How many patents are enough for your portfolio?
Patent experts believe a well-balanced patent portfolio reduces the risk of patent litigation. But 81% of companies report that their portfolio is too big, too small or both. Cipher provides you with efficient access to the data you need to calculate and communicate the balance between the cost of your portfolio, measured against the litigation threats faced by your organisation. Key findings
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Over $40 billion is spent on patents each year, but less than 20% of companies report that their portfolio is the right size.
Is our patent portfolio too big or too small or both (in different places)?
Most companies review their portfolio at least once a year. Balancing your budget with the changing requirements of the business is hard. It is frankly impossible without access to the right data and a model to plug it into.
How can I measure the impact of our portfolio if the primary objective is to neutralise threats from third parties?
The majority of companies agree that a well-balanced portfolio reduces the risk of patent litigation. Calculating your organisation’s exposure to patent risk requires an objective and repeatable model, which takes account of the changing patent landscape and relative revenues.
What’s the most efficient way to access the strategic patent intelligence I need?
Manual tagging and sorting of patents is slow and expensive. Advances in AI and Machine learning make it possible to both customise patent intelligence to your business and automate the calculation of the analysis required for sophisticated optimisation models.
With improvements in AI technology and other analytics platforms like Cipher, today we are able to understand the numbers of patents that are relevant to certain technology areas at a push of a button.
Jeremiah Chan, Head of Patents, Facebook
Using Cipher classify your patents into technology areas, aligning to revenue and map competitors
Combine with revenue data for both your organisation and your competitors
Plug the numbers into the SPI optimisation model, as shown in ‘How many patents are enough?’
Analyse the areas of under and over-stocking and make evidence-based decisions
The goal is to avoid litigation. Having a decent sized portfolio provides the perfect protection for our products.
Daniel Hernandez, Intellectual Property Manager, Stryker
Return on Investment (ROI) is a widely used measure of efficiency or profitability of an investment. Put simply, it identifies which parts of your portfolio are delivering value to your organisation and which are not. With $40 billion spent on patent portfolios each year, calculating the return of such a significant investment is critical.
Jared Engstrom, Head of Patent Development, Red Hat
Can the Optimisation Model be used for other strategic patent decisions?
Yes. Cipher subscribers have used the model to support cross-licensing (see 2019 article – AI for evidence based-decisions) and monitisation projects (where companies require dominance). Recently patent teams have been using Cipher intelligence to analyse the impact of budget constraints.
Do I have to use Cipher to tag our portfolio and competitor portfolios?
No. Historically internal patent teams have maintained their own taxonomies and tagging processes. Less than half of organisations report that they tag the patents owned by their competitor to products or technologies. Cipher automates the tagging of your own and third party assets, which is both quicker and cheaper.
Does the Cipher approach to optimisation ignore patent quality?
No. The model outlined in How Many Patents are Enough? includes subjective weightings for patent quality and also threat weighting. Users of the model often combine their models with traditional ‘pick lists’, but the advantage of the model is that it takes account of all your patents and all other patents relating to relevant technologies. There is universal acceptance that no one organisation owns all the good ones.
What support is available for setting up the model?
As much or as little as you need. The authors of the Cipher Report include the co-founders of Cipher, Nigel Swycher (CEO) and Steve Harris (CTO). Nigel and Steve routinely advise companies of the suitability of the model. Many of our customers also use consultants. Once the model is set up and fine-tuned, many organisations run the models without external support.
Is the output generated by the model right?
No. “All models are wrong, but some are useful” (George E. P. Box). What the model provides is objective and repeatable evidence to align your portfolio to your patent strategy. And an objective and repeatable means of communicating to executives the direct relationship between patent cost, and its role in mitigating the risk of paying royalties and damages to third parties.
Understand who’s doing what by automating patent to technology mapping.
Combine patent and revenue data to determine rational licensing outcomes.
Justify patent budgets to CFOs and others to communicate the impact of your investment.
Automate manual reviews for efficient execution of M&A and licensing transactions.
Be prepared with evidence to create a fast and effective threat assessment.
Assess your portfolio in comparison to other owners through your own technology lens.
Identify opportunities to create value through licensing or sale of patent assets.
Track new technologies of today and discover the unknown owners of future disruptive innovation.
“Cipher’s classifiers enable you to understand the patent landscape or analyze a portfolio. Combining expertise in both IP and data science, Cipher provides you with solutions to the strategic problems patent owners face, with quick and accurate results.” Erik Oliver, Richardson Oliver Insights
Speak to the Cipher team today.
