Measuring the Role of Patents at Your Firm

Thanks to Rees Morrison at "Law Department Management" for reminding us about Michael Kaminski's Spring 2005 paper on "Measuring the Patenting Success of Companies: Metrics and Measurement for Patent Departments" where he "describes 27 possible metrics and measurements that a company can choose from to describe its patent activities:"

• Number of Patents Issued
• Number of Patent Applications Filed
• Number of Invention Disclosures Received
• Comparing the Number of Patents Obtained to the Number of Patents Issued to Your Competitors
• Illustrating How the Patents or Applications Cover Products or Technology
• Protection of Market Exclusivity
• Patent Use Indicators
• Ratio of Sales to Patents
• Market Impact of Patented Innovations
• Added Product Value From a Patented Feature
• Volume of Sales That Is Patent Protected
• Effects of Expiring Patents on Company Performance
• Money Saved by Abandoning Patent Protection for Products Removed from a Product Line or No Longer Being Developed for Introduction
• Money Savings From Abandoning Low-Quality Patents
• Amount of Revenue Generated Through Licensing
• Non-Monetary Value From Licenses
• "Technology Cycle Time" of Cited Patents
• "Technology Strength" Measurement
• Calculating Value Using Patent Citations
• Value of a Patent or Groups of Patents Calculated Through a Discounted Cash Flow Analysis
• Value of Intangible Assets
• Rate of Return on Intangible Assets

"It is useful to remember the five fundamental roles of patents in facilitating business success," writes Mr. Kaminski. "Such roles should be reflected in whatever metrics and measurements are used," including

• Patents Protect Core Technologies From Competitor
• Patents Attract Investment
• Patents Prevent Competitors From Inventing Around Critical Inventions
• Patents Can Create a Tool to Improve the Firm's Negotiating Strategy
• Patents Can Be Used as Offensive Weapons in Market Competition