Analysis of national patenting behaviour in cloud computing technologies from an Irish perspective

1. Cloud Computing
The Irish Perspective
July 2012
Tony Owens and Dr Fred Logue

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, 121‐122 Capel Street, Dublin 1, Ireland
E:info@newmorningip.com T:+353 (0)1 254 2340
Shibumi Consulting, 22 Seacliff, Wicklow, Co. Wicklow, Ireland
E: info@shibumi‐consulting.net T:+353 (0)1 442 9609
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 According to a recent report commissioned by
Microsoft4:
Cloud computing is considered to be one of
the key evolving technologies that will “New Cloud Computing based products and
revolutionise how organisations will run their services represent a huge opportunity for new
operations in the future. In Ireland cloud product development and exports by Irish
technology has been identified as a priority firms. Large new markets for exports, which
area for investment and job creation. It has Irish based firms are ideally placed to enter,
been estimated that the development and are opening up at exactly the time that Ireland
adoption of cloud technologies in Ireland needs to seek export led growth.”
could generate up to 20,000 jobs and be
worth €9.5 billion to the economy by 20141. Given the export potential of cloud
technology it is essential that Irish firms fully
The recently published report of the Research understand the patent landscape in which
Prioritisation Steering Group of Forfás they operate and make the fullest use
identified future networks and possible of the global intellectual property
communications, an area underpinned by system to protect their innovations, remain
cloud computing, as one of the priority areas competitive and enable them to generate
for research and development in Ireland2. sustainable profits from the global market.
Earlier this year the Irish government Patent database records provide a rich source
announced a new initiative in cloud of high quality data on the evolution of
computing research when it provided funding commercially oriented technology
of €1.2 million to make Ireland a world leader investment. Patent search and analytics
in cloud computing3. The funding will be used reveal trends in invention and investment.
to establish a new Cloud Computing Unlike most other forms of published
Technology Research Centre based in Dublin corporate and national statistics and content,
City University, NUI Cork and Athlone Institute patent literature is structured, relatively
of Technology. authoritative and represents a substantial
investment by the applicant and is likely to
have genuine strategic significance at the time
1

3. Cloud Computing: The Irish Perspective
of filing. In this context, we therefore analyse on the vertical axis of Figure 10. While our
global patent filings relating to cloud search is representative of cloud computing,
technology by Irish resident applicants and the diversity of relevant technologies means
inventors. that it virtually impossible to exhaustively
identify all publications relevant to cloud
What is Cloud Computing? computing. However our search is adequately
According to NIST5, cloud computing is a representative of cloud computing
model for enabling ubiquitous, convenient, technologies and permits benchmarking and
on‐demand network access to a shared pool broad insights to be derived.
of configurable computing resources (e.g., We searched the full text of the main English
networks, servers, storage, applications, and language patent authority databases, and
so on) that can be rapidly provisioned and title, abstract and claims of other language
released with minimal management effort or databases including the German, Japanese,
service provider interaction. For example, Chinese and Korean databases. The search
Gmail, YouTube, DropBox and SalesForce are took place in early June 2012 and after
all applications that are hosted remotely, can elimination of patent family duplicates
be accessed from a web browser and can be (number of patent families is a good proxy for
configured easily through a simple interface. number of distinct inventions filed) yielded
Other embodiments include Software as a 28,167 published patent application or
Service (SaaS), Platform as a Service (PaaS) granted patent records relating to cloud
and Infrastructure as a Service (IaaS). computing.
It should be noted at the outset that cloud Global Trends
computing is not a well‐defined technology. A patent applicant’s choice of priority country
The majority of relevant patents do not is often an indication of where protection is
mention the word “cloud” in the specification. most desired. In the case of cloud computing
In fact cloud computing is a combination of another factor however is the greater ease of
several technologies and applications but is prosecuting software patents through the
not a concept that has yet been USPTO. The majority of cloud computing
accommodated with a convenient patents are software patents so it is not
classification by the world’s patents offices. surprising to see US patents dominate, as
The search strategy used was guided by a seen in Figure 1.
landmark publication by an important Figure 2 shows the top applicant countries in
regulatory authority6 and by desk research cloud computing. The most striking
about the evolution of cloud computing, and observation is the dominance of US
finally by word‐mining patent records applicants, which accounted for 59% of patent
containing the keyword ‘cloud computing’ for families, almost an order of magnitude more
other suitable keywords. Our chosen search than those from applicants resident in the
strategy employed a variety of technical next country, South Korea. Ireland lies 16th in
concepts characteristic of cloud computing this metric; 91 (0.32%) of all records were
and widely used by cloud computing filed by Irish‐resident applicants.
developers, organised as a hierarchical system
comprising a taxonomy of keywords and Figure 3 shows where cloud computing
synonyms. A condensed version of the search inventors were resident. We see that 113
strategy used is given in the categories listed (0.4%) of all records named one or more Irish‐
2

4. Cloud Computing: The Irish Perspective
resident inventors, placing Ireland 17th Figure 2 Top applicant countries by count of published
patent families.
globally according to this metric.
