IP portfolio audits: Conquering the odds


John Boyd

IP portfolio audits: Conquering the odds

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Patent portfolios require constant monitoring, amending and culling in order for businesses to keep pace with their competitors, says John Boyd of TechInsights.

For an organisation to realise the greatest benefit from its patent portfolio, the portfolio needs to evolve in tandem with the business that owns it, adjusting and adapting to industry developments, emerging technologies, and business areas of focus and growth. To maximise the return on investment of a portfolio, it should be monitored regularly to ensure a continued match with business objectives, effective coverage in desired areas, and to identify and take action on low-value patents to minimise maintenance costs. 

A portfolio audit helps establish the criteria by which an organisation can ensure that its current assets align well with its overall goals.

Patent portfolio audits can focus on achieving any or all of the following goals


Streamlined   Well positioned Optimally monetised

  but not excessive

Cull patents that don’t add value to eliminate maintenance fees

  • Abandon low-value patents that do not add to the portfolio.
  • Divest patents that are no longer core to the company’s technology but which could be of value to a third party.

Depending on the portfolio objective (assertion or protection)

  • Ensure the portfolio provides sufficient coverage and aligns with product portfolio and roadmap.
  • And/or consider augmentation
  • through development or acquisition.
  • License eligible assets.
  • Divest fewer strategic assets.
  • Strengthen eligible assets.
  • Ensure the patent portfolio provides adequate coverage while minimising over-coverage across all areas

For example, an audit can be conducted to:

  • Map patents to technology products, compare against competitors, provide an understanding of the value drivers in the portfolio and of those patents that are not adding value (Well-positioned, Comprehensive); and
  • Find over- or under-patented areas in the portfolio to identify patent areas that are no longer aligned with the company’s business strategy (Streamlined, Well-positioned, Comprehensive).

Audits can also provide an overall assessment of the portfolio to identify strengths and gaps.

Building an evaluation framework

At TechInsights, the portfolio audit methodology we apply is consistent so that patents can be examined, compared, and acted on appropriately to best serve the needs of the client.

The first step is to develop an evaluation framework specific to the business, ensuring that patents are being evaluated against set criteria, and results and recommendations are reported uniformly.

The steps to develop the evaluation framework in turn become the steps to conduct the audit itself:

1. Understand corporate objectives and what role the patents play therein The objectives define what decisions need to be made and what information needs to be collected. For example, some companies consider their portfolios as defensive tools and intend to use them only against potential litigation, while other companies consider their patent portfolios as revenue generation products.
2. Classify the portfolio into a taxonomy


This step allows us to understand the breakdown of the existing portfolio, and to parse the patents in the relevant technology domains. The taxonomy is developed to fit the specific needs of the client, and allows for the sorting of patents into various classifications at a higher level. 

3. Establish criteria to evaluate individual patents


Develop evaluation criteria that will enable the systematic comparison and triage of individual patents. The criteria should map back to the business objectives and allow for quick identification of areas that require more extensive examination.

4.Drill down into individual patents

Develop criteria by which individual patents can be analysed in-depth to compile comparison data, and to develop ratings for each patent. Plan to engage subject matter experts for accurate evaluations.

5. Review portfolio results versus corporate objectives


Determine how the results of the audit will be compared to the company’s portfolio objectives, competitive products, and competitive landscape.

6. Report results


Determine the reporting requirements to provide appropriate results to decision-makers so that proper action can be taken on the portfolio and its assets.

Patent assessment criteria and ratings

The criteria we use to assess patents will vary from business to business based on the client’s objectives and industry area of focus, the use of patents within the industry, and their ability to detect. Two core criteria for consideration are:

  • Use of the technology within the industry; and
  • Ability to detect such use of the invention.

In addition, some or all the following are typically evaluated as well:

  • Strength of the invention;
  • Commercial merit of the technology;
  • Quality of the claims construction;
  • Novelty of the claimed invention;
  • Remaining life span of the patent;
  • Strategic value to the core business; and
  • Licensing or assertion history.

By evaluating the patents, we can assign a rating to each one of A through D. The following tables provide a high-level overview of what each rating means. 





As patents are evaluated, some will fall easily into defined categories, for example, patents that are not detectable and are not known to be used in the industry would be considered low-value and can probably be abandoned; key portfolio drivers which can be easily detected and which are known to be used will be kept and maintained.

