A patent portfolio is the body of patents owned by a single owner. These patents might have been developed individually by the owner or might have been purchased from the original patent owner. A patent portfolio can be a valuable asset to its owner.
The value of a specific patent portfolio is dependent upon the patents within it. Each patent has a limited lifespan underneath the patent protection regime. The value of a specific patent within a portfolio is constantly changing based upon where the patent is in its viable life. In some cases, a company may use its patent portfolio to determine its overall value, especially if its portfolio is one of its largest assets.
Many patent owners license the technology included within their patent portfolios to third parties. These licenses are separate income streams for these patent owners. The manner in which the patent owner attempts to find licensees to its patents is important. Due to the way that patent infringement cases are prosecuted, the patent owner must be very careful in offering a license to patents within his patent portfolio.
Generally speaking, companies that develop and patent their own technology can license their patents with greater ease. An organization that purchases patents from the original owner with the intent to license them to yet another party might be walking a finer legal line. The value of licensed patent portfolios may not change, as the value is normally placed upon the patents themselves and not on any revenues gained from licensing.
Certain international organizations rank the value of patent portfolios so the public can determine portfolio values and how much of the owner’s value is based upon his patent portfolio. These valuations are difficult to determine since a patent can change in value overnight. Patents also are based upon prior art: To the extent that a new patent is issued and incorporates an existing patent, the existing patent may be invalidated, or it may coexist with the new patent if it is required to create the new technology.
It is unclear whether or not a patent within a patent portfolio will develop licensing revenues based upon a new patent being granted or not. Generally speaking, when both patents are owned by the same company, the old patent retains more of its value than if it is owned by separate parties. These types of issues are increasing as the patent protection regime is growing.