Basics of Patent Valuation Basics of Patent Valuation Guriqbal Singh Jaiya Guriqbal Singh Jaiya Director Director SMEs Division ( SMEs Division ( www. www. wipo wipo . . int int / / sme sme / / ) ) World Intellectual Property Organization World Intellectual Property Organization (WIPO) (WIPO)
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Basics of Patent Valuation Guriqbal Singh Jaiya Director SMEs Division ( ) SMEs Division ( ) World Intellectual Property.
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Basics of Patent ValuationBasics of Patent Valuation
• Of no economic value if not exploited• Generally of higher economic value if
protected by a patent (family of patents) and exploited
• Leveraging: Unlike a tangible product, an inventions or a patent may be licensed several times over to many others for the same or different purposes, in the same or different geographical areas, for the same or different duration; easier to license if patented
Phases of an Invention
Investment Phase– development– filing and prosecuting patents
Return on Investment Phase– commercialization– generating income
Stages of Technology 1
• embryonic stage of development
• new and needing further development
• market proven
• about to be supplemented or replaced by new developments
Stages of Technology 2
• untested idea
– outcome completely unknown
• working model (bench top)
– works in laboratory environment and justifies further development
• prototype
– feasibility shown, commercialization still not sure
• commercialized
– market success still not guaranteed
Commercializing Patents by...
• own manufacture and own marketing of patented product
• licensing of patent (portfolio)
• selling of (part of) the patent (portfolio)
• Permutations/combinations of above
Challenges in Valuation 1
Computing the value of a patent– always difficult; beauty/eye of the beholder ($$$)– more difficult in early stages than at the stage of
marketing a technology/product– legal, technical and commercial risks change
greatly during its legal life span• patent (granted with or without examination)
• technology/product does not work
• customer unable or unwilling to pay a profitable price
Challenges in Valuation 2
Computing the value of a patent– claims: quality of drafting; defensive/offensive– part of a bundle or not (royalty stacking; core or