How Sagacious IP’s Patent Valuation Service Helped a US-based Client to Cost-Effectively Identify their Patents’ Real Market Value
How Sagacious IP’s Patent Valuation Service Helped a US-based Client to Cost-Effectively Identify their Patents’ Real Market Value: Companies across the globe are increasingly seeking ways to ascertain the monetary value of their IP portfolio, especially patent portfolio. This is because it not only impacts their R&D strategies but also boosts their revenue. Patent valuation is a common approach that determines the monetary value of patents and enables patent owners to make informed business decisions. Read on to discover how Sagacious IP’s patent valuation service helped a multinational information technology company to identify the real market value of their patents.
Brief Description of the Problem
Our client is a US-based multinational enterprise information technology firm. Recently, they engaged Sagacious IP for a custom project wherein they wanted our team to perform patent valuation on a set of patents from multiple market domains. Although patent valuation ideally analyzes the entire patent portfolio to assign a group value, the client wanted our team to provide a value to each of the 17 patents listed by them.
Solution Offered by Sagacious IP
Our team understood the client’s requirements and devised a strategy on how to assess the market value of their patents cost-effectively. At the outset, we categorized their patents into four broad markets – data analytics, cloud computing, search engine, and customer support. Based on our market research and analysis, we estimated that the fair market value of their patent portfolio ranged from USD 4.6 to USD 5.5 million. Outlined below are the two methods that we used for patent valuation:
- Valuation of Top 10 Patents
We followed our proprietary Hybrid Patent Valuation approach for valuing the top 10 patents in their portfolio. The relative fair market value of the remaining seven patents was then calculated based on these top 10 patents. Initially, all patents in the portfolio were grouped under the four aforementioned markets. Then, an average of the market value of the top two patents was calculated in each market.
- Relative Fair Market Value
The relative fair market value of a patent in a specific market was calculated by comparing the patent with the top two patents in the corresponding market category. Numerous parameters such as infringement possibilities, claim scope, technology overlap, forward citation, and number of claims were considered during comparison and were assigned weights based on respective importance of these parameters in the valuation study. Based on this comparison, a relative weightage factor was calculated and multiplied with the average fair market value of the top two patents in the corresponding market category.
To summarize, the overall relative approach proceeded as follows:
- Step 1: Comparison with the top two patents in the corresponding market category to get a weighted factor (0.00 to 1.00) as an output.
- Step 2: Calculation of average market value of the top two patents in the corresponding market category to get a figure representing the average market value as an output.
- Step 3: Calculation of relative fair market value by multiplying the output of step 1 with the output of step 2.
Our patent valuation report helped the client to know the real market value of their patents while also enabling them to make informed decisions regarding those patents. For the project, a team of four analysts evaluated the top 10 patents and then used their value to calculate the market value of the remaining seven patents. In essence, instead of carrying out a comprehensive analysis on each patent, the team performed a cost-effective analysis to deliver the valuation report on time.
Companies often perform patent valuation to determine the real market value of their patents and to generate revenue from them. Information derived from patent valuation can also be useful in case of deals, such as a merger or an acquisition. Sagacious IP’s Patent Valuation service enables companies to ascertain the monetary value of their patents which in turn affects their R&D efforts, strengthens their IP rights, and boosts their revenue. Click here to know more about this service.
-ICT Licensing and the Editorial Team