What makes your Patent more valuable

The two February articles covered the concept of IP valuation — the benefits of understanding the value of your IP and the different models in use today for quantifying that value. There’s a missing piece to the equation though: exactly which attributes make your IP valuable?

First, it is important to understand that specific attributes of your IP don’t necessarily make it valuable, but you can look for indicators that are consistently correlated to types of value. There are multiple definitions of value depending on the focus of your organization. For example, maintenance, litigation, licensing, defense and strategy each have their own value that is unique to your team or company.

Within the context of that focus area, you should try to understand statistical patterns that are correlated to valuable outcomes, as you define them. Based on the desired outcome, you can leverage attributes of your IP to find other IP that also demonstrate those same patterns. The following example illustrates one outcome for litigation value that Innography can help you evaluate.

An academic paper produced by faculty members at University of California at Berkley, Stanford, University of Texas, and George Mason University School of Law entitled Valuable Patents is a patent analysis paper that analyzes key indicators that suggest the relative value of patents in a legal context. The authors argue that "…some patents are intrinsically more valuable than others" and that the relative value can be objectively measured, patent litigationbeing a key indicator. They also determined that there are at least seven attributes that can suggest whether a patent is relatively valuable:

• They tend to be young, i.e. litigated soon after they are obtained.

• They tend to be owned by domestic rather than foreign companies.

• They tend to be issued to individuals or small companies, not large companies.

• They cite more prior art than non-litigated patents, and in turn are more likely to be cited by others.

• They spend longer in prosecution than ordinary patents.

• They contain more claims than ordinary patents.

• They come disproportionately from certain industries. Patents in the mechanical, computer and medical device industries are significantly more likely to be litigated than patents in the chemical and semiconductor industries.