Gartner: Algorithm-based technology patents are raging

Gartner says by 2020 there could be nearly half a million patent applications mentioning "algorithm"


Algorithms are hot – so hot that Gartner is saying that by 2019, 250,000 patent applications will be filed that include claims for algorithms, a tenfold increase from five years ago.

Gartner wrote that according to a worldwide search on analytics vendor Aulive, nearly 17,000 patents applied for in 2015 mentioned "algorithm" in the title or description, versus 570 in 2000. Including those mentioning "algorithm" anywhere in the document, there were more than 100,000 applications last year versus 28,000 five years ago.

At this pace, and considering the rising interest in protecting algorithmic intellectual property, by 2020 there could be nearly half a million patent applications mentioning "algorithm," and more than 25,000 patent applications for algorithms themselves, Gartner stated. Of the top 40 organizations patenting the most algorithms the past five years, 33 are Chinese businesses and universities – IBM is the only western tech company on the list at No. 10.

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"Despite their growing importance, too many great algorithms in enterprise are still left in the shadows. Many business leaders don't care too much so long as they 'work,” wrote Douglas Laney, vice president and distinguished analyst at Gartner. "But algorithms can make a great deal of difference. The list of important algorithms is endless. To name just a few: Google's PageRank algorithm, mp3, blockchain and backpropagation in deep learning."

Gartner has noted the importance of algorithms before. At its Symposium/ITxpo last year it included algorithm development in its most strategic and potentially disruptive technologies for 2017. Daryl Plummer, managing vice president, chief of research and Gartner Fellow stated that by 2020, algorithms will positively alter the behavior of more than 1 billion global workers global workers.

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The algorithmic economy will power the next great leap in machine-to-machine evolution in the Internet of Things. Products and services will be defined by the sophistication of their algorithms and services. Organizations will be valued not just on their big data but by the algorithms that turn data into actions, Gartner said. Algorithms are where the real value lies. Algorithms define action and dynamic algorithms are the core of new customer interactions.

Gartner says that data and analytics leaders should work with business leaders to adopt and develop tactics for valuating algorithms and assessing which ones should be patented.

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