Patent Quality and Value

Debunking the "All Patents Are Created Equal" Myth

Part IV — Sorting the Signal from the Noise: Prioritizing Patent Reviews

A detailed review of patent claims is always required, especially in litigation and transaction. Patent practitioners may take a few days, weeks, or even months to review patents, search for relevant art references, or even interview technical experts.

Companies with an extensive portfolio often face and deal with thousands of patents: identifying the most noteworthy ones becomes a necessity.  

Filters such as patent office, legal status, and patent applicant/owner can benefit prioritization when it comes to reviewing patents. Some practitioners may also have developed their own set of advanced parameters such as forward citations, family size, number/length of independent claims as a more effective way to find out which patents should be reviewed first.

Similarly, the Patent Quality and Value Rankings can also function as useful filters with perhaps even more relevance in the scenarios mentioned earlier. This week, we’re going to discover how they can help in Evidence of Use and Patent Clearance.

Scenario 2: Evidence of Use Evaluation in Patent Assertion

In patent assertion, carrying out an Evidence of Use search is potentially an issue for two main reasons:

  • Tearing down products to produce claim charts can be costly;
  • Even if a convincing claim chart is produced, the patent still needs to successfully go through a prior art search to prove its validity.

Since the try-error cost can be significant, a preliminary review is crucial for the evaluation work to be efficient and cost-effective. However, a preliminary review might still take a great amount of time for patent holders with large portfolios.

Fortunately, Patentcloud’s Patent Quality and Value Rankings can provide predictions on the relative likelihood of patents of being practiced (capable of generating a claim chart) and not being invalidated (capable of overcoming a validity search).

In market adoption evaluation, an effective way to pick-up a smaller subset of patents for the first round of subject-matter expert’s review is to identify family members in major markets with Patent Quality and Value Rankings higher than A.

Let’s take, as an example, the 3,653 active U.S. TFT patents owned by Semiconductor Energy Laboratory (SEL). By filtering out those with a Patent Quality and Value Ranking lower than AA, we obtain a smaller set of 259 U.S. active patents to review first:

sel us amoled patents

SEL’s active U.S. AMOLED patents

SEL’s active U.S. TFT patents with Patent Quality and Value Rankings higher than A

For patent portfolios that have already been evaluated for their value — such as the Standard Essential Patents (SEPs) — the Patent Value Rankings may not be an appropriate filterHowever, the Patent Quality Rankings could still be a useful feature for narrowing down the scope of the review, based on the patents’ tendency to overcome prior art.

For example, as shown below, there are 375 active U.S. patents that have been declared as 3GPP SEPs under the Technical Specifications (TS) 36 Series:

huawei us standard essential patents technical specification 36 series

Huawei’s active U.S. SEPs (limited to TS 36 Series)

After filtering out patents with a Patent Quality Ranking lower than AA, we obtain a smaller portfolio of 157 U.S. active patents to review first:

huawei us standard essential patents quality ranking technical specification 36 series

Huawei’s active U.S. SEPs with a Patent Quality Ranking higher than A (limited to TS 36 Series)

Scenario 3: Patent Clearance Scope Setting

For companies with products on the market — most notably in the United States, Europe, and even in emerging markets such as China or India — patent risk is one of the defining elements of their commercial success. A patent clearance search is the standard process for identifying and controlling these risks.

For startups seeking opportunities in cutting-edge technology fields, it is usually simple to limit the search scope and determine the company’s core technology. As the industry moves towards maturity, however, new entrants join the field and file more patents.

At the same time, the technologies involved in a product often become more sophisticated, making it harder to determine the relevance of a specific patent to a product.

As a result, the scope of a patent clearance search can become vague and vast. Some companies — especially in Asia — may even give up on controlling patent risk and simply allocate a budget for taking licenses.

However, as history has shown so well, preparing for risk is always more cost-effective than settling it when it occurs: Patentcloud’s Patent Quality and Value Rankings can help set the scope of a patent clearance search when a product becomes more complicated and the number of related patents continues to increase.

In these cases, prioritization becomes a must. Traditionally, practitioners take into consideration jurisdiction, legal status, and even current patent owners in their practices for patent clearance searches. As the patent filing trend continues to rise, however, some industries — such as LCD, LED, wireless communication, mobile phones, lithium battery, and electric/unmanned vehicles — can easily involve thousands of active patents in each major country.

It would be better for practitioners to define the product and the criteria for determining the relevance of a patent to it. In this way, they could then evaluate the relevant patents based on the likelihood of infringement.

While there would still be thousands of relevant patents, the Patent Quality Rankings could be useful in limiting the search’s scope, so that the preliminary review could start with the patents that have a relatively higher quality, that is those that are relatively not as likely to be invalidated.

By identifying patents with a Patent Quality Ranking higher than D (the top 25% most likely to be invalidated), practitioners could somewhat narrow down the scope:

If a patent holder takes the D-ranked patents against the product, it should be possible to settle the risk by invalidating them.

us patents amoled technology

U.S. active patents related to the AMOLED technology

Yet, as the product becomes more sophisticated, practitioners may not be able to gain a comprehensive definition of it to be used in judging the relevance of patents. The Patent Value Rankings may be helpful for a first-round search and review under their assumption of the relative likelihood of patents being practiced or monetized (including litigation).

For example, as we examine all the active U.S. patents related to AMOLED products and technology, we notice that we have 8,956 patents to review. Even if we focus only on the AMOLED panel patents related to the TFT structure design, there are still 5,310 patents to be examined for patent risk.

By screening out D-ranked patents, we end up with 5,261 U.S. active patents that are not the least likely to be practiced and not the most likely to be invalidated. Out of them, only 3,610 AMOLED panel patents are related to the TFT structure design:

us patents amoled technology quality value ranking

U.S. active patents related to the AMOLED technology with Patent Quality and Value Rankings higher than D

If we further set criteria for Patent Quality and Value Rankings to be higher than A, as shown below, we end up with 829 U.S. active patents to be reviewed first: they are the most likely to be practiced and the least likely to be invalidated.

For the AMOLED panel patents related to the TFT structure design, there are only 617 patents left:

us patents amoled technology quality value rankings

U.S. active patents related to the AMOLED technology with Patent Quality and Value Rankings higher than A

Next week, we’re going to discover how the Patent Quality and Value Rankings can provide benefits in several phases of the patent life cycle, including R&D, patent prosecution and management, and patent monetization.

2019-05-15T17:28:21+08:00May 7th, 2019|0 Comments

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