Tools and technologies for analysing patent strength in a portfolio

Every type of intellectual property – whether in the form of a patent, published patent application or a trade secret – is a valuable asset. A portfolio that contains strong assets is an important indicator of a company’s worth, making it crucial to emphasise quality over quantity. Once a patent is granted it may have to undergo litigation, post-grant review or other challenges in court. Companies should therefore focus on the enforceability of their assets as obtaining a favourable outcome contributes to the patent’s worth. It is therefore ill-advised – and poor portfolio management – to land on a final strategic investment decision without analysing the patent’s strength. A number of conventional indicators can be used to assess this, including:

• forward citations, which include examiner citations, inventor citations and USC 102 and 103 forward citations. The higher the number of forward citations the higher the strength of the patent. Conversely, backward citations indicate the invention’s background;
• oppositions;
• patent family size, which demonstrates protection for the invention across the globe;
• grants (versus patent applications);
• number of claims – a patent with a higher number of claims is more likely to prevail in a litigation procedure;
• breadth of claims, which is provided by technical scope and the number of claims disclosed in a patent; and
• the remaining life of the patent, among many other things.

However, increasing demand for IP protection has led to the development of advanced tools and technologies to assess patent strength, which include:

• IPscore, a free evaluation tool developed by the EPO for patent portfolio management. It assesses the following factors:
  • legal status – thi provides an overview of the patent’s legal status and situation by considering the broadness and durability of claims and also includes an infringement monitoring programme and patent enforcement activities;
  • technology – this works out the strength of the technology by examining other emerging and similar technologies;
  • market conditions – this examines factors and conditions that affects market options of the patented technology and the business opportunities it creates; and
  • finance and strategy – this classifies patents with a view to weighing the purpose of the patent against qualitative and financial assessments.
• AcclaimIP scores patents by a P-score, which is a weighted average of three components – namely citation, technical and legal scores – calculated by various statistical metrics.
• Orbit Intellixir provides a patent strength score by considering the number of forward citations, the gross domestic product of the countries in which patent families are granted or pending, and the remaining life of patents.
• Innography is based upon algorithms that predict patent value.
• Derwent assesses portfolio strength based on the volume, global reach and persistence of R&D.
• LexisNexisIP provides patent strength by relying on industry-proven KPIs to track progress.
• Scitech Patent Art provides a quantitative assessment of a patent’s strength, which is based on estimating the strength relative to its peer and involves extraction of forward citations, backward citations, claim word count, number of family members and the patent’s remaining life.

Comment

The wide variety of conventional indicators and availability of advanced tools can simplify the process of obtaining a patent’s value, strength and weight in the market. However, there are still many challenges when it comes to managing a patent portfolio as these can be affected by technical advancements, market trends and the latest court rulings. Moreover, every advanced tool has its own algorithm that works on certain key parameters, which have not been considered in those of its competitors. The choice of tool therefore depends on various patent strength indicators.

Determining the strength of a portfolio is an important factor in valuing a company and a crucial step in ensuring that the company is protecting its patents against unfavourable litigation. While the use of conventional and advanced tools is beneficial in offering an indicator of a patent’s strength, the most trustworthy analysis is still that of an experienced IP practitioner.