A patent portfolio is a collection of

patent A patent is a type of intellectual property that gives its owner the legal right to exclude others from making, using, or selling an invention for a limited period of time in exchange for publishing an sufficiency of disclosure, enabling disclo ...

s owned by a single entity, such as an individual or

corporation A corporation is an organization—usually a group of people or a company—authorized by the state to act as a single entity (a legal entity recognized by private and public law "born out of statute"; a legal person in legal context) and ...

. The patents may be related or unrelated.

Patent application A patent application is a request pending at a patent office for the grant of a patent for an invention described in the patent specification and a set of one or more claims stated in a formal document, including necessary official forms and rel ...

s may also be regarded as included in a patent portfolio. The monetary benefits of a patent portfolio include a market

monopoly A monopoly (from Greek el, μόνος, mónos, single, alone, label=none and el, πωλεῖν, pōleîn, to sell, label=none), as described by Irving Fisher, is a market with the "absence of competition", creating a situation where a speci ...

position for the portfolio holder and revenue from licensing the

intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...

. Non-monetary benefits include strategic advantages like first-mover advantages and defense against rival portfolio holders. Constituting a patent portfolio may also be used to encourage investment. Because patents have a fixed lifespan ( term of patent), elements of a portfolio of patents constantly expire and enter the

public domain The public domain (PD) consists of all the creative work to which no exclusive intellectual property rights apply. Those rights may have expired, been forfeited, expressly waived, or may be inapplicable. Because those rights have expired, ...

Market value and evaluation

The value of a corporation's patent portfolio can be a significant fraction of the overall value of the corporation. Ocean Tomo LLC, for example, maintains an index of corporations whose market value is governed in large part by their patent portfolio value. The index is called " Ocean Tomo 300 Patent Index". Another example is ''IPscore''—acquired in 2006 by the European Patent Office—a software application, developed by the Danish Patent and Trademark Office. The application estimates "the economic value of patents and development projects".

Patent portfolio valuation

Because patent portfolios can contain hundreds, sometimes thousands, of patents, companies that wish to license a patent portfolio often must negotiate without complete information. In many cases, it is too costly for the negotiating parties to assess the validity and value of each of the portfolio's individual patents. Instead, parties will attempt to set a royalty that, over time, "converges on an objective probabilistic assessment of the portfolio's value."J. Gregory Sidak, ''Evading Portfolio Royalties for Standard-Essential Patents Through Validity Challenges'', 39 WORLD COMPETITION (Forthcoming 2016) at 10, https://www.criterioneconomics.com/evading-portfolio-royalties-for-standard-essential-patents.html.

References

Patent law Monopoly (economics) {{finance-stub

Market value and evaluation

Patent portfolio valuation

See also

References