The 5 most common mistakes that make your patents worthless

Characteristics that are significantly important in a patent valuation.

1. Missing blocking effect

Although alternative inventions serve to broaden a protective fence if other technologies or processes with similar functionality have already been patented, in general inventions which are only an alternative (sometimes worse) to other solutions are only of interest to potential buyers who want to increase the blocking effect of their own solutions - i.e. only an indirect benefit.

However, someone will hardly want to spend much money if the invention does not give him exclusivity (with a high blocking effect). This lowers the value.

The situation is very similar with a very high degree of specialisation in the claims: inventions that address exactly only one specific problem in one specific technology in one specific sector also suffer from a limited range of claims and a minor problem area to be addressed. This restricts the market for the potential buyer of an intellectual property right. The smaller this market, the lower the value of the patent that is determined in a patent valuation.

2. Too complex claims

The more complex claims are formulated, the smaller the range of claims typically are. The rule of thumb is the "two finger claim": Good, broad claims are formulated briefly and clearly, are not limited by explicit specifications (e.g. a voltage specification of 230 V or a concentration of 35%) or a certain amount of features.

3. Too small or wrong patent family

Casually speaking, a patent family comprises the same invention in different countries (jurisdictions).

If, for example, a US invention is protected in a US patent, it only has protection in Europe if the patent family includes a corresponding European patent.

It is often assumed here that the invention is adequately protected by the protection of a core country in which, for example, a product is mainly produced or in which one has access to the market. In fact, however, it means that the invented product could easily be placed on the market in all other countries. Moreover, a competitor in these countries could even assume a "freedom to operate" if the patent is granted in the "heartland".

Of course, the territorial coverage of the property right and the underlying economic size as well as the relevance of a technology for this economy have an enormous influence on the patent value. This can change the value of a patent family that is determined in a patent valuation by several orders of magnitude.

4. Too long "grant lag"

The period from the filing of a patent application to its grant can take several years, depending on the country and the assignees effort, of cause. In some countries, the granting process can even be delayed by the assignee until the end of the patent term.

However, this also has a negative impact on the valuation: For example, a lack of grant indicates that an applicant has no (own) interest in exploitation. Thus the invention would at best only have an indirect benefit, e.g. to increase the blocking effect of other own inventions or to use it for marketing purposes.

A missing grant implies that no grant is sought at all, e.g. because a grant is questionable (proximity to the state of the art, lack of technicality or inventive step). But it can also be "defensive publishing": an application that has only the purpose that nobody else applies for the invention.

Until a certain point in time this may seem reasonable, for example until it is possible to decouple utility models from a broadly based application. But even this instrument can no longer be used 10 years after the priority application (10 years is the maximum term of a utility model).

This means that applications that have not been granted lose significantly in value after 10 years: Here the exploitation prospect, the lack of strategic usability, the remaining term and the legal uncertainty with regard to grantability are priced in.

5. Filing in an uncompetitive environment

If you have achieved a unique position with your technology, which is based on a very special sales form or a special competence (e.g. a particularly high precision made possible by your own process), a patent application makes no sense, on the contrary: you disclose the inventive core. After the patent expires, a potential imitator, for example, is precisely described how the this high precision has been achieved. And since you have no competition anyway, you wouldn't have to lock anyone out. From a patent valution point of view the market of a potential patent buyer is strictly limited, this reduces the market value of the patent.

#patentvaluation #patentvalueexamples

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