IP strategy that ensures Irish companies can build and sustain competitive advantage and can grow into multinational companies themselves. Evidence of patent output from the national research sector is poor. Despite the range of technologies examined and the fact that ICT is one of the four thematic areas funded under the 2006 Strategy for Science Technology and Innovation, only four records belong to Irish publicly-funded research institutions. The majority of Irish third level institutions do not appear within our search indicating that historically ICT research activity within these institutions relevant to cloud has not been commercially focussed. We see this is a signal to research and development policy makers to ensure that the limited funding available for cloud computing research and development is targeted towards technology development and its commercial exploitation, and specifically includes a budget for patent filing. Conclusion Our survey of worldwide patenting activity by Irish resident applicants and inventors shows an industry dominated by international firms with a relatively weak and uncompetitive indigenous cloud computing sector. Our analysis shows that while Ireland is an attractive location for multinational companies to develop and hold cloud computing patents, indigenous Irish companies do not seem to have adopted strategies to build globally significant patent positions to protect their technologies from being copied and to use as collateral should they become large enough to be targets for patent infringement attacks. In our view the relative strength of the foreign direct investment sector should be used as a lever to incentivise and facilitate the creation of cloud computing patents by Irish companies and third level research institutions. 1 Ireland could become world cloud computing hub Bruton Irish Independent 2 April Report of the research prioritisation steering group, Forfás - 1 March Irish Govt invests 1.2m in Cloud Computing Technology Research Centre; Silicon Republic 2 nd April Ireland s Competitiveness & Jobs Opportunity: Cloud Computing, Goodbody Economic Consultants, January NIST Cloud Computing Standards Roadmap; ref. NIST CCSRWG 092, 5 July Ibid. 7 Accenture press release,29 May