Maintaining a patent in the United States, European Union, and Japan over 20 years (the full protection period of a patent) costs an average of $75,000 per year. For an organization with a portfolio of 100 patents, annual maintenance costs will exceed $7.5 million. When maintaining a patent is so costly, it’s vital for an organization to ask itself on a yearly basis, “Is this patent worth the cost of protecting it?”
Identifying Pruning Opportunities
Patent portfolio pruning helps align your portfolio (and associated costs) with your business’s long- and short-term goals. Ensuring each piece of intellectual property in your portfolio is valuable is one piece of a strong IP strategy.
To identify which patents can be pruned from your portfolio, you need to have a way to rank patents. The most important patents offer both quality, meaning they are valid and enforceable, and value. These patents are integral to the way your organization does business and deliver continued ROI. On the other hand, protecting IP that does not contribute to the overall success of your company may be candidates for elimination. To put it simply, these patents aren’t worth the cost of annual maintenance.
Identifying opportunities for patent portfolio pruning, either by allowing a patent to expire or selling your intellectual property rights, gives your company the ability to redistribute its IP budget more strategically. Of course, eliminating IP with future potential from your portfolio would be devastating. It’s important to consider multiple perspectives when asking the question, “Is this patent worth the cost of protecting it?” Perhaps a patent could be licensed, or help your organization expand into a tangential market.
Objective Patent Analysis
As such a consequential process, patent portfolio pruning decisions should not be made on gut feelings or incomplete data. An AI-backed analysis of an IP portfolio and its individual assets can help IP professionals make data-driven decisions about the value of a patent. IP.com helps businesses make informed decisions about their portfolios with the Portfolio Intelligence Report and Patent Vitality Report. Together, these tools allow businesses to review their assets’ overall strength, litigation risk, monetization potential, new technology value, and patent quality.