Minnesota, not California, has the highest average number of inventors per patent (inventor     contributions/unique patent count).

With 22 inventor contributions to 21 patents in 2005, North Dakota ranks ahead of only Alaska in     terms of inventor contributions. However, this set of patents scored the highest of all states in 2005     when measured by ipIQ's Current Impact Index (CII), a proprietary measure of the impact that a     company's patents have across the industry (see sidebar). North Dakota's CII score of 3.03 is     nearly three times that of industry-leading California, Massachusetts, and Minnesota.

On average, patents produced by Kentucky inventors have the highest interdependency scores per     patent at 1.9. This score is 6.33 times more than that of South Dakota, the state receiving the fewest     average citations per patent. Interdependency illustrates foundational patents that are key building     blocks to other innovations.

While these data points may not necessarily dictate that a medical device company should relocate to North Dakota, they may cause medtech executives to consider locations that might otherwise not appear on their list of prospects. For example, low-cost locations in close proximity to both Minneapolis and eastern North Dakota would situate a company between a major medtech hub and a region of the nation producing exceptionally high-quality patents. Similarly, with the insight that inventors living in Kentucky have discovered some potentially seminal patents in the medical device field, some companies might consider the Cincinnati-Northern Kentucky region a more attractive site.

Medtech Inventor Contributions by Region

Similar to the state-by-state breakdown, an analysis of inventor contributions at the core-based statistical area (CBSA) level paints a highly concentrated picture. In fact, since 2003, the top 10 CBSAs have generated 51% of the nation's inventor contributions to medical device patents (see Table II). CBSAs encompass both metropolitan and micropolitan statistical areas as defined by the U.S. Office of Management and Budget. A look at ipIQ's patent quality indicators reveals the following information at the CBSA level.

Minneapolis–St. Paul–Bloomington has the highest average inventors-per-patent ratio among the top     20 CBSAs for medical device patents.

Houston-Sugarland-Baytown in Texas has the lowest average inventors-per-patent ratio among the     top 20 CBSAs for medical device patents. It also has the lowest CII score among the top 20.

San Jose–Sunnyvale–Santa Clara in California has the highest CII and average interdependencies-    per-patent ratio.

San Diego–Carlsbad–San Marcos: Not only is the San Diego life sciences community one of the     most productive, but as it has grown, the community has also started to attract many commuters     from Orange County. Its connection to medtech companies such as Beckman Coulter (Fullerton, CA)     and access to UC Irvine complement the already strong San Diego academic and research     institutions.

Patent Quality by State

In addition to analyzing the quantity of patents produced in an individual region, it's also important to determine the relative quality of a region's patents. In examining the top 10 states in terms of medtech patent quality—as measured by ipIQ's technology strength indicator—the following observations come to light (see Table III).

The technology strength indicators of medtech patents produced in Pennsylvania, Florida, and Texas     are higher than their inventor contribution rankings, meaning the patents produced in these states are     of comparatively higher quality. On the other hand, the technology strength indicators for Ohio, New     Jersey, and Illinois are relatively weaker than might be expected based on their inventor contribution     rankings.

California tends to produce the medtech patents that have the most influence within the industry, as     indicated by its CII score of 1.19.

Massachusetts generates the medtech patents that are most closely related to leading-edge     research, as indicated by its 10.0 science linkage score.

New York produces medtech patents the most quickly, as indicated by its technology cycle time of     7.7, the lowest among the top 10 states. However, New York's industry influence score (CII) of 0.80 is     the second lowest among the top 10 states.

Conclusion

Although the site selection process has evolved to include numerous factors, such as traffic density, tax rates, and projected population growth, many of the forces that drive innovation—intellectual property, patents, and research—have historically not been a significant part of the site selection algorithm. In order for a medical device company to best align its need for continued market-leading innovation with its need for an appropriate location, fact-based analytics regarding high-quality patenting within geographies is a key component.

Consideration of numerous quality-of-life inputs is undeniably important when choosing a location. However, without understanding an area's ability to produce innovation, a medtech company's site selection process might not lead to the best possible location to meet the company's long-term needs. Scott Kratzer is vice president of advisory services for intellectual property research and advisory services firm ipIQ (Chicago). Jorge Diaz is an analyst in the firm's advisory services division.

Scott Kratzer is vice president of advisory services for intellectual property research and advisory services firm ipIQ (Chicago). Jorge Diaz is an analyst in the firm's advisory services division.

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