The analysis platform for strategic IP management

The Technology Relevance is based on forward citations. Patent offices examine all patent applications to determine which prior patents new inventions are based on. If a patent is relevant to technological development in a particular field, subsequent patents will build on it and the original patent is often referred to by patent offices as prior art, or state of the art in Europe and Australia.

Technology Relevance measures whether a patent has been cited more often than other patents in the same technology area from the same year. The total number of patent citations received depends not only on the relevance of the patented invention, but also on the time that has passed since the patent was published. Patents that have been published more recently tend to have much fewer citations than older patents. The influence of time on the number of citations is corrected for by dividing the number of citations of a patent by the average number of citations of all patents published in the same year.

Technology Relevance also takes into account how international patent offices follow different citation rules.

Market Coverage measures the total size of the world market for which patent protection exists. The more patents companies own in key markets, as indicated by high Market Coverage figures, the more valuable the patents are, as innovators spend more on patent protection in multiple markets when they believe an invention is more valuable.

This makes the degree of international patent protection an important indicator of the value of a patent. Market Coverage is calculated based on the number of patents granted and applied for, i.e., valid patents per country, and is adjusted based on the size of each market. The size of each market is estimated using the countries’ gross national income (GNI) relative to U.S. gross national income, as the largest economic power. Alternatively, Market Coverage can be calculated based on industry-specific market size data.

Competitive Impact is calculated at the patent family level and represents the relative business value of each patent family. Competitive Impact is the economic value of patents as measured by multiplying the Technology Relevance and the Market Coverage of each patent family.

It is stated in comparison to other patents in the same field. For example, a value of three means that the patent is three times more important than the average patent in that field.

The Patent Asset Index is the measure of the overall performance of the patent portfolio, calculated as the sum of the Competitive Impacts of all patents in the portfolio.

Compare IP development over time and examine both quantity and quality in any patent portfolio. You can use historical analysis to gain insight into your competitors’ strategies. Analyze a company’s entire patent portfolio, a specific technology field, or individual patents.

Identify leading or disruptive technologies among the enormous number of patents worldwide. This applies regardless of whether you are analyzing an established technology field dominated by multinationals or an up-and-coming market pioneered by startups. Small startups can be spotted early, even when other stakeholders in the same space are filing many more patents.

Don’t neglect the current patent situation in mergers and acquisitions. Preparatory patent research should include the following questions:

• Is the target company dependent on another competitor?
• Could this possibly lead to a legal dispute?
• Does the target company own intellectual property that is influential in its industry?
• Are its patents of interest to a specific competitor?

With PatentSight, you can find answers to these and other IP questions, and gain insight into critical patent situations or unexpected profits. You’ll find ample information that goes far beyond what you would find on company balance sheets.

Identify patents with a high external and low internal relevance by analyzing the prior art. This can help you to determine which patents may be suitable for licensing. You can also profile potential licensees to investigate the way they work and their potential willingness to pay.

While patent data is publicly available and can be sourced from patent offices worldwide, the quality of the raw data is often insufficient for decision making.

A common reason analysts struggle to work with patent data is incomplete ownership information. Patents do not necessarily state the entity ultimately controlling them. They might be filed under various names such as subsidiaries or inventors, making it almost impossible to create a holistic company profile. Without knowing which company has the commercial power over an invention, analyses become void.

Enhancing raw, global patent data with value-add data and data enrichments enables businesses to get a better understanding of patent portfolios—their own and those of competitors, partners, potential licensees or M&A targets.

Another challenge with the raw data is ambiguous legal status information. Patents usually have a lifetime of 20 years but may go inactive well before they reach their maximum lifetime for reasons such as invalidation or lack of fee payments.

Companies sell individual patents, entire business units, and even merge or get acquired. Therefore, complete tracking of ownership changes and the remaining lifetime of patents is required to produce reliable insights from patent data analytics.