Estimating The Value Of Patents: Reliability Of Automated Methods

les Nouvelles January 2021 Article of the Month from the Licensing Executives Society Internation journal

Cutting-edge technologies being adopted in new sectors (automotive, health, security, etc.), thanks to the Internet of Things (IoT) and various standards, are offering unique experiences to users and economic benefits to manufacturers. However, inexperienced licensees who enter license negotiations on patents required for standardized products and services struggle in understanding the value of the patent portfolio they are looking to license. This has created a market for computer platforms offering automated patent valuation. While these tools can provide an overview of a patent portfolio, it is important that both users and service-providers be aware of the drawbacks and limitations of these automated methods. This paper analyzes the most common factors used by popular platforms and correlates them with the existing evidence about their reliability as value indicators.