Introduction
For years, many in the intellectual property world clung to a simple equation: more patents would automatically translate into more licensing revenue. This volume-driven mindset treated patent counts as a proxy for innovation and income. But a growing body of evidence – and the experiences of leading IP-driven organizations – show that "more patents = more money" is a fallacy in today's landscape. The vast majority of patents never even recoup their filing costs. Companies are waking up to the reality that the quality of their patent portfolios and their strategic use matter far more than sheer quantity. This post offers a contrarian, data-driven perspective on why IP leaders are shifting from accumulating patents to curating high-value, high-impact IP portfolios.
Debunking the Quantity–Revenue Myth
It's tempting to assume that a larger patent portfolio will yield higher licensing fees. Reality paints a different picture: roughly 97% of all patents never generate enough licensing revenue to cover the cost of filing. In other words, only a tiny fraction of patents are ever monetized in a meaningful way. Corporations routinely spend tens of billions maintaining bloated patent troves with little regard to return on investment – over $40 billion annually, according to industry surveys. This "patent hoarding" approach made sense when patents were seen primarily as defensive assets or bargaining chips. But the data shows no linear correlation between portfolio size and profit. Many organizations are consequently rethinking the "bigger is better" philosophy, realizing that more patents can often mean more costs and complexity with marginal gain.
From Volume to Value: The New IP Strategy
*Patent portfolio quality often trumps sheer size. *For example, in the cellular technology sector, companies with fewer patents can outperform larger filers on value-centric metrics like the Patent Asset Index, which gauges technological importance. The industry is finally waking up to the fact that when it comes to patents, quality matters much more than quantity. In practice, this means focusing on patents that cover truly core innovations or standard-essential technologies, and pruning the rest. Even the traditional volume champions are pivoting: IBM, famed for topping US patent grant charts for 29 years straight, recently surrendered its crown after deliberately shifting to a "more selective approach to patenting."
As IBM's research head, Darío Gil explained, "While we will remain an IP powerhouse..., as part of our innovation strategy, focus means that we are taking a more selective approach to patenting." In other words, Big Blue stopped chasing raw patent counts to concentrate on key strategic areas (hybrid cloud, AI, quantum, etc.). This dramatic 50% cut in IBM's filings underscores a broader trend: leading innovators are measuring success in IP by value creation and alignment with business strategy, rather than by the number of patents they hold.
Japan's Pivot: IP-as-a-Service over Stockpiling
Japan's IP leaders have been trailblazing this shift from volume to value. Take Panasonic – once a prolific patent filer – which has moved from a closed IP strategy to an open, service-oriented approach. In 2022, Panasonic announced plans to open its entire patent database to the public for collaboration and licensing by fiscal 2023. The goal is no longer to dominate markets solely through patent fortresses, but to share "IP seeds" with partners and co-develop solutions, tapping untapped IP potential. As Panasonic's IP director Yoshiaki Tokuda put it, "IP is an asset not only for monetization. We are expanding the use of IP from exclusive rights to IP as assets and information." This philosophy – viewing IP as a tool for cooperation, co-creation, and even solving social problems – marks a stark departure from the old patent-maximization playbook.
Another Japanese example is Fujitsu, which explicitly aligns its IP strategy with value creation in its services business. Fujitsu's policy focuses on building an IP portfolio (encompassing technology patents, designs, and brand assets) aimed at creating new value and licensing opportunities, rather than simply accumulating filings. This holistic approach treats IP as integral to business innovation (including participation in open-source ecosystems) rather than as trophies.
On a national scale, Japan even launched a dedicated IP monetization fund – IP Bridge – to turn dormant corporate patents into revenue streams. Founded in 2013 with government backing, IP Bridge was tasked with acquiring unused patents from Japanese companies, including Panasonic, NEC, and Fujitsu, and licensing them globally. The logic was clear: having thousands of patents on the shelf is of little value unless they are actively leveraged. Over its first years, IP Bridge acquired over 3,500 patents and struck licensing deals with major global companies. In essence, it provided IP-as-a-service – a platform for Japanese firms to monetize quality patents they weren't using internally. The success of IP Bridge (now a private entity) reflects Japan's evolving IP culture: after decades of stigma surrounding the sale or litigation of patents, Japanese companies today are far more open to transacting and licensing IP for its value.