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,
US 72.22% Netherlands and Israel filed substantially
more cloud patents than Irish applicants.
0 500 1000 1500 2000 2500
United States
17,750
South Korea 1846
China P.Rep. 1212
WO pubs Canada 1195
Unknown
JP 2.11% 1.65%
Germany 876
KR CN 3.82% DE IN CA
0.55% 0.33% 0.31%
United Kingdom 861
6.5% 5.24% GB
1.41% AU
Japan 823
EP pubs 0.51% Others
2.63% TW FR 0.22%
India 597
0.59% 0.49%
Israel 500
Figure 1 Priority Country of patent family records. Taiwan 320
Sweden 263
Australia 254
Finland 253
Netherlands 176
0 500 1000 1500 2000 2500 Singapore 123
United States Italy 120
16540
South Korea 1940 Ireland 113
China P.Rep. 1350 Belgium 110
Japan 1158 Switzerland 108
Germany 745
Denmark 82
Spain 76
Canada 579
Macau 63
United Kingdom 425
Russian Federation 52
Sweden 337
Finland 313
Israel 258 Figure 3 Top Inventor Countries by count of published
patent families.
Taiwan 252
Netherlands 180
The data suggests that Irish companies need
India 151
to increase their research and development
Switzerland 144
effort and to file more patents if they are to
Australia 144
compete in the key US market with
Ireland 91
companies from other jurisdictions. At the
Singapore 90
Italy 64
same time the US dominance in patent
Spain 43
ownership offers an opportunity to Irish
Denmark 31
companies to build relationships with US
New Zealand 27 companies with operations in Ireland.
Belgium 26
Focus on Irish Cloud Patenting Trends
3

5. Cloud Computing: The Irish Perspective
There is an important complication in this
Total - all Applicants
Country of Applicant
picture, which is the distorting effect of
OAC=Finland
OAC=Ireland
Total - Listed
OAC=Israel
Countries
OAC=US
OAC=UK
Applicant
foreign direct investment (FDI) in Ireland.
Given the nature of the Irish economy and the
Total - all Inventors 24151 21350 16538 257 428 313 91
role that FDI plays, it is important to Total - Listed
Inventor 22621 19820 15568 249 377 281 83
understand the structure of cloud computing Countries
patent ownership by Irish companies.
Country of Inventor
OIC=US 17749 15432 15040 34 50 47 27
OIC=Israel 499 429 205 232 5 1
0 5 10 15 20 25
OIC=UK 861 722 375 332 26 8
ACCENTURE GLOBAL SERVICES LTD (IE)
OIC=Finland 236 220 17 6 210
SKYPE LTD (IE)
BUSINESS OBJECTS SOFTWARE LTD (IE) OIC=Ireland 113 95 36 6 46
MARKPORT LTD (IE)
Toll Text International Ltd (IE) Figure 5 Patent family co‐occurrence between
CORVIL LTD (IE) applicants and original inventors for 5 Countries.1
TRINITY COLLEGE DUBLIN (IE)
YOUGETITBACK LTD (IE)
We find that 45 were created by one or more
HESNAN JOHN (IE) non‐Irish resident inventors, among which US‐
SOFTMARK LIMITED (IE) resident inventors figure most prominently,
Changing Worlds Ltd (IE)
yet filed by Irish‐resident applicants. In terms
MOBILEAWARE TECHNOLOGIES LTD (IE)
of Irish resident inventors, 49 of the 113
documents with named Irish inventors were
Figure 4 Irish resident applicants with two or more
published patent families. filed by non‐Irish applicants, among which US
corporations dominate, with 36 records. This
Figure 4 shows all Irish resident applicants
suggests that US and other companies are
which have two or more publications Notably
investing in commercially‐focused cloud
the distribution shows that filing of cloud
patenting in Ireland on a scale which is
computing patent families by Irish resident
comparable to that of the indigenous sector.
