Know your portfolio

Every patent owner wishes to prove the value of its patents. The most immediate proof of value is when licences are negotiated, patents are sold, or your portfolio has been leveraged as an important asset. In lieu of that, rating the potential value of patents is subjective, the sum of many factors and observations. The best practice of portfolio owners is to know what they’ve got, determine where to take their portfolio, and how to use it.

What’s in your portfolio?

To gain an understanding of your portfolio, you can count your assets, conduct analytics of some key factors, and engage a variety of subject matter experts to evaluate your portfolio.

Portfolio assets can include patents, existing licences, claim charts that are ready to use, and an effective team invested in the assets. Looking solely at the patents, a baseline would be to count the number of patents in each jurisdiction where your products are sold and where your competitors have operations. In addition, count how many applications are in play and how many granted patents have continuations underway.

Securing indications of portfolio value may involve analytics. The key to effective analytics is to validate that a parameter correlates to demonstrated real world success. There are many patent tools available which report on a long list of parameters. Practically, it is up to portfolio owners to determine which parameters are correlated to value and what methods to follow with these tools to determine indications of value.

Let’s consider how patent age and forward citations might reflect patent value. The validation dataset would be TechInsights’ long history of creating evidence of use. The average age when evidence of use is produced is a bell curve centred at ten years. This suggests the average revenue stream of a patent comes in the second half of its lifetime.

Some patents, however, may be of higher value if they target technologies that are adopted in the market early in the patent lifetime, as they may generate more licensing revenue. Such recent technologies include LEDs, mobile phone control panels, and integrated circuit stacking, layout and architecture. Forward citations, and preferably non-self-citing forward citations, have been found to be higher for patents that have documented evidence of use (Figure 1).