Danshari your patent portfolio to keep it in optimal condition

On June 19 2018, a Japanese e-commerce company Mercari, Inc. goes public on the Mathers market. It operates the “Mercari” marketplace app and is the first in Japan to reach “unicorn” status. Therefore, stock market players expect that it brings about positive impact on the market.

In the Mercari marketplace, users can sell unnecessary possessions and turn them into money. Recently, more people willingly throw away unnecessary possessions with the current danshari boom. In the meantime, even if it is unnecessary for you, there is someone who wants it. So, many people use this app to sell their unnecessary possessions (monetization), rather than just throwing them away.

Similar action has been taken in the patent world.

Companies have and hold numerous patents to ensure technology advantage. The chart shows 2017 Top 10 US Patent Assignees. These companies obtain such number of patents in a year in the US only. They are required to pay registration fee to the patent office, and also required to pay maintenance fees for those patents. Furthermore, the maintenance fees are set higher for older patents. Therefore, you are required to manage your patent portfolio in optimal condition, considering the maintenance cost and deciding which patents should be maintained or abandoned.  

However, it is not easy to evaluate patents. The value of a patent is non-constant. It varies in response to a change in business strategy and / or technology trends. The purposes of holding patents also vary from patent to patent. It may be for protecting your products or services. It may be for warning against your competitors. Or it may be for receiving patent licensing fee. Also, evaluating patents individually requires too much effort and the evaluation result may be different depending on the skill level of each of the evaluators.

Therefore, some companies want to take a systematic approach to evaluate their patent portfolio.

The approach may include identifying important patents by analyzing citation relationship between patents which has been generated in the process of examination at a patent office, that is similar to identifying important papers where a paper which is referenced in many other papers can be regarded as an important one. The approach may also include identifying important patents by checking if the patent has been challenged by others to prevent emergence of patent right.

Anyway, a patent should be regarded as “asset” only when it is made use efficiently, i.e. contributes to your business. A patent which is once “asset” may change into “debt” which does not contribute to your business and which just comes with the maintenance fees. When you notice such debt patents, you might want to monetize them by selling or licensing them to other companies who want to use them, as you do in your private life.