PATENT EVALUATION
Building the tools to extract and unveil
intelligence and value from patent data
April 2014 - Nice
Laure...
PATENT EVALUATION
Evaluation is a systematic determination of a subject's
merit, worth and significance, using criteria go...
Patent valuation vs. Patent evaluation
• Valuation: Assess economic worth
– How much ?
• Evaluation: Systematic assessment...
Contrast uses
• Global valuation model: How much ?
– Provide a single number per patent, representing the
"economic worth"...
Examples: you choose the right approach
• How much has the value of US companies
portfolio grown in 2013?
• Are HP patents...
Global valuation models: how does it work?
• Three steps
1. Estimate value V for historical patents
• Based on renewal beh...
Goal driven evaluation
• Our Goal: make the best decision on an IP issue
– Can we license out some of our patents? To
whom...
A process based on expert best practice
• To answer these questions, licencing professionals use
specific metrics, to comp...
Nothing is absolute
• The core of the evaluation process is to compare
metrics value with the distribution of metric value...
What is a comparable set?
• Building a good comparable set is key to this approach
• May be manual, expert work:
– combina...
Goal driven evaluation process
Select patents
Build comparable set
Compute metrics
Assess patents against
comparable set
M...
BUSINESS
NEEDS
IP RELATED
CHALLENGE
IP
SOLUTIONS
R&D
PRODUCT
DEVELOPEMENT
GO-TO-
MARKET
ASSET
MONETIZATION
SPEED
R&D
MITIG...
BUSINESS
NEEDS
IP RELATED
CHALLENGE
IP
SOLUTIONS
R&D
PRODUCT
DEVELOPEMENT
GO-TO-
MARKET
ASSET
MONETIZATION
SPEED
R&D
MITIG...
LEGAL
Best
Patents
1. BENCHMARK
PATENTS
2. COMPARE
STRENGHTS &
WEAKNESSES
3. LEVERAGE
NEGOCIATION
POWER4. NEGOCIATE
TECHNI...
BUSINESS
NEEDS
IP RELATED
CHALLENGE
IP
SOLUTIONS
R&D
PRODUCT
DEVELOPEMENT
GO-TO-
MARKET
ASSET
MONETIZATION
SPEED
R&D
MITIG...
Exclude Others
PLAYERS
INVESTMENT
DOMINANCE
INTENT
SUBSTITUTE
THREATS
1. BENCHMARK
PATENTS
2. APPLY
INDUSTRY
PATTERNS
3. A...
BUSINESS
NEEDS
IP RELATED
CHALLENGE
IP
SOLUTIONS
R&D
PRODUCT
DEVELOPEMENT
GO-TO-
MARKET
ASSET
MONETIZATION
SPEED
R&D
MITIG...
COMPUTE
METRICS
ABANDON
SCAN PATENT
PORTFOLIO
MANAGE
QUALITY RANKED
PATENTS
RENEW
Patent Portfolio Pruning
BUSINESS
NEEDS
IP RELATED
CHALLENGE
IP
SOLUTIONS
R&D
PRODUCT
DEVELOPEMENT
GO-TO-
MARKET
ASSET
MONETIZATION
SPEED
R&D
MITIG...
LEGAL
Best
Patents
1. BENCHMARK
PATENTS
2. COMPARE
STRENGHTS &
WEAKNESSES
3. LEVERAGE
NEGOCIATION
POWER4. NEGOCIATE
TECHNI...
• Worldwide invention based family-grouped patent database
• Up-to-date normalized legal status info:
• Reassignments
• Op...
• Up-to-date patent classifications
• Deep indexing (semantic technical concepts)
• Sophisticated similarity algorithms
• ...
Technical
Metrics
Copyright 2014
Sample charts: licensing out
Legal
Metrics
Copyright 2014
Sample charts: licensing out
Geographical
Metrics
Copyright 2014
Sample charts: licensing out
Ranked
Patents
Copyright 2014
Sample charts: licensing out
• Patents are a key business evaluation material
• Evaluation is driven by business needs
• Business needs define metrics ...
