Measuring Innovation with Patent Indicators:The Case of E-commerce Business Methods in U.S.

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Since the United States Patent and Trademark Office (USPTO) made the announcement of examination guidelines for computer-related inventions in 1996 and the decisions of U.S. Court of Appeals for the Federal Circuit (CAFC) in the case of State Street Bank v. Signature and AT&T v. Excel Communications, it has been clearly stated that the inventions of the business methods are treated like any other process invention and that the subject matter is patentable. USPTO White paper, published in 2000, uses “AUTOMATED FINANCIAL OR MANAGEMENT DATA PROCESSING METHODS" as the name of business methods and classifies it into UPC 705. In the future, patent applications will increase and become the strategic tools of E-Commerce business methods for the E-Commerce related companies in virtual markets. This study refers to the patent indicators established by CHI Research, and focuses on evaluating innovation of E-Commerce business methods in EC companies. This thesis adopts a patent analysis to extract the patent data from USPTO, and uses those patent materials to calculate patent indicators. Those indicators are further used to analyze innovative development of E-Commerce and compared to the nine major E-Commerce companies, including IBM、USA Technologies、VeriFone、InterTrust、HP、Microsoft、Hitachi、Amazon and AT&T, in an attempt to analyze the situation of the patent, the speed of innovation, the patent impact and the ability of basic research. The findings of the research show that Hitachi is only 2.9 years faster than others in the speed of innovation while the average is 4.54 years. Also, IBM has an outstanding number of patents and patent impact, and its CII is 1.67, implying the average count of citation is 1.67. Among the others, it is a very affective company. In terms of basic research ability, the most outstanding company is InterTrust as it has been citied in a total of 117 SCI journals and 47 times by “Communication of the ACM” This means that the research ability still cannot be ignored in such a rapid-changing E-commerce environment.