How Much Is My Patent Worth? Where to Begin with Patent Valuation

How Much Is My Patent Worth? Where to Begin with Patent Valuation

Determining the potential value of a patent portfolio can feel like a complex, even impossible, task. Though businesses and inventors alike rely on innovation to remain competitive, the intangible nature of intellectual property makes it inherently difficult to value. The number of ways that patent value can be influenced means that each patent valuation, much like startup company valuations, is part science and part art. In addition, the opaque patent market, where most transactions are confidential, makes assessing the real-world value of a patent elusive and problematic. Having a sense of what that might look like as early as possible will provide patent holders with a much stronger footing and sense of direction when finally entering the patent market, and there are a few key starting places to help evaluate a patent or portfolio’s worth:

1. Evidence of use in the marketplace,

2. Impact of the infringement, and

3. Validity of the patent claims.



Evidence of Use (EOU)

The undeniably greatest impact on a patent’s value lies first and foremost in the market, not the patent itself. Namely, if there is clear evidence of the patented invention being used in existing products or services, referred to as “evidence of use” or “infringement.” By definition, a patent is the right to exclude, not a right to practice, so if there is no one to exclude, there is naturally limited value mostly pent up in potential future use of the patent. Therefore, clear cases of infringement, in particular products or services verifiably released after the priority date of the patent (most often the date the patent or application was initially filed), will naturally push a larger return on investment when moving to transact in the marketplace. This may come in the form of either selling or licensing the use of the patent to the infringing parties.

While the subjective nature of intellectual property and the patent marketplace does not mean that a clear case of infringement automatically equals a profit for the patent holder, it is undoubtedly the best place to begin when considering the possible value of a patent or portfolio. Discussed more below, a few places to begin exploring these concepts include:

Researching patents, products and services of competitor companies operating within any relevant fields.

– How competitive the existing products and services already are on the market (do they drive value already? How much value does the novelty of the patent in question add to the product or service?).

– How similar (or not) the patented innovation is to industry standards or common technology, and where it may fit into future implementations of products or services.

– The complexity of the technology in both the existing products and as outlined in the patent, and how simple or difficult evidence of use would be to prove with this in mind, (e.g. is reverse engineering required or can infringement be documented through publicly available information?).


Impact of Infringement

Even where cases of infringement clearly exist, there are certain factors which affect how valuable the patent or portfolio being infringed upon really is. When valuing a patent, it is crucial to consider not just where possible infringement lies, but how strong and provable the evidence of infringement is, and how much impact the infringing product or company has in the current market.

For example, clear proof that a trivial feature of a prominent product will hold significantly less value to a company than proof that a primary feature of a lesser-known product is infringing on the patent. Questions like “how big is the product or service being infringed?” and “how important is it to the company?,” “how key is the patented innovation to the product or service in question?,” and “how much revenue does this product/service already drive?” all require attention when evaluating a patent’s real-world value in the marketplace. Additionally, consider how easy it might be for the offending company to redesign the product or service in order to avoid infringement accusations altogether.

Remember that being successful in the patent marketplace requires not just innovation, but strategy as well. Having a patent monetization strategy with clear, unavoidable evidence of use in high-value competitor products or services will naturally hold the greatest chance of tangible value in the marketplace.


Validity via Claim Evaluation

Though infringement remains the first and foremost factor in valuing a patent, no case of EOU would be successful without the language of the patent itself. The strength, complexity, or specifics of the outlined technology in the patent claims can make or break a case for infringement. Additionally, due to the inefficient and oversaturated nature of the patent industry, it is possible for similar patents to pass through different examiners, and both be published as unique, patented inventions. For this reason, the primary place to look for distinction and value is in the patent claims.


There are three primary parts to claim evaluation when considering possible value:

– Ease of proof (how the claims are written and the type of technology);

– Usefulness (probability of use in the relevant industry); and

– Uniqueness (possible prior art and/or cases of infringement)

The easiest way to begin here is by simply asking, “are the claims understandable?” It is crucial that no matter how complex or simple a claim may be, that it is able to be clearly documented in order to definitively show infringement at each claim step. Successfully evidencing infringement with the goal of selling or licensing is where most patents receive the highest return on investment, so claim strength particular to infringement documentation naturally provides the best opportunity for owning or selling a more valuable patent. Just as an unclear claim set may prevent a strong infringement read, a clear, definitive read of the claim language will ensure infringers cannot maneuver around an allegation once presented.

It is also important to note, however, that the inherent complexity of the patented technology may just as easily affect a patent’s value on the market, regardless of the claim strength. For example, semiconductor patents can often be very difficult to prove use because companies don’t typically publicize the inner workings of their chipsets, and reverse engineering is typically required to prove infringement. Claims that are too complex or specific are not only more difficult to determine infringement, but may create additional obstacles when looking for a relevant niche market or buyer which will benefit from its complexities. Claims that are too broad, on the other hand, may leave the patent open to prior art accusations, lack of uniqueness in the market, or relying too heavily on existing industry standards, which devalue the patent.


It has become increasingly important to understand the worth of a patent beyond its innovative merit, especially for businesses who rely on their intellectual property as primary assets of the company. The way the patent claims read and can be interpreted, the usefulness of the invention, and potential for real-world use and subsequent profit, are a few examples of places where patents hold value, and many of these aspects will naturally fluctuate with the market, regardless of industry. To get the most accurate valuation, and improve monetizing the patent during a transaction, consider also working with an experienced patent broker who is already trained in researching, evaluating, and identifying a patent or portfolio’s strengths and weaknesses, including all of the elements discussed above. Even without the assistance of a patent broker, utilizing these starting points when wondering “how much is my patent worth?,” will help establish a realistic price, market for buyers or licensees, and potential for profit.


The core team of patent consultants at Vitek IP, LLC have analyzed over 20,000 patents, while managing hundreds of buy-side and sell-side transactions for some of the world’s largest companies. Vitek’s founders have over five decades of experience in IP and tech, and have developed sophisticated patent sales and patent acquisitions strategies for some of the world’s largest companies. Vitek’s patent consultancy, brokerage group, and research organization provide clients exceptional guidance navigating the patent landscape. For more information, visit