There is, however, often a grey area in a portfolio where very good patents have not yet been adopted by the industry, but which may become foundational patents in the future as technology evolves. Patents in this area take a higher degree of skill to evaluate appropriately, and can be candidates for patent-strengthening programmes.

Evaluated patents: next steps

A patent portfolio audit can result in the classification of individual patents based on their potential value to the company, allowing for the definition of a set of clear next steps for each:

  • Keep Identify the assets that generate revenue or strengthen the portfolio, and maintain them appropriately.
  • License Identify and take action on infringement and licensing opportunities.
  • Strengthen Work with the prosecution team to identify patent families that, from a technical perspective, may have applications beyond what has already been examined and that could be candidates for continuations and claims improvement based on unclaimed subject matter. With augmented or improved claims construction, for example, a C-rated patent can become an A-rated patent that is targeted at an industry segment which is strategically significant to the company.
  • Divest Identify over-patented areas of the portfolio; this is typically characterised by groups of patents in a narrow area of focus that has been patented to the point where divesting some would have no impact on the ability to use the portfolio to achieve the company’s objectives.

Identify patents that have value, but that do not necessarily align to corporate strategy or goals. These could be, for example, non-core loner groups of patents produced through R&D programmes that are not part of the client’s core technology, but still have value to a third party.

  • Abandon Identify patents deemed to be of no value. These include patents that are known not to be used, not likely to be used, and not detectable; they have no licensing or defensive potential so they would not be likely to be of interest to a buyer. Additionally, they may be patents in a geographic region not of importance to the company.

Portfolio audits inform decisions

Broadly speaking, the following are scenarios where portfolio audits can help a client make informed decisions about their assets.

Mergers and acquisitions

Does a newly acquired portfolio provide patents in areas that aren’t covered by the existing portfolio? 

If yes: are the patents ready to be used?

If no: abandon or divest.

Portfolio strategic alignment

Does the portfolio fit the company’s strategy?

If yes: The portfolio provides effective counter-assertion against the company’s competitive threats and aligns with the competition’s product roadmap. 

If no: Develop a plan to align it through acquisition, targeted R&D development and other programmes.  

Patent culling

Is the client paying maintenance fees that don’t provide value to the company?

If yes: Determine the best way to cull patents.

If no: Well done.

With the big questions answered and the patent portfolio optimised, we can help the client to develop a best practices strategy to maintain and grow its value moving forward.

Adopting active portfolio management

A portfolio audit can be a significant undertaking. Following an audit, a client organisation should adopt best practices that support proactive portfolio management moving forward. With the portfolio streamlined, the client needs to make sure that its IP teams and business units can identify areas of invention for patenting that align well with the product roadmap. This should be an active task with teams working to pull technology inventions, as opposed to waiting passively for disclosures of invention.

When the team pulls a technology invention, it should go through the normal review process to determine whether to invest in the prosecution of the invention, and how broadly to prosecute it.

This plan:

  • Will prevent portfolio bloat from reoccurring;
  • Can lead to strategic filing;
  • Ensures that evolving business needs and product roadmaps will be aligned with the IP portfolio strategy; and
  • Enables the client to react to a changing competitive landscape quickly

Moving to active portfolio management often requires a fundamental behaviour change between the business units and the IP groups to enable proactive information sharing. Some staffing augmentation may be required. The IP group, for example, will need a technically savvy individual with good IP knowledge, who is also connected to the strategic decision-makers. This person should be empowered to enable IP and business unit groups to connect and work together in a much more strategic and proactive way.

Patent portfolio audit promotes effective portfolio maintenance

A patent portfolio is like any other high-value business asset in that if it isn’t proactively maintained, it will become less effective at serving the needs of the business. A portfolio audit realigns that asset with shifting organisational requirements, it streamlines the portfolio to ensure optimal performance, and it enables the establishment of effective maintenance best-practices moving forward.


John Boyd is a managing principal, patent transactions at TechInsights. The inventor of well over 200 patents in semiconductor technology, Boyd offers his knowledge and expertise of the IP ecosystem by helping clients develop and execute IP monetisation programmes. He can be contacted at:



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