October 01, 2012, 7:43 AM — As companies strive to regain the ground lost to the recession, CEOs are talking a lot about innovation. Some have decreed that a certain percentage of revenue must come from brand-new products and services each year. If CEOs want innovation, then CIOs ought to want patents. Not for internal IT operations inventions, but for unique business methods and other inventions made possible by new technology. The innovation mandate, and the convergence of social media, mobile technology and analytics, has companies running to the patent office, trying to lock in ownership of new ways to do business and interact with customers.
"It's a new gold rush," says John Lanza, a partner at the law firm of Foley and Lardner.
And it's big.
Remember the dotcom boom, when just about anything anyone did on the young World Wide Web--from clicking to chatting to buying a book--was ripe for patenting? Today's race involves more companies in more industries. In the 1990s, it was mainly financial services companies and startups eager to nurture e-commerce. Today's patent push includes rich, established companies in a variety of industries where IT is becoming the business model: healthcare, automotive, retail, insurance, consulting, airlines.
Allstate Insurance, which has more than 100 patents pending, sees patenting as a powerful weapon. For example, the $28 billion company has patents for customizable insurance policies and for picking the best location for its offices, all enabled by IT. Allstate's patent portfolio has doubled in the past three years, a spokesman says. "Patents are invaluable in keeping the company ahead of the competition," he says.
Patents can indeed bestow a sizeable competitive advantage. A company may, of course, incorporate its unique invention into products or services customers have never seen. But even if the invention doesn't make it to market, the patent owner can block others from doing the same thing. "The monopoly granted to you by a patent will help you establish and shape a marketplace," Lanza says.
Who doesn't want in on that? In the past two years, Bank of America has applied for patents for a system to change a person's emotional state and for wearable financial indicators--rings or watches that bring consumers financial data. General Motors found a way to let you text while driving. Humana patented a system for predicting a person's future health based on his medical and pharmacy claims data. Equifax patented technology to monitor a child's budding financial data for identity theft. Wal-Mart invented a system to let you apply for credit cards at the gas pump.