By hiring engineer and inventor James W. Bryce in 1917, Thomas Watson Sr. showed his commitment to pure inventing.
Bryce and his team established IBM as a long-term leader in the development and protection of intellectual property.
By 1929, 90 percent of IBM’s products were the result of Watson’s investments in R&D.
In 1940, the team invented a method for adding and subtracting using vacuum tubes—a basic building block of the fully electronic computers that transformed business in the1950s.
This pattern—using innovation to create intellectual property—shaped IBM’s history.
On January 26, 1939, James W. Bryce, IBM’s chief engineer, dictated a two-page letter to Thomas J. Watson, Sr., the company’s president. It was an update on the research and patents he had been working on. Today, the remarkable letter serves as a window into IBM’s long-held role as a leader in the development and protection of intellectual property.
Bryce was one of the most prolific inventors in American history, racking up more than 500 U.S. and foreign patents by the end of his career. In his letter to Watson, he described six projects, each of which would be considered a signature life achievement for the average person. They included research into magnetic recording of data, an investigation into the use of light rays in computing and plans with Harvard University for what would become one of the first digital computers. But another project was perhaps most significant. Wrote Bryce: “We have been carrying on an investigation in connection with the development of computing devices which do not employ the usual adding wheels, but instead use electronic effects and employ tubes similar to those used in radio work.”
The investigation bore fruit. On January 15, 1940, Arthur H. Dickinson, Bryce’s top associate and a world-beating inventor in his own right, submitted an application for a patent for “certain improvements in accounting apparatus.” In fact, the patent represented a turning point in computing history. Dickinson, under Bryce’s supervision, had invented a method for adding and subtracting using vacuum tubes—a basic building block of the fully electronic computers that began to appear in the 1940s and transformed the world of business in the 1950s.
This pattern—using innovation to create intellectual property—is evident throughout IBM’s history. Indeed, intellectual property has been strategically important at IBM since before it was IBM.
Herman Hollerith, inventor of the tabulating machine that was used in U.S. population censuses, had worked briefly as an assistant examiner at the U.S. Patent Office in 1883–84 before becoming a full-time inventor. Soon after leaving government service, he filed his first patent—for an electrical calculating system that was the basis for his Tabulating Machine Co., a precursor of IBM. By hiring engineering consultant Bryce in 1917, Watson showed that he recognized the importance of pure inventing. Rather than developing products, Bryce’s job was to dream up new ways of doing things and patent them. He established a patent development department in 1932, hiring Dickinson, who later described his boss’ style: “If he had an idea or was thinking about something, he would discuss it. Usually he would make a sketch or a drawing, which was sufficient to establish what he was thinking about or what he wanted to do.”
The pattern continues today. In a world where relationships and innovation are increasingly collaborative, the concept of intellectual property isundergoing profound change—and IBM is leading the way toward new regimes and approaches to the creation of intellectual capital. The company’s century of fostering innovation has revealed that the way to optimize intellectual property systems for maximum innovation in this new world is to seek balance between appropriate protection of individual and organizational ownership on one hand, and the fostering of new, open, collaborative forms of value creation on the other.
For example, IBM helped establish the open-source operating system
Linux ® as a mainstream software platform in business by declaring in 2005 that it would not enforce its patents against the Linux kernel. In 2008, IBM co-founded the Eco-Patent Commons and contributed 28 patents covering environmentally friendly business and manufacturing processes, which are now freely available for anybody to use for eco-friendly purposes.
At the same time, IBM has taken significant steps to improve the performance of national patent offices and stimulate innovation throughout society. In 2006, in collaboration with the U.S. Patent and Trademark Office and other companies, IBM helped establish the Peer-to-Patent project. This project enables experts to contribute evidence of prior inventions via a website, helping patent examiners evaluate the patent-worthiness of an application.
Through it all, IBM’s dedication to inventing and protecting intellectual property is as strong as ever. In 2010, IBM ranked number one among companies receiving U.S. patents, with 5,896 granted. It marked the company’s 18th consecutive year as the U.S. patent leader.