Atlanta Law Firm - Understanding the Value of Your Intellectual Property

Intellectual Property (IP) can be expensive to develop, commercialize and maintain, so we intuitively understand that it has value. Many IP professionals wonder, though, just what makes it valuable and whether certain attributes make some IP more valuable than others.

First, it is important to understand that specific attributes of your IP don't necessarily make it valuable, but you can look for indicators that are consistently correlated to types of value. There are multiple definitions of value depending on the focus of your organization. For example, maintenance, litigation, licensing, defense and strategy each have their own value that is unique to your team or company.

Within the context of that focus area, you should try to understand statistical patterns that are correlated to valuable outcomes, as you define them. Based on the desired outcome, you can leverage attributes of your IP to find other IP that also demonstrate those same patterns. The following example illustrates one outcome for Intellectual Property litigation.

An academic paper produced by faculty members at University of California at Berkley, Stanford, University of Texas, and George Mason University School of Law entitled "Valuable Patents" analyzes key indicators that suggest the relative value of patents in a legal context.

The authors argue that "...some patents are intrinsically more valuable than others." and that the relative value can be objectively measured, litigation being a key indicator. They also determined that there are at least seven attributes that can suggest whether a patent is relatively valuable.

They tend to be young, i.e. litigated soon after they are obtained. They tend to be owned by domestic rather than foreign companies. They tend to be issued to individuals or small companies, not large companies. They cite more prior art than non-litigated patents, and in turn are more likely to be cited by others. They

spend longer in prosecution than ordinary patents. They contain more claims than ordinary patents. They come disproportionately from certain industries. Patents in the mechanical, computer and medical device industries are significantly more likely to be litigated than patents in the chemical and semiconductor industries.

The value of identifying these attributes is that they can be objectively measured. You can know, for example, how old a patent is and how many times it has been litigated. Likewise, a patent is either owned by an American company or it is not and you can know definitively how many times a patent is cited and how many patents it cites.

There are other metrics that can also be leveraged for maintenance, IP licensing, product protection, and so on. The key takeaway is that regardless of the outcome you're seeking, valuation metrics are much more mature than they once were and they can give you insights that are beyond human capabilities.

These statistical patterns can give way to new opportunities such as Increasing licensing rates - Picking the highest potential licensable patents. Decreasing litigation risk - Identifying risk and preemptively taking steps to avoid it. Decreasing maintenance fees - Pruning patents that should be dropped from maintenance.

Regardless of the outcome or valuation, the science has produced tremendous results and should become a core part of your business. Gauging the relative strength of a patent is no longer science fiction; it is science fact and it can enable significant ROI you wouldn't have without it. Our Atlanta Law Firm provides IP litigation and consultation expertise in a variety of areas.

Our Atlanta Law Firm has strategically positioned itself to provide high-quality, niche expertise to resolve IP disputes at affordable rates.

Townsend Lockett & Milfort, LLC is an Atlanta Law Firm that is a multi-service law firm dedicated to providing dynamic legal solutions and services to its client base. From start to finish, 360 degrees of service.