A key question facing executives when they are about to license-out an intellectual property portfolio is “What’s the true value of these assets and who should I license them to so that I further my business objectives?”
Answering this question in a timely and accurate manner is vitally important. The ability to quickly find value in an intellectual property portfolio, and successfully negotiate its sale for the benefit of a company, is a critical competency for any organization—and a significant competitive advantage.
Three key criteria are typically used when determining the commercial value of an acquired patent portfolio. The first relates to the validity and enforcement potential of the acquired patents. Once validity and enforceability of a patent portfolio have been ascertained, the second criterion is the technical strength and business utility of the portfolio.
Given that a portfolio is valid and enforceable, and has technical strength and business utility, the third criterion for establishing value is whether or not the geographic markets covered by the patents include countries that have large commercial markets in which to sell the technology at high-volume and profit.
The final key to the value of patents is how broadly applicable they are to the commercialization of products in many diverse industries, as well as whether the technology is distinct from a performance or cost standpoint in one or more specific markets. Naturally, patents with commercial potential have significant value compared to those that may have interesting scientific elements but little commercial utility.