Thank you
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II-SDV 2014 Patent Valuation: Building the tools to extract and unveil intelligence and value from patent data (Laurent Hill and Renaud Garat – Questel, France)

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II-SDV 2014 Patent Valuation: Building the tools to extract and unveil intelligence and value from patent data (Laurent Hill and Renaud Garat – Questel, France)

  1. 1. PATENT EVALUATION Building the tools to extract and unveil intelligence and value from patent data April 2014 - Nice Laurent HILL - Renaud GARAT Copyright 2014
  2. 2. PATENT EVALUATION Evaluation is a systematic determination of a subject's merit, worth and significance, using criteria governed by a set of standards (…) to help in decision-making; (…) any particular definition of evaluation would have be tailored to its context Copyright 2014
  3. 3. Patent valuation vs. Patent evaluation • Valuation: Assess economic worth – How much ? • Evaluation: Systematic assessment of worth to assist in decision making in a given context – Should I ? • The first part of this presentation will try to contrast methodology and intended use for both approaches
  4. 4. Contrast uses • Global valuation model: How much ? – Provide a single number per patent, representing the "economic worth" – May be aggregated for any large corpus of patents Single value for a large portfolio • Goal driven evaluation : should I ? (and why?) – Answer a specific question – Provide rational for the decision making process Reach quickly high quality, documented, decisions on specific IP issues
  5. 5. Examples: you choose the right approach • How much has the value of US companies portfolio grown in 2013? • Are HP patents worth more than Apple's? • Are my 10 nanotech patents worth licencing out? to whom ? • Which patent should I stop renewing this year?
  6. 6. Global valuation models: how does it work? • Three steps 1. Estimate value V for historical patents • Based on renewal behavior 2. Compute predictor metrics P for same corpus • Citations, family size, claim length, … 3. Build model • Use machine learning techniques to estimate V=f(p) • Now V can be estimated for any patent for which we can compute the metrics
  7. 7. Goal driven evaluation • Our Goal: make the best decision on an IP issue – Can we license out some of our patents? To whom? – Is this patent cluster offered to me for licencing a good match for our company? – For which patent should we stop paying annuities? – …
  8. 8. A process based on expert best practice • To answer these questions, licencing professionals use specific metrics, to compare the patents at hand with comparable patents • There is more or less a consensus in the industry on what the main ones are • High level, business driven metrics: legal strength, originality, predator presence, citation velocity… • These metrics contribute to the decision process, are understandable by decision stakeholders • Metric list depend on question being answered
  9. 9. Nothing is absolute • The core of the evaluation process is to compare metrics value with the distribution of metric values for a comparable set • Values have no intrinsic meaning for business stake holders – Compare explaining: "our average velocity is 3.2" versus "our patents get twice as much citation per year as the rest of the industry". • What is important is: how do the selected patents compare to similar patents
  10. 10. What is a comparable set? • Building a good comparable set is key to this approach • May be manual, expert work: – combination of IPC classes, keywords, competitors… – serious patent information expertise + time needed • Questel of course advocates the use of our similarity algorithm, allowing instant comparable set building. – Based on a proprietary semantic engine, plus all other available information: classes, citations… – Much faster: usually all is needed is to decide where to set the cutoff point
  11. 11. Goal driven evaluation process Select patents Build comparable set Compute metrics Assess patents against comparable set Make a fast, documented, high quality decision
