Patent Kinetics works with inventors, entrepreneurs, and investors to enhance the value of their patent portfolios and then works to monetize these portfolios through their sale, license or enforcement. Since Patent Kinetics works on a contingent fee basis, only a few cases of the many presented to us are accepted. The opportunities that we do accept are those where the prospective client has thought through—as best possible—relevant market, technology, and patent issues.
Many mistakenly believe that simply having pending applications and/or issued patents creates notable value. However, most patents are worthless. Research reports have found that only about 10% of issued patents ever return any value to their owners. Creating real value entails successfully overcoming significant challenges and a bit of luck. These challenges might be best understood by addressing most or all of the questions listed here. These questions can, of course, be used as a checklist for innovators or as a basis for preliminary due diligence by prospective stakeholders.
Market Anticipation Factors
Early on in the development of a patent portfolio it may be very difficult to discern where relevant markets will be in three to five years. Few stakeholders are sufficiently prescient to accurately foresee market evolutions over the several years it typically takes to get patents issued here in the United States. Thus, as is often said, “Luck favors the prepared.” Addressing at least some of the following questions may help improve your fortune:
- Who has the problem addressed by the innovation?
- How much are they willing to pay to solve it?
- Who makes the buying decision?
- How much better than previous solutions (if any) is the new invention?
- Does the invention help a mature company re-invent itself?
- Does the invention help a young company “pivot” toward a new-found, market- validated opportunity?
- Will the market be large enough to generate a significant return?
- Will the patented technologies be adopted by the target markets, and if so, how quickly?
- Are there substitution threats: e.g., other ways of solving the same problem or of obtaining similar benefits?
- Are the benefits of the patented technologies so compelling that markets cannot ignore them?
- Does the target market segment generate margins sufficient to provide financial support for products that incorporate the patented technologies?
To be continued Wednesday, 2/27/2013....