Patents are intangible assets but can be traded and monetized as like any other asset class. During periods of slowdown in growth it is important to consider your patents as a source for generating revenues. There are many options using which you can do this – patent licensing, enforcing, pooling, sale or brokerage, and via intellectual property banks. However, it should be noted that 90% of patents do not get commercialized for several reasons like not having sufficient supportable infringement position or claim language not being up to the mark; meaning that it is not simple and straightforward job to do.

An important step in patent monetization is getting to its value. Patents are outcome of an extensive research and significant degree of monetary expenditure hence you need to be sure that despite being an intangible item, theycan create a scalable value, cash-flow, and goodwill.

Generally (Traditionally) there are three main approaches to valuing patents – [1] cost method, [2] market method, and [3] income method.

Each approach is a multi-step process involving diligence, analysis, and reporting. The complexity is not just limited to the information which a patent holds but also the language – in 2017 over 5.6 million patented documents were published globally of which more 62% were in Chinese, Korean, or Japanese language, with no English language equivalent at most times. Besides these, several other factors impact true patent value and finding these factors rightly set the tone to assess the valuation.This situation makes the whole valuation exercise more tricky, thus demanding the need of smart tools that can automate the first-pass analysis without missing out on any factors typically used in calculation.

As a solution, a number of software companies have expanded the capabilities of their programs to gauge the value of a patent. These patent analysis tools make use of the latest in modern day technology like artificial intelligence, and can calculate a score based on various attributes of a patent like, number of forward citations, family coverage, remaining life, comparison with parallel existing patents with known value, its technological importance, etc.