cloud computing patenting report

CloudComputingTheIrishPerspectiveJuly 2012 Tony Owens and Dr Fred Logue

Cloud Computing: The Irish Perspective

1

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:[email protected] 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

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 20141.

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 Ireland2.

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 computing3. 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

Microsoft4:

“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


2

of filing. In this context, we therefore analyse

global patent filings relating to cloud

technology by Irish resident applicants and

inventors.

What is Cloud Computing?

According to NIST5, 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 authority6 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

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 Irish‐


3

resident inventors, placing Ireland 17th

globally according to this metric.

Figure 1 Priority Country of patent family records.

Figure 2 Top applicant countries by count of published patent families.

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,

Netherlands and Israel filed substantially

more cloud patents than Irish applicants.

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

Others0.22%

CA0.31%

IN0.33%

FR0.49%

AU0.51%

DE0.55%

TW0.59%

GB1.41%

Unknown1.65%

WO pubs2.11%

EP pubs2.63%

JP3.82%CN

5.24%

KR6.5%

US 72.22%

1940

1350

1158

745

579

425

337

313

258

252

180

151

144

144

91

90

64

43

31

27

26

0 500 1000 1500 2000 2500

United States

South Korea

China P.Rep.

Japan

Germany

Canada

United Kingdom

Sweden

Finland

Israel

Taiwan

Netherlands

India

Switzerland

Australia

Ireland

Singapore

Italy

Spain

Denmark

New Zealand

Belgium

16540

1846

1212

1195

876

861

823

597

500

320

263

254

253

176

123

120

113

110

108

82

76

63

52

0 500 1000 1500 2000 2500

United States

South Korea

China P.Rep.

Canada

Germany

United Kingdom

Japan

India

Israel

Taiwan

Sweden

Australia

Finland

Netherlands

Singapore

Italy

Ireland

Belgium

Switzerland

Denmark

Spain

Macau

Russian Federation

17,750


4

There is an important complication in this

picture, which is the distorting effect of

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.

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.

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 US‐

resident 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.

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)

0 5 10 15 20 25

ACCENTURE GLOBAL SERVICES LTD (IE)

SKYPE LTD (IE)

BUSINESS OBJECTS SOFTWARE LTD (IE)

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)

24151 21350 16538 257 428 313 91

Total - Listed Inventor

Countries22621 19820 15568 249 377 281 83

OIC=US 17749 15432 15040 34 50 47 27

OIC=Israel 499 429 205 232 5 1

OIC=UK 861 722 375 332 26 8

OIC=Finland 236 220 17 6 210

OIC=Ireland 113 95 36 6 46

OA

C=

Irel

and

Total - all Inventors

Cou

ntry

of I

nven

tor

Tot

al -

all

App

lican

ts Country of Applicant

Tot

al -

Lis

ted

App

lican

t C

ount

ries

OA

C=

US

OA

C=

Isra

el

OA

C=

UK

OA

C=

Fin

land


5

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‐2008. 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.

Applicant trends.

The top 25 worldwide applicants are shown in

Figure 7. The top Irish resident applicant

Accenture, which has 20 publications, lies 30th

on the overall list of top cloud computing

applicants.

Unsurprisingly the world’s largest cloud

computing portfolios are owned by well‐

known multinational companies including

IBM, Microsoft, SAP, Samsung and Cisco.

Notably more than half of the top 20 have

operations in Ireland.

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,

0

5

10

15

20

25

30

35

40

45

0

500

1000

1500

2000

2500

3000

3500

4000

4500

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

Irish Applicants

All Applican

ts

All Applicants

Irish Applicants

0 500 1000 1500

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


6

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.

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 20097. 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

2011. 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

0 2 4 6 8 10 12 14

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)


7

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.

Figure 9 Variation in relative proportion of Top 10 US Main Classes, by year of publication. (applies to US publications only).

Figure 10 Number of patents referencing common cloud computing subject‐matter areas for Ireland and other applicant countries.

Discussion

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

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

Publication Year

726: Information security

725: Interactive videodistribution systems

715: Data processing:presentation processing ofdocument, UI and screensaver processing713: Electrical computersand digital processingsystems: Support

709: Electrical computersand digital data processingsystems: Input/output

707: data processing:Database and filemanagement or datastructures705: Data processing:Financial, businesspractice, management, orcost/price determination455: Telecommunications

379: Telephoniccommunications

370: Multiplexcommunications

Applicant

Country

Global US GB FI IL IE

23,017 13,916 327 248 208 75

20,479 12,327 297 232 187 65

8,124 5,796 131 86 75 30

8,615 5,206 144 100 76 36

10,191 5,988 140 152 95 26

1,666 1,140 13 5 27 2

1,439 1,014 19 3 16 1

240 139 4 2

357 178 3 3 2

423 309 4 1 2 3

3,889 2,686 44 46 25 24

78 64 1

186 130

532 376 5 3 2 8

59 54 1

7 5 1

7 7

1,097 796 22 6 8 6

524 417 5 2 1 5

8 8

3,819 3,272 28 15 13 10

3,732 3,205 25 15 13 10

109 84 3 1 1

15 13

3,606 2,679 43 28 43 11

120 79 1 1

2,413 1,936 25 3 16 9

537 293 10 19 17 2

287 217 3 1 2

185 128 1 3 2

10 7

68 49 5

51 34 1

5 4 1

44 30

1

Keyword Category

Totals

Software as a Service

Software as a Service

Communications SaaS

Apps

Electronic Banking Apps

Digital Content

Distribution

Business SaaS Apps

Software Development

AppsAuction and Exchange

Apps

Infrastructure as a Service

platform

as a

service

data centre

technology

E‐Learning

Access Control and

Intrusion

cloud computing

cloud computing

demand computing

thin client interface

cloud service

cloud IT solution

cloud virtualization

cloud based software

smart networks smart networks

power by the hour

building management

systembuilding management

system

utility computing

platform as a service

desktop virtualization

data hosting service

storage as a service

cloud storage

P2P file sharing

virtual machine

hardware as a service

Infrastructure as a Service

liquid cooling

energy efficiency

grid computing

data centre technology

multi‐tenant systems


8

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 2012. 2 Report of the research prioritisation steering group, Forfás ‐ 1 March 2012 3 Irish Govt invests €1.2m in Cloud Computing

Technology Research Centre; Silicon Republic 2nd

April 20124 Ireland’s Competitiveness & Jobs Opportunity: Cloud Computing, Goodbody Economic Consultants, January 2011 5 NIST Cloud Computing Standards Roadmap; ref. NIST CCSRWG – 092, 5 July 2011 6 Ibid. 7 Accenture press release ,29 May 2009

cloud computing patenting report

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