  12. 12. BUSINESS NEEDS IP RELATED CHALLENGE IP SOLUTIONS R&D PRODUCT DEVELOPEMENT GO-TO- MARKET ASSET MONETIZATION SPEED R&D MITIGATE RISKS SUSTAIN COMPETITIVE ADVANTAGE MAXIMIZE PROFIT Portfolio PruningBusiness Dev.FTO EVALUATING = BENCHMARKING Business needs drive evaluation methods Technology scouting Licensing outExclude OthersPortfolio BuildingLicensing in Evaluation principles Metrics- based comparison Copyright 2014
  13. 13. BUSINESS NEEDS IP RELATED CHALLENGE IP SOLUTIONS R&D PRODUCT DEVELOPEMENT GO-TO- MARKET ASSET MONETIZATION SPEED R&D MITIGATE RISKS SUSTAIN COMPETITIVE ADVANTAGE MAXIMIZE PROFIT Portfolio PruningBusiness Dev.FTO EVALUATING = BENCHMARKING Business needs drive evaluation methods Technology scouting Licensing outExclude OthersPortfolio BuildingLicensing in Evaluation principles Metrics- based comparison Copyright 2014
  14. 14. LEGAL Best Patents 1. BENCHMARK PATENTS 2. COMPARE STRENGHTS & WEAKNESSES 3. LEVERAGE NEGOCIATION POWER4. NEGOCIATE TECHNICAL GEOGRAPHICAL Potential Licensors Licensing-in Copyright 2014
  15. 15. BUSINESS NEEDS IP RELATED CHALLENGE IP SOLUTIONS R&D PRODUCT DEVELOPEMENT GO-TO- MARKET ASSET MONETIZATION SPEED R&D MITIGATE RISKS SUSTAIN COMPETITIVE ADVANTAGE MAXIMIZE PROFIT Portfolio PruningBusiness Dev.FTO EVALUATING = BENCHMARKING Business needs drive evaluation methods Technology scouting Licensing outExclude OthersPortfolio BuildingLicensing in Evaluation principles Metrics- based comparison Copyright 2014
  16. 16. Exclude Others PLAYERS INVESTMENT DOMINANCE INTENT SUBSTITUTE THREATS 1. BENCHMARK PATENTS 2. APPLY INDUSTRY PATTERNS 3. ABILITY TO EXCLUDE ASSESSMENT 4. ASSESSMENT REPORT DETAILS Copyright 2014
  17. 17. BUSINESS NEEDS IP RELATED CHALLENGE IP SOLUTIONS R&D PRODUCT DEVELOPEMENT GO-TO- MARKET ASSET MONETIZATION SPEED R&D MITIGATE RISKS SUSTAIN COMPETITIVE ADVANTAGE MAXIMIZE PROFIT Portfolio PruningBusiness Dev.FTO EVALUATING = BENCHMARKING Business needs drive evaluation methods Technology scouting Licensing outExclude OthersPortfolio BuildingLicensing in Evaluation principles Metrics- based comparison Copyright 2014
  18. 18. COMPUTE METRICS ABANDON SCAN PATENT PORTFOLIO MANAGE QUALITY RANKED PATENTS RENEW Patent Portfolio Pruning
  19. 19. BUSINESS NEEDS IP RELATED CHALLENGE IP SOLUTIONS R&D PRODUCT DEVELOPEMENT GO-TO- MARKET ASSET MONETIZATION SPEED R&D MITIGATE RISKS SUSTAIN COMPETITIVE ADVANTAGE MAXIMIZE PROFIT Portfolio PruningBusiness Dev.FTO EVALUATING = BENCHMARKING Business needs drive evaluation methods Technology scouting Licensing outExclude OthersPortfolio BuildingLicensing in Evaluation principles Metrics- based comparison Copyright 2014
  20. 20. LEGAL Best Patents 1. BENCHMARK PATENTS 2. COMPARE STRENGHTS & WEAKNESSES 3. LEVERAGE NEGOCIATION POWER4. NEGOCIATE TECHNICAL GEOGRAPHICAL Potential Licensees Licensing-out Copyright 2014
  21. 21. • Worldwide invention based family-grouped patent database • Up-to-date normalized legal status info: • Reassignments • Oppositions • Litigations • Licensing • Alive/dead state • Comprehensive citation coverage • Clean & normalized patent assignee names Copyright 2014 Evaluation pre-requisites
  22. 22. • Up-to-date patent classifications • Deep indexing (semantic technical concepts) • Sophisticated similarity algorithms • Citations (forward & backward) • Patent classifications (IPC + CPC) • Semantics • Broad choice of pre-defined valuation metrics (120+) • Full user control over metrics (weighting) • Fast on-the-fly metrics computing capacity Copyright 2014 Evaluation pre-requisites
  23. 23. Technical Metrics Copyright 2014 Sample charts: licensing out
  24. 24. Legal Metrics Copyright 2014 Sample charts: licensing out
  25. 25. Geographical Metrics Copyright 2014 Sample charts: licensing out
  26. 26. Ranked Patents Copyright 2014 Sample charts: licensing out
  27. 27. • Patents are a key business evaluation material • Evaluation is driven by business needs • Business needs define metrics & methodology • Evaluation is contextual • Context is set by benchmarking • Benchmarking relies on similarity algorithms • Data quality & value-add are essential • Metrics adjustment lead to sharper conclusions Copyright 2014 Conclusion
  28. 28. Thank you

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