How to Evaluate Existing Patents and Patent Portfolios
Patents are a type of Intellectual Property Rights granted to owners of new and original product enhancement processes or products in production or already in existence; a patent portfolio is a collection of patents owned by a single entity that may or may not be related. It gives the owner exclusivity in the right to exploit their new product or idea for a maximum of twenty years.
Whether you are an inventor seeking capital to move your product from the backstreets to a significant position in the central market, or you are a leader in a tech company seeking a price for your company’s invention, the question, “how much is my patent worth?” comes into play. Whatever your reason for asking this question the resultant action is the evaluation of your patents or patent portfolios, and this article will assist you in that aspect with the following significant factors to consider.
The Target Market
The target market of whatever your invented product or idea is meant to impact is a significant factor to consider given that, that would determine the success in the distribution and sale of your invention. The size of the market and the level of competition from other inventors and probably already existing companies would be of significant impact to the value of your patent. That is because for instance; for the former (size of the market) the number of sales anticipated to be made on the product or its patent forms the bearing of the value of that license. And for the level of competition your patent’s cost is likely to be reduced depending on the solution, it provides which may not be of great significance compared to a competing patented invention by a different individual. Of course, there are other factors to consider within the target market in evaluating your patents and patent portfolios; the above is just the outstanding ones.
Significance of the Product to be Patented
Inventions that offer solutions to long-standing problems or that have explored new avenues of technology as the first of their kind are patented as breakthrough patents. Breakthrough patents are the most valuable given that being the first of their kind the patent owner is given a total monopoly over the target industry which may culminate into billions of dollars. Breakthrough patents also provide the patent to owners an upper hand over their competitors, since you can make your competitors pay for your patented product, or to use your copyrighted idea. For instance patents for products such as the light bulb, or the first automobile engine just to name few, fetched fortunes of money leave alone giving their owners that is Edison and Benz respectively immense control over their respective industries. However, not all original patents reach the intended heights of industrial success. That nonetheless does not reduce the significance or value of the license.
Existence of Prior Art
The presence of prior art may have a significant impact on the value of your patent. This effect increases exponentially on the negative side, with the increase of the number of cited documents or patented products in existence within your area of innovation. The more there is prior art, the more the potential clients and buyers of your product are spoilt for choice, primarily if the other prior art has been actualized, thus reduced premium. A stand-alone patented product, on the other hand, one who enjoys the monopoly of its industry increases with the value given that there is no alternative to share its profit.
The Patent Period
Patents value for a maximum period of 20 years, and so an inventor, company or product owner is faced with the challenge of making the most out of this period. Therefore, in evaluating your patent and patent portfolio, you are expected to consider ways in which your product can be promoted and sold, within a given market during its period of validity. A potentially monopolized patent means that it will make more money during its patent period, compared to a license with competing patents, thus giving the former relatively more value. A product, however, cannot maintain its sale value all through its 20 year patent period. That is why most patents are to be made the most of in the years of their introduction into the market, considering that there may be alternative patents introduced in the course of your patent’s reign.
Conclusively, it is fundamental knowledge to any inventor that any product or idea worth copying is worth protecting and patenting is the way to do that. The cost of this protection, however, should be of consequence to the anticipation of the return value of the product being protected. The process of evaluating your patent and patent portfolio, however, may prove to be cumbersome and daunting in the long run. It is for this reason that you should consider the assistance of a professional team of experts specialized in patents. Panda Patent is one such firm, legible to offering these services and more.