AT&T boss Mike Armstrong has a lot of cards on the table. Witness his forays into cable television, local phone service and Internet access. To support these bold initiatives, a few years ago Armstrong ordered his researchers to bulk up AT&T's intellectual property position, a strategy that has sparked an almost sevenfold increase in the number of patents issued in 1999 versus just two years earlier.

Now look at 3M-the inventor of Post-it notes and Scotch tape-whose name is almost synonymous with corporate creativity. There, 1999 patent output fell by nearly 150, a 24 percent dropoff from the previous year.