applicants is dominated by three global
companies; Accenture and Skype (acquired by Evidence of the internationalisation of cloud
Microsoft in 2011), and Business Objects computing invention is also apparent in the
Software (acquired by SAP AG in 2007). They UK statistics, in that more UK inventors are
collectively account for almost half of the named by US applicants than are named by
total. Many of these publications lack Irish UK applicants. On the other hand, the
resident inventors indicating that the Irish overwhelming majority of UK applicants filed
company is acting as a holding company for all patents originated by UK inventors. A very
or a portion of the wider group’s patents. similar pattern is apparent when examining
Israeli patterns of invention, except for the
Referring to Figure 5 we can see that of the 91
relatively exclusive interaction of Israeli and
published inventions by Irish resident
US inventors and applicants. Finnish
applicants, only 46 have named one or more
applicants are seen to largely work with
Irish‐resident inventors. This indicates that
Finnish inventors, while Finnish inventors
half of inventions filed by Irish resident
overwhelmingly invent for Finnish applicants.
applicants were in fact invented outside of
Ireland.
1
Note that due to counting of records with multiple
applicants or inventors totals for listed inventor‐
countries and listed applicant‐countries are always less
than the sum of the respective records)
4

6. Cloud Computing: The Irish Perspective
4500 45 Applicant trends.
4000 40
3500
All Applicants
35
The top 25 worldwide applicants are shown in
Irish Applicants
3000 30
Figure 7. The top Irish resident applicant
Accenture, which has 20 publications, lies 30th
Irish Applicants
All Applicants
2500 25
2000 20
on the overall list of top cloud computing
1500 15
applicants.
1000 10
Unsurprisingly the world’s largest cloud
500 5
computing portfolios are owned by well‐
0 0
known multinational companies including
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
IBM, Microsoft, SAP, Samsung and Cisco.
Notably more than half of the top 20 have
Figure 6 Filing trend by priority year.
operations in Ireland.
The historical profile of cloud computing
0 500 1000 1500
invention worldwide, indicated in Figure 6, IBM
shows a rapid growth in the number of cloud ATT CORP.
MICROSOFT CORPORATION
inventions each year globally, following the SAP AG
SAMSUNG CORP
advent of the Internet. After some contraction LG ELECTRONICS INC
ALCATEL LUCENT
attributable to the dotcom bubble, rapid HEWLETT‐PACKARD CO
ZTE CORP
growth ensues again, which is maintained ERICSSON TELEFON AB L M
HUAWEI TECH CO LTD
post‐2008. This reflects the growing NOKIA CORP
CISCO TECH INC
importance of cloud computing technologies SONY CORP
ORACLE CORP
and the importance of patents to the owners VERIZON BUSINESS GLOBAL LLC
FUJITSU LTD
of those technologies. GENERAL MOTORS LLC
CITRIX SYSTEM INC
QUALCOMM INC
By contrast cloud patent publications by Irish HITACHI LTD
MOTOROLA, INC.
applicants lag for several years following the RESEARCH IN MOTION LTD
SIEMENS AG
dotcom bubble, only recovering in 2006, NEC CORP
whereupon strong growth from a very low
base is observed. In 2010 an enormous Figure 7 Top 25 applicants worldwide.
expansion in publication takes place, mostly
Figure 8 shows the top 10 applicants for
reflecting a sharp increase in activity by a
patent families which name at least one Irish
single applicant ‐ Accenture. It is interesting to
resident inventor. Firms including IBM, HP,
note that not one of the 20 inventions
Ericsson, Amazon and Nortel Networks have
recorded by Accenture Global Services Ltd
all filed patent applications which have
names an Irish inventor.
included at least one Irish resident inventor.
Overall, the data shows that the increase in This shows that Ireland is an attractive
Irish patent publications is almost entirely due location for foreign firms to engage in cloud
to three FDI applicants: Accenture, Skype and computing research and development and
Business Objects Software. After filtering out with approximately 50% of cloud publications
those records, the number of publications by with Irish resident inventors; the FDI sector is
indigenous Irish applicants is not growing in similar to the indigenous Irish technology
line with global growth, indicating that the sector in patenting output.
indigenous Irish cloud sector is falling behind
In the indigenous cloud computing sector
in terms of patenting activity.
there are a small number of patent owners,
5

7. Cloud Computing: The Irish Perspective
the majority of whom have filed only one and has its corporate headquarters in
patent. This is surprising given the Luxembourg.
prominence of the software sector in Ireland.
