valuation

How Much Is That Patent Worth?

America’s public companies are being subjected to greater scrutiny than ever before over their business decisions.   For many of these companies, the scrutiny extends to decisions with respect to acquiring and enforcing their own intellectual property rights, as well as with respect to honoring the intellectual property rights of others.  Although these rights may include all forms of intellectual property, e.g., trademarks, copyrights, and trade secrets, for many companies, the biggest exposure lies in decisions made with respect to patents.

Assigning a value to a patent is a difficult problem.  In order for the value to be meaningful, one must consider at least four issues: (1) the potential to increase revenue (IR); (2) the risk that a patent will be invalidated (RIV); (3) the risk that someone will design around (RDA) the technology; and (4) the risk that any commercial product or service will be covered by a multiple patents (RMP).