Identifying the Right Significance in the Right Patents (and Ignoring the Rest)

How does one know for certain if a patent portfolio presents real risk or opportunity within a technology landscape? The question is often impossible to answer quickly and with high confidence. Fortunately, patent indicators can help. These business, technical and legal metrics enable estimation of the probability of patent significance (as opportunity or risk). The trick is to remove the probable low significance patents from consideration as soon as possible, leaving higher significance items for escalation to specialized experts.

In the recent chapter "How Analysts Can Effectively Assess Patent Value" in the book Competitive Technical Intelligence (Competitive Intelligence Foundation,  Alexandria VA, 2009), Barry Brager of Perception Partners introduces an evaluation process reliant on patent indicators that includes a checklist useful to anyone finding themselves in the role of patent analyst. This checklist is part of a larger discussion describing how to build a scoring model to effectively estimate the probable significance of a patent relative to a particular business objective. What follows is an excerpt from the chapter, including the checklist.

Eliminate Noise and Red Herrings

Consider low significance patents as those not affording any distinct stakeholder appreciation for your business if it held the assets.

To remove the distraction of low significance patents, assess a portfolio or landscape in a very particular order: first by business significance, then by technology significance, and finally by legal significance. If the business significance is inconsequential to the company, the patent requires no further analysis. Even if some business significance is indicated, the technology significance in the patent still may not warrant further concern.

And even if the patent is significant from both a business and technology perspective, the resulting legal significance to the company may be trivial. It is only when these three significance types in combination create an undeniable risk or opportunity that one should escalate the patent to specialized experts and a new basis of concern.
In short, weed out low significance patents early, and then assess critical value indicators for the remainder.

Use Patent Indicators to Strip Away Patents with Low Business Significance - No Money, No Interest

The first priority is to asses patents by business significance. If a patent does not disclose a commercially relevant invention (related to the business objectives at hand) or have claims that could cover a meaningful portion of revenues from such an invention, it is not worthy of any further analysis, period.

Key business significance factors can be evaluated (and scored) with the following useful questions and indicators:

When a patent or portfolio under assessment does not embody a majority of these indicators, it most often may be considered of low significance and therefore non-essential to business objectives.

Now Eliminate Patents of Minimal Technology Significance - Prioritize Profitable Innovation

After business significance has been assessed and a patent is still deemed worth evaluating, it is appropriate to then evaluate technology significance. Seek to understand whether the technology disclosed is seminal, scientific and original and whether the technology in fact provides a viable approach for the risk or opportunity under assessment.

The following patent indicators are helpful when assessing technology significance:

It should be expected that many patents will be discarded after this phase of assessment.

Finally, Remove Patents with Insignificant Legal Coverage - Then Escalate the Rest

If the patent has survived business and technology significance assessment, a high level review of legal significance is then justified. In this phase, the focus is on determining which patent claims may be broad enough and potentially valid or enforceable in order to escalate them to qualified legal counsel.

Legal significance factors can be initially evaluated using patent metrics as follows:

At this point, only a few patents or portfolios should remain under consideration as relevant to business objectives.

Finding Signals and Red Alerts

This process of significance assessment using patent indicators does not quantify value precisely. However, it does permit screening within a consistent framework of patent, market and even financial data. By successfully screening for low- significance documents (which will be most patents that are encountered) and leaving only small sets of pre-screened, higher- significance documents for expert review, time and money can be saved as business strategy is developed and implemented across a technology landscape.

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