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Portfolio Triage

Companies often have large patent portfolios, but not all of those patents are created equal. Patents may be classified in three broad categories: core, non-core and useless.

Core patents are patents that represent the core competency of the enterprise and protect company’s market share. These patents must be maintained and enforced to realize the market monopoly afforded by these patents. This is not to say that such patents cannot be licensed. Often, such patents may be subject to cross-licensing and other collaborative arrangements. However, these patents represent the core value of the company and much thought must be given as to the use of these extremely valuable assets.

Non-core patents are valuable patents, which do not support the competitive strength of the company as they do not add exclusivity to the market share of the company’s products or services. Nevertheless, such patents are valuable assets, which could be used defensively, monetized through sale, licensing, or cross-licensing. Such patents could also be used assertively to generate substantial profits through enforcement. Such patents may also be donated to universities or other non-profit institutions for a tax write-off.

Useless patents are those which have no value, not just for their owner, but for anybody else as well. Usually, these patents represent technologies that have not materialized or have been proven commercially non-viable or obsolete. Abandoning such patents can save maintenance fees, which add up in large portfolios to very substantial sums that can be used to subsidize licensing efforts.

Patent triage is the process of classifying the patents in these three broad categories, which is an essential aspect of patent portfolio management. Just as every garden needs pruning, nearly every sizeable patent portfolio needs an annual triage.

Are you making the most of your patent portfolio, or wasting money for the maintenance of useless patents? Contact GPC to find out.