Algorithm Patents Increased 30x The Past Fifteen Years

Recently at Gartner we have been researching issues surrounding the ownership and legal protection of a company’s Information assets and analytic models. Since Information can be legally protected only via copyrights (in rare cases) or specific usage contracts, I was curious to see if Patent applications for algorithms have ticked up over the years.

Fortunately, one of Gartner’s recent Cool Vendors, AULIVE, (see: Cool Vendors for Information Innovation and Governance, 2016) tracks, analyses and provides all kinds of interesting query, charting and reporting on patents and patent applications worldwide. Here’s what I discovered:

Nearly 17,000 patents applications in 2015 mention “algorithm” in the title or description, versus 570 in 2000. They jumped from 2400 applications in 2011 to 8000 in 2012, and to 12,000 in 2013 (A post-recession bump?). Including those mentioning algorithm anywhere in the document, there were over 100,000 patent applications last year versus 28,000 five years ago.

At this post-recession pace, plus considering the increasing interest in protecting algorithmic intellectual property (IP), by 2020 there could be nearly half a billion patent applications mentioning “algorithm” and over 25,000 patent applications specifically for algorithms.

You may wonder whether the term “algorithm” simply is growing in popularity as a synonym for “process” or “routine” or “formula”. Google trend data shows this is not the case.

Patent applications for algorithms have about a 60/40 granted-to-rejected ratio. By comparison, applications for devices or products end up granted 66% of the time.

Looking at the algorithm patents granted, peaking at 7000 in 2013 then dropping to 4700 and 2400 the past two years, it seems there’s an incredible backlog of applications. How can patent offices and examiners hope to keep up? Perhaps an algorithm for patent examination? Seriously. By the time your algorithm Patent application gets reviewed it’s likely outdated anyway. Still, “patent pending” offers some value and limited protection.