Korea's Diversified IP Play: Beyond Patents to Design Rights
South Korea's tech giants have likewise learned that winning the innovation game isn't just about utility patents – designs, trademarks, and other IP can be equally crucial. Samsung and LG have become world leaders in securing design rights. By 2014, Samsung was the #1 filer of US design patents (836 that year), and LG was close behind. lexology.com Both companies also rank among the top global applicants for industrial designs under WIPO's Hague system. This significant investment in design and branding rights is strategic: it helps differentiate products and preempt copycats, thereby reducing the need for costly litigation.
After facing high-profile design patent battles (think Apple vs. Samsung), Korean firms realized that proactive IP protection – filing more design patents and trademarks – is more effective than reacting with lawsuits, as noted on lexology.com. The numbers bear this out: in South Korea, design patent filings have surged threefold in the last decade, with Samsung and LG together filing over 1,500 partial design applications in 2020 alone. These design rights, along with robust trademark portfolios, provide Korean innovators with a means to extract value and secure a market position beyond technical patents. It's a broader view of intellectual property that treats product aesthetics, user experience, and brand identity as monetizable IP assets in their own right. Notably, this diversified IP strategy contrasts with the more patent-centric approaches often seen in the West.
East vs. West: A Tale of Two IP Strategies
These shifts in Asia highlight a growing divergence in IP strategy. Traditional Western (mainly US) companies long equated IP strength with volume – tallying yearly patent grants like sports scores. For decades, IBM's annual patent haul was celebrated as a benchmark; other American tech firms similarly incentivized engineers to file prolifically. This volume-heavy approach did yield significant licensing revenue for some – IBM reportedly pulled in over $27 billion from patent licensing since 1996, according to jdsupra.com, under its old model – but it also led to ballooning portfolios riddled with low-value filings. By contrast, the emergent Eastern approach prizes focus and flexibility: fewer, stronger patents complemented by other IP rights, deployed in nimble ways (licensing-out, cross-licensing, open innovation, etc.).
Interestingly, the lines are now blurring. Western firms are starting to follow suit. IBM's retreat from the patent count race is one example; others are conducting portfolio "pruning" exercises to trim deadwood patents and concentrate on high-value technologies. In Europe and the US, IP strategists are increasingly discussing quality indices, patent-to-product relevance, and ROI on IP – concepts closely aligned with what Japanese and Korean companies have been practicing lately. The contrarian view, perhaps scoffed at a decade ago, that 100 significant patents are better than 1,000 mediocre ones, is rapidly becoming conventional wisdom worldwide.
Conclusion
The core takeaway for today's IP heads and innovation strategists is clear: it's not about the number of patents you hold, but how you utilize them. More patents do not automatically mean more money. Not in an era where licensing partners cherry-pick quality, patent litigation is costly and unpredictable, and tech cycles rapidly render many filings obsolete. Leading companies are responding by right-sizing their portfolios, focusing on value-based IP management, and exploring "IP-as-a-service" models that leverage their know-how in more innovative ways.
Whether it's Panasonic opening up its patents for collaboration, Fujitsu monetizing its innovations through services, or Samsung protecting its design innovations, the message is the same: strategic IP trumps sheer volume. In the final analysis, intellectual property is most potent as a business enabler – a carefully tended garden of high-value assets that drive innovation and revenue – rather than as a numbers game. The sooner we dispel the licensing fallacy, the sooner IP portfolios can truly start working smarter, not just growing bigger, for the organizations that hold them.
Looking to explore this topic further? Check out our previous article and case study on value-based IP management and more innovative monetization strategies to continue the journey.
