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21st July 2023

How innovation affects revenue for Big Tech

Tracking the revenue of Big Tech firms and their patent innovations over the last 20 years.

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Rightsizing or the linkage between a company’s revenue and patent portfolio size is complex yet interdependent.

Since the turn of the century, Silicon Valley has thrived on innovation, and patents play a crucial role in protecting and monetising those innovations.

A robust patent portfolio can serve as a strategic asset, enabling companies to:

  • safeguard their intellectual property
  • establish market dominance
  • generate revenue through licensing or litigation.

How innovation can ignite revenue generation

A company’s revenue is often a reflection of its ability to commercialise innovative ideas and products.

A larger patent portfolio can provide a competitive advantage by granting exclusivity and market protection, allowing a company to differentiate itself from competitors and capture a larger share of the market.

Patents can create barriers to entry for potential rivals, providing the patent holder with a significant advantage in terms of market share and revenue generation.

A company’s patent portfolio size can also attract potential investors, as it:

  • demonstrates the company’s commitment to research and development
  • shows its ability to create valuable intellectual property.

The benefits of maintaining a strong patent portfolio

Investors often view a company’s patent portfolio as a measure of its long-term viability. It is also an indicator of future revenue growth.

A robust patent portfolio can enhance a company’s valuation and provide a basis for revenue-generating licensing deals or strategic partnerships.

No guarantees when increasing a patent portfolio

The mere size of a patent portfolio does not guarantee revenue growth. The quality and relevance of the patents within the portfolio are both crucial factors.

A company must focus on developing patents that align with its core business strategy, protect key technological advancements, and address market demands.

Simply accumulating a large number of patents without a clear strategy or commercialisation plan may not translate into increased revenue.

Why adopting an IP strategy is essential

Portfolio optimisation or a company’s revenue and patent portfolio size are intrinsically linked.

A robust patent portfolio can provide market protection, differentiate a company from competitors, attract investors, and open avenues for revenue generation through licensing and litigation.

However, it is essential for companies to:

  • prioritise the quality and relevance of patents
  • align them with their business strategy
  • have a clear plan for commercialisation to effectively leverage their patent portfolio and drive revenue growth.

Patent Risk Hub

Cipher has produced a number of reports, hosted industry webinars and carried out a major survey on the subject of patent risk.

Whether it’s risk mitigation, or the broader need for risk management, Cipher’s classified patent data will meet your needs to analyse and implement a robust IP strategy.

Visit our Patent Risk Hub
Patent Risk

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