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Imagine There's No ‘Bad Patents’ – Patent Life Cycle Metrics


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Determining whether a patent is a "good" asset can be tricky. With a patent's value typically being realized almost ten years after its grant, how can we know the value of any newly-granted patent? We offer concrete metrics as to how to gauge patent value at each point of its life cycle.

Published in: Law
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Imagine There's No ‘Bad Patents’ – Patent Life Cycle Metrics

  1. 1. Imagine There’s No “Bad Patents”* - Patent Life Cycle Metrics Kent Richardson *With apologies to John Lennon
  2. 2. Slide 2 Exec Patent Assumptions • What’s in a patent • Patents are the specification • Claims!? I don’t need no stinking claims • Umm … the market? • What a patent does • Patents protect products • Patents are defensive, monopolies, exclusive
  3. 3. Slide 3 …a Failure to Communicate How much is it worth? Is it a good patent? How good is it? Is it any good? What do you mean? All we need is a killer patent? Don’t we have the patent on that!? What do you mean? Our product isn’t covered??!! Why is it taking so long? What’s our patent strategy? We want a defensive portfolio! Are we spending too much? We’re spending too much! What do you mean? Argh!
  4. 4. Slide 4 The Problem • Our customer doesn’t understand our product • Return on investment analysis…for a patent? • Value isn’t realized until 8-12 years after the work is done – you’re long gone! How Is It that We’re Still Employed?
  5. 5. Slide 5 Interesting Statistic > 95% of new patent applications can result in patents
  6. 6. Slide 6 What Conclusions? • With this information, what decisions can we make? • Is this good? Bad? OK? • How does this relate to a strategy? • The information is necessary, but not sufficient
  7. 7. Slide 7 What Processes/Metrics Address this Curve? 90% of your patent budget is wasted, you just don’t know which 90% 5% Value Portfolio Not Valuable
  8. 8. Slide 8 Patent Life Cycle - Stages • Potential Creation • New patent applications • Development stage • Opportunity Realization • End of Life Invented Filed Patent Issues Customer Product Your Product 00 99 20 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 EarlyPatent Office Volume Late Other Users Opportunity Realization Infringement Potential Creation
  9. 9. Slide 9 Potential Creation Metrics: Year 0 • Status • Brand new invention • Market for the invention unknown – use Total Available Market (TAM) • Goals • Capture the inventions • Allocate resources for long term portfolio potential • Example metrics • Ranking criteria well understood • Newness, visibility, compellingness • Connection to products or markets? • # of apps • $R&D/apps • Total potential creation (ranking * weighting) per market
  10. 10. Slide 10 Potential Development Metrics: Years 3-6 • Status • PTO feedback • Market maturing – TAM shrinks, consider Serviceable Available Market (SAM) • Goals • Shift resources towards high potential families • Create substantially greater potential in a few families • Process • Re-rank to identify high potential families • Directed patent development projects (DPDPs) to substantially enhance select families • Example metrics • SAM • Change in rankings • # & results of DPDPs • Resources allocated to high potential cases
  11. 11. Slide 11 Opportunity Qualification Metrics: Years 6+ • Status • US patents issued, int’l still pending • Specific products in the market • Goals • Validate high value patents • Process • Qualify claims against real volume products • Example metrics • Conversion rate to “qualified patents” • Volume, infringement, prior art analysis
  12. 12. Slide 12 End of Life Metrics: 6-12 years • Status • US patents issued, int’l issued • Products and uses are known • Goals • Extract residual value, stop loss • Process • Qualify patents for sale or end of life • Example metrics • % portfolio ready for end of life • $ returned by sales, $ saved
  13. 13. Slide 13 Conclusions • Patent life cycle metrics address business needs • The patent isn’t “good” or “bad”, it’s at stage X, with A,B,C criteria • Our portfolio has changed in potential by X amount over the last Y years