Valuable patents are patents that provide economic benefit and can be enforced against infringement.
Some patents are intrinsically more valuable than others. Many patents have no value either because the inventions are worthless or even if the invention has business value the patent is legally handicapped. Conversely valuable patents have high business value and high legal value.
Patent Checkup uses a Patent Rating scale “A” through “D”. A-rated patents represent patents with the highest value, B-rated patents have medium value, C-rated patents have low value and D-rated patents are unlikely to have value. The checkup further distinguishes Business Value (BV) and Legal Value (LV), both are independently measured; described further as follows.
Business Value is a measure that a patented invention is used in the industry and has significant revenue attached to its use. A granted patent is no guarantee that the invention has business value in fact most patents will never achieve significant commercial relevance. Licensees and buyers often need to be certain that a patent can support a revenue-generating licensing program. They consider who is using the patented technology, whether the technology generates profits, reduces costs, how much revenue the products generate and how much the patented technology contributes to that profit generation. Business Value is expressed as a decimal value on a scale from 0-1 with 1 representing the highest score.
Legal Value is a measure that a patented invention can be enforced against infringement and is a key component for the monetization of a patent. The legal factors influencing value highly depend on the way claims were written and their ability to stand up to legal scrutiny. Claim language should be explicitly supported within the specification, construed as commonly understood by persons of ordinary skill and probably most important – be detectable. Simply stated if one cannot demonstrate that someone is practicing all elements of an issued claim, there is no case to assert the patent. Evidence of use (EOU) in the form of a detailed claim chart offer concrete evidence that a patented invention is being used in a product and that show how the claims are being infringed (see Custom Services). Licensees and buyers often base their decision on the presence of strong EOU. Regardless of an invention’s Business Value, without Legal value of the patent is significantly diminished. Inventions are knowingly being infringed all the time because enforcement is either too difficult or cannot be economically unjustified. Hence, patents with low Legal Value have a low value rating. Legal Value is expressed as a decimal value on a scale from 0-1 with 1 representing the highest score.
Patents are rated according to Business Value and Legal Value, both are individually scored and combined to formulate the Patent Rating. Checkup analyzes each patent claim and the final Patent Rating is determined by the independent claim with the highest combined score. Having Business Value and Legal Value measured separately is particularly useful when analyzing a sizeable portfolio of patents (see Portfolio). Patents can be prioritized according to business goals; for example, patents with the highest Legal Value could be prioritized for licensing, and patents with the highest Business Value could be prioritized for valuation purposes (see Custom Services).
If you have any questions or require more information about Patent Checkup, please contact us. We’d love to hear from you.