Corvil is a provider of network latency
In the academic sector only four cloud management systems to the world’s leading
computing records were found, owned by trading organisations. Headquartered in
four universities, a situation that will no doubt Dublin it was founded in 2000 by a group of
change as Irish public research investment mathematicians from the Dublin Institute of
policy evolves under the recently published Advanced Studies.
research prioritisation exercise.
According to filings in the Companies
0 2 4 6 8 10 12 14
Registration Office, Markport is a subsidiary of
IBM (US)
HEWLETT PACKARD DEVELOPMENT CO (US)
a Dutch company and while we have not
ERICSSON TELEFON AB L M (SE) investigated the ownership of Markport, its
NORTEL NETWORKS CORP (CA)
directors are also senior executives of Acision,
Toll Text International Ltd (IE)
CORVIL LTD (IE) a global leader in mobile messaging which is
SUN MICROSYSTEMS INC (US)
partly backed by Atlantic Bridge Ventures, an
DAON HOLDINGS LTD (US)
YOUGETITBACK LTD (IE) Irish venture capital fund.
MOBILEAWARE TECHNOLOGIES LTD (IE)
MICROSOFT CORP (US) Technology Trends
None
WESTERN UNION CO (US)
Amazon Technologies Inc (US)
The nature of the inventions represented by
TRINITY COLLEGE DUBLIN (IE) the patent family publications found, can be
ROCKSTAR BIDCO LP
summarised by looking at the patent
BUSINESS OBJECTS SOFTWARE LTD (IE)
Changing Worlds Ltd (IE) classification codes assigned by patent
SOFTMARK LIMITED (IE) examiners during examination. The USPTO’s
Snap‐on Incorporated (US)
classification scheme is more representative
for cloud computing patents than the
Figure 8 Applicants globally with two or more
inventions which name at least one Irish‐resident international classification scheme given the
inventor. large number of cloud patents that have been
Profiles of Irish Applicants filed in the US. Figure 9 shows the relative
proportion of cloud patents citing the ten
To illustrate the diversity of ownership of most common main US classification codes,
cloud computing patents by Irish companies, and how this has evolved over time. The
it is worth profiling some of the more declining focus on traditional point‐to‐point
prominent Irish resident patent applicants. telecoms invention during the 1990’s is
apparent, reflecting the maturity of wired
Accenture is a global management consulting,
telecoms technologies. This decline appears
technology services and outsourcing company
to have been offset by user‐interface
which relocated its place of incorporation to
technology development during the latter
Ireland in 20097. Earlier this year Accenture
1990’s. Also apparent is a rising trend in
announced plans to create 100 jobs at its
information security invention approximately
Analytics Innovation Centre based in Dublin.
two years following the Sept 2001 attacks in
Skype is a peer‐to‐peer voice over internet the US.
protocol telephony service with 663 million
Another view of the types of inventions being
users registered as of the end of September
filed can be obtained by employing full‐text
2011. It was acquired by Microsoft in 2011
word‐mining. The heatmap of Figure 10
6

8. Cloud Computing: The Irish Perspective
summarises cloud computing patent families
Applicant
Country
Global US GB FI IL IE
broadly according to technological topics Keyword Category
Totals 23,017 13,916 327 248 208 75
identified as relevant to cloud computing by Software as a Service 20,479 12,327 297 232 187 65
NIST. It can be seen that the focal areas for Communications SaaS
Apps
8,124 5,796 131 86 75 30
Irish cloud patenting is little different from Electronic Banking Apps 8,615 5,206 144 100 76 36
Software as a Service
Digital Content
10,191 5,988 140 152 95 26
that of other jurisdictions, with the exception Distribution
Business SaaS Apps 1,666 1,140 13 5 27 2
of low levels of Irish patenting in the fields of Software Development
1,439 1,014 19 3 16 1
Apps
Business SaaS Applications and Software Auction and Exchange
Apps
240 139 4 2
Development Applications. There has been E‐Learning 357 178 3 3 2
Access Control and
423 309 4 1 2 3
no patenting to date in the areas of auctions Intrusion
cloud computing 3,889 2,686 44 46 25 24
and exchanges. These areas are all associated
demand computing 78 64 1
with the innovation of high potential startup
cloud computing
thin client interface 186 130
firms, and the superior performance of Israeli cloud service 532 376 5 3 2 8
and British applicants in these areas is cloud IT solution 59 54 1
cloud virtualization
apparent. 7 5 1
cloud based software 7 7
platform as a
service
platform as a service 1,097 796 22 6 8 6
utility computing 524 417 5 2 1 5
100% 726: Information security
multi‐tenant systems 8 8
data centre technology 3,819 3,272 28 15 13 10
data centre
90%
technology
725: Interactive video grid computing 3,732 3,205 25 15 13 10
