There are many good reasons to evaluate the value of your patent portfolio from time to time, but how do you determine how much something like this is worth? A patent is more of an idea than a physical object that can be sold off, but there are ways to assign value to your intellectual property. A California medical device patent lawyer from our firm can tell you more about when you might want to assess your portfolio and how that can be done.

Why Assess the Value of My Patent Portfolio?

Your patent portfolio is likely one of your most valuable assets. You should want to know exactly how much it’s worth, especially if you are planning to enter into business with any other entities. Think about it. If you are going to partner with someone, merge with another company, or sell off your company and its assets, including patents, to another party, how would you get a fair deal if you do not accurately assess just how much this portfolio is worth?

What Are the Main Ways to Assign Value to a Patent?

There are three primary methods that can be used to figure out the value of a patent. You can use:

The cost method: This looks at the development of the patent and what it would cost to develop a similar invention or product. You can look at the costs of doing such work in-house or try to calculate how much such work would cost if outside contractors were used. A potential drawback to this method is that future revenue is not really considered a part of the calculations.

Market method: In this method, the price of similar products and patents is carefully considered. This requires recent and relevant transaction data to look at, and that can be a problem if you are trying to value a particularly unique patent.

Income method: The main consideration here is how much potential income such a patent could bring in. You may be able to use past transactions and market research to make some educated guesses here, but keep in mind that predicting the future isn’t always so easy or straightforward.

Which Factors Should Be Considered When Evaluating Patents?

There are also some specific factors that should be looked at when you are trying to value a patent. We recommend considering elements like:

  • How long you have had a claim to the patent
  • Whether the patent has stood up to litigation in the past
  • Your evidence of use of this patent
  • Recent technology developments
  • Industry trends

Talk to an Intellectual Property Lawyer

If you have any questions about how to value and protect any of your intellectual property, we’re ready to assist you. Contact Burns Patent Law and learn more about how our attorneys can help you safeguard your company’s most important assets.