For years, all the professionals in charge of valuing companies' patent portfolios have tried, with varying degrees of success, to identify patents that were based on inventions of high technical quality. Contrary to what is written in many publications, it is not the companies that file the most patent applications that are the most innovative. The challenge is to objectively measure the technical quality of a portfolio of patented inventions based on public information. To this end, the INPI has joined forces with the OECD, the OST and industry in different sectors to improve and standardize methods of using indicators predicting the technical quality of inventions. Our ultimate goal is to create an international standard. This methodology allows a very fine comparison of the quality of the patent portfolios of companies operating in the same sector and the identification of the most innovative companies. If a ranking is now possible, our objective is to allow the most innovative to be better developed especially in their communication, attract investors, reassure shareholders, validate the quality of the head of the patent department or to borrow money using their patents as collateral. Quality must take precedence over quantity.

1. Patent rating by technical quality opens the door to patent ranking of
companies’ patent portfolios
Frédéric Caillaud M.D., Ph.D.
Executive Director of Innovation
fcaillaud@inpi.fr
IC-SDV 2018 Nice
copyright F.Caillaud

2. Patent rating by qualityPatent rating by quality
MarketMarket
LegalLegal
Technical
impact
Technical
impact
IP rating methods :
-Financial analysis (NPV, similar deals, costs…)
-Internal non public scoring.
-External scoring : « View from the outside »
Better structured huge IP public databases (18m)
allowing the calculation of predictive parameters (OECD)
Highly difficult and complex during the past 10 years
copyright F.Caillaud

3. Calculation of Predictive indicatorsCalculation of Predictive indicators
Reference
set of
patents Sample ranking
Value
Portfolio10% 50% IP
High
Low
Two steps process :
- Selection of the sets of patents to be compared
- Select predictive indicators according to final use and calculate them (OCDE)
Comparison
copyright F.Caillaud

4. Patent qualityPatent quality
• 100 econometric studies/10 years/ 100 indicators
• 3 sets of indicators (technical, legal or market)
• Large set of patents (countries) and not on « a company scale »
• Several ways to calculate each of them
copyright F.Caillaud

5. Predictive indicators for TechnologyPredictive indicators for Technology
• Forward citations are reflecting the Technical impact of an invention as well
as the economical importance of a patent (OECD)
« If a set of patents is receiving more forward citations from third
parties compared to the average in the sector during the same period
of time, this invention has a better value »
Accurate comparison
5 years post filing.
Other indicators : Citation velocity, Top 10%, Non Patent littérature…
copyright F.Caillaud

6. Medical Diagnostic fieldMedical Diagnostic field

7. Predictive indicators for Technology DiversityPredictive indicators for Technology Diversity
Patent
Backward
cites
Forward
cites
OI GI
Prior art New patent
copyright F.Caillaud

8. Portfolio diversityPortfolio diversity
G1
Highly innovative
sectorial
G1
Highly innovative
sectorial
G3
Best for
monetization
G3
Best for
monetization
G2
Specialzed patents
Blocking patents
sectorial
G2
Specialzed patents
Blocking patents
sectorial
G4
Good for
monetization
G4
Good for
monetization
Originality
Generality
copyright F.Caillaud

9. Portfolio diversity (same field)Portfolio diversity (same field)
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Gold nuggets
Diversity is evolving with the release of forward citations
Blocking
Niche
Innovation
potential
G1G1
G2G2
G4G4
G3G3
copyright F.Caillaud

10. Portfolio diversity comparisonPortfolio diversity comparison
P&G
0
20
40
60
80
100
120
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
0
20
40
60
80
100
120
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010

11. Mapping & rating :
A Powerful Strategic advantage
Mapping & rating :
A Powerful Strategic advantage
copyright F.Caillaud
• Patent Portfolio Management and R&D strategies of
companies and PROs are becoming TRANSPARENT
• Ranking patent by quality is accessible to all
• It opens the door to companies comparisons
in the same sector and to loans.
• New challenge to Head of IP &
Top management (annual report and GA)
Companies must prepare themselves to
communicate about the quality of their patent
portfolio as it directly influences their stock value.