Value versus quality

The terms patent value and patent quality are used interchangeably and are often confused and misunderstood. While one cannot completely divorce quality and value, it is important to understand the distinction between the two.

Patent prosecution is commonly driven by patent quality – essentially whether a patent will withstand the scrutiny of a patent examiner or interpretation by a Patent Trial and Appeal Board (PTAB) judge. Key considerations include Disclosure (35 U.S.C. § 112), Non-obviousness (35 U.S.C. § 103), and Novelty (35 U.S.C. § 102).

Several patent metrics can be applied to assess patent quality. Reverse citations help understand the legacy of the patent and its novelty over the prior art. Another metric is time spent during prosecution; the premise being that time taken to patent grant shows the extent that the owners are willing to invest resources to get the patent granted.

An issued patent includes a ‘presumption of validity’ under the requirements of patent law. However the presumption is rebuttable, and a patent may be invalidated in litigation if the challenger can establish by ‘clear and convincing evidence’ that any of the statutory requirements of disclosure, novelty and non-obviousness were not met. Invalidity is common defensive tactic used in licensing negotiations.

Simply stated – quality is no guarantee for value

A patent with narrow claims may be considered a ‘quality patent’ however may have little or no commercial use or substantive importance. This is often overlooked where granted patents are universally considered valuable. In fact, the overwhelming number of granted patents have little or no value and the question of quality becomes inconsequential. Hence one could argue, at least from a business perspective that priority should be given to value versus quality.

Patent value is driven by different criteria. Key question in determining value include; is the patented technology used in products, is there significant revenue attached to those products, can the use of the patented technology be detected? Conventionally, patent attorneys will typically recommend pursuing a patent on an idea, however they will shy away from evaluating the invention for detectability, commercial applicability and performing an economic analysis of the invention.

The question is – what makes a patent valuable? The corollary question is equally important for inventors; how can I ensure my patent applications are more valuable? Securing valuable patents need not require more effort or cost than obtaining invaluable ones. Building a valuable patent portfolio relies on practices starting from filing an application, during prosecution as well as after the patent issues. By applying best practices consistently across a portfolio, owners can create valuable patents and patent portfolios.

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