distribution systems
energy efficiency 109 84 3 1 1
80% liquid cooling 15 13
715: Data processing:
presentation processing of
Infrastructure as a Service 3,606 2,679 43 28 43 11
document, UI and screen
70% saver processing hardware as a service 120 79 1 1
713: Electrical computers
Infrastructure as a Service
and digital processing virtual machine 2,413 1,936 25 3 16 9
60% systems: Support
P2P file sharing 537 293 10 19 17 2
709: Electrical computers cloud storage 287 217 3 1 2
and digital data processing
50% systems: Input/output storage as a service 185 128 1 3 2
707: data processing: data hosting service 10 7
40% Database and file desktop virtualization 68 49 5
management or data
structures
smart networks 51 34 1
705: Data processing:
smart networks
30% Financial, business power by the hour 5 4 1
practice, management, or building management
cost/price determination 44 30
system
20% 455: Telecommunications building management
1
system
10% 379: Telephonic Figure 10 Number of patents referencing common
communications cloud computing subject‐matter areas for Ireland and
other applicant countries.
0%
370: Multiplex
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
2011
communications
Publication Year
Discussion
It is clear that there is a wide range of firms
Figure 9 Variation in relative proportion of Top 10 US
Main Classes, by year of publication. (applies to US both domestic and foreign who create
publications only). 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 We see this is a signal to research and
cloud computing intellectual property and in development policy makers to ensure that the
our view it offers Irish policy makers the limited funding available for cloud computing
opportunity to use this attractiveness as a research and development is targeted
means of further developing creation and towards technology development and its
exploitation of cloud computing technologies commercial exploitation, and specifically
in Ireland. includes a budget for patent filing.
The indigenous sector holds few patents and Conclusion
is weak. The sector is clearly not globally
competitive given the giant portfolios created Our survey of worldwide patenting activity by
by large multinational corporations and has Irish resident applicants and inventors shows
fallen behind in the rate of filing of new an industry dominated by international firms
patent applications. with a relatively weak and uncompetitive
indigenous cloud computing sector.
It is all too common today that those
companies with weak or non‐existent Our analysis shows that while Ireland is an
portfolios are attacked for patent attractive location for multinational
infringement by non‐practising entities or by companies to develop and hold cloud
specialised licensing companies acting on computing patents, indigenous Irish
behalf of the owners of large portfolios. Such companies do not seem to have adopted
targeting is almost assured in the US market strategies to build globally significant patent
once cloud software companies reach a size positions to protect their technologies from
that makes them a good prospect for royalty being copied and to use as collateral should
payments. they become large enough to be targets for
patent infringement attacks.
This represents a significant real threat to the
development of a globally significant cloud In our view the relative strength of the foreign
computing industry in Ireland and we urge direct investment sector should be used as a
CEOs and policymakers alike to take action to lever to incentivise and facilitate the creation
develop an IP strategy that ensures Irish of cloud computing patents by Irish
companies can build and sustain competitive companies and third level research
advantage and can grow into multinational institutions.
companies themselves.
1
Ireland could become world cloud computing hub
Evidence of patent output from the national – Bruton Irish Independent 2 April 2012.
2
research sector is poor. Despite the range of Report of the research prioritisation steering
technologies examined and the fact that ICT is group, Forfás ‐ 1 March 2012
3
one of the four thematic areas funded under Irish Govt invests €1.2m in Cloud Computing
the 2006 Strategy for Science Technology and Technology Research Centre; Silicon Republic 2nd
April 2012
Innovation, only four records belong to Irish 4
Ireland’s Competitiveness & Jobs Opportunity:
publicly‐funded research institutions. The
Cloud Computing, Goodbody Economic
majority of Irish third level institutions do not Consultants, January 2011
5
appear within our search indicating that NIST Cloud Computing Standards Roadmap; ref.
historically ICT research activity within these NIST CCSRWG – 092, 5 July 2011
6
Ibid.
institutions relevant to cloud has not been 7
Accenture press release ,29 May 2009
commercially focussed.
8