Should your patent be renewed? Assessing the external and internal value of a patent

Many patent owners, whether universities, SMEs, research organisations or even big corporations, end up having a large patent portfolio that can cost them a significant sum to maintain over time.

In an ideal world the owners would value each patent before renewing them, which could provide them with the confidence to save money by abandoning low value patents. 

Unfortunately fully valuing every individual patent to be renewed them could be cost prohibitive, much more costly than the cost of renewing the patent. So IP managers have traditionally made assessments based on such factor as:

  • The alignment of the patent to the products and strategy of the patent owner. In other words, what is the ‘internal value’ of the patent?
  • The cost of renewal

And these are good approaches. However for large patent portfolios, or where the internal value of the patent is less clear, a licensing assessment such as discussed above can show if the patent being considered has much ‘external value’ – and so could be worth renewing from this viewpoint. 

 

How can we cost efficiently assess the internal and external value of a patent?

Firstly, the question of the internal value of this patent can only be answered by the patent owners. In this case both universities probably maintain a biomaterials research program to this day, but this does not mean that this particular patent adds a lot of value to these program. The reality is that many universities, and research organisations, and companies for this matter, file patents for reasons that may have made perfect sense at the time – but circumstances may have changed this then.

As for the external value, this can be quickly investigated using our Cluster Searching patent search tool. Essentially we use this tool to look for similar patent to the patent you might be trying to manage, as ask these sorts of questions:

  • How similar are other patents in this area? (particularly later patents). This is a great test of the commercial value of the patented area
  • How important are these other similar patents?
  • Most importantly, who owns them?

This can be done in a matter of minutes using Cluster Searching, so making the time invested in this analysis very worthwhile compared to potential cost of renewing a patent family.

In the example below, we will consider US8318902 filed in August 2007 by Cambridge University and MIT for a Biomaterial. Biomaterials as an area sound very interesting – but is their steak behind the sizzle in this case?

 

Using Cluster Searching to assess the external value of a patent

US8318902 is part of a patent family including a WO2008017858, and family members in a range of countries. It is easy to get this list of family members from Espacenet, and then to copy these into Cluster Searching. In this case, we will run a search for similar patents filed after July 2008 – the resulting query looks like this:

Cambridge-query.jpg

 

This provides a ranked list of similar patents. The first three patents on the list below are filed by research organisations, but the next few are filed by companies developing technologies in this area (click on the image to see a full sized version)

Cambridge-patents-found_20160715-050330_1.jpg

 

While commercial companies developing similar technologies is a good thing and suggests that the area could be valuable, we also need to consider

  • How similar are these similar patents?
  • How important are these patents?

The answer to both of these questions appears to be “not very”. Similarity scores of 2 are not speciial, and we look at the AmberScore values to the right of the table, these are all less than 1 – or  in other words, less than the average score of 1.0 for US patents. 

Because both of these parameters are numbers, it is easy to combine them, and we have to form the metric “Licensing Potential”, abbrieved to LP in the image above. Again values are quite low compared to a lot of other cases we have looked at.

It is possible to sort these patent by Licensing Potential – when we do, the top three patents look like this:

Top3-patents-by-licensing-potential.jpg

 

There is some potential here, but I would want to look closer at the overlap between the Stryler/Howmedica patents and the Cambridge patent family.

But on the whole there is a not a lot of value shown here. A fuller investigation of the similar patents found and the patent owners would be needed to confirm this, but in the absence of this, there is not a lot of immediate evidence of high external value. 

 

So – should this patent be renewed?

From above, we would need an understanding of both the internal and external value of the patent to make this decision. A good IP manager should have a reasonable understanding of the internal value, and the Cluster Searching shown above can help to build an understanding of the external value. This, in a matter of minutes, a decision can be made to abandon, retain, or even start to licence out a patent you may be managing.

 

Like to run your patents through Cluster Searching before renewing them?

Please contact us to ask about a free trial and demonstration. 

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