The costs involved in managing an IP portfolio are usually high, so often there comes a stage in each patent or trademark’s life when its owner asks the question: which IP is worth keeping?
This question becomes especially relevant when:
1. the owner is looking to raise capital for the business
2. the owner, or someone else, seeks to sell/buy, or license the Intellectual Property
Here are some of the common factors which usually effect the worth of your IP:
The importance of the individual patent or trademark
When an IP portfolio is relatively small, it is quite easy to identify patents or trademarks that have the most potential use and value. As the portfolios grow, it becomes more and more challenging.
The guidelines are that core technologies (for patents) and house brands (for trademarks) are the most valuable whilst incremental patents or names of products that are not major products are less valuable.
How can you put a price on it, however?
One way is try to ask a hypothetical question “how much would my competitors pay to use my protected product, process or logo?”
Another way would be to get an access to licensing databases that some vendors sell, which might provide some guidance and estimate.
The size of the relevant market
The size of the potential market and the number and sort of sales that the patent or trademark are expected to support, and for how long, have a significant influence on the value of the IP.
Patent Term, Trademark vulnerability
As a patent has a limited life of 20 years, patents that have been granted recently will have more value than a patent reaching the end of its term, as they can provide a longer protection period and cause a greater threat to the competitors.
Trademarks become vulnerable for cancellation if they are not used for a period of 5 (in some countries 3) years. They are less valuable if they are vulnerable for cancellation.
IP strategy
Every patent and trademark has its own importance in a particular area, but will usually also form part of an overall IP strategy of a business, that aims to maximize its individual worth but also to help maximising other patents and trademarks value.
When an IP portfolio becomes more crucial in the business strategy, for example, by blocking competitors from gaining a foothold in a market, it’s value grows.
The contribution of the patent or trademark to the IP strategy and to the general business strategy is therefore an important factor as well in evaluating it’s worth .