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.

1. Imagine There’s No “Bad Patents”* -
Patent Life Cycle Metrics
Kent Richardson
*With apologies to John Lennon

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. 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. 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. Slide 5
Interesting Statistic
> 95% of new patent
applications can
result in patents

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. 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. 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. 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. 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. 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. 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. 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