Unleashing the Value of IP with IPwe’s SIAM Platform
Patents are an essential component of the modern business landscape. Patents provide companies with exclusive rights to their innovative ideas. These exclusive rights are critical because they allow companies to gain a competitive advantage by preventing competitors from copying their inventions. Also, without intellectual property (IP), companies would be vulnerable to IP theft, resulting in significant financial losses. Furthermore, patents are essential for generating revenue. With exclusive rights to produce or manufacture their inventions, companies can charge premium prices for their products or services. In addition, patents can be licensed to other companies, providing the holder with passive income. However, determining patent value can be a complicated process. Various factors influence the value of IP, and there is no set formula for valuation. IPwe’s SIAM Platform offers an alternative, standardized approach to valuing IP.
The Complexity of Technology
One of the primary factors that make it challenging to determine patent value is the complexity of technologies that patents often protect. This complexity makes it challenging for people outside the field to understand the technology patent’s value. Technical experts typically evaluate the novelty and usefulness of an invention when assessing its patent value. However, even for experts, evaluating the potential market value of a patent can be challenging. Also, the technology can be in the early stages of development, when its potential is not apparent.
The Scope of Claims
Another factor that contributes to the difficulty in determining patent value is the scope of the claims. A patent’s claims define the boundaries of the invention and determine the extent of the protection provided by the patent. Patent claims vary by invention and application detail. Determining the value of a patent requires assessing the scope of the claims and evaluating the likelihood of infringement. This requires an understanding of the relevant technology and legal landscape.
Valuing Past License Activity
Previous patent licensing also plays a significant role in determining its value. A patent’s value can increase significantly if it has licensing potential in a particular market or industry. However, identifying potential licensees and negotiating licensing agreements can take time and effort. It also requires knowledge of the market, the competition, and the legal landscape. Moreover, the value of a patent can be affected by the number of previous licensees and competition in the market.
The Legal Landscape at Large
Finally, the legal landscape can also impact the value of a patent. For example, changes in patent law interpretation, changes in patentability standards, or changes in the availability of legal remedies can all affect patent value. Moreover, the value of IP can be significantly impacted by litigation due to legal fees and the uncertainty of litigation outcomes.
Given these complexities, determining patent value requires a thorough understanding of the technology, the legal landscape, and the market. Patent valuation often requires multiple methods, including cost based, income based, and market-based approaches. Cost based approaches focus on the cost of creating the invention, while income based approaches focus on the expected income from licensing or commercialization. Market based approaches consider the value of similar patents in the same or related industries. However, each approach has limitations and can be affected by the abovementioned factors.
How IPwe’s SIAM Platform AI Determines Patent Value
IPwe has developed an innovative solution, the Smart Intangible Asset Management (SIAM) platform, which utilizes a sophisticated income based valuation approach with over 15 years of AI development. Unlike other established valuation approaches, which can vary widely in their assessment methods, metrics used, and required data, IPwe’s patent valuation model integrates patent and financial data from multiple sources using a relief from royalty model.
By leveraging the power of AI, the SIAM platform automates the valuation process, eliminating the inherent subjectivity associated with income based valuations. The platform’s core innovation lies in its pre-aggregation of cleaned and normalized data in the model, resulting in a previously unattainable level of accuracy in valuation for a process that typically requires significant time and incurs high discovery costs.
The algorithm automatically carries out several steps to obtain a sophisticated economic valuation of the target patent:
1. It extracts input data, such as CPC codes.
2. It performs market mapping and qualitative analysis of the target patent and the whole peer group in the market. It also calculates the remaining useful life, forecasts attributable revenue and annual growth, and determines the risk adjusted discount rate, applicable royalty rate, and pre and after tax royalty savings.
3. It outputs the DCFA of royalty savings over the remaining useful life.
IPwe’s Valuation Methodology provides a new perspective on intangible assets, such as patents, that are rarely valued at scale. With its AI powered platform, IPwe enables patent owners to determine the true value of their patents quickly and accurately. Click here if you would like to read more about IPwe’s Valuation Methodology.
Conclusion: Unlock the Value of IP with SIAM
Determining patent value can be complex and challenging because of the complexity of the technology itself, the scope of the claims, potential licensing opportunities, and the current and future legal landscape. Traditional patent valuation methods, such as cost based, income based, and market based methods, have limitations and can be subjective.
The Smart Intangible Asset Management (SIAM) platform provides an innovative solution to this challenge by utilizing a sophisticated income based valuation approach that integrates patent and financial data from multiple sources using a relief from royalty model. This AI powered patent analytics software automates the valuation process, providing patent owners with a quick and accurate patent valuation.
With over a decade of development, IPwe’s Smart Intangible Asset Management platform is a game changer for intangible assets such as patents that are rarely valued at scale. With the SIAM platform, patent owners can now unlock the full potential of their IP.
IPwe is a global financial technology company revolutionizing the IP space. Our mission is to become the go-to IP business analytics company—leveraging cutting-edge technology and world-class Clarivate data sets—to enable businesses to understand their portfolios from a financial viewpoint and make informed decisions to maximize value and innovation.