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The clear relationship, but murky benchmarks, of R&D spending and legal spending

A correlation exists, I am sure, between corporate R&D investments and legal investments. More patents mean more in-house patent lawyers or external patent counsel, larger annuity payments, more frequent licensing arrangements (See my post of Dec. 10, 2009: licensing fees cover cost of legal department), and heightened litigation. But what the formula is that links additional R&D millions to legal department millions I don’t know.

As a small step, however, I spotted in the fine print of Wired, Oct. 2010 at 52, some data on 2009 R&D expenses as a percentage of revenue for some companies. It lists Microsoft (15%), IBM (6%), Intel (16%), GE (2.1%), Amgen (19.8%), Siemens (5.2%), Philips (6.9%), BASF (2.8%), and BAE Systems (4.9%). Each of these companies pours billions of dollars a year into research, some portion of which results in intellectual property that deserves legal nurturance and incurs legal costs.

Someday benchmarks will guide us on standard correlations between the two (See my post of Aug. 3, 2005: patents granted per million dollars of R&D spend by Microsoft; Dec. 21, 2005: IP lawyers per million dollars of R&D spend; July 13, 2008 #3: patents per R&D spend are increasing steadily; Jan. 12, 2009 #1: R&D spend is 7 times total legal spend; Aug. 13, 2008: R&D spend may correlate with total legal spend; Feb. 18, 2009: Bosch’s R&D is 7.7% of revenue; Dec. 3, 2009: about 6 times multiple, at average of 3.6% in 2008; and Aug. 10, 2007: legal components of R&